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Greg Mankiw Quits the New York Times? - Grasping Reality with Both Hands

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Grasping Reality with Both Hands The Semi-Daily Journal of Economist J. Bradford DeLong: Fair, Balanced, RealityBased, and Even-Handed Department of Economics, U.C. Berkeley #3880, Berkeley, CA 94720-3880; 925 708 0467; delong@econ.berkeley.edu.

Economics 210a Weblog Archives DeLong Hot on Google DeLong Hot on Google Blogsearch October 10, 2010

Greg Mankiw Quits the New York Times? An email from Mark Thoma saying that it sounds like Greg Mankiw is giving up his New York Times Economic View column because President Obama does not want to extend the temporary Bush tax cut on the marginal rates applied to high incomes. It certainly sounds like it. The New York Times pays $650 a column and, Greg says, at anything less than the temporary Bush marginal rates on high incomes, that just is not enough: Greg Mankiw:: AN important issue dividing the political parties is whether to raise taxes on those earning more than $250,000 a year. Democrats say these taxpayers can afford to chip in a bit more. Republicans say raising taxes on those who already face the highest marginal tax rates will hurt the economy. So I thought it might be useful to do a case study on one of these high-income taxpayers. Fortunately, I have one handy: me.... I can afford to pay more in taxes.... I have been very lucky.... I don’t have trouble making ends meet.... I am almost completely sated.... I don’t aspire for much more than a typical upper-middle-class lifestyle.... [B]ut I [do] hope to put some money aside for my three children. They will never http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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lead lives of leisure, but I hope they won’t have to struggle to find down payments to buy their own homes or to send their kids to college. Suppose that some editor offered me $1,000 to write an article.... If I invested it in the stock of a company that earned, say, 8 percent a year on its capital, then 30 years from now... assuming that the Bush tax cuts expire, I would pay 39.6 percent in federal income taxes... the phaseout of deductions adds 1.2 percentage points... Medicare... 3.8 percent... 5.3 percent in state income taxes... the corporation in which I have invested pays a 35 percent corporate tax.... the estate tax.... Most likely... my kids will get... $1,000.... [W]ithout the tax increases advocated by the Obama administration... that writing assignment would yield my kids about $2,000.... Now you might not care if I supply less of my services to the marketplace — although, because you are reading this article, you are one of my customers. But I bet there are some high-income taxpayers whose services you enjoy.... Like me, these individuals respond to incentives. (Indeed, some studies report that highincome taxpayers are particularly responsive to taxes.) As they face higher tax rates, their services will be in shorter supply... I think that this is a big mistake for two reasons: one moral-political and one economic-analytical. Let me deal with the economic-analytical reason first: First, start with the fact that tax on Greg's current writing earnings because he wants to leave more to his children in thirty years will be higher than today's current Bush-era tax rates. But they will not be higher because of anything Barack Obama has done or failed to do. They will be higher for three reasons. First, George W. Bush and his advisors--of whom Greg Mankiw was one--failed to find any spending offsets in order to pay for the temporary Bush reductions in tax rates. Second, George W. Bush and his advisors--of whom Greg Mankiw was one--enacted a very large long-term spending increase without figuring out any way to pay for it: Medicare Part D. Third, George W. Bush and his advisors--of whom Greg Mankiw was one--enacted a second very large spending increase when they responded to Al Qaeda by greatly increasing the size of a conventional military which is of not much use in our current struggle, and also did so without figuring out any way to pay for it. As Milton Friedman liked to say, and as he did say when he--I am told--yelled at George W. Bush during his 90th birthday celebration at the White House--to spend is to tax. Will the spending, and you will the taxes. If somebody claims to have cut your taxes without cutting spending, do not believe them: all they have done is to shift taxes forward into the future, and made taxes on current consumption lower while making taxes on long-term transfers of wealth into the future higher. The sooner taxes are raised in order to pay for Medicare Part D, the expanded U.S. military, other pieces of Medicare and Medicaid spending growth, and to offset the revenue lost over the past decade of the Bush temporary tax cuts, the lower the taxes on Greg's saving for his children's inheritance will be. That Barack Obama is taking some steps to restore fiscal sanity should diminish his view of the risk-adjusted taxes his long-run savings will pay, and make him more willing to write for the New York Times--not less. But there is more. The two biggest long-run policies that Barack Obama has set in motion over the past two years have been (a) the entrenchment of future reductions in

