The problem is a puzzle, he said. 'No one has the slightest idea what will work. The cupboard is bare.'"

Exactly. Any economist knows economic rent gains from monopoly and monospony market power passed from one generation to the next is a myth.

Prices higher than economic cost always induce entry to dissipate these gains across the broader population over the long run.

As long as competitors can choose their parents under the bastion of free market capitalism efficient markets will yield fair and equitable outcomes.

Let the cupboard of overwhelming information remain bare and produce Hayekian gains that only markets can achieve collectively that individuals cannot.

Stupid liberals.

Yet another superlatively stupid idea from izzatzo: that people can choose their parents. Will someone please tell me how I choose different parents because I’m not too satisfied with Mum and Dad - I’d like to trade them in for new models.

History has been a continuous battle between worker's rights and the forces of Capitalism to maximize profit. Labor laws and labor unions in general increase fundamental worker's rights and provide a base for the working class.

Raising the federal minimum wage to $10 an hour and indexing it for inflation would be a good first step towards realigning productivity gains with wage gains in America.

Eliminating the 1.2 trillion dollars of annual tax expenditures with stand alone policies would save hundreds of billions of dollars a year which could be used to reduce our long term deficit and rebuild our educational system.

A 0.1% tax on financial transactions would generate around 100 billion dollars a year which is about the projected annual shortfall in national infrastructure spending. Taxing Wall Street to rebuild every street would greatly reduce unemployment and income inequality.

Taxing wages from work and interest from investment the same would also reduce income inequality.

And let's not forget the top factor that causes bankruptcy, medical expenses. Oh yeah, and having children is the number 1 predictor of poverty.

Who's for universal health care with contraception included for everybody?

Yet another superlatively stupid idea from izzatzo: that people can choose their parents.

izzatzo has a point; however, the problem is that the babies in poor households do not have any morals. As Charles Murray would say, if your parents are hopeless hippies with no dignity, then you, as a 1 year old, are morally obligated to strike out on your own and seek rents in the free market. The cupboard may be bare, but at least it includes an ethical manuscript.

Stupid occupiers.

izzatzo,
Satire is a hard way to make a living in the US. Nobody understands it.

It is not necessary to reduce pre-tax income inequality to make spending on children more equal. One obvious answer is to tax higher incomes more - maybe at levels that existed 50 years ago when inequality was least - and spend the money equally through public education. Mention of increasing taxes is taboo in the media, so it is not mentioned in the article.

State and local taxes, which are the main support for public education, are highly regressive. Kevin Drum had good post on this (Soaking the Poor, State by State):

http://motherjones.com/kevin-drum?page=3

One idea that doesn't involve reducing income inequality-- abolish private schools:
http://www.theatlantic.com/nat...s/250564/

This is assuming that the main objective is to improve aggregate performance, and not to flatten out education outcomes per se.

skeptonomist,

Thanks for the Mother Jones link.
"Serious" discussions of increasing taxes are not only taboo, they are out and out censored.

Vouchers to poor kids in DC were oversubscribed until the elites bowed to NEA pressure and got rid of them. School choice seems to be the only way to punish ineffective schools/teachers and they obviously don't like the pain. Oh, never mind, Obama is relaxing compliance with national tests.

Regarding more taxes, hmm...my total rate (15% SS and medicare, fed income, state property) is around 60%, and that's ignoring sales taxes. You could try and squeeze more but it would be painful.

Satire is a hard way to make a living in the US. Nobody understands it.

I dunno, reason, JSeydl seems to have a pretty good handle on it.

Either that or tariffs on low-wage imports combined with a time-out in mass immigration.

Hey, pete, go teach in any public school and then tell me that all parents want what's best for their child. It's simply not true. Sure, parental neglect leads to behavior problems and low educational outcomes, but that's not the whole story. Many kids with poor outcomes (generally poorer, but not always) have parents that come to the parent teacher conference and say "don't tell me how to raise my kid: if they want Cheetohs for dinner and watch TV or play video games all night instead of studying, so be it." How can any teacher be effective in the face of that? So what do effective teachers do? They get a much better paying job in the private sector that values their talents more. Sure there's ineffective teachers, but there's far more ineffective parents, the teachers are outnumbered.

Pete can ridicule the PotUS, and encourage the general population to by doing so, and yet want somehow , via magic I suppose, that families across the nation will begin to value education; but a valuable education won't result from a teacher who is not respected and forced to teach to a test that doesn't test much, other than the ability to mimic learning. What these tests are really about is massive amounts of money to be paid to testing services out of local coffers. It's a waste and should be stopped. I live in Texas, I've seen them first hand, it was a waste of my kids' time. There are better ways to enforce effectiveness.

The cupboard isn't bare, not hardly, but the ones with the ideas and the full larders get cut out of the conversation.

From the article freebird linked to (see above):

As for accountability of teachers and administrators, Sahlberg shrugs. "There's no word for accountability in Finnish," he later told an audience at the Teachers College of Columbia University. "Accountability is something that is left when responsibility has been subtracted."

