Or, we could pay attention to the 10th Ammendment:
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
Instead of randomly applying variations of a law, don't federalize it. Let the states pass their own variations, and see how that works out. Sure there are other variables at play, but they mostly revolve around how suitable the law is for the people it applies to, and that's a legitimate reason for the law to vary and part of the purpose of the 10th Ammendment: local self-governance.
I believe most federal laws should be repealed and replaced with guidelines for the states to follow when designing their own laws. These would be "Best Practices" for governments. Most of the world treated the US Constituion this way as they wrote their own constitutions, and I think that worked pretty well. It should work for State governments too.
That won't work. Somehow we've gotten into Lord of the Rings Mode -- "one ring to rule them all"
We have effectively turned a distributed system into a monolithic piece of spaghetti. And now folks are suggesting that what we need -- wait for it -- is more testing.
We're effectively having all the same conversations large organizations have when creating billion-dollar POS centralized software development systems. Should we focus on requirements (listen to the voters). Should we be more clear on the impact of the change (environmental, financial, etc)? Maybe we just need some super-smart people put in the right spots. That'll fix it.
Many times I wonder: are people doomed to repeat the same mistakes over and over again just in slightly different settings? (sigh)
"are people doomed to repeat the same mistakes over and over again"
This is a common view in mainland China. Particularly, the last few years, in regards to the U.S.: "They've had a good 200-250 year run, now this arc/dynasty is coming to its end and another arc will replace it. Hopefully the turmoil while bootstrapping the next won't be too painful." 200-300 years is the generally accepted time of a Chinese dynasty. As near I as can tell, this is due to people "forgetting" their history. Written history may not be enough. You need to be able to feel it similar to those that put their lives on the line to create it.
Using the states to perform the experiments is useful, and we've been doing that for hundreds of years, but it's besides the point of the article.
The whole point is to produce sets of people that are drawn from an identical distribution where the only difference is whether the law applies to them or not. That way any changes that result can be confidently attributed to the law itself.
Right now, when we see differences between California and Iowa, there are a million other factors that may be causing different outcomes than a single law.
Random testing, particular in cases like drug trials where the technique started, also relies on neither the testor nor testee knowing who is being tested. That can't be the case for laws. So, if someone behaves differently, is it because of the law that applies to them, because of the law that applies to others but not them, or because they're being watched to see how they behave?
You know, we used to have laws like this: segregation laws. The people who weren't subject to the laws became abusive to the others, and the people who were subject to the laws rebelled against them. The situation was very unjust.
Segregation laws are by nature nonrandom. It doesn't seem very apt of an analogy to me. You're right about the fact that people might react differently when they know they are being singled out, though.
My point in bringing up segregation wasn't about the selection process, but the outcome. I believe that if two groups of people are given different variants of a law to live by, one of those groups is going to discover a way to use the difference in the laws to gain an economic, social, or political advantage over the other group. As soon as that happens, you've got state-mandated discrimination, and we already know how that turns out.
Not necessarily always the case. Anyway, the author isn't suggesting that we do this in all areas of society. Just the ones that fit the experimental structure pretty well. Using the articles examples of education and crime -- seems pretty difficult to imagine criminals gaining advantages over each other b/c they had different rehab experiences.
Also, "[using] the difference in the laws to gain an ... advantage" does not equal state mandated discrimination. It's more of a state-accepted, or allowed, discrimination. State mandated discrimination is something a little more explicit, like when Zimbabwe's President Mugabe enacted laws that took land from one racial group and bequeathed it to another.
There are already ways in which people are given different variants of a law to live by, perhaps due to selective enforcement and because people with wealth and power are given a lot more slack than nobodys. Compared to that, these sorts of experiments, limited in both scope and deployment, seem quite reasonable.
The article actually explicitly discusses your first point: that people can be affected by the experiment. It's called Hawthorne's Law, and the author discusses what types of laws might be good / bad to perform these tests on.
Your second paragraph isn't particularly applicable, because what you're describing doesn't meet the requirements to be considered a double blind randomized trial, modeling after drug testing policies.
Yes. Independent of your position on the proper distribution of power between the state and federal government, having states experiment is little better than doing observational studies. There is a reason randomized experiments are the gold standard.
It is tough to compare California to Missouri or any other pair of random states.
Lets lower taxes in Missouri on gains from startup companies. Would silicon valley suddenly move to Missouri? Probably not. Does that mean it is a bad idea for the US economy as a whole to lower taxes on startups and encourage entrepreneurship? Absolutely not.
Random testing works because you have hundreds or a thousand people with a relatively similar background and then you break them into groups and try different things. The states are so variable to begin with that you can't find two that are all that similar.
How about this: let's let the states decide how much to tax gains from startup companies. Then we could see if the states that don't tax startups have a boom in startup companies and economic growth, while states that tax startups don't.
Hey, we already do this: some states have corporate income tax, and some don't, and guess which states have more corporations registered?
If you break people into groups and say that group A won't have to pay taxes on startup company gains but group B does, then group A gets a significant economic advantage over group B which wouldn't exist if you weren't doing the test. You're discriminating against group B and if the test goes on long enough to produce results, you've probably given group A a permanent unjust advantage.
Well I lived in Delaware for 4 years, and sure a lot of companies are on paper headquartered there, but those companies are not actually there. Basically Delaware's economy is DuPont, Gore, and a bunch of financial companies. But my startup is "based" in Delaware even though not one of us still lives there. So that argument is really irrelevant.
I don't think breaking people into groups is a good idea either. I just think extrapolating from states to national policy might be a bad idea. I'm against higher taxes, but if you look at states with high taxes vs low taxes, the logical conclusion would be higher taxes. Why? Because NY, CT, CA, NJ, and MA have really high taxes but also really strong economies. Manhattan has high income, sales, and property tax, along with super high tolls and everything else, and it is one of the richest places in the country.
You can't recreate that in the middle of a tax haven even if you wanted to. At some point you make enough money that you'd rather live in downtown Manhattan and pay an extra 5% of your income in taxes than give up what you like about living in Manhattan to save 5%.
