Comments for Greg Mankiw Hides the Role of Government in Redistributing Income Upward at http://www.cepr.net , comment 1 to 23 out of 20 comments http://www.cepr.net Sat, 18 May 2013 21:00:17 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-16086 excellent piece of information, I had come to know about your website from my friend kishore, pune,i have read atleast 8 posts of yours by now, and let me tell you, your site gives the best and the most interesting information. This is just the kind of information that i had been looking for, i'm already your rss reader now and i would regularly watch out for the new posts, once again hats off to you! Thanx a lot once again, Regards, Valuation of Land - Anonymous Mon, 23 Apr 2012 22:22:29 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15951 [b]matt[/b] wrote, [quote]Let's not overlook the biggest upward-distribution scheme of them all: land rent.[/quote] Agreed. I try to mention it whenever rent collection comes up on this blog, but didn't this time. [b]RL[/b] wrote, [quote]On its face, it doesn't seem like government spending would differ from private sector spending with regard to land values.[/quote] Of course, it depends. Many things contribute to land value, including the talented work of people long dead. The one fact, however, is that the landowner in his role of landowner doesn't make any contribution to land value, which is why taxing it at high rates is fair. As for references on Georgism and geolibertarianism, my favorite is "Are you a Real Libertarian, or a ROYAL Libertarian?". Another good one is "A Geolibertarian FAQ". - liberal Mon, 16 Apr 2012 14:44:12 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15950 Ah, yeah, I don't know why I said Henry James. Been reading a lot of stuff lately that mentions William James might be why. I'll do that Google search and see what I can find. Thanks. - RL Mon, 16 Apr 2012 12:41:59 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15949 RL: Google "Henry George Theorem." Joe Stiglitz theorized that there'd be a 1 to 1 ratio between public spending and land values, and there have been some studies which seem to show that this more or less holds true. Aside from that, it's a well-known phenomenon that when public infrastructure such as roads or railways are built, land in the serviced areas increases greatly in value. If the land rents were taxed, these projects would be self-funding. Instead, the rents are just pocketed by the landowners. Land rents are, by an immense margin, the biggest subsidies for the rich. - Matt Mon, 16 Apr 2012 12:11:24 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15947 Could you expand upon how government taxing of production and spending on goods and services crystallizes as land values? Is there good empirical data on this? For example, do countries that tax and spend at high rates see higher land values? On its face, it doesn't seem like government spending would differ from private sector spending with regard to land values. I don't know much about these sort of issues and have never heard that claim before. The whole geolibertarianism argument intrigues me, but other than Henry James's "Progress & Poverty," which I've read is rather out of date, I haven't read much on the idea. - RL Mon, 16 Apr 2012 11:55:21 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15942 Let's not overlook the biggest upward-distribution scheme of them all: land rent. The government taxes production and spends the revenue on goods and services, which crystalizes as land values, as the landowners are able to charge for access to those goods and services. Seeing as how big corporations own the vast majority of land, value-wise (and residential land is commercial banks' biggest asset), this is tantamount to straight-up stealing from the poor and giving to the rich. Few economists will mention it though. - Matt Mon, 16 Apr 2012 06:27:35 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15940 Top 10% own 73% Net Wealth and 83% Finanical Wealth plus take 50% of individual income. 70,000,000 workers get 13% of income. In OECD we rank #2 as Lowest taxed---#2 as least tax on corporations and #4 on Inequality--- Since 1980, we borrowed 14000B instead of taxing wealth to pay our way Tis a shame. Richest nation has 14,000B Total Income. Spend 3800B but tax only 2500B of 14,000B. Borrow 13000B. Disgraceful - CLARENCE SWINNEY Mon, 16 Apr 2012 05:42:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15938 We don't need to import doctors from India or China. There are plenty of kids who would like to become doctors and have the smarts to do it. However, they cannot get into medical school. Perhaps medical schools should be more like our law schools, which have pumped out far more attorneys than our economy can absorb. But then again, the whole law school problem really shows that there is no invisible hand, just as there is no flying spaghetti monster. Approximately 40% of new law school gradutates cannot find work as lawyers, and those who do are not paid particularly well for their six figure investment in a law school education. http://insidethelawschoolscam.blogspot.com/ Can we imagine central planners in the former Soviet Union producing twice as many lawyers as the economy could absorb? - High Plains Lawyer Mon, 16 Apr 2012 03:03:29 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15935 "No one