Relevant and even prescient commentary on news, politics and the economy.

The Art of Conservative Persuasion, Don Boudreaux Edition:

Being an economist can be frustrating.  Most people do not understand how markets work, and economists spend a good deal of time arguing against bad policy ideas that appeal to non-economists, and for good ideas that do not appeal to common-sense.  This can sometimes feel like pushing rocks uphill.  Plus it can lead people to suspect that you are carrying water for the corporate rich, which is unpleasant.
But what is it like to be an extreme right-wing economist?  If Don Boudreaux is any indication, it’s frustrating!  Boudreaux’s hero, Friedrich Hayek, understood the importance of reaching out to his intellectual opponents.  At least at times Hayek attributed good motives to socialists.  Boudreaux has pioneered a new approach:  insult the people you disagree with.
This is a hoot:

Okay, so what I’m about to do is a bit unfair to protectionists; indeed, it is pure consumption for me: I’m going to poke fun at Warren Platts (once a frequent protectionist commenter here at Cafe Hayek and still a commenter at EconLog). The reason that what I’m going to do here is unfair to protectionists is that, although even the most-able protectionist is armed intellectually only with the equivalent of a nerf gun, these nerf-gun-toting protectionists possess far more fire power than Mr. Platts brings to the battle between protectionists and free traders.

Still, I confess to having no patience with persistent protectionists such as Mr. Platts. It’s not a crime to be ignorant and misinformed, but it’s vile to cling stubbornly to one’s ignorance and misinformation in order to justify state predation against innocent people – which is what protectionism is. And so I here gleefully expose a true howler – one that must be read to be believed – that Mr. Platts deposited on this recent EconLog post by Pierre Lemieux.

Gee, I wonder why Platts doesn’t post at cafehayek anymore!  As they say, read the whole thing (for the details of Platts’ “clueless nitwittery”) . . .

Fair and Balanced? Tyler Cowen on Wolff on Wealth Taxes.

Here is the abstract of a new paper by Edward Wolff:

The paper analyzes the fiscal effects of a Swiss-type tax on household wealth, with a $120,000 exemption and marginal tax rates running from 0.05 to 0.3 percent on $2,400,000 or more of wealth. It also considers a wealth tax proposed by Senator Elizabeth Warren with a $50,000,000 exemption, a two percent tax on wealth above that and a one percent surcharge on wealth above $1,000,000,000. Based on the 2016 Survey of Consumer Finances, the Swiss tax would yield $189.3 billion and the Warren tax $303.4 billion. Only 0.07 percent of households would pay the Warren tax, compared to 44.3 percent for the Swiss tax. The Swiss tax would have a very small effect on income inequality, lowering the post-tax Gini coefficient by 0.004 Gini points. The effect of the Swiss tax and Warren tax on wealth inequality is miniscule, lowering the Gini coefficient by at most 0.0005 Gini points.

Here is how Tyler Cowen linked to the paper today on Marginal Revolution:

The effect of the Swiss tax and Warren tax on wealth inequality is miniscule, lowering the Gini coefficient by at most 0.0005 Gini points.

I don’t have a strong opinion on the Warren wealth tax proposal, other than wondering whether it makes sense to push for a tax that may well be found unconstitutional.  But one could certainly approve of the tax as a source of revenue even if its effect on overall equality is small, no?

Do we need a World War II style mobilization to decarbonize the United States Economy?

The American Prospect has a new issue out on climate change, and I highly recommend the article by Jeffrey Sachs.

Sachs does an excellent job explaining why we do not need a World War II style mobilization to decarbonize the United States economy.  We can achieve a high level of decarbonization by 2050 at a modest aggregate cost (Sachs guesses 1 to 2% of output) by replacing existing power plants, vehicles, furnaces, etc. with green technologies at the end of their useful lives, using the resources that would have been used for this purpose anyway.

Sachs also explains very clearly how accelerating the timetable for a clean energy transition will greatly increase the cost and economic disruption for small gains and is probably not justifiable.  This point does not seem to be widely understood.  Here is Sachs:

Consider, for example, the challenge of decarbonizing the U.S. fleet of some 200 million light-duty vehicles. Suppose, as an illustration, that cars last for 20 years, and that ten million vehicles are currently retired each year and replaced with ten million newly produced vehicles. The industry’s production capacity is geared to ten million sales per year. In order to shift the U.S. automobile fleet to electric vehicles, the industry must be retooled.