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Medicare spending growth designed by the Independent Payment Authorization Board so that they can only be overturned by affirmative congressional supermajority votes to prevent them, and (b) the enactment of a growing and eventually very large tax on high-cost health-insurance plans. Now these policy changes may not survive--the Republicans are pledged, to a sophont, to repeal both of them. But if they do they greatly reduce the amount by which income and other taxes must rise over the next generation. And so they make the expected taxes on Greg's saving-for-his-children'sinheritance significantly lower. If Greg wrote one column a month before Obama took these big steps to restore longrun fiscal balance to the U.S. federal government, the prospect of lower tax rates on his saving-for-his-children's-inheritance should induce him to write three columns a month now. Second, Greg says that it's worth it for him to write columns if they generate $2000 in net bequeathed wealth in 2040 but not if they generate $1,000. But that shouldn't be why anybody writes columns. Indeed, if people write columns not because they are driven to inform and educate their readers but rather because it is a way to make money to leave to their children--well, then those columns will be written not to inform but to entertain, and so they will be worthless as sources of information and education (rather than as sheer entertainment) to their readers. I do not think society can survive if the voices writing on political-economic issues in our public sphere are doing so not to inform but merely to entertain. I think that society can only survive if those who write columns are driven by a geas to make Americans better-educated citizens but rather to leave more wealth to your children. We ought to write columns not because we think our children will need extra money in thirty years, but because we think our fellow-citizens need better information now. Indeed, I don't think America can long survive if we treat our contracts with newspapers merely as ones in which we craft words qnd they pay us money, and in which we craft our words to make as much money as we can. Edmund Burke, I think, put it best when he said that society can only survive if at the very least it is a long-term partnership, and ought to have much more of social giftexchange than that. As Burke wrote, we ought not to speak of a "social contract" in which each narrowly counts their contributions and benefits. And if we do speak of a "social contract," we must recognize that that is far from being a complete description: Subordinate contracts for objects of mere occasional interest may be dissolved at pleasure; but the state ought not to be considered as nothing better than a partnership agreement in a trade of pepper and coffee, calico or tobacco, or some other such low concern, to be taken up for a little temporary interest, and to be dissolved by the fancy of the parties. It is to be looked on with other reverence; because it is not a partnership in things subservient only to the gross animal existence of a temporary and perishable nature. It is a partnership in all science, a partnership in all art, a partnership in every virtue and in all perfection. As the ends of such a partnership cannot be obtained in many generations, it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born. Each contract of each particular state is but a clause in the great primeval contract of eternal society, linking the lower with the higher natures, connecting the visible and invisible world, according to a fixed compact sanctioned by the inviolable oath which holds all physical and all moral natures each in their appointed place... http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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Brad DeLong on October 10, 2010 at 12:11 PM in Economics, Economics: Fiscal Policy, Philosophy: Moral, Political Economy | Permalink Favorite

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Comments DrDick said... I for one applaud Mankiw's noble decision and can only wish that he would extend it to completely going Galt and becoming an anchorite. I can think of few more pernicious influences on our economic policy than he and his fellow travelers. Reply October 10, 2010 at 01:10 PM postescript said... If his is a bi-weekly post like Krugman's, (I don't know because I have the good sense not to read Mankiw's) that's $62,400 a year. I say quit and the Times can find someone more profound to write for less. I can't believe the Times pays him for that stuff. A self-serving, whiny, completely illogical op-ed. See if the tax cuts expire, I will quit my job. We have record unemployment, very smart people are looking for work. Just because you have a job at Harvard doesn't mean you are indispensable or irreplaceable. The arrogance. Suck it up Mankiw. And seriously if you are that desperate for an op-ed idea, steal something from one of your bloggers. They're probably have more to offer than you do. Reply October 10, 2010 at 01:17 PM postescript said... Correction, $67,600. That's even better. Reply October 10, 2010 at 01:21 PM allan said... I fully agree with Mankiw that the present value of his future columns is negligible. Reply October 10, 2010 at 01:33 PM JP said... It would be much better if Mankiw decided to quit the U.S. Reply October 10, 2010 at 01:38 PM Nick L said... Brad-With respect to your criticism of Mankiew's motivations: what about, say, the econ prof who signs up with a speakers' bureau, acknowledging that he does so to help put his kid through college? [Why do I think that you did not bother to read what I wrote?] How are the ensuring lectures less, shall we say, socially problematic than Mankiew's columns?

