Religion, Part II

[moraulf]

So I found online this speech by Barack Obama, which made me feel kind of dumb about my previous religion post. I will stop plugging for Obama now. Sorry. But seriously, watch this if you haven't seen it.



I mean, holy crap, right?

Comments

[symmys]

I don't think Global Warming is something we'll either solve or not -- I think there are degrees. Hell, even without global warming, there are degrees to how clean our air will be, to how liveable our cities will be, etc., and making it harder to pump carbon into the air seems to me to be something that will help.

What most frustrates me about this issue is that the republicans resist the free market solution (carbon taxes) and instead plug the alternative energy subsidies (what I would see as the nanny-government-knows-best solution).

If you believe the market is the answer, as Republicans claim to, then you should believe that the best way to regulate a negative externality is with a Pigovian tax or a cap-and-trade system. The point is, the government shouldn't be in the business of deciding which innovation will be the most effective at reducing polution -- that opens it up to too much corruption. Rather, government should simply set a price on polution -- as time goes by, we expect more from our people and our technology in the way of conservation, and we continually raise that price.

[moraulf]

It's not that I don't agree with you, but I think there's an argument to be made that *some* externalities get hit with taxes and some don't, and that therefore there's no lack of nanny-state politics involved with that decision, either. I also generally think the phrase "nanny state" is an annoying Republican attack on all consumer-protection law and that people who use it should be forced to drive Pintos (although being that you have a new baby, you're exempt).

[symmys]

fwiw, I use the term nanny-state precisely because I'm annoyed at Republicans for choosing the more-government solution here (and in many other places) when they make such strident claims to be the party of smaller government and respect for the power of the free market.

I may also be somewhat sympathetic to the phrase.

In a number of ways, I'm sympathetic to the relative economic right -- I agree that bottom-up competition usually yields better results than top-down design, I agree that government often intercedes in the market in ways that aren't helpful and create more corruption. And I'm deeply annoyed by populist rhetoric about evil companies. I'm generally annoyed at the tax code -- I think it's stupid I could save money in taxes if instead of paying a rent check I were paying off a mortgage, I resent government influencing my choices in that way (in my case, it's quite real -- I can rent in a community I enjoy or I can buy in a community I don't; the savings of buying are mostly artificial, because government gives a tax break)

Obviously any time a pigovian tax is created, the government is deciding to intercede in the market. But (here's where I'm not actually a Republican), that's the government's job. That's precisely why I'm so annoyed when people talk about "evil corporations". Corporations have one job: to make money. It's governments job to rig the system so that in the process, our society doesn't get hurt.

One thing I like about Obama is that often his rhetoric is much more reasonable than that of other candidates, and he's open to using economic logic (as opposed to strictly moralistic logic) in making policy decisions.

[moraulf]

...and by extension, you understand that the point of the tax breaks you'd get for moving to a community you "don't like" are, for better or worse, the point of those breaks - the government thinks that it's in the national interest for people to be encouraged to own property rather than concentrate all the property in the hands of a few owners, which is what renting does, and a natural consequence is that people with means have to spread out to other communities instead of all moving to the nice ones.

You know...I bet there's probably some way to actually measure the government's success at "rule-setting" within bottom up competition (which, I agree, is a good basis for an economy) but I have no idea what that would look like other than "are we making $$ or not". It seems to me that one of the problems is that the government isn't quick or uncorrupt enough to respond effectively to stuff like offshore tax break abuse.

[symmys]

There are ways to measure these things. I read somewhere recently (probably linked from Mankiw's blog or the freakonomics blog) that with respect to housing, the government has succeeded in making people overinvest in housing, but it has not succeeded in promoting home ownership. Rather than encouraging more people to buy homes than would otherwise, we've those people who do buy houses spend more on homes than they otherwise would.

I believe the comparison was done by trying to draw analogies between segments of the U.S. population and people in countries that don't give a tax break on housing-related interest.

[moraulf]

Is that because the people who sell houses just incorporate the tax break into the price? I mean, you would think making it cheaper to buy a house would encourage home ownership.

[symmys]

The Brookings Institute says: "Evidence suggests, however, that the mortgage interest deduction (MID) does little if anything to encourage homeownership. Instead, it serves mainly to raise the price of housing and land and to encourage people who do buy homes to borrow more and to buy larger homes than they otherwise would. Most tax return filers, especially those with low or moderate incomes, do not itemize their deductions and therefore are not in a position to take advantage of the deduction if they were to buy a home. As a result, the deduction not only drains significant revenues from the Treasury every year, it also provides much larger benefits to high-income households than to low- or moderate-income households, and has at best a small effect on homeownership." (http://www.brookings.edu/articles/2007/0618housing_gale.aspx). That's in the midst of an article advocating different kinds of meddling with the market -- they still buy the premise that home ownership is good -- it's just that we do it wrong, they say.

http://www.dollarsandsense.org/archives/2007/0507karger.html - this article suggests the federal policy does succeed in encouraging homeownership (though it goesn't give data to that effect), but explains why it's bad.

And here's the original blog that got me thinking about this (from a right-leaning programmer): http://gregarius.dropcode.net/demo/feed.php?channel=56&iid=128395&y=2007&m=11&d=13

[moraulf]

oh yeah...it's not wrong to complain about "evil corporations", either - according to the government, corporations are people, so when the do hideously immoral things (like locking their workers in at night, thanks, Wal-Mart!) it is clearly legally appropriate to judge them in moral terms.