One concern is if neighboring states differed too much there would be incentive to exploit the system. We already see issues with purchasing cigarettes in low tax states and smuggling and selling them in higher tax states. States would effectively be have to have the same system its most permissive neighbor does since geography makes it so easy for illicit enterprisers to smuggle in those benefits.
Possible solutions are to coordinate neighboring state activities or to increase enforcement but each of those has its own set of problems.
You have two options: try to change your state's policies, or move to another state. Both are easier when you're dealing with a more local government than the Federal government.
If the Fed mandated the approach the state takes, then there is much less ability to push back. That's really unfair to the citizens of the state.
Funny thing about the 10th Amendment: only reason it made it into the Constitution was because the Founding Fathers made sure to reserve most powers to the Federal government in Articles I-III.
America has had a limited-power central government. The first time, it was called the Confederation, and it failed within 5-6 years. The second time, it was called the Confederacy, and it failed just as quickly. Europe's experiment with a weak centralized government hasn't worked out that well either.
The US Constitution deliberately created a strong federal government because the Founders had lived through a weak federal government and had no desire to go through that ever again.
As for that bit about guidelines: it would never work. States actively resist guidelines and best practices. Its one of the reasons that the federal government issues so many mandates to the States as a condition of receiving federal funding.
Powers are not "reserved" to the federal government. They are granted. This is an important distinction because the federal government does not innately have any powers so it does not make sense to say that some power is reserved to it in this context. It is the same way with states, but since the states ceded some of their powers (which had previously been granted to them by the people, who are considered to be the ultimate source of the powers by the predominant philosophy of the founders) to the federal government it makes sense to say that the states reserved some of their powers.
Also, the mandates you speak of should be looked at for what they are: loopholes. The federal government was not granted the power to explicitly set (for example) the legal age of alcohol consumption, so it used the loophole to effectively give itself that power. So the guidelines should never work. When the federal government tells the states to follow guidelines, they should be allowed to say "shove it" without being punished because the federal government was never given the power to set those guidelines in the first place.
I don't think you understand how mandates work. If the federal government has the direct power to issue a mandate in the context, it does so, states' be damned.
If the federal government does not have the direct power to issue laws in the context, it uses the power of the purpose to convince states to play along as a condition of receiving federal funds. The states can receive without punishment, they simply can't receive the contingent federal funds. That happens a lot in practice.
By the way: the legal age of consumption is imposed on the states through this latter method. The federal government, as you point out, doesn't actually have the right to impose a legal age of booze on wholly-intrastate lanes of commerce. So, it makes receiving federal funds for roadway/transit construction and maintenance contingent on setting a legal age equal to or higher than the federal "mandate".
I know how mandates work. I was just coming up short for a better word. You haven't really said anything I didn't already know, (possibly because you didn't think I understood the point, which is fine. I didn't do a good job saying what I meant), but I will respond to one statement.
"The states can receive (refuse?) without punishment, they simply can't receive the contingent federal funds."
This isn't really true, in my opinion. They really are punishing the states. The money they are willing to give out in exchange for cooperation does not originate with the federal government, it originates with the people of the states. By taxing the people, they are depriving the states of revenue. By not giving it back because they are not cooperating, they really are punishing them.
Article I is mostly about how the government is run, except for sections 8-10. Section 8 is powers of congress, which in summary are:
- Manage the economy
- Deal with foreign nations
- Deliver the mail
- Run a patent/copyright system
- Manage the military (standing navy, but the army is supposed to be justified every two years)
- Govern Washington DC
Section 9 puts limits and boundaries on the powers of congress.
Section 10 says that the states can't do the things Congress is responsible for.
Article II is about the president. The only real power he has is to be commander in chief of the military and to negotiate treaties. There's no new power here; the president is just in charge of a couple of items from Section 8.
Article III sets up the supreme court. No particular powers are granted here, just some definition of the responsibilities of the highest court.
There is nothing in here about "most" powers being granted (not reserved) to the Federal government. Most of the power was still with the states, who were responsible for their own internal governance and who influenced the Federal government through their Senators. The earlier federal governments were weaker than the one set up by the Constitution, but the Constitution did not establish a strong central government. The states were still largely independent, self-sufficient, and self-governing, and only gave up rights related to how they interacted with each other, other nations, and the scope of their military's.
I wouldn't say that States actively resist guidelines and best practices; I'd say they resist unfunded mandates. And the real point is that they're supposed to be able to resist. They're supposed to be self-governed and independent, and if the Federal government tries to tell the States to do something that is outside of the Fed's powers to dictate, the States should resist unless it happens to be a really good idea.
you are basing this on your public school education in a democratic state. I am sick of democracy taking credit for the gains in the human condition due to free trade.
the best form of peaceful organization of humans in order to create wealth is the joint stock corporation. no other innovation in economic interaction can even touch it when it comes to boosting the human race out of subsistence living. the venetian republic which ran on roughly this model flourished through trade for 1000 years. how many other civilizations have lasted that long? and without enslaving their neighbors?
populism has ever been the ally of dictators, because dictators know exactly how easy it is to sway the opinions of the masses with propaganda. this is one of the few points I am in agreement with Chompsky about (manufacturing consent). you can trace this through hitler and napolean all the way back through the ages to caesar.
you see a non-democratic form of government and think "autocracy" because you have been programmed to. there is a huge space of possible governments, and technology is enabling more of them to be possible. democracy is shit, it is only efficient in value-homogeneous small populations.
you can downvote away but google books means there is no more excuse for being ignorant about the shitty democratic (not political label) historical narrative of good triumphing over evil.
Note how the example is lower taxes: why don't we give lower taxes to a hundred thousand people and see what they do? But now suppose the proposal is higher taxes for a hundred thousand people. How do you think the hundred thousand people in the test group are going to react? Not too well, and probably not nearly the same way as if you raised taxes on everybody.
Isn't this one of the supposed advantages of having states, though? So that different laws can be tried out in different places under the same general societal conditions and we can learn what works and what doesn't work? And yet doesn't the Federal Government keep trying to subsume more state powers into itself?
You're asking how people would feel if they were forced into high-tax and low-tax test groups.. But suppose people are given a choice opt-in to a tax lottery system, such that instead of paying a fixed rate the taxpayer would have a random chance of paying either a higher or lower rate.