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Reply October 10, 2010 at 01:44 PM Oliver said... I'm a lot more bothered by the fact that Mankiw's financial analysis is totally off base. First off, if he's genuinely wanting to save money over a thirty year horizon, then he can tax shelter the saving. Second--is he *really* saving that government taxes the annual increase is share *price*? His example only makes sense with that assumption. Reply October 10, 2010 at 01:46 PM Gray, Germany said... Sad that his kids obviously are unable to make a living for themselves, and have to rely on the money they'll inherit from dad. But even more reason for Mankiw not to stop working because of a ridiculous irritation about the tax system. Instead, he should ask his kids what they prefer, $1000 or nothing. The answer should be obvious. Reply October 10, 2010 at 01:46 PM TB said... Do DeLong and Thoma really not understand that people can respond to monetary incentives without money being your only incentive? Of course they do, but it's all for an entertaining blog post. (Deletion imminent) Reply October 10, 2010 at 01:55 PM Jacques Distler said... Indeed, it would be better if Mankiw quits writing his column. Among his erroneous assertions, is that the $1000 in income, from his column, will be subject BOTH to the top (39%) marginal tax rate AND to FICA taxes. I assume that a Harvard Economics professor (and former CEA head) knows better. Reply October 10, 2010 at 01:55 PM Robert Waldmann said... These points are minor compared to the points you make, but I'd note three things. First corporations don't really pay 35% corporate income tax on average. This is just false and Prof Mankiw knows it. Second it isn't as if the pretax return he could get on stock is unaffected by the price of shares. That would go up, so his return would not increase proportional to untaxed profits (which would be on the order of 10% not 35/65 anyway). Also he is assuming that he doesn't bother to avoid taxes *and* that the pre-tax returns on taxed assets are the same as they would be without taxes. Many rich people buy municipal bonds to avoid paying taxes. That might be a mistake, but if they didn't make it, Mankiw wouldn't get 8% on stock. First it is odd that he presents the Obama proposed tax non cut on income over 250,000 when his example is based almost entirely on the estate tax. He would have a harder time convincing people that $ 40 thousand a year each while he lives plus 3.5 million untaxed isn't enough for his poor kids to avoid the need to struggle for down payments on houses and tuition. His version of his motives is inconsistent with the proposed taxes. Notice, his claim is that if he and (I'm blocking on her name) give the maximum of (more than but I don't know how much more) $120,000 per year together to their kids *and* include the kids in a will should one pass away before the other then there will still be over 3.5 million left. That's not just enough to avoid struggling over a down payment. http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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If he isn't giving to his children, then he has himself and not Obama to blame for his incentive problem. I'd also guess that his upper middle class lifestyle implies that the upper middle class goes up into the top ninety something high percentile of the distribution of expenditures. Odd that he gives so much detail on taxes and so little on income, wealth and spending. Reply October 10, 2010 at 02:00 PM howard said... i actually find it difficult to believe that mankiw is as obnoxious as he so obviously is, but please: quit. you would think the chairman of president's economic advisory council during the most fiscally irresponsible presidency in american history - a presidency that made a campaign issue out of the fact that it didn't believe the iraq war should be paid for with taxes - would simply hide away in shame, but this is obviously beyond the pompous little snot. so i can only hope he quit in a mouth-foaming pique, since society as a whole can only benefit from his voluntary silence in expiation of his many sins. Reply October 10, 2010 at 02:00 PM postescript said... Trump in one of his interviews was saying that rich people are threatening to leave the country (to the tax shelters of none other than Europe - yeah) if the tax cuts are allowed to expire. It's so childish, this argument. If I don't get my way, I'm leaving. I'm running away for good. I mean are they 5 years old. Grow up people. And if they are this immature and selfish, the country will be better off without them so I don't exactly get the threat. Reply October 10, 2010 at 02:00 PM Rob in FL said... Mankiw another non-serious Economist. This dude is advocating policies that could destroy the economy and all he can think about is getting his money. Reply October 10, 2010 at 02:13 PM Morten said... You, and Thoma, get this all wrong. He is not quitting NYT, he is just letting everyone know why he can not be bothered to do any more work for them. He still want to collect his paycheck though. So this is the first installment in his new re-blogging column. The original is here http://gregmankiw.blogspot.com/2008/10/blog-post.html Reply October 10, 2010 at 02:14 PM Uwe Reinhardt said... There's yet another angle to this story: the taxes paid by the rich actually pay for stuff. They are not raised just to punish the rich. Greg might have mentioned that, as Americans, we face the difficult trade-off between (1)having one more essay by Greg Mankiw and (2) the things government buys with tax revenues including, say, adequate armor for our warriors in combat (I recall my son's unit being short flack jackets when it fought in Iraq in 2003) or health care for waitresses and cab drivers. Someone has to pay for that stuff. To be sure, there's always the argument that the trade off is really between Mankiw's http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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scribblings and the pure, mammoth waste that tax revenue buys. Fair enough. But that argument would be more convincing if, led on by a fearless Greg Mankiw, President Bush, whom he served, and the then Republican Congress had gotten rid of all that alleged waste, as they could have. We must assume either that there was not enough of it to bother wasting political capital on it, or that Greg et al were derelict in their duties. Take your pick. I'll also post this comment on Mark Thoma's blog. Reply October 10, 2010 at 02:16 PM dll argh said... What I found interesting is there is no option to comment on the Mankiw's article or email him directly. Contrast this Krugman's articles and blog which make it easy to contact the author. So effectively isn't he hiding in shame? (I did dig up his email on his Harvard profile eventually...) Reply October 10, 2010 at 02:21 PM derek said... This announcement is obviously an almost irresistible incitement to snark and imply good riddance to Mankiw, but instead I'm going to be serious and sincere when I say this is actually a positive result of the end of the Bush tax cuts. Mankiw (and I'm not going to imply he's a lousy economist, I'm sure he's quite a respectable member of his profession) gets to concentrate on the things that the market feels he brings most value to. If the market felt his columns were of more value, it would pay him more for those, and less for whatever else he's going to be doing in the next few years. In addition, the NYT gets to spend its money on another columnist who I'm sure will bring as much value as Mankiw would have for the same money. To imply otherwise is to imply the possibility that Mankiw's own columns did not bring value, but were instead just a job offered to one of the boys for sentiment's sake (because either there is a correlation between the NYT's pay and the value of its columnists, or there is not). For my own part, I'm sure I won't stop hearing about Mankiw, but I will start hearing about another writer: more voices is a win, right? The *purpose* of progressive taxes is to open opportunities to a larger group of people, and distribute wealth more broadly. This doesn't look like an unintended negative consequence of the end of tax cuts, but an unusually clear illustration of an intended positive consequence. Reply October 10, 2010 at 02:23 PM Buce said... Were I Mankiw's friend I would advise him that Inheritances Make People Weak and that by saving to leave money to his kids, he is almost certainly breeding bunch of ungrateful trust fund babies. Reply October 10, 2010 at 02:25 PM dave said... So what would happen if Mankiw, not pressed for money, took his $1K per column, ate the tax, & put the $1k into a UMGA? Reply October 10, 2010 at 02:27 PM Gene O'Grady said... I'm not at all concerned with incentives (my least favorite word in the world) for high income individuals to work a little harder (maybe). I am extremely concerned with the disincentivation of young people to pursue the education necessary for careers in http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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science, engineering, and technology due to the outsourcing of jobs in those fields to India. I am even more concerned about the disincentivation to pursue careers in primary and secondary teaching due to the coming wipe-out of those fields due to continuing success of the tax whiners (that means you, Chris Dudley and Phil Knight). This is all a sad rerun of what I saw in California in the sixties and seventies. People my age in the sixties who saw how Lockheed treated their engineers went into any field but engineering (HP used to be a different model, but thanks Carlie), while the tax revolt in seventies moved school teachers with initiative and ambition (and a desire to own a home) into real estate sales. I'm curious as to how rich you have to be before you're allowed to talk about incentives? Reply October 10, 2010 at 02:33 PM Charlie Deist said... I think that Mankiw's column is both informative and entertaining. I agree with Scott Sumner's point that most readers will have trouble visualizing a loss in artistic services, but it's a solid example of the less visible costs of a bigger government that provides more services. You criticize Mankiw on two grounds: that he doesn't take his duty to his country seriously, and that he (as an advisor to President Bush) is partially responsible for deficit-inducing tax cuts in excess of spending cuts. You first point strikes me as unrealistic, because it doesn't take human beings as such. Incentives matter, and at all the relevant margins, even a nationalist changes his behavior in response to them. Your second point seems unfair, because as you and Krugman have been arguing, Presidents rarely follow the advice of their economic experts ("Rahm Emmanuel blocked the right-sized stimulus!!"). Reply October 10, 2010 at 02:40 PM Mike the Mad Biologist said... Is there a tax structure that will convince Thomas Friedman and David Brooks to write less for the NYT? Reply October 10, 2010 at 02:43 PM kcar1 said in reply to Mike the Mad Biologist... Yes! Yes! Let's come up with one! Reply October 10, 2010 at 02:54 PM howard said... charlie deist, the number of artists who would sneer at the marginal income that greg mankiw sneers at is very, very tiny, and we'll all manage to cope without their marginal output, poor dears, just as we'll cope without some extra crap served up by greg mankiw in the times business section every few weeks. it'll be a struggle, but we'll manage. so as far as i can tell, the "less visible" costs are, in fact, nonexistent at the kind of marginal differentiation we're talking about. as for mankiw's service to country: there is zero possibility that he went to bat for expenditure cuts in the face of the cheney axis, just plain zero. he's way too much of an kiss up, kick down kind of guy to actually, you know, live up to his supposed principles. why would you defend him? Reply October 10, 2010 at 02:57 PM

