Friday, January 12, 2007

Greg Mankiw Swings and Misses

Above find Dr. Mankiw's inaugural response to CaptiousNut!!!

That is in fact a truncation of my comment above the vaunted professor's. First read his original blog post - Pigovian Questions. Here is my comment in its entirety,

CaptiousNut said...

"all taxes are too common"???

Anyone that thinks that is a simpleton?

Greg tries to paint himself as the realist which I find quite ironic. The reality is that taxes have always been an end-around for more and bigger government.

In theory, one tax raise could be offset with a decrease elsewhere. But I thought Greg was trying to be realistic - when has this ever happened?

I don't buy his "there will be we should use the least bad ones" excuse. Nor do I buy his profession that he thinks government spending is too high. If he had just one-tenth as many "cut the government down to the bone" posts as he had Pigou Club posts it'd be more credible. As it stands, his blog can be summed up as just one big ad for gasoline taxes, for the abolition of Red State agricultural subsidies, and an unending humoring of the "inequality" debate. Can you say "class warfare"?

The empirical, real-world externalities of socialism are far worse than the hypothetical externalities of carbon emissions.

I make no distinction between socialists and those that harbor them - unwittingly or not.

As of yet, no one has ever answered my question from way back:

Why not limit cars to 16 mpg instead of a gasoline tax?

The background of this is of course Greg's Wall Street Journal editorial that proposed to add a $1 tax to every gallon of gasoline sold (on top of the current 50 cent burden). He's been on this long crusade to get politicians, economists, and other pinheads to join this "Pigou Club". This nonsense is little more than his transparent job audition for a future tax-raising Democratic Administration. Click here to read his editorial. And this link will give you more context if desired.

My response to Dr. Mankiw's mistake,

For you Morons, I suggested banning Yugos and Camrys NOT Hummers and 10 mile per gallon clunkers, as Mankiw and one of his toadies mistakenly inferred. A population driving Chevy Suburbans would drive a heck of a lot less, ergo there'd be less "congestion".

Note that I eschewed all acerbity in my response to Mankiw even though he was DEAD WRONG and called me "Mr. Nut". His larger portfolio of folly is my concern, not a single overly-Captious misread.

But his response did reveal a couple of things. First it demonstrated his latent, but predictable, hostility towards me. I took a screenshot of the comment thread immediately for fear that he'd erase his embarrassing jab.

It also showed that he's both tunnel-visioned and tone deaf regarding the gasoline tax. I have proposed my ingenious solution to congestion on his blog more than a few times, so he should have been aware of my idea. Given such an awareness, he wouldn't have misread my latest comment. Mankiw is no dummy. He certainly has the capacity to understand my suggestion BUT it's been neutered by his both his animosity towards me and the self-righteousness of his own crusade. He's kind of like Jeff Jarvis with his Dell Hell.

Unshaken and unapologetic, Mankiw and one of his fawning minions vainly try to attack my proposal. A few more comments were exchanged; the noble professor who called me "Mr. Nut" actually lectures me on civility; and I smack them both down in a rousing grand finale.

CaptiousNut said...
Without directing it at anyone in particular, there is an expression, “never argue with a fool because others may not know the difference”. In that vein, I refuse to be sucked too far into debating the Pigou Manifesto, a foolish bricolage complaint. To say that my proposal would not reduce pollution, a Pigovian aim, is fatuous at best. As more than a few people have pointed out, a Pigou gas tax wouldn’t even necessarily accomplish what it purports to do. Pacify the Mid-East? Balance the budget? Reduce congestion? Save the environment? Give me a break.

Pigou Club members demand to be judged by their “aims” rather than their results. Just like all of the other socialists!

By definition, no practical, narrow solution can compete with a fantastic panacea. The Pigou gas tax is a great example of why the term panacea is mostly uttered sarcastically. The criticism of my idea is quite analogous to critics of securing the southern border who claim it’s not a “comprehensive solution” for immigration when in fact it doesn't purport to be one.

If a higher gas tax is supposed to reduce pollution, then why are emissions growing 5.4% in Western Europe and 4.7% in the U.S.? (since Kyoto no less)

Europe proves incontrovertibly that consumers are immune to a gas tax so long as little cars are legal. So, unlike my proposal, a gas tax makes no salient into congestion. By the way, for those of you with “global warming” phantoms dancing in your heads, the rotten fruit of congestion is idling, no friend of Mother Nature either. Furthermore, the fewer gallons consumed in America due to a $1 gas tax will just be burned by Third World rickshaws without catalytic converters. Al Gore’s Earth will still be doomed with or without a gas tax. Shouldn’t the inevitable energy consumption take place here, where emission standards are better?

Like I said above, I don’t want to get sucked too far into this morass of conjecture. There is a tradeoff between congestion and fuel efficiency and it’s ill met by a gas tax. My proposal better attacks congestion and may increase emissions slightly in the short term. I could care less about that but there are many feasible offsets for those that care. Massachusetts could take many cars off the road and reduce overall emissions if it: deregulated taxis, lowered the cost of mass transit, allowed car insurance companies to charge urban drivers and younger drivers higher premiums, built high rises near train stations, and modernized its toll booth collections. There may be a ton of Priuses in the Bay State and no shortage of Earth-huggers, but they are all allied politically with the opponents of my emissions offsets. Go figure.