As initially reprehensible as this sounds to me, the government could make quite a bit of money by taking clues from the gaming industry. Gamification of the tax system?
If the experiment is opt-in, there will surely be a bias in the sample population. In this case, the strategy will select risk-seeking individuals, because risk-averse ones will not want to participate.
I guess that's true. But what I meant to say was that in order to arrange for the results to net a zero difference from what the government would collect normally, you're not really randomly assigning tax rates or running a lottery, you're just fixing people's rates at something other than what they would normally be.
Something about manipulating the conditions of the experiment (even a stupid thought experiment) to force a desired outcome doesn't sit right with me.
I'm guessing behavioral economists would be lapping this one up if they were given the cash to do so, but then we'd actually have some empirical proof about policy - politicians prefer to just rant for votes - far cheaper and easier to manipulate...
Yea, power always concentrates up - seemingly because coordination costs get cheaper as the pool of people decreases in size.
Well, for the record, we have tried the whole supply-side economics thing in the real world twice now, with less-than-stellar results.. I mean, there's no control group but you'd need an alternate universe for that.
EDIT: sigh. Downvote away for not liking what I said, but you can't even disagree with it, it's factual. That particular idea has been tried twice in the real world.
High marginal tax rates discourage work effort, saving, and investment, and promote tax avoidance and tax evasion. A reduction in high marginal tax rates would boost long term economic growth, and reduce the attractiveness of tax shelters and other forms of tax avoidance. The economic benefits of ERTA were summarized by President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth." Unfortunately, the Council could not bring itself to acknowledge the counterproductive effects high marginal tax rates can have upon taxpayer behavior and tax avoidance activities.
Since 1984 the JEC has provided factual information about the impact of the tax cuts of the 1980s. For example, for many years the JEC has published IRS data on federal tax payments of the top 1 percent, top 5 percent, top 10 percent, and other taxpayers. These data show that after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase. The graph below illustrates changes in the tax burden during this period.
Indeed, I'd like to see your evidence that it's bad. That evidence should be clear, in that it shows that the problem is not actually government over-spending or other issues.
quote: tax payments and the share of the tax burden borne by the top 1 percent climbed sharply
This is the reason for that phrase lies, damned lies and statistics. The top 1 percent have been getting an ever-increasing share of gross national income, so their share of gross national taxed income, hence gross tax take, correspondingly went up. Meanwhile, we're staring at a total meltdown on the demand side of the equation -- people who aren't in that top tier have seen their real wages fall consistently since the 1980s. What happens to a consumer economy when you've starved all the consumers?
I'm not saying that the tax code created that upward aggregation - technology, globalization and outsourcing labor are probably the biggest factors in that order. But it seems like a solution addressing the exact opposite of the problem.
...people who aren't in that top tier have seen their real wages fall consistently since the 1980s.
This claim doesn't pass the smell test. Can you name a single good or service (note: not a category of goods/services) which is less available today than it was in the 80's? If not, then real wages (i.e., wages measured in terms of the amount of stuff they can buy) have not gone down.
I overspoke. They've stagnated for the bottom 4 quintiles since the early 80s, and declined since 2000. For future trends, I'd extrapolate from the current U-3 and more importantly U-6 figures (they don't look good).
In general, the definition of economic concepts does not include references to specific government agencies. Are "real wages" not a meaningful concept in Mexico, beyond the reach of the BLS?
If you look at the definition of inflation (keep track of units!), you can immediately see that wages indexed by inflation == amount of stuff you can buy.
As for BLS inflation numbers, I agree that by that specific measurement, real wages appear to have stagnated. On the other hand, people today have more stuff than they did in the 80's. That suggests the BLS inflation numbers might not mean what you think they mean.
(It's actually pretty clear why they don't quite match up if you look closely at the methodology of the BLS. The basket of goods used to compute inflation today is larger than the basket of goods in 1980. A proper measure of inflation would take a fixed basket of goods at t[0] and measure the cost of the same basket of goods at t[1]. But that would require different inflation measures based on the starting year. This would be too complicated to give to politicians, so the BLS doesn't bother. )
Ok, so let's throw out the BLS inflation numbers even though they're the standard for basically everyone in academia and industry because you don't like what they say in this case? What's the alternative? I wasn't talking about Mexico, I'd defer to the canonical inflation figure for there if I were.
If you want to kibbitz about the basket of goods, fine.. but that conversation's gonna go right to "fix our egregiously broken healthcare system".
The BLS numbers are not as good as you seem to think, and many people are aware of their flaws. For example, the Boskin Commission (in 1996) concluded that inflation was overstated by about 1.3%/year (up to 1996, which includes about 16 years of the period you are interested in).
Regardless of your argumentum ad populum, do you disagree with my claim that a correct measure of inflation should not use an expanding basket of goods? If so, please explain why we should care about this quantity:
BLS-adjusted wage = (nominal wage) x (cost of smaller basket A in 1980) / (cost of bigger basket B in 2010)
So did you cancel your subscription to the Economist and the WSJ? Because they cite the BLS inflation numbers all the time, like multiple times per week.
BLS inflation numbers get cited all the time. That doesn't mean they actually show what [random pundit X] thinks they show. In particular, they don't support the claim that people have less purchasing power now than they did 30 years ago. They don't directly measure purchasing power; "real wages" is a misnomer, and a decrease in "real wages" doesn't necessarily correspond to "starving" the consumers as you claimed in an ancestor post.
When asked to directly measure purchasing power, why do you instead go for the "appeal to authority" regarding an indirect and clearly flawed method? Why not try to actually directly answer the question at hand: name one good or service that is less available now than it was 20-30 years ago, thereby establishing an actual decrease in purchasing power for the consumers you claim are being "starved".
Look, if it's the BLS with their 70 year history vs yummyfajita's basket of goods he'll throw together to try and prove the point, I'll stick with the BLS. Nothing against Mr. fajitas, he's a smart guy. But I could throw together an index that was heavy on healthcare and gasoline costs, maybe factor in average debt level and show the opposite.
I didn't throw together a basket of goods, because I think it's true for virtually any constant basket of goods. Feel free to construct your index which is heavy on healthcare and gasoline - I think you'll fail.