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denim in the U.S. said... Even I know this: Most of this municipal bond information refers to munis which are free of federal taxes. See Taxable Municipal Bonds for more about taxable municipal issues. http://www.investinginbonds.com/learnmore.asp?catid=5&subcatid=24 http://www.investinginbonds.com/learnmore.asp?catid=5&subcatid=24&id=243 http://personal.fidelity.com/products/fixedincome/fitaxabletax.shtml Reply October 10, 2010 at 03:05 PM Rob said in reply to Morten... Yep Morten I remember the original that Mankiw put out for free. So for Mankiw its OK to write for $0 and OK for like $425 net. But if that becomes like $400 that just waste of his time and he'll just keep on producing it for $0. Reply October 10, 2010 at 03:13 PM bob said... dll argh: Don't bother digging through Mankiw's web profile for his email address - just go to Harvard's online Directory. Reply October 10, 2010 at 03:19 PM kcar1 said... I realize that using a "case study" -- aka anecdote when it isn't thoroughly grounded in theory and previous research -- is an effective writing and political technique but it is shameful on the part of a "well-trained" economist, regardless of persuasion or forum. To the point of whether this minor increase in the marginal tax rate will encourage people to work more or less -- if I remember correctly, it has not been clearly established how to predict whether people would substitute leisure for consumption or work harder to maintain income BUT that people at higher incomes levels indicate more of the income effect. The second part of that question is whether the increase is large enough to even have a marginal effect one way or the other -- which, of course, would mean that the income had some tangible link to the quality and quantity of work. Questionable at best when you get into the upper income strata. To the point of whether it is a good or bad thing that Mankiw is induced to work less - as brilliant and unparalleled as I am sure Mankiw thinks he is, I am sure the NYT would find someone else to write a column. If that someone were more middle income with a greater propensity to put that money into circulation and pay payroll and income taxes on it as opposed to save it for inheritance, so much the better.