Other states and particularly congestion-ridden cities could take thousands of uninsured drivers of the roads. BUT that might be seen as discriminatory racial profiling in some circles. Needless to say, the opponents of this offset also vote with the global warming chorus.

Taking a ton of cars off the road entirely would reduce congestion emissions for the rest of us. In the longer term, driving Chevy Suburbans would force everyone to make major lifestyle changes. People would live closer to work, there’d be more carpooling, and overall drivers would eliminate so many frivolous car trips. I think once people get a whiff of telecommuting and the facility of online ordering, not only will they’ll never go back, they’ll strive to drive even less and emissions would decrease. I’d be quite surprised if Moffatt or anyone else possessed a chart of price elasticities that could predict the future interplay of so many dynamic variables. I am sure 200 years ago no one could envision horse transportation usage dropping 100% either. When they banned smoking in public places critics said no one would quit, they’d just smoke more at home. At first nobody quit, but over time people started dropping the nasty habit in droves.

Of course my idea won’t raise tax revenue but that’s kind of the whole point. I just can’t find the law stating new revenue must be found before old revenue is eliminated. But since I am not angling for a policy job maybe it’s all beyond my ken.

8:50 AM


Tax Shelter said...

Mankiw can't think clearly, I think he has psychological issues. I don't bother reading what he has to say. It's a waste of time. The strange thing to me is that Harvard hired him to teach their students (what does that say about the quality of Harvard's economics department? those who can't do, teach?), and Bush picked him as his economic advisor (why did Bush do that?). He needs to take a sabbatical and try to make it as a screen trader based on his economic ideas. But maybe he already knew that he and his ideas won't make it in the real world, and therefore is afraid of anything outside of the safety net of academia and government jobs.

CaptiousNut said...

tax shelter,

I think Mankiw's problem is that aside from being drunk on the theoretical nonsense, he genuinely wants to be liked by the latent socialists in his circles. From my perspective, it definitely is a psychological issue as you stated.

He just doesn't have the stomach to argue with, Marginalize, or confront intellectual thugs. He certainly is no dummy; it's just that his brain has been subjugated by his jelly spine.

Financially I would probably envy the guy a bit. Garbage or not, he sells a lot of textbooks and easily makes a few hundred thousand bucks (if not more) a year just off that. I know someone who wrote a spanish college text; it's paid a lot of bills for over ten years. Mankiw's book is much more prominent. Risk-free income is the ne plus ultra of financial endeavor.

For me anyway, reading his blog is not a waste of time. I wish more people like him would blog. I definitely learn a lot from exploring enemy territory. Obviously, the more someone's mouth runs, the easier they are to Marginalize.

On the other hand, CaptainChi may have no use for Mankiw's blog...

Anonymous said...

Captious....'I know morons and I can assure you sir, you are no moron'! I like your take on things and don't appreciate taxes but I found myself more than willing to pay an extra buck or two on whatever...(read something that I can buy at my convenience - gasoline?) just to avoid sitting in out of state toll roads idling for 40 minutes to pay a 60 cent toll (repeat 3 or 4 times when passing through the windy city (290)). Not to mention the long term medical costs associated with current stress....

CaptiousNut said...

I actually like toll roads. I too scoff at 60 cent tolls but there's an entire population (older folk perhaps) that loathes the financial "hit". It definitely makes them drive less.

But toll roads should mandate electronic payment. Transponders should be the law - without exception. In Massachusetts no one bought them and they don't help much anyway because the "Fast Lane" is always blocked by cash payers. In New York, the "EZ pass" lanes can save you an enormous amount of time and sanity. I think it may start two miles from the GW Bridge.

The problem is, not only is the Mass Pike underutilizing rapid electronic payment, the money just goes to Teamster toll collecters at 70k per year. Further troubling for congestion-phobes is recent talk of eliminating many of the tolls on the Mass Pike.

I secretly root for gasoline to rise in price even though I have a Suburban and an Explorer. My schadenfreude is driven by that theory you bring up, that perhaps congestion will abate.

I fear unfortunately that traffic everywhere will only get worse in our lifetime - unless a Jetsonian flying machine becomes cost efficient.

The Owner said...

"Pigou Club members demand to be judged by their “aims” rather than their results. Just like all of the other socialists!"

Exactly. Mankiw is a fraud, like most of the economic establishment today.

I'm glad he finally responded to you. Your patience and perseverance appear to be paying off. Unfortunately, people like Mankiw live and breath in a world of theory... they're not as convinced by what there thoughts DO result in, so much as what they THINK they will result in.

This is a case where you really need to come down to his level and explain the theoretical error of his ways. Only then will he accept the reality of what he reaps after he sows.

The Owner said...

By the way, the knock-out punch graphic was hilarious. This whole post was so funny because Mankiw is such an elitist, I just about died laughing imagining him reading your posts and trying to compose himself enough to respond. He probably got very self-conscious after you ruffled his feathers by posting something other than mindless, worship-like effeminate love-letters like all of his little Junior Mankiw Club members.