Gasoline won't help you much, wages have kept up with gas prices [1]. I don't see much reason to believe a basket of 1980's health care goods would help you either. All the drugs would be out of patent (and vastly cheaper), among other things. Feel free to prove me wrong.
The particular basket you pick just doesn't matter, because I don't think there is a single good we can afford less of today than we could in 1980. We drive more cars, live in bigger houses, we wat more food, consume more medicine, and we have more appliances. Feel free to cherrypick a basket and prove me wrong.
Look, CPI is a fine measure for what it is aimed at. But it is not designed to calculate real wages in the manner you seem to want it to. No inflation measure with a variable basket of goods could possibly do that.
If you think I'm wrong, please post a basket of goods which has inflated. Or feel free to go back to appealing to authorities who are misusing measures created by other authorities for a different purpose.
[2] People do consume less of some things, e.g. land line telephone service and television. But that's only because they have become rich enough to afford more attractive alternatives, e.g. cell phones and video games.
The question at hand is "how do we measure whether consumers have less purchasing power than before?"
It doesn't matter how long the BLS or yummyfajitas have been taking measurements. The only thing that matters is whether the measurement is accurately capturing what we want it to capture, and whether it shows that real ability to purchase stuff has gone up or down. The BLS measurement doesn't accurately measure purchasing power; it's misleading to act as though it does. A measure that takes the same items in 1980 and 2010 and compares wages to total price would be far better, and I contend that you would have to work very hard to create such a measure that shows what you claim.
My challenge to you: come up with the measure based on your actual spending habits. Compare your wage to that of someone in a comparable socioeconomic position 30 years ago, and calculate how much it would've cost to maintain an equivalent lifestyle 30 years ago. Unless you have very, very unusual spending habits, you'll find that your purchasing power is much higher now than someone in the same relative position in the 1980s.
So does housing(0)=a cave? We've been improving ever since.
I understand your point that for a buck we get more today than previously, but really what is happening is that the wages for the bulk of people are stagnant or shrinking relative to the measure of inflation (which over 20 years really hasn't changed that dramatically, especially when it ignores gas prices which have gone up 300% in nominal dollars in 15 years) while the tippy top are seeing their wages grow relative to that same measure of inflation.
You are argueing the point on "real wages", which I see you point, but really the problem is that "real wages" are increasing very quickly for a tiny fraction of people, and not for everyone else. How you actually define real wages doesn't matter so long as it is the same for both groups you are comparing.
Yes. The fact that a suburban house with electricity, running water, heating and assorted other amenities costs more than a cave with a firepit is not inflation.
Similarly, it's also not inflation for cheese fries to cost more than french fries.
How you actually define real wages doesn't matter so long as it is the same for both groups you are comparing.
This is true only if you want to make a relative comparison. I wasn't making a comparison at all, I was simply pointing out that everyone in the US, in every decile, has a lot more today than they did in 1980.
really the problem is that "real wages" are increasing very quickly for a tiny fraction of people, and not for everyone else
Mr. Fajitas's distinction is important. Without it, the picture being drawn is one of a declining middle class; a trend that, if continued, will see us all digging in the dirt just to live. But this is woefully incorrect. We're all better off. The middle class has much more goods and leisure time. Even the poor have more.
Really, I have trouble seeing the problem here. As far as I can tell, the real objection is simply that the rich are getting richer at a faster rate than everyone else. And that seems like nothing but simple envy.
It implies that there is a disparity in effort vs. reward, which to many seems unfair (not to mention the truly rich have no need nor use for all their money).
It is not that rich people do not deserve riches (well, some don't). It is that the rest of the people do not deserve any less.
I think the point that jbooth is trying to make is that, the wealth of the country has measurably increased since the 1980's but that increase is going mostly to the wealthy. The problem is jbooth is trying to prove this using inflation data. Indexing purchasing power to a constant basket of goods is missing the point because our production has become more efficient over that time.
But this is exactly the point he's trying to make: While productivity has increased across the board, the wealthy are gaining disproportionately from that increase in productivity. I think this is indisputable. The middle class is shrinking precisely because what it means to be "middle class" should reasonably grow with increases in productivity. However, this isn't happening. And by many measures its decreasing (say health care, college education).
The question should be then: is it in societies interest to make sure that the benefits of increased productivity are distributed more proportionally, and should government attempt to accomplish this.
The middle class is shrinking precisely because what it means to be "middle class" should reasonably grow with increases in productivity.
And it has. Every decile has considerably more stuff today than they did in 1980. More cars, bigger houses, more food, more medicine, and more education [1].
Jbooth is making the fallacy of measuring income in non-constant baskets of goods. His claim is that in 1980, median wages bought you 1 basket of goods, and in 2010, median wages still buys only 1 basket of goods. He is deliberately ignoring the fact that the basket in 2010 is bigger.
However, this isn't happening. And by many measures its decreasing (say health care, college education).
The same is true of medicine - we consume more drugs, visit the doctor more, and get more treatments. According to a quick google search, the % of the labor force producing health care has gone up considerably: http://www.doctorhousingbubble.com/wp-content/uploads/2009/1...
You might want to argue that consumption should have increased more, but it's nonsensical to argue that consumption has not increased significantly (as jbooth is).
[1] I don't like treating education as a consumption good, since it's primarily purpose is to gain credentials/skills so you can get a job.
But its not too far from being true, wages have increased very slowly vs. GDP. What _has_ risen at the same rate as the GDP is the amount spent on employee compensation, but that includes wages, benefits, and the costs of administering the first two. A lot of this is rising health-care costs that have been increasingly been met by employer provided health insurance, but part of it is just companies preferring to give compensation in ways that won't be taxed.
"The top 1 percent have been getting an ever-increasing share of gross national income, so their share of gross national taxed income...people who aren't in that top tier have seen their real wages fall consistently since the 1980s."