Reply October 10, 2010 at 03:34 PM jhe said... I thought that the purpose of Mankiw's (like George Will's or David Brooks') columns is not to earn $1k or $2k or to inform or to entertain but to maintain the brand which drives the big speaking fees. The speaking fees in turn I always assumed were laundered bribes to make sure that the people who have serious money on the line, not a grand here or there, can give their paid political flunkies Testimony from Expert Economists to support their position on things like capital gains, inheritance taxes and marginal tax rates. But maybe I'm just cynical. Although I thought one of the lessons of the last decade is that you really can't be too cynical. http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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Reply October 10, 2010 at 03:53 PM DrDick said in reply to allan... "I fully agree with Mankiw that the present value of his future columns is negligible." Exactly the same as his past columns. Reply October 10, 2010 at 04:01 PM Sly said... The entire problem with the "withholding productivity" or "Going Galt" argument is that it assumes that the productivity being withheld could not be replaced by another economic actor. Is there a shortage of conservative economic writers and polemicists of which I am unaware? Because if there isn't, then it is likely there are legions of writers who are personally willing to pen articles for the New York Times and other publications for 3% less than what Mankiw is demanding. Will no one want to be a hedge fund manager if the carried interest deduction is abolished? Will no one want to be a doctor if Medicare reimbursements are cut? The answer to these questions is, of course, no. Where there is demand, there are jobs and people wanting to occupy them. If Steve Schwartzman is compelled to leave the Blackstone Group because he thinks eliminating the carried interest deduction is akin to Germany invading Poland, I'm sure there are a high number of "Senior Managing Directors" at the firm who are ready, willing, and able to take his place. Emphasis on "willing". In other words, the people who advance these kinds of arguments believe themselves to be essential to the point of indispensability. They're that guy in the office who thinks the entire operation would grind to a halt if he up and quit, but never does because he secretly knows that, should he find himself unemployed, he'll be competing for jobs with people younger than him and willing to work for less. Reply October 10, 2010 at 04:04 PM MikeBoyScout said... Mankiw's column would rate a D minus as an essay in my non-super yet private liberal arts college macro econ class. Brad's take down is pretty thorough but he misses a rather significant "George W. Bush and his advisors--of whom Greg Mankiw was one--" point: Any tax increase which is the result of the non-permenant nature of the legislation crafted and negotiated by George W. Bush and his advisors--of whom Greg Mankiw was one-- is the fault and policy of George W. Bush and his advisors. Also, Drum takes Mankiw to school over at http://motherjones.com/kevindrum/2010/10/mankiws-taxes The most dismal aspect of Economics is that demonstrably incompetent people like Mankiw are not drummed out permanently. Reply October 10, 2010 at 04:11 PM Matt said... If money's the only thing that motivates Mankiw, I'm sure there's plenty of people in Bangalore that could be just as wrong for $100/column. Maybe the Times should look into it. Reply October 10, 2010 at 04:13 PM kat huff said... http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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I'm just wondering what exactly Mankiw's been up to if he thinks his estate is going to cause his children to bump into the inheritance tax given it only kicks in when estate properties are over one million fifty thousand dollars. That's one heckuva chunk of change for some one of supposedly modestly wealthy means. Reply October 10, 2010 at 04:24 PM scathew said... Wow, if he was writing for money rather than for the betterment of society, then I am happy to see him go. It's kind of like choosing a doctor - do you want one who does medicine for money, or one who does it out of passion? Ok, you want the one who won't screw up, but generally speaking my money is on the later, not the former. In some sense I doubt the money actually matters to Mankiw - he's using it to make a point, however it still doesn't reflect well on him. He seems a whiny nearly-rich prick that doesn't want to share his toys. I make a lot less than him and am actually upper middle class (as opposed to pretty nearly rich as Mankiw is but pretends not to be) and am perfectly willing to pay a bit more for the betterment of the country, to make sure the roads are maintained, that everyone has healthcare, that everyone eats and has shelter, and that my son doesn't have to pay for what I didn't. I'm fact, what eliminates my motivation is watching all these pretty much rich people who have everything they could possibly want needing more, more, more. BTW - working an honest job and not getting a reasonable wage for it is far less motivating than higher taxes. The former is the larger problem, one that Mankiw and his ilk don't ever seem to discuss (quite the opposite - they actively work to aid the unfair income distribution). Reply October 10, 2010 at 04:30 PM scathew said... @kat huff Yes, there are a lot of "poor little rich kids" coming out of the woodwork these days. It's pretty enlightening just how out of touch they are with reality. It's sick, but it's also kind of refreshing to finally see it put honestly. Reply October 10, 2010 at 04:32 PM Ned said... One of my favorite places in the Bay Area is Muir Woods. There's a letter there from the guy who owned it and was giving it to the US as a park. He wrote to Teddy Roosevelt and asked that it be named after the naturalist. When Roosevelt wrote back and suggested he name it after himself, he replied that he had 5 sons and if they couldn't be his legacy, it wasn't worth having a legacy. I'm all for helping my kids. I am fortunate enough to be able to help them. But their legacy is their own. Their names are theirs and not some "me, Jr." I would sure like to see some kid who has had half the opportunities of my son have a little more of a chance. So I'd gladly pay the additional marginal tax. Reply October 10, 2010 at 04:51 PM Peter K. said... He should "Go Galt" no question. I'm sure we'll survive somehow without his columns. Reply October 10, 2010 at 05:10 PM Bloix said... Having your name on a column in the NYT is priceless free advertising for your books, http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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Greg Mankiw Quits the New York Times? - Grasping Reality with Both Hands

