Two Things to Watch and One to Listen To

April 16th, 2014 at 2:25 pm

Typically, I impose on my readers to…um…read, but here are three links to things I strongly recommend you watch or give a listen to.

1) Thomas Piketty at EPI: His book, Capital in the 21st Century, is quickly and deservedly on its way to becoming a classic, and here he is on a great panel moderated by Heather Boushey and featuring Robert Solow, Betsey Stevenson, and Josh Bivens.

A few highlights: I found Bivens’ opening remarks extremely crisp and incisive.  Solow’s contributions were also very important, especially his connection of Piketty’s main thesis—wealth accumulation is likely to accelerate in the future as the return to capital exceeds the growth rate (which they talk about as r>g)—to the secular stagnation hypothesis.  I also appreciated Boushey and Stevenson both tying human capital investments to better inputs into growth with the potential to raise future g.

2) An excellent tax policy discussion on the Diane Rehm show: just three extremely clear-speaking experts talking about tax policy and ways it might and might not be changed (I listened to this while running—learn while you burn!).

Highlights include many of the comments of Alan Viard from the right of center American Enterprise, who said much I’d agree with, including the need for more revenue and full-throated support of the proposal to expand the EITC to childless workers (they get a very small benefit now, but there’s some bipartisan interest in raising it).  OK, Viard wants to get rid of the corporate tax but a) the corporate tax is truly a mess, and b) at least he wants to raise the revenue back from the individual side.  Ed Klienbard’s response in this exchange was much closer to where I am on this issue.

3) Finally, Larry Summers again, this time talking about secular stagnation and repeating many of his admonitions on fiscal policy from his keynote speech at our full employment event.  Here’s an outstanding quote (h/t: CCH):

Somehow, the people who are worried about the deficit think that they’ve got some kind of monopoly on morality in terms of the way we care about our children. I’m here to tell you that from the point of view of my children I am a lot more worried about bequeathing them no investments in the advancement of science, bequeathing them a vast bill for deferred maintenance, bequeathing them a starved public sector that no longer functions because of attrition of all the most able civil servants, than I am bequeathing them paper debt that’s accumulating interest at less than 1 percent in real terms.

Exactly.

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4 comments in reply to "Two Things to Watch and One to Listen To"

  1. Alex Ajeto says:

    Stealing this quote….thanks!


  2. Perplexed says:

    -“I’m here to tell you that from the point of view of my children I am a lot more worried about bequeathing them no investments in the advancement of science, bequeathing them a vast bill for deferred maintenance, bequeathing them a starved public sector that no longer functions because of attrition of all the most able civil servants…” -Larry Summers

    And all of this neglects the single most important bequeath, the one that can guarantee all of the others and was the one most difficult to achieve and most important to protect:

    http://www.ted.com/talks/lawrence_lessig_we_the_people_and_the_republic_we_must_reclaim.html

    To think that we’ve voluntarily relinquished it without a struggle is incomprehensible to any who know its real importance.


  3. Perplexed says:

    -“An excellent tax policy discussion on the Diane Rehm show:…”

    Really, tax policy discussions while running? This must be way to make a one hour run psychologically simulate a full marathon right? No doubt you’re a hard-core believer in the no-pain, no-gain theory of working out!

    Yes, an interesting discussion that shed a good deal of light on the complexity of the decisions we attempt to resolve through the tax code. The “elephant in the room” that was completely ignored by all parities was the importance of real representation of all groups, in proportion, in how these decisions are arrived at. With so many lacking true representation, and so many over-represented, every change in the code ultimately results in another incremental move that skews the system in favor of the over-represented at a huge cost to the under-represented. If we don’t get the representation and power distribution right, the inequities get further enhanced and entrenched at each increment. That’s why doing things in the right order matters so much:
    http://www.ted.com/talks/lawrence_lessig_we_the_people_and_the_republic_we_must_reclaim.html DINO in name only will only lead to further degradation over time. By defining “democracy” and “representation” so broadly, will we even know when we’ve lost it?


  4. Blissex says:

    «Viard wants to get rid of the corporate tax but a) the corporate tax is truly a mess, and b) at least he wants to raise the revenue back from the individual side.»

    The cleverness with that is that if one abolishes corporation tax it becomes phenomenally easy for rich people to “shelter” individual taxes.

    They already “shelter” a lot of their income in foreign corporations domiciled in places that don’t have corporation taxes, precisely because of that.

    Tax systems are designed not just for “optimal taxation policy” from an economics point of view, but also to minimize cheating; and a way to minimize cheating is to tax a little in a lot of places, and as close as possible to where the income originates. It is then easy to introduce tax credits on taxes already witheld if necessary.


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