Actually, I find this side of the argument to fall under the heading of "lies, damn lies, and statistics." The problem with this argument is that it conflates "population segment" with "particular individuals." You see that the top one percent get a larger share and conclude that the rich keep getting richer while everyone else gets poorer. If those population segments were static, this would be true. In reality, these groups are very dynamic and people move between them throughout their lives, so when you look at "the bottom twenty percent" over a multi-decade period, you're not looking at a fifth of the population permanently trapped at the bottom of the totem pole, you're looking at many different people starting out in that position before moving up. Certainly some of them are stuck there, but most of them aren't. The top 1% is extremely volatile: I don't have any statistics handy but I have read more than once that the percentage of the top 1% who were up there ten years prior has fallen dramatically since the '70s. It's not the same people getting richer, it's new people (who used to be well below that top tier) getting even richer than the last set of top earners.
As an example, consider a typical middle-class American family: they start out as two individuals fresh out of college each earning thirty or forty thousand dollars a year: nowhere near the top 1%. As they gain experience they begin to earn more and more each year, moving up into higher earning segments. At some point they meet each other and get married, dramatically increasing their "household" income (and creating difficulties for economists trying to make apples-to-apples comparisons). In their fifties they hit their peak earning years and spend half a decade or so in the highest tax bracket: not in the top 1% of earners, but probably in the top 10% or some other arbitrary slice frequently villified as earning more than their "fare share" of income. Then their income tapers off as they transition into retirement and they fall back into the next quintile down, maybe even two quintiles down. For their entire working lives prior to retirement they saw their income grow steadily, but by taking a snapshot of their income when they were twenty-five and comparing it to the income of twenty-five year-olds from three decades earlier you come to the conclusion that "people" are earning less than they used to. I'd like to see some statistics on lifetime real compensation (not just income, but ALL compensation). I'd be willing to bet that it would show that the middle class has done quite well by themselves in the last three decades.
decisions to cut taxes on the wealthy and give very little help to the non-wealthy
This incorrectly characterizes what's been done, because you're failing to distinguish between cutting tax rates versus cutting tax revenue.
Yes, the tax rate was cut on the rich. However, the result of that was that the rich wound up paying more, but as the amount of revenue they contributed, as well as the portion of the total revenue that their contributions accounted for. Since they were accounting for a greater portion, they most certainly did help the non-wealthy.
It seems to me like you're trying to cut off your nose to spite your face. It's not good enough for you that the wealthy paid more, and paid a greater portion. I believe that you actually want to punish them somehow for being rich, even if it means that the whole system has less and operates less efficiently.
I didn't have time to read all ten installments in depth, but I'm having trouble finding the part where it proves that people don't frequently move between income bands. Can you point me to the right section, or provide a quote?
Certainly, the parent post sounds quite plausible. It seems to describe most everyone I know.
I read through all ten parts, and found nothing to refute my post: the author provides no evidence that rich individuals stay rich while poor individuals stay poor. In fact, the only piece that even touches on this subject actually supports my position: in part 7, the author notes that most of the very rich today earn their income through wages, rather than by leveraging inherited wealth.
In general, I am terribly surprised that this article received any upvotes: The author doesn't even bother at the pretense of objectivity, making no attempt to temper (or even hide) his political biases. Furthermore, I found plenty of flaws in his reasoning--here are some highlights:
The author fails to consider the possibility that the U.S. has higher income inequality than Europe because of, rather than in spite of, the lower marginal tax rates on high-income earners in the U.S. He repeatedly mentions the fact that Europe has lower income inequality and that the U.S. has lower top marginal income tax rates, but dismisses the importance of the latter out of hand rather than asking the question.
In part 1, the author conflates wealth disparity with income disparity when discussing Latin America: he mentions very poor people living in squalor outside of walled mansions and cites "grotesque maldistribution of wealth" as an oft-stated reason for societal problems in Latin America. He then attempts to refute this explanation by pointing out that the United States has greater income disparity than many Latin American countries. Wealth distribution != income distribution.
In section 3, the author discusses the impact of immigration on income inequality. He fails to consider the fact that adding large numbers of low-income workers to the economy will reduce the income share of the lower quintiles by skewing average income in those quintiles downwards, regardless of how they impact the labor market for others.
In section 5, the author analyses income growth (and disparity in income growth) as a function of the president's political affiliation. The unspoken assumption seems to be that this serves as a reasonable proxy for how liberal or conservative policies were at the time. A far better choice would have been the party in control of the house: the president can influence tax and fiscal policy greatly, but it is congress that makes policy. Furthermore, presidents tend to be less politically orthodox than representatives: for example, Kennedy set a relatively conservative fiscal and tax policy.
He finishes strong by populating section 10 with a handful of convenient straw men, which he then proceeds to tear down with great sanctimony.
About the only place where I agreed with the author was when he tied income growth to education in section 9, but he applied his same sloppy reasoning and so failed to make a very good argument. If I had disagreed with him on this point, he wouldn't have changed my mind.
Just because it's factual doesn't make it true. If you're going for the record, could you supply some good citations? The skeptic in me writes all statements like the one you just wrote as categorically false without some form of external verification.
> "Just because it's factual doesn't make it true."
May I ask what definition of "factual" you use? Because every definition I can find says that it has to be something grounded in reality and I looked it up just to be sure.
I operate on facts being something that can be shown to be true or false i.e. something that is not an opinion. Here's one I found on Google define that's close to what I've always used:
"Fact: a concept whose truth can be proved; "scientific hypotheses are not facts"
Thus, a thing that can be proven one way or the other given verifying information. Something that is factual is something that is of facts. Something can be false and still grounded in reality, because reality shows it to be false, hence your definition holds as well...because they're effectively the same thing.
That sounds more like what I would use for a definition of the word "falsifiable."
I understand the word "factual" to require that the thing so named be true, which is what I understand the definition to mean when it talks about things "grounded in reality."
I'd like some good reading on arguments against supply-side economics and its applications during those two presidencies. Even better if its from somebody who knows a little bit of what's what (you) on the topic. :)
You could structure it such that when the experiment is over and the law is either accepted or rejected, those who tried the eliminated alternative were economically compensated. It would be harder to do in cases like criminal law, though.
We then write in the test laws and see what side effects occur. When those side effects occur, we must make note of them and consider the potential exceptions.
As a second layer then we must test it on smaller populations to determine the effects. This has worked wonderfully in some situations. "Gay Marriage will destroy marriage and society" is a claim I've heard prior. So test it in Massachusetts. Several years later, no marriages on record have been destroyed due to gay marriage, and the metrics of society's stability have not moved significantly in any direction that we can attribute to same-sex marriage. So it (should) pass and become law nationally because we've observed its effects. We can observe similar for the long term effects of required health insurance in Massachusetts as we debate how things should work out nationally.
