Tech Policy

America at 10mph

My friend Rose from Boston, travelled through Pittsburgh, my home town yesterday. She was meeting up with her new friends that are travelling to Boston. No big deal right? Wrong!! Her and her new friends are travelling 4200 miles from Seattle to Boston. Still now big deal, right? Wrong again!! They are travelling from Seattle to Boston on a Segway. Max speed of a Segway - 10mph. The point - to slow down and "capture a true sense of what this country is all about." They are filming along the way in order to produce an independent documentary of their trip. Check them out..

The Sox Win it All!

Well, last night was quite a historic night for Boston and all the Red Sox fans. I went out to take a look at the celebrations in the streets of Boston, and I am sure that the revellers continued until the morning. Meanwhile, John Kerry finds hope in the Red Sox victory.

"About a year ago, when things weren't going so well in my campaign, somebody called a radio talk show and they said, thinking they were just cutting me right to the quick, they said 'John Kerry won't be the president until the Red Sox win.' Well, we're on our way."

May be the Red Sox have done it for Kerry's sake :-)

Why Do Americans Work More than Europeans?

I need help.
Edward Prescott, winner of 2004 Nobel Prize for Economics, had an article in the WSJ last week titled "Why Do Americans Work More than Europeans?" The article is based on a NBER research paper. Excerpts from the Journal Article:

...Based on labor market statistics from the Organization for Economic Cooperation and Development, Americans aged 15-64, on a per-person basis, work 50% more than the French. Comparisons between Americans and Germans or Italians are similar. What's going on here? What can possibly account for these large differences in labor supply? It turns out that the answer is not related to cultural differences or institutional factors like unemployment benefits, but that marginal tax rates explain virtually all of this difference.
...This analysis has important implications for policy -- and not just for Europeans, but for the U.S. as well. For example, much has been made during this election season about whether the current administration's tax cuts were good or bad for the economy, but that is more a political question than a policy consideration and it misses the point. The real issue is about whether it is better to tweak the economy with short-lived stimulus plans or to establish an efficient tax system with low tax rates that do not change with the political climate.

What does this mean for U.S. tax policy? It means that we should stop focusing our attention on the recent tax cuts and, instead, start thinking about tax rates. And that means that we should roll back the 1993 tax rate increases and re-establish those from the 1986 Tax Reform Act. Just as they did in the late 1980s, and just as they would in Europe, these lower rates would increase the labor supply, output would grow and tax revenues would increase.

Now, might there be a small increase in debt as we move to a better tax system? Sure, but remember that the most important measure of debt is privately owned government debt as a percent of gross national income, which has been flat over the past three years. Also, there is a sure-fire way to handle this increase in debt, and that would be to cut expenditures. Actually, there is another way to handle it, and that would be to pray to the Gods for another high-tech boom and the debt would go "poof," and we'll praise whoever is president for being fiscally responsible.
...The important thing to remember is that the labor supply is not fixed. People, be they European or American, respond to taxes on their income. Just one more example: In 1998, Spain flattened its tax rates in similar fashion to the U.S. rate cuts of 1986, and the Spanish labor supply increased by 12%. In addition, Spanish tax revenues also increased by a few percent.

Now, my problem is that I do not understand a lot of macroeconomics. When he says that increase in labor supply increases when tax structure is flattened, does he mean that people just work harder/longer to deliver more output?

I emphasize that my labor supply measure is hours worked per person 15-64 in the taxed
market sector.

Remember that Prescott is talking about Marginat Tax Rate on labor income.

It is the fraction of additional labor income that is taken in the form of taxes holding investment, or equivalently savings, fixed.

In his research paper, Prescott also discusses the implications of his hypothesis for social security:

If labor supply were inelastic, the advanced industrial countries would face a cruel choice of either increasing taxes on the young, thereby lowering young people’s welfare, or not honoring the promises made to the old, making the old worse off.

Help me by making sense out of this argument.

UPDATE: Arnold Kling at EconLog has some explanation.