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lectures, consulting gigs, whatever. The idea that we're supposed to take this seriously is not even an insult to our intelligence. We're in Orwell world now, where we're expected to believe whatever nonsense we're told to believe. Reply October 10, 2010 at 05:11 PM Rob said in reply to kat huff... Mankiw became "famous" as being the first person to get a seven figure advance for his econ textbook. Reply October 10, 2010 at 05:29 PM Richard Careaga said... Since Mankaw used a hypothetical $1,000 gig as an example, let's go with that. Assuming that it is taxed at the highest marginal tax rate and taking into account his other taxes, next year he estimates he will only earn $523 after tax. Whereas, this year it would be $535. Twelve bucks. A half page of the NYT to complain about an extra $12 tax? Reply October 10, 2010 at 05:33 PM Full Employment Hawk said... So Mankiw wrote less during the Clinton administration,when his marginal taxes were higher than he has under the Bush administration when his taxes were lower? Reply October 10, 2010 at 06:27 PM Lee A. Arnold said... An embarrassment. Mr Mankiw should be ashamed of himself, writing a partisan screed when the rest of us are called upon to think with simple arithmetic holistically. What spending would he cut to give him his tax cuts? He doesn't say. That is the obvious topic, not this weird classroom attempt to demonstrate that he should be given incentives so he won't be trumped by parental regrets. He took a tax cut in time of war -- the first in U.S. history -- and now there are soldiers without arms and legs and even faces in Walter Reed. Payroll taxes are increased over decades to cover Social Security for another 25 years, his income tax cuts drained it (and then some!) -- let's hear where Mr. Mankiw thinks the money should come from. Are we supposed not to know that payroll and income taxes fall largely on different sets of people, that he is taking money form others? Obamacare cut the long-term deficts by 2/3rds and even winds down a costly Medicare boondoggle. Well golly, does Mr. Mankiw think this is a good thing? Why is he writing instead about his selfinterested cause in keeping the dough? Because the rest of us don't feel it too? Is he a moron or a fool? No, he is an economist -- surely he should be able to give us an account of the tradeoffs. The obvious clue that he is writing a "partisan screed" is not mentioning what to cut. Because the flimflam has always been to disconnect the tax cuts from the spending cuts, then distract the attention, as in a shell game. Oh, where is the pea! And then blame the Democrats for the deficits in the next election. No more! Not even once more! No more putting it off into the future with balanced budget amendments or forswearing earmarks. Exercise your right to demand that the Republicans put the tax cuts to equal their spending cuts in the same Congressional bill. Shove it right down the Tea Party's throat. Then we will see what they really want to do. Then we can all see what the deal really is. Meanwhile I'll stick with the party that delivers a smart safety net while continuing to shave costs. Please not another word from Mr. Mankiw until he gives us his quid pro quo.

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Reply October 10, 2010 at 06:34 PM save_the_rustbelt said... Wow. In Flint Michigan or Toledo Ohio a lot of families could put food on the table and shoes on the kids with $650. Mankiw's whining would not seem so harsh if so many people were not suffering, largely due to rich white guys who looted the country during the watch of George W. Bush. Reply October 10, 2010 at 06:42 PM Grizzled said... It is my opinion that the net loss of effort due to a tax increase for the top 2%, and especially for the top .5%, would be zero. The are far too many people out there waiting to replace them for slacking off to be an option. Reply October 10, 2010 at 07:14 PM purple said... Per other NYT columns, there seem to be a number of cab drivers who would qualify ... Reply October 10, 2010 at 07:15 PM purple said in reply to MikeBoyScout... Per other NYT columns, there seem to be a number of cab drivers who would qualify ... Reply October 10, 2010 at 07:17 PM Martin Weil said... Edmund Burke indeed said it well, thanks for the quotation. Reply October 10, 2010 at 07:58 PM jamie newman said... For me, the take-away message of Mankiw's piece it this: Marginal tax rates may influence your behavior if you're the kind of stupid, shit-for-brains, contemptible asswipe who allows marginal tax rates to influence his behavior. Reply October 10, 2010 at 08:37 PM jcb said... Mankiw's column is almost as unintentionally humorous as that of justly derided University of Chicago Law Professor. He reminds me of someone putting a gun to his head and threatening to pull the trigger. To which, one can only reply, "Go ahead. There are plenty of people to take your space in the universe. And they need it more than you do." His single effort at humility: "Now you might not care if I supply less of my services to the marketplace — although, because you are reading this article, you are one of my customers. But I bet there are some high-income taxpayers whose services you enjoy." To which one might reply: "Please don't confuse the auspices under which you write with my personal favor. It's the NYT Business Section, stupid! And there are plenty of unemployed business writers to take your place." More seriously, if the innumerable -- and I mean innumerable -- pat assumptions that this piece makes in order to reach its preconceived opinion are what passes for received economic wisdom, then we are in even greater trouble than we thought. And you, BD, are being far too polite in your response. I suppose we should be grateful that you did not question the marginal utility to him of bequeathing $650 (minus x, compounded y percent) to his three wee bairns in z years, when he reportedly earns