"Tests as a means of accountability" is a farcical means to ensure quality. From that same article:

Decades ago, when the Finnish school system was badly in need of reform, the goal of the program that Finland instituted, resulting in so much success today, was never excellence. It was equity.

Dean, why do you want to remove protective barriers for white collar professionals so badly? Why not add protections for all workers? It's generally best to avoid race to the bottom situations.

We have to understand this. That is the way the economy works. The right understands it well, which is why they push down wages of middle class and working class workers whenever possible.
If we refuse to pay attention to economic we will lose. We can't afford to be ignorant on these things.

Does the US suffer from a paucity of lawyers and architects? To what extent is the supply of doctors in OECD nations responsible for lower health care costs? Why not an expansion of medical school here or an expansion of the utilization of midlevel providers such as NP's, PA's, dental therapists? Will other countries welcome retirees who buy into their health care system? Is it really that easy to immigrate to another country? What is the predicted net effect on the supply of doctors with more foreign doctors coming to the US? If doctors are compensated less do consumers realize those savings or do our for profit insurance companies?

skeptonomist wrote,

State and local taxes, which are the main support for public education, are highly regressive.

Not all of them. Property taxes aren't regressive.

Skeptonomist,
Property taxes are deductible if you itemize so this tends to help higher income earners.

Dean, I don't see how eliminating "protection" of doctors and lawyers from international competition will correct the enormous income inequality that exists in the USA at this time. As for lawyers, it was my understanding that many US law school grads are unemployed or underemployed at this time. What would bringing even more lawyers into this market accomplish beyond even more unemployment? As for doctors, there already seem to be plenty of those as well. You have to take into account the fact that many of the jobs doctors used to perform are now performed by physician assistants, nurse practitioners, and so on. At least some of the expense of seeing a doctor is tied into the lab tests (blood tests, x-rays, MRI, and the rest) was well as malpractice protection etc etc, all of which will still be present for doctors with overseas degrees. That would mean that even these doctors would only be able to offer high cost health care. Many physicians (most, perhaps) aren't earning exorbitant incomes to begin with(I myself am proof of that!). And, as a matter of fact, there are already plenty of doctors with overseas degrees in this country, are there not? Which brings me to my last point. It is my understanding that there is ALREADY a tremendous drain of physicians OUT of the countries you seem to suggest would serve as the repository from which these income inequality rectifying doctors would come. Wouldn't your suggestion to bring foreign doctors to the USA to reduce income inequality here end up making health care even less available in those countries?

Kat wrote,

Property taxes are deductible if you itemize so this tends to help higher income earners.

To the extent that the taxes fall on land (with zero elasticity of supply), that's not true, insofar as the tax advantage is already capitalized in the land price.

Very valid points, I was holding constant that some parents are of course the biggest problem, but assumed everyone knew that. Given that momentous problem, and working at least on the margin, assumedly parents taking advantage of vouchers or other choice options are a little more caring.

Liberal,
I'm not quite sure what you're saying but I'll take your word for it. You sound smarter than me.

More supply will mean lower wages for doctors and lawyers. This is true even if some lawyers are already unemployed, just as more dishwashers means lower wages for dishwashers even if there are already some unemployed dishwashers. Wages for doctors in Europe average about half of wages here, so there is a lot room to bring them down. (Wages for autoworkers are higher in Europe -- so it is not a question of lower wages in general.) And yes, lower costs generally do get passed on, otherwise insurers would already be charging more. We would save about $100 billion a year (almost two Bush tax cuts for the rich) by paying our doctors what they get in Europe.

Kat,
It's actually not that complicated. It just comes from the theory of tax incidence.

Even if buyers don't have the explicit knowledge, the fact that there's a tax write-off has to be reflected in the price of a home. You can think of it as a negative tax.

Just like a normal (positive) tax, a tax subsidy's effects aren't immediately obvious. It depends on the supply and demand curves.

The supply of land is fixed, however, unlike the supply of most things we deal with in life. If you look at the supply and demand curves, that means (if you believe the standard economic theory about such things, which is pretty reasonable) any future tax subsidy (in terms of the tax/subsidy falling on land) will be completely reflected in the price of the land now.

Tax incidence theory says other interesting things. For example, the employer side of the payroll tax is remitted by the employer, but that doesn't mean it's truly born by the employer. Depending on the slopes of the demand and supply curves for labor, the fraction of the payroll tax born by the employer and employee could be many different values. Most economists think that most of the payroll tax falls on the employee.

Re re estate, note that while land is in fixed supply ("no one's making more land"), improvements (structures like houses) are not in fixed supply. So the incidence of the tax depends on empirical numbers.

The real issue re school choice and related issues is whether the schools have to take all comers.

A big disadvantage facing a tradition public school is that they have to take any student, and have no means (other than things like suspension/expulsion) to filter students. Private schools face much easier constraints in that regard. So to compare public and private schools (given the impact of disruptive students, students with various disabilities, etc) is ridiculous.