Andrew Tobias asks if we can finally put the tax argument to bed:

• Is the reason you’re not investing in stocks these days (a) the prospect of having to pay 15% capital gains tax?  Or (b) the fear of further losses?  (Well, or – c – that you don’t have any money?)
• Is the reason you don’t start a new business that (a) if it made you a lot of money you’d have to pay a lot of taxes?  Or that (b) you can’t get anyone to risk the funds you need to finance it?
• Is the reason you don’t hire new workers that (a) you’re paying so much in taxes?  Or that (b) with business down so much, you don’t need them?
• Is the reason you’re not spending money as freely as you used to that (a) your taxes are too high?  Or that (b) you’re afraid of losing your job?  (Well, or – c – that you’ve lost half your net worth and suddenly realize you’d better get serious about saving for a decent retirement?)
• Is the reason you’re unemployed that (a) taxes are too high to make you want a job?  Or that (b) you’ve sent out 400 resumes and called every connection you have, but no one’s hiring.

NPR covered it like an eclipse or astronomic curiosity, and did little to question the claimed energy saving benefits. But, as Michael Downing asks in Spring Forward, how can something understood by so few be done by so many? And why go through this twice annual madness?

Supposedly, we subject ourselves to the rule of time to conserve oil, but even the most wildly optimistic predictions suggest only a 1% drop in consumption. And those predictions are based on bad data.

The 1% statistic came from the 1970s when people used less oil during the OPAC OPEC embargo, making it difficult to tell what caused what. A late 1960’s British experiment with daylight saving time failed to show any such benefit, and an Australian experiment in 2000 showed none. In fact, it resulted in “a slight but statistically negligible increase in overall usage.”

Seed Magazine re-ran numbers in 2006 and estimated that at best we might achieve a 0.04% oil savings based on the theories (the Australian report hadn’t been published by that time), and reported:

Saving four-hundredths of one percent is like shaving about 200 feet off of 100 miles. Does any sane person think this will make a serious dent in our energy use?

Alternatively, a one mile per gallon increase in average fuel economy would result in a 4% reduction in fuel use and cut our overall oil consumption by 1.6%.

There might be good reasons to extend DST, but let’s not fool ourselves into thinking it’s going to do anything about our energy problem. Sometimes the little things mean a lot. Sometimes they don’t mean squat.

Special thanks to servus for the photo.

economy, dst, daylight savings time, daylight saving time, conservation, energy, oil, statisticseconomy, dst, daylight savings time, daylight saving time, conservation, energy, oil, statistics

Conservatives hate Freakonomics, that book by economist Steven D. Levitt and journalist Stephen J. Dubner that takes on more than a few sticky issues that most people don’t normally consider to be within the purview of economics. (See also the Freakonomics blog).

Publisher’s Weekly notes:

There isn’t really a grand theory of everything here, except perhaps the suggestion that self-styled experts have a vested interest in promoting conventional wisdom even when it’s wrong. Instead, Dubner and Levitt deconstruct everything from the organizational structure of drug-dealing gangs to baby-naming patterns. While some chapters might seem frivolous, others touch on more serious issues, including a detailed look at Levitt’s controversial linkage between the legalization of abortion and a reduced crime rate two decades later. Underlying all these research subjects is a belief that complex phenomena can be understood if we find the right perspective. Levitt has a knack for making that principle relevant to our daily lives

See, conservatives like conventional wisdom because it supports things the way they are and counsels against change. And conservatives especially dislike Levitt’s theories in Freakonomics because one of them suggests crime rates are causally linked to abortion and that the drop in crime rates in the late 90s was caused by the legalization of abortion in 1973 (read the book to understand it).

That’s why conservative icon Bill Bennett was criticizing the book. Not only did Bennett misunderstand Levitt’s argument, but he tried to make a false and intentionally racist corollary: “I do know that it’s true that if you wanted to reduce crime, you could [...] you could abort every black baby in this country, and your crime rate would go down.” Well, that made a sound.

In the list of those who understand how wrong Bennett was stands Harry Shearer, host of the radio program Le Show. His October 2 program (RealAudio stream, start at about 33 or 34 minutes in) of Le Show brought this to my attention and highlighted Bennett’s attempts to backpedal. Le Show, incidentally, is also available by podcast.

tags: abortion, bill bennett, conservative, conservatives, criticism, economist, economy, freakonomics, harry shearer, levitt, racisim, steven d levitt, steven d. levitt, steven levitt, theory, william bennett, william j bennett, william j. bennett

So long as I’m talking about change I want to bring attention to some commentaries by Chris Farrell in Marketplace Money. On September 16th he noted that hurricane Katrina (Rita hadn’t hit yet) “ripped the veil off poverty in America” and wondered aloud weather the voting public would continue to support the Republican obsession with tax breaks in the face of this new empathy for those struggling to hold on to the bottom rung of that same economic ladder.

Earlier, in a commentary on September 9, he says he believes the driving theme in government is shifting from “private interest” to “public purpose.” Farrell is leaning on Albert Hirschman, the “maverick economist” who wrote about how government policy oscillates back and forth between themes of public and private interest. Certainly, one would agree, we’ve endured thirty years or so on the private side of that cycle.

Robert Reich was poking at this in his October 5 Marketplace commentary about the Harriet Miers’ nomination to the Supreme Court. Here’s a quote:

The President says Miers will “strictly interpret” the Constitution. That tells us almost nothing. The Constitution can be strictly interpreted in all sorts of ways.
Before 1937, a majority of Justices, saying they were “strictly interpreting” the Constitution, struck down as unconstitutional laws setting minimum wages and maximum hours, and barring child labor.

The economic values of those justices favored private property over community standards of fair play. To them, due process of law was mostly about freedom to contract and liberty was the ability to accumulate personal wealth.

Then, early in 1937, one of those Justice switched sides (coincidentally, his last name was Roberts) and the Court’s new majority chose community over property. They said they were still strictly interpreting the Constitution. But suddenly due process was about making laws fairly, and liberty was about giving people opportunities to get ahead.

I don’t have the credentials of Farrell or Reich, but I do believe that while governments can’t prevent hurricanes[1], they do have a role in making sure its people and communities are strong enough to endure the tragedy in their wake.

[1] Preventing hurricanes is one thing, participating in treaties that reduce the threat of global warming and the inevitable effect it will have on dramatic weather like hurricanes is another. The insurance industry already understands this.

tags: albert hirschman, chris farrell, commentary, economic priorities, economic priority, economy, governement, government responsibility, marketplace, marketplace money, political priorities, political priority, poverty, poverty in america, private interest, public purpose, robert reich, straight story, tax policy