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well over a million dollars per annum in royalties from his bestselling economics textbook, consulting, salary, etc. Reply October 10, 2010 at 08:41 PM PQuincy said... scathew and jcb hit it: why have we seen this eruption of truly clueless overpaid professors at elite institutions making fools of themselves? The Chicago Law professor who threanted to cut off his cell service because of a tax increase of a few dollars...the Harvard economist threatening to stop work because a $30 dollar increase in total taxes on his $1000 fee for an article might mean that his children have $1000 less in 30 years. These cases are so ludicrous (not to mention arithmetically illiterate) to put the individuals involved, and the professoriate at elite institutions, in serious question. What costs should we attribute to the inevitable sense of entitlement that an appointment at Chicago or Harvard carries? Not all faculty at such august institutions, of course, lose their sense of proportion and humanity, but a reasonable proportion succumb to the explicit and implicit whispers constantly telling them that they are Very Important People. Some become egotistical pufftoads like Mankiw and Chicago Law Professor, others become nutcase advocates of various fringe positions across the spectrum (leaning, mostly, leftwards). I saw a fair amount of this at Berkeley when I taught as a visitor there for a semester, and I have friends at Harvard who show little sign of it -- but the likelihood of pompous ill-informed self-importance does seem to increase as one goes higher up the academic food chain, doesn't it? Reply October 10, 2010 at 09:04 PM dd said... Brad, I think you're arguing from ratex that guys who accept ratex have no rational ground to complain of tax increases. Because they always knew that rates would rise. Mankiw's CV is besides the point unless you're using it to show that he subscribes to ratex. But you really can't argue that an unanticipated shift in marginal rates won't prove a disincentive at higher marginal rates. Can't we take Mankiw at his word that he's 1) surprised; [No. We cannot.] and 2) finding unexpectedly higher rates a disincentive? So he'd prefer either more remunerative stuff or more leisure. As would we all. What's so hard about that? Not every former member of the Bush admin wrote torture memos, you know. Reply October 10, 2010 at 09:13 PM dd said... So does me mean that he always intended to limit his output to textbooks and publication in academic journals? Seems sensible enough. Blogs and newspapers seem pretty thankless when one can appear in the prestige econ journals. No harm though in warning against the headwinds of higher marginal rates, is there? Reply October 10, 2010 at 09:57 PM jesse said... Mankiw uses some baseline scenario of ZERO taxes as his point of comparison. Can we also assume then that we have zero, or at least much smaller, government? Who is guaranteeing, insuring, and regulating his 30 years of investments for his kids then? Reply October 11, 2010 at 12:48 AM

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r.d. said... "Indeed, if people write columns not because they are driven to inform and educate their readers but rather because it is a way to make money to leave to their children-well, then those columns will be written not to inform but to entertain, and so they will be worthless as sources of information and education (rather than as sheer entertainment) to their readers." This is amazingly fallacious. This is like saying: If someone sells bread not to nourish his customers but rather because it is a way to make money, well then that bread will provide no nourishment and will be worthless. Huh? Reply October 11, 2010 at 05:23 AM Bill said... Here is something I wrote at MRev in response to a person named Matt on why Mankiw's piece was disengenuous, and why the use of a phoney reference price of untaxed compounded income was misleading. 1. Mankiw, as I stated earlier and no one since has disputed, is looking at the marginal tax change from letting the tax bracket in the highest income category expire. If you do so, the MARGINAL change is 1,000*.03=$30. You can't dispute that. And, not even Mankiw disputes it when he says: "Paying an extra few percent in taxes wouldn’t create a lot of hardship." 2. The set up to his piece, from a marketing perspective, is to create a phoney reference price and then make a comparison so the reader thinks that he is getting or not getting a deal. In marketing, a reference price is that television commercial where you see the pots and pans going for $100--but, wait Matt, you can have it for $40. Your mind fixates on the $100 (reference price) and when I say $40, you say, what a deal for this crappy set of pots and pans. So, what are some of the phoney reference prices Mankiw employs. Any guesses, Matt? Here are some of the cues for reference prices. a. He starts with a phoney reference price: "If there were no taxes of any kind, this $1,000 of income would translate into $1,000 in extra saving." Matt, did you notice something--do you live in a world "where if there were no taxes of any kind"--that's a set up cue for a phoney reference price and you bought it. There is no such world where there are no taxes of any kind, and to say that his $1000 grows to $10k starts from premise that you are living in a world where there are no taxes and the $1k grows to $10k. Remember those $100 pots and pans. b. If he were truthful and objective, he might start with $523 which is the status quo. c. But, as the Ronko fishomatic salesman would say, there's MORE deception in phoney referencing awaiting you: remember he says that he would take that $1000 (free and clear with no taxes) and invest it in a company earning 8% (show me that company), but, he says, that because THE COMPANY pays taxes, his earnings are only 5%--he's doing a little wave of the hands here too--he has himself paying the company's taxes. Now, he might be arguing tax incidence, but even the die hards argue tax incidence falls back on laborers, and falls forward to customers (some of whom might be foreigners, I might add), and no one says it all falls toward a shareholder. And, besides, if we eliminate corporate taxes, don't Mankiw's taxes go up? So, now his taxes are going up because the company is not paying those taxes, he is. Nice of him to

