The Ec 10 view of the world

He’s a Republican, but a damn smart one. Greg Mankiw’s blog is one of my regular reads. This week, don’t miss:

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18 Responses to The Ec 10 view of the world

  1. Sinclair Davidson says:

    “He’s a Republican” – an accident of history, no doubt. He is a fine economist and his blog is must reading. However with Republicans like this, we don’t Democrats.

  2. Patrick says:

    that must be like Andrew Leigh, who is a Democrat (by inclination if not actual affiliation) but economically literate even so :)

  3. Panadawn says:

    The hardest thing to convince the average punter is that petrol, beer and cigarette taxes are there to prevent higher consumption, not just to raise revenue.

    Obama would know that, so there’s buckley’s chance of any politician who wants to be elected saying “We’re gonna make fuel more expensive! Don’t worry it makes perfect economic sense!”

    It’s the easiest policy to attack, thats why it wont happen. I mean, I agree, its a good idea, but noone is ever gonna be elected on that policy.

  4. Sinclair Davidson says:

    Why would government want to prevent consumption of petrol, beer or cigarettes? If they came out and said ‘we’re going to tax low elasticity products’, then I’d have no problem.

  5. Russell says:

    “Why would government want to prevent consumption of petrol, beer or cigarettes?” OK, I’ll say what seems obvious – because people who damage their health with beer and cigarettes fall into the government funded national health system and suck up vast amounts of money.

  6. Bring Back CL's blog says:

    Sinkers is right what would we do if Republicans actually understood economics!

  7. Sinclair Davidson says:

    So we would be unconcerned about beer-drinkers and smokers who have private health insurance and beer drinkers and smokers in those economies that have no, or little, public health?

  8. Russell says:

    I’m not sure private health insurance will help much with lung cancer etc – the treatments will attract Medicare rebates, and after a certain amount each year ($1,500?) the government pays virtually everything. Besides, even if they had private health insurance they would be a bad example to young, impressionable people who may not have insurance!

  9. Sinclair Davidson says:

    Okay. So if the government were announce no public funding for smokers, we then would only worry about ‘young impressionable people’?

    The problem I have with this type of argument (which, to be fair to Russell, is the mainstream argument) is that it assumes that government has nationalised people’s lifestyles choices simply because government has expanded the welfare state. (I think of this as the ‘contrived externality’ argument). So the logic is “You are a slave because we might have to buy your choices”. So, simple solution, don’t nationalise people’s choices.

  10. Russell says:

    But it isn’t just the welfare state that affects your choices – my local council has a town planning scheme that prevents me choosing to build a 3 storey home which would put my neighbour in permanent shade. Living in communities means always negotiating about your behaviour so as not to disadvantage others. The Medicare system is what the overwhelming majority of people want, and they don’t want it drained by people who have knowingly caused their own illness. Taxing and taxing and taxing tobacco is encouraging people to be more responsible (so satisying for the left to be able to lecture the right about personal responsibility).

  11. Sinclair Davidson says:

    Russell, I having difficulty following your argument. You say

    Living in communities means always negotiating about your behaviour so as not to disadvantage others.

    Why negotiate “about’ your neighbour and not “with” your neighbour?
    Is this negiotiation?

    my local council has a town planning scheme that prevents me

    So even if I agree to pay my neighbour compensation, and they agree, I still can’t have a three story building?

    But lets get back to smoking. Why are you assuming that I want others to condorm to y definition of ‘personal responsibility’? In any event, how responsible are you being if you’re being coerced by the State?

  12. Sinclair Davidson says:

    “conform to my”

    sorry not “condorm to y”

  13. Russell says:

    We can’t all negotiate with each other about everything so we elect people to do it for us, ie set the rules.
    You can’t negotiate outside the rules – doesn’t matter if you pay someone to allow you to kill them, you can’t – this is about a community trying to make the kind of community it wants to be. Aim to change the rules if you want them changed.
    “how responsible are you being if you’re being coerced by the State?” – that’s a good question. When I was thinking (well that’s what I call it) while typing on Andrew Norton’s blog I wrote that sometimes we make better decisions when we are making them for the whole community, than if we are just making a personal choice. I might be too lazy to buy and wear a bicycle helmet, but I support the law which makes us all (myself included) buy and wear them. You seem to see the state as being something very different than the sum of all of us who make it up.

  14. Sinclair Davidson says:

    You seem to see the state as being something very different than the sum of all of us who make it up.

    Yes.

  15. Sacha says:

    “We can’t all negotiate with each other about everything so we elect people to do it for us, ie set the rules.”

    In principle, you could negotiate with your neighbours about all aspects of your potential 3-storey building. Why, in this case, do there need to be council guidelines?

  16. Russell says:

    “Why, in this case, do there need to be council guidelines? ”

    I’m not sure I understand the question – the Council rules are there if most people in the area don’t want 3 story buildings. You can’t have a rule and allow some people to choose to break it. If they do they change the situation illegitimately – instead of persuading others to change the rule (based on what people want), they change the situation – for example in this case if someone sets a 3 story precedent, then others will move from what they wanted (no 3 storey buildings) to also capitalise on being able to have 3 storey buildings, and then you have a situation that most people didn’t want.

  17. Sacha Blumen says:

    I think that what I was meaning was that, assuming (conceptually) that all the property rights are clear (eg the neighbours have title to sunshind and you need to negotiate with them to take it away), why is an outside body (eg a council) needed in this case? I think that taking councils away in these scenarios would be difficult to do in practise, but it’s interesting to consider the situation conceptually.

  18. Sacha Blumen says:

    Thanks Andrew L for the link to Greg’s site.

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