Just as we have 'human-readable code' why shouldn't our laws be machine readable? Computers can remember/understand 200+ years of case law probably better than humans. Again, this is something that we could test.
One of my friends is working on a law firm run by computers (http://www.robotandhwang.com/). Of course the machines can't show up in court or legally offer advice, but they can advise the attorney. (Law.com and ABA Journal have cited him doing this, so maybe it isn't as crazy as it sounds).
I was about to respond until I realized your post was a Swift-ian parody so sophisticated as to be almost over my head. Well done.
But if we were going to try to reduce the complicated, inherently human, and uncertain concept of law to computer code, surely you'd agree that a declarative programming language would be a better choice. Something like:
means that foo(X) is true if bar(X) is true, not the other way around. So your code would indicate that anything that's not a law is unconstitutional, and anything unconstitutional prohibits free exercise of religion (for example).
Your entire system breaks down because it hinges on the notion that there exist objective and generally accepted definitions for the things you intend to describe. Moreover, the metrics for things you describe also do not exist. While one could say that we could make them, I'd respond by saying that in itself is simply kicking the can down the road. Instead of arguing that, say, gay marriage destroys marriage, we'd be arguing what marriage is, how it is destroyed, and how it should be measured. Also, just because society hasn't changed in a measurable way does not mean that it is unaffected. To use this model would be to rely on the notion of some kind of perfect set of tests, which I personally find impractical, if not impossible.
Heck, TDD is something we have to do because we're working with languages that aren't powerful enough to give us a clear precise spec of what we're writing a program to do. While it can help you weed our corner cases in your code, it doesn't produce a formal description of how your program works. The same goes for society. We can use something like TDD to look for corner cases and things we don't like, but ultimately (granted it would even work, which I doubt) we'd only be looking for things that the test writers didn't like and wanted to weed out.
Automated legal interpretation makes sense if you're looking for edge cases to get out of something or you're trying to do your taxes, but for other things it does not (1st, 2nd degree murder vs manslaughter, for example). Laws are just as much about their interpretation as they are about what's on paper. These interpretations tend to evolve over time with what society finds acceptable and proper, and I'm totally cool with that. Now if you have a machine that needs updating in this regard, how he heck do you keep it updated?
I'd venture to guess that legalese may almost be easier for NLP to interpret than modern English. It seems much more structured. I think automated interpretation of laws could definitely be used in an area like tax law. To be honest, I think it's completely unreasonable that it has not been done so already. Why do millions of Americans have to pay some intermediate body to do their taxes for them because the tax law is difficult for them to understand? Why do we write administrative rules that are so difficult for everybody to understand, full well knowing that everybody must understand them for society to function? That, to me is absurd.
> Just as we have 'human-readable code' why shouldn't our laws be machine readable? Computers can remember/understand 200+ years of case law probably better than humans. Again, this is something that we could test.
Great website, however I'm going to play a straight bat on this one.
While I think expert systems have enormous potential to reduce costs and errors in legal matters, the fact remains that when the law is against your client, you must still try your level best to generate a new exception if they insist on going to court against your advice.
There is also the problem that large parts of the law rely on judicial or executive discretion, thus leading you computer to do what lawyers do: say "maybe" and bill you $600 for the time to say it.
This kind of testing is already done in certain contexts. I am thinking specifically of air quality and automobile efficiency standards which are "tested" in California before being rolled out to the nation. However, this is only allowed because California has special exemptions from federal law in these contexts. It is important to note that scale and scope are critical-what may be efficient/optimal in one locale may not be so in others, or at larger scales. E.g. fuel standards and national energy profile are arguably under legitimate federal authority... other issues not so much. Also important to point out that the "optimal" and "efficient" are not mutually inclusive or absolutely defined-preferences, for better or worse, are king.
Why stop at new laws? Existing laws should be relentlessly reviewed for relevance.
One issue I see with random sample law experimentation is blindness to effects which only crop up when everyone is subject to a law. Take for example gun control. If a small sample of folks aren't allowed to have guns there may be little negative fall out. But taken to the extreme if gun ownership is illegal than by definition only law breakers would have guns making the random burglary or home invasion far less dangerous for criminals and far more dangerous for law abiding citizens.
This is the reason why jury nullification exists. It's just a shame that most citizens have no idea that it either exists, or is a valid choice when serving on a jury.
A problem with jury nullification is that the interactions between laws is complex and can easily have unintended consequences. I am overall in favor of jury nullification, but it requires an educated jury. The complexity of our system of laws makes that very difficult.
An interesting issue. One way around it would be to enact the law in two states that have a similar environments. Continuing the example with gun control if there were two states with similar situations, both of them have an abnormally high gun crime rate, one of them could serve as a control state. If say 10 pairs of states were compared it would serve as a reasonable experiment on whether the law should be passed nation wide or not. Even better if evidence comes up that passing the law would only be beneficial in certain circumstances then it would help reveal the underlying causes of the problem in the first place.
Gun control is a case where there's probably enough data to do interesting analysis if someone were to collect it and study it without trying to make it show a specific result. Noteworthy data points would be the first derivatives of gun crime, non-gun violent crime and burglary rates before and after specific gun control measures were passed or repealed.
There is a fair amount of evidence that gun owners are less safe than non gun owners, and societies with higher levels of gun ownership tend to be less safe overall. But, changing gun laws don't alter the prevalence of gun ownership vary quickly so it's hard to such analysis with idential populations.
There's also the fact that correlation does not imply causation. The possibility of a common cause is fairly obvious here: people who are at higher risk of being the targets of crime may be more likely to buy guns for protection, and people who are armed may be more likely to become involved if they see someone else being attacked.
Yep, while hiding and calling the cops is generally safer during a robbery, the attitude that causes people to defend their property is the same one that results in gun ownership. Add in people being shot with their own weapons and the home protection benefit becomes very complex. There is an idea that gun ownership deters criminals but at the same time it promotes criminals buying guns escalating the situation.