should buy this garbage unless you're being paid lots of money." Pretty much the same as saying, "No one should buy this garbage." If you're being paid lots of money that makes you a seller. It's only by dint of emotional disturbance that the people who sell this garbage might believe what they're saying. Thus it is delusion, rather than belief. - Jay Schiavone Mon, 16 Apr 2012 02:02:35 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15934 [b]Dan Nile[/b] wrote, [quote]I don't disagree with the larger argument but the notion that doctors are protected from foreign competition due to special protectionism simply isn't the case. There are a lot better examples. [/quote] Completely, utterly wrong. For example, foreign doctors who didn't do their residency here have to repeat an entire residency if they want to practice in the US. - liberal Mon, 16 Apr 2012 01:40:29 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15933 One in four US doctors in foreign born and they are given all sorts of visa preferences. The comparison with autoworkers isn't apt because medical care can't be outsourced overseas, but even then, the comparison isn't favorable because we have far more demand than supply of doctors in the US. I don't disagree with the larger argument but the notion that doctors are protected from foreign competition due to special protectionism simply isn't the case. There are a lot better examples. - Dan Nile Sun, 15 Apr 2012 17:34:32 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15932 ...adding, that the ineffectiveness is due to the desire to rent-seek. - liberal Sun, 15 Apr 2012 15:33:01 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15931 [b]tew[/b] wrote, [quote]Now... how much revenue would they need to cover their costs (to remain viable non-profits)??? Here's a hint: It's much more than $30MM/yr allocation from the U.S. [/quote] The flaw in that argument is the implicit assumption that we'd need to fund the equivalent of all the pharma research going on. However, that's clearly not so. Given how ineffective the majority (if not "vast" majority) of drugs are, the phenomenon of "me, too" drugs, etc etc, it's not necessary in order to get equivalent improvements in human health. - liberal Sun, 15 Apr 2012 15:24:35 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15930 [b]Andrew Clearfield[/b] wrote, [quote]Aside from the moral bankruptcy of his position, Mankiw also makes an empirical error. He writes that "competition between states to provide services" like roads and schools can be beneficial because taxpayers will move to the cities with the best school districts and roads thereby creating healthy competition among governments and improving net social welfare. This is a central premise of the federalist position but it has been repeatedly disproven: people simply don't "vote with their legs" as the saying goes.[/quote] I don't know about that empirical finding---I'd be interested in hearing about such research---but AFAICT the gist of what you're saying is completely correct. If it wasn't correct, crazy (inefficient, etc) stuff you see in a particular state would cease if there were competition between states. But it doesn't. - liberal Sun, 15 Apr 2012 15:14:51 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15928 Once again, you proved today that anyone visiting this site SHOULD donate! I heard, "Where you spend your money, there lies your value." - James Sun, 15 Apr 2012 13:04:38 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15925 [quote]and Democrats prefer a more centralized government[/quote] Really? I'm a Democrat and I don't [i]prefer[/i] a centralized government or a large government. 5% of GDP is not that big really. What I [i]do[/i] prefer is that someone keep the greedy folks in check so that the rest of us can enjoy a good life too; nobody wants to live in late 19th century Chicago, do they? Great amounts of money yields great amounts of power, and power corrupts; what does Mr. Clearwater propose we do about the moral and ethical laxity of the upper 1%? LSTB: how many college instructors do you know? As in, eat dinner with? You are sorely mistaken about where costs flow to. Upper administration, not janitors, administrative assitants (aka secretaries) and instructors (yes there are highly paid professors but they are few, the average instructor is solidly middle class. Upper level administrators, now, that's a different animal. And sports. Do you know who the highest paid public employee in Texas is? Mack Brown, head coach of the UTexas football team. He currently pulls down $5 million. Supposedly that doesn't take away from the educational component of the school. Also, European countries begin training their professional elite much sooner than the US, and they do have to do residencies, and their full professors have a more rigorous certification than in the US system. As far as too few dental and medical schools, are you suggesting more schools with more faculty and administrators? That would mean more costs to the taxpayers, which seems inconsistent with the drift of your comments. I'm willing to foot that cost, if they all give up their salaries. But really, do you want your surgeon to have 4 years of school after high school? That's all? Are you serious? It's not like fixing your car. The advent of nurse practitioners is one way to attempt to drive down the cost of standard care for minor ailments. But having inept, poorly read doctors is not a solution the profession, nor the rest of us, can or should accept. I wonder where you got your misinformation from? A sly fox? - David Sun, 15 Apr 2012 12:34:34 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15924 [quote]We could have designed trade policy to make it as easy as possible for smart kids from China, India and elsewhere to study to U.S. standards and then practice medicine, law, and economics in the United States … This would lead to huge gains to consumers and the economy in the form of lower costs for health care, college education and other services provided by highly paid professionals.