Russia ratifies the Kyoto Protocol

Extra, extra, the Russian State Duma has ratified the Kyoto Protocol. Read more about it at the UNFCCC website.

From the BBC:

The State Duma voted 334-73 to approve the treaty, which calls on signatories to cut their greenhouse gas emissions.

The protocol still has to pass through the upper parliament and be signed into law by President Vladimir Putin.

Both further stages should be a formality, says the BBC's Sarah Rainsford in Moscow, meaning the Kyoto protocol could get final approval from Russia within the month.

Update on Climate Change Search Statistics

Update on Climate Change Search Statistics:
(Click on the picture for larger view)

"Global warming" is not included in this chart because it's searches are at a much higher level (~80,000).

"DARFUR: How To Respond To Genocide" A Panel at KSG

There's a panel discussion at KSG about the genocide in Darfur, Sudan. I can't make it, but it looks to be an important talk. If you attend, please tell me about it.

Sudan's government backed militia's have ethnically cleanses over one million people in Darfur. Tens of thousands have been killed, hundreds of thousands have been driven from their homes and abused. The US Government has declared the situation to be a genocide. Neither the US, UN, nor Europe is responding in any meaningful way.

If your going to attend this, or are otherwise concerned, the Frontline Special on the genocide in Rwanda is a powerful film. It can help prepare you for the horrors that are these situations.

***************************
MONDAY, OCTOBER 18, 2004
6:00 PM
FORUM
***************************
* "DARFUR: How To Respond To Genocide"

A Panel Discussion With:
ROMEO DALLAIRE, Former Force Commander, United Nations Assistance
Mission
for Rwanda; Lieutenant General, 35 Years of Service with Canadian Armed
Forces (Retired)
OMER ISMAIL, Director, Darfur Peace and Development
JOHN PRENDERGAST, Special Advisor to the President, International
Crisis
Group
SAMANTHA POWER, Lecturer in Public Policy, Kennedy School's Carr Center
for Human Rights Policy; Author, A Problem from Hell: America and the
Age
of Genocide (2003)
MICHAEL IGNATIEFF (Moderator), Carr Professor of Human Rights Practice,
Kennedy School of Government; Director, Kennedy School's Carr Center
for
Human Rights Policy

***************************

What is the Employment Situation Really Like?

This is fit to be in the Shrillblog. Barry Ritholtz is really shrill:

The shrinking labor force is why we have been enjoying a “deceptively modest unemployment rate.” In a post-bubble environment, job creation is an ongoing structural problem. Thus, these changes cannot be blamed on President Bush - at least not entirely. We questioned whether the Tax Cuts were over-emphasizing the stock market, to the detriment of the broader economy, over a year ago.

That turned out to be fairly prescient: We now see strong corporate profitability combining with anemic job creation to create a range-bound, exigent stock market.

Forget about the Presidential elections for a moment, and consider this: Without organic job creation, any economic recovery is doomed to failure sooner rather than later.

Read the Big Picture, if you are not already.

Another "Green" blog

This time by a guy named Joel Makower and titled Two Steps Forward. Take a look.

Atrios on Gas Taxes

It is cool that a high profile blog like Eschaton is discussing the Gas tax issue. Of course, his arguments are not new, and we have discussed those previously here on TechPolicy. I am not so much sure when Atrios says that mile based fees are not as good. I would say that they are politically more taboo than the gas taxes. (When California Energy Commission undertook analysis of mile-based fees, they met with such a resistance that they dropped the ball on it in the next round of analysis). If schemes like Pay-at-the-Pump insurance or mileage based insurance are coupled with very small mileage based fees (about 0.5-1 cent per mile), that could give a lot of incentive to people to consider their driving habits, as well as what kind of vehicles they buy.

Bush and Kerry on Science Policies

Physics Today asked both Bush and Kerry to comment on a variety of science policy issues such as Missile Defense, Climate Change, Science Investment, Nuclear Weapons, Nuclear Proliferation, Energy, and Space policy. The story is titled Presidential Candidates Speak Out on Science Policies. As the article notes, science policy is almost a background noise in this election, but never the less, there are people like us who may care about them.