PS: For a somewhat less contentious example, video games have been linked with a significant drop in crime. However, because that does not agree with their biases people focus on the direct effects to support their argument.
I think you'll find there tends to be a correlation between using [protection against bad thing] and being at risk for [bad thing]. As an example, I'm fairly certain you'll find a correlation between wearing a helmet while driving a car and being injured in car crashes because most people who wear helmets while driving are racing or doing stunts. I also suspect people with burglar alarms lose more money to burglary than people without if no other variables are taken in to account.
I don't think an unbiased study has been done that accurately identifies causes looking at gun ownership and crime. My suspicion is that it would be possible to do, as I described above.
Add in people being shot with their own weapons...
This is a pretty minor effect, unless you are including suicides. In 2007, there were only 613 accidental firearm deaths. For comparison, there were 1039 "transport, other" deaths (I believe this means plane/boat crashes).
All of these numbers are fairly low. Adusting for the percentage of gun owners and you end up with a higher rate than just 5% of all deaths from firearms being accidental. And when you start looking at low risk populations (for violent crime), accidental death from gun ownership is fairly significant relative risk.
Yeah, it looks like the author is a dickwad with a big ego. I don't plan to invite him to any parties.
However, the scientific criticisms of his methodology hardly look damning (according to wikipedia). It doesn't look perfect, but it doesn't look terrible either.
The criticisms wikipedia lists: he used cocaine prices rather than cocaine consumption as a variable, if you remove smaller counties +florida the drop in murders becomes statistically insignificant (drops in assault and robbery are still significant), and a couple of critics believe the model has bias and coding errors. As I said, I haven't read it in detail, so I won't comment on how significant these are.
I'm not sure it's clear that carrying a gun makes crime safer for the average criminal, though I think it is clear that armed homeowners make crime more dangerous for criminals. My impression is that when guns are hard to get, crime goes up, but the number of criminals carrying goes down.
However I'd be concerned that the law would work differently with a subset than the whole population. For instance take a law banning cellphones while driving. If you try to apply this to half the population, then the police aren't going to try to apply it because at least half the time they would be pulling over people who are allowed to use cellphones. But if you pass the law for all of the people, then the police could enforce it. So you try to solve this by saying that it will be selectively enforced according to location. But now you've gotten rid of the random selection that is the heart of evaluating the statistics.
For another example, look at the tax cut example they were discussing. The challenge here is that the touted economic benefit of tax cutting is that people with lower taxes spend their money, increasing circulation, and general prosperity. (And eventually improving tax revenue.) However there is no way to economically separate out the people you're giving the cut to from those you aren't. Therefore any economic change cannot be attributed to the tax cut, and you're unlikely to get a clear economic difference. (Other than that the less taxed have more disposable income.)
That depends on whether or not license plate numbers are assigned by county, or by driver last name, or some other nonrandom criterion. And in some states, significant numbers of drivers choose their own customized license plate numbers.
I don't think you could test taxation, for a number of reasons.
First, you don't have time to measure the effects of funding changes. How do people behave with the new services funded by the taxes, when you aren't collecting enough to provide them anyway? Does the government go bankrupt? No, because revenue was not changed significantly due to the small size of the test.
Second, sample populations are unlikely to exhibit the same behavioral traits of large-scale populations. For example, if you applied a tax increase to a limited segment of the population the first behavior change you would see is that people would try to escape the test group.
For something like a sales tax this is even more obvious. The overall rate of taxation matters much less than the rate relative to a competitor. It's a free competitive advantage and of course behavior will change-- the untaxed businesses will be more likely to thrive and grow while driving their competitors bankrupt. When everyone has the same tax rate they have to find real market advantages.
The whole point of taxes is that they are applied universally as much as possible. Everyone contributes a little bit so that the society can have things that benefit everyone but the market is unlikely to ever provide. NPR just discussed autopsies as an example of this. Understanding why people die is good for the public, yet only the most altruistic individuals are inclined to pay for an autopsy of their own loved ones.
While I suppose it is possible to design test runs of tax laws, I doubt it will ever be as simple as picking a "representative sample of 10,000." There are probably only certain kinds of laws that can be tested, and tax laws probably aren't among them.
What is the purpose of passing a law? I submit that its primary purpose may not be to bring about a change in the behavior of those subject to it, but rather, as a signaling mechanism by which a politician can say to those in his party, or his constituents, "I'm playing on your team".
We see time and time again regulation that is known to be worthless or even destructive even before it's implemented (e.g., CAN-SPAM, airport porn scanners), yet bureaucrats stand behind them, and even trumpet their "success", just the same.
Recent threads here have discussed whether voting behavior is really based on weighing issues, as opposed to signaling one's identity as a member of the "club" (party, special interest, etc.). If this is true, then it's only logical that the politician's job is to make it know that he is the representative of that "club", and actual goodness of his work isn't particularly relevant.
> I submit that its primary purpose may not be to bring about a change in the behavior of those subject to it, but rather, as a signaling mechanism by which a politician can say to those in his party, or his constituents, "I'm playing on your team".
Another important purpose is encouraging support.
For example, one of the best ways to get bankers to contribute to your campaign is to propose banking regulations.
It would follow that the ultimate law would be one that sent a strong signal to your base and had very few people who could appear on TV and say they were directly harmed by it.
For some reason the tax code comes immediately to mind.
I've advocated this for a while in a somewhat obvious field, traffic law.
However, there's a flaw; science in the political arena is subject to interpretation. In VA, we've gone through this with red light cameras. For a while they were authorized at a few intersections to see if they reduced accidents.
But a few years later, red light cameras are back, the whole study thing having been an annoying thorn in the side of politicians, who like red light cameras (because they are perceived as good for safety, for money, whatever - who knows?)
How can the same study come to opposite conclusions? That's politics. In any case, the politicians decide what they want to do, and then change the science to suit.
After all, can you really imagine a politician saying "I supported X fully, until the results of the study came out, and clearly, X is not effective, so I no longer support X?"
Surely this is a prime candidate for the Hawthorne effect?