[/quote] Or we could reduce U.S. standards to make it as easy as possible for smart kids from the United States to train for these positions. Most countries don't require their doctors to spend 10 otherwise productive years in postsecondary education, or their lawyers seven years, to obtain professional degrees. Nor do they require them to take on six-figures in nondischargeable student loan debt owed to federally protected banks or the Department of Education. Universities capture any increase in available loans in the form of excessive tuition increases, which they lavish on instructors' and administrators' one-percentian salaries, bonuses, summer research grants, and occasionally forgivable loans. Supply is also an issue: There are too few dental and medical schools in the U.S. and about double the number of law schools necessary. - LSTB Sun, 15 Apr 2012 11:40:27 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15921 Yes, we're fools to pay too much for our medicines. The U.S. subsidizes the world's drug habit. But this is a laughable statement: "We spend about $300 billion a year on drugs that would cost less than $30 billion a year in a free market." It is so easy to disprove that statement. How? Well, assume all the drug companies were non-profits. Then cut the pay to executives, limiting compensation to $250k/yr max. Then eliminate the marketing budget. Make sure you include ALL companies and entities involved in drug development including the ones that currently only have R&D at this stage. Now... how much revenue would they need to cover their costs (to remain viable non-profits)??? Here's a hint: It's much more than $30MM/yr allocation from the U.S. - tew Sun, 15 Apr 2012 09:38:08 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15917 I agree with a lot of what you write here, but there's only one problem: it has absolutely nothing to do with Mankiw's argument - which is a shame, because there is so much wrong with what he says. In these two paragraphs, Mankiw simply writes that Republicans prefer federalism and Democrats prefer a stronger central government. He explains (with refreshing honesty) that Republicans prefer federalism because they're not worried about a "race to the bottom" between states. And why are they not worried about a race to the bottom? Because Republicans think that government should not be trying to equalize society via things like the minimum wage, child labor laws, and environmental laws, and so it doesn't matter if states lower their standards in these areas in order to attract business. There is nothing "hidden" about Mankiw's statement, but there is much wrong with it: mainly, it is morally repugnant. Aside from the moral bankruptcy of his position, Mankiw also makes an empirical error. He writes that "competition between states to provide services" like roads and schools can be beneficial because taxpayers will move to the cities with the best school districts and roads thereby creating healthy competition among governments and improving net social welfare. This is a central premise of the federalist position but it has been repeatedly disproven: people simply don't "vote with their legs" as the saying goes. In other words, they don't move based on the quality of gov. services they receive even when it would be in their economic interest to do so. and Democrats prefer a more centralized government - Andrew Clearfield Sun, 15 Apr 2012 08:54:07 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/greg-mankiw-hides-the-role-of-government-in-redistributing-income-upward#comment-15916 That is, the politicians and big talkers (we're weak in the pundit line in the Bay Area) all assume that the high medical prices are the result of the market, a natural reward for quality. In fact, government toleration and enforcement of market barriers up and down the line is responsible for much of the overpricing. But no one has enough skill. information, or lack of bias to see this. Even to discuss this problem would be to question the very high salaries of the people involved, often to question the security of friends and relatives. Another problem is that many big talkers' only source of information about health economics are the big gainers from this failed market. The talkers think this is only natural, don't notice a conflict of interest. Moreover, the big hospital chains are heavily involved in the funding of the mass media, both for-profit and non-profit. So who could possibly profit by noticing what is hurting the cities? None of the politicians or talkers, whether "progressive" or "conservative." It's just market forces at work, but not free markets. - Rachel Sun, 15 Apr 2012 08:03:44 +0100