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assume this. d. Then he says that 8% (without taxes in the unreal reference world) would compound to $10,000. Yeah, what world is he living in with that statement. The world where there are no income taxes is the one where it grows to $10k compounded. Is that the correct reference price world. Think $100 pots and pans again. e. He then cites the marginal tax for medicare (again, this should not be marginal change, because the rate has not varied, only his income did, but I'll disregard that disinguity to focus on a different point: he is focusing on the cost without offsetting it with the benefit). Mankiw does not do double entry bookkeeping, and, I would add, is a bigtime beneficiary because medicare will protect his estate from being depleted so he can pass it on to his kids. If you don't believe me, ask yourself this question: who benefits more from medicare: (a) a person with substantial assets which would be depleted by medical expenses, or (b) a person with no assets at all. Answer: (a) and his beneficiaries. Person (b) will not die in the street, but will pay for the protection of Mankiw's assets from medical expenses. But, the medicare stuff is just a ruse, because nothing changed. f. Now, the estate tax kicks in on that $10k reference price. A whopping 55% on that 10k which would have in a nontax world would. I can't predict, but that is not the likely future estate tax rate, nor is it exclusion. Nor is it smart tax planning. Give a gift to your kid, set up a 529, or an UGTMA. But, don't worry--like all of us in the upper middle class, we give our kids good educations, and not money anyway. g. For being an economist, Mankiw is not a good tax planner either. He didn't set up a SEP for his independent contractor income, which he could shelter to compound tax free, nor did he talk about the business expenses (home office, phone, travel, seminars) which he could offset against this income. 3. Beyond the phoney reference prices, the phoney but for non-taxed worlds, I am disappointed that Mankiw would write this column because there are a lot of uniformed people out there. That's how you get to a 90% marginal tax rate. Let's take up a collection for Mankiw for $30 (or if you want to include medicare), $46. Second thought, let's not take up the collection and hope he doesn't write columns like this again with phoney reference prices.

Reply October 11, 2010 at 05:50 AM Darren said... I am not sure if the Professor is being disingenuous but even this non-textbook author spotted. Mankiw‘s thesis seems to be an inability to increase his savings if the tax cuts are repealed. So what?!? Most of the arguments about the tax cuts suggest/claim that the repeal of the tax cuts will reduce demand at a time when we need increased demand. He completely ignores any need for increased demand or even suggests that demand will decrease if we increase his taxes. Mankiw mentions the 35% corporate tax. This tax will not affect his assumed 8% annual return, as it is part of the corporations’ books already. It could reduce his return from 10% to 8% but it is unfair and incorrect to count that tax AFTER assuming an 8% return. The good professor seems to be a little confused about what“middle” is. He – by his

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statement – is in the top marginal tax rate so he is not in the “middle” class. If we assume middle is around the mid-point of annual income then upper middle has to top out well below 250k per year… this is like saying that a male adult who is 6’7” tall is slightly taller than average. If I had any doubt to his “middle –class street cred” a quick peak at his concern about a 55% estate tax ($3 million plus) dissuades me. One can assume that the only real impact Mankiw can have is in the noise market. If he no longer writes a column in the NYT this should have a slight downward push on the quantity of noise. Since we are already swimming in excess noise, a reduction of noise would bring us a little closer to a position of noise equilibrium. Reply October 11, 2010 at 07:00 AM DrDick said... Mankiw is absolutely right. A massive 3% increase in the top marginal rate on income over $250K will undoubtedly destroy the economy. We need only look at the devastating impact of the Eisenhower era top marginal rate of 90% for individuals and 50% on corporation and the economic stagnation and lack of innovation during that period. Reply October 11, 2010 at 07:19 AM ogmb said... "Now you might not care if I supply less of my services to the marketplace" This from the guy who, with the overt collusion of thousands of his lazy peers, runs the biggest textbook scam in the U.S. (and thus, by implication, the world). What a selfimportant, whiny, sanctimonious b*tch. Reply October 11, 2010 at 07:51 AM howard said in reply to DrDick... drdick, really, we don't have to go back to the '50s. i'm sure mankiw remembers the '90s - they weren't that far back - and the awful, horrible, rotten, no good, very bad clinton tax hikes on upper-income individuals. and of course there's tons of empirical support from that period for mankiw's supposition that a modest tax hike is some giant disincentive to marginal efforts, and that's why he quoted it all. wait - you mean he didn't quote any empirical evidence? you mean his entire piece was a piece of right-wing twaddle? Reply October 11, 2010 at 07:52 AM roger said... Mankiew does not write his column for what he makes from it from the NYT, but because it puts his name at the center of the attention of millions of readers. That P.R. is worth much, much money - it keeps the income stream from his textbook