From Wikipedia: http://en.wikipedia.org/wiki/Hawthorne_effectThe Hawthorne effect is a form of reactivity whereby subjects improve or modify an aspect of their behavior being experimentally measured simply in response to the fact that they are being studied, not in response to any particular experimental manipulation.
this sounds smart until you realize that would mean giving up the principle that the law treats everybody the same, which we always complain about the politicians doing.
I see this as a possible problem that would have to be considered when such an idea is implemented but not something that stops the idea dead in its tracks because it is fundamentally opposed to the principle of equality.
You would have to make sure that the tests are truly random (everyone has an equal chance of being selected), that they run only for a limited and pre-determined time which cannot be extended and that the differences to existing laws is not too big (e.g. people shouldn’t suddenly become multi-millionaires because some law was tested on them).
Such tests would then no more or less contribute to inequality than, say, jury duty.
Hmm..Hacker News' love of A/B testing also applies to laws, apparently.
Also, isn't one of the arguments for stronger state laws and weaker federal laws very similar to this proposal? That is, if you give states greater autonomy, it's easy to test the effects of laws and give citizens choice over which laws they'd like.
I'd be happy if they developed a protocol for testing the constitutionality of a law. That would have to be part of any experiment, since the effectiveness of a law is irrelevant if it's unconstitutional.
>Randomly assign a representative sample of the population - say, 10,000 taxpayers - a lower tax rate, and see what happens.
This assumes the tax rate only affects the individual paying tax; but taxes are used at least in part to finance public goods - positive externalities that also affect individuals. If a random group of people personally pay lower taxes but still benefit from the available public services that other taxpayers are still funding, that doesn't tell us anything useful.
Unfortunately, the federal aspect of the US government has almost disappeared as a result of the 16th amendment and the 17th amendment and a few other factors such as mandates that the states must follow in order to receive federal funding. The US government is now plainly a national one.
Experimenting on humans with a system backed by the use of force would be despicable. What happened to basic respect for each other?
<snark>
Anyway, if we want to know how a group behaves when lawbreaking goes unpunished, we need look no further than the FIRE industries, Congress, and the current Cabinet.
</snark>
The idea that raising taxes increases revenue has been shown to be untrue with actual taxation data time and again. A good resource for cause and effect with taxation is "Hauser's Law": http://en.wikipedia.org/wiki/Hausers_Law
Maybe we could also put the laws into source control, be able to roll back to a "known good" state and have a "blame" command for who introduced changes that screwed everything up.
Unfortunately, politics is largely in the realm of emotion. And people hate being proven wrong.
I firmly believe that the next major system of government to emerge in the future will be heavily influenced from the lessons learned in governing social media communities.
The idea of A/B testing laws seems like it would fit into this pretty well.
Effective methods to elevate political and social discourse above the level of ideological debate would be revolutionary. Empirical testing of proposed legislation should be implemented as soon as possible. In controversial cases where experimentation doesn't lead to satisfactory outcomes, thanks to ideological intransigence, the method should be supplemented with a proposal that I call Bimodal Politics.
Technology could be used to manage controversial political issues, for which the distribution of voters is bimodal and for which there is essentially no middle ground. Such issues include abortion rights, stem cell research and gay marriage. Through the system of bimodal politics, voters would live in parallel legal and political worlds, with different rights and obligations to the state depending on how they voted.
Where controversial legal and political matters are concerned, the distribution of opinion involves roughly equal and opposite numbers of equally-informed, impartial rational voters. (Some would contend that for issues such as abortion, a few vociferous opponents give the misleading impression of a much larger opposition, but until this is established, we will proceed as if public discourse reflects a genuine controversy.)
Although the voters on each side of a controversy may not see the other side as rational or equally informed, one essential feature of controversies is that they cannot be decided by common morality, and they have to be transferred to the legal and political system for resolution. The legal and political system can attempt to resolve controversial issues one way or the other, but it is understood that the resolution is provisional and does not resolve any underlying moral issues.
Deciding controversial issues one way or the other is inherently unstable. What if it were possible to decide issues in parallel, in such a way that each group in a controversial issue imposes rights and obligations only upon itself and no group imposes its vote on the members of the other group? Is there a procedure that would result in less political and social instability than deciding one way or the other for all voters?
Bimodal politics attempts to provide a legal and political mechanism for resolving politically controversial issues, with the understanding that it provides a political decision procedure: it does not address the underlying moral issues. In outline, a database is maintained of voter preference on controversial issues that are designated bimodal issues. Your vote is recorded by the bimodal voter database. Your vote determines your rights and obligations to the state on that particular issue in parallel with those voters who voted oppositely, and who may have (and probably have) different rights and obligations under the state.
Consider stem cell research. Under the proposed system, stem cell research would be designated a bimodal issue. During an election, your vote on stem cell research would be entered into the database. If you voted in favor of stem cell research, you may be taxed to support it, your embryos may be harvested for stem cells (these may be from embryos slated for destruction in any case) and if you develop a disease that requires stem cell derived therapy for its treatment, you will be eligible for it.
If you voted against stem cell research, you will not be taxed to support it, your embryos will not be harvested for stem cells and if you develop a disease you will be prohibited from pursuing treatments derived from stem cell research.
Abortion is another issue that would be designated a bimodal issue under the system of bimodal politics. If you vote against abortion, your tax dollars will not be used to support state-sponsored family planning programs or sex education, and you will be legally barred from having an abortion if you are female. If you are male and you impregnate a woman who has an abortion, and you voted against abortion, you will be held legally liable.
In either case, if you voted against abortion and your fetus or your partner’s fetus is aborted, you will be prosecuted by the state. However, if you voted in favor of abortion, your fetus can be aborted, and your tax dollars may go to support state-sponsored family planning programs and sex education.
These examples illustrate the slogan that under bimodal politics, you live in the world you voted for.
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
Instead of randomly applying variations of a law, don't federalize it. Let the states pass their own variations, and see how that works out. Sure there are other variables at play, but they mostly revolve around how suitable the law is for the people it applies to, and that's a legitimate reason for the law to vary and part of the purpose of the 10th Ammendment: local self-governance.
I believe most federal laws should be repealed and replaced with guidelines for the states to follow when designing their own laws. These would be "Best Practices" for governments. Most of the world treated the US Constituion this way as they wrote their own constitutions, and I think that worked pretty well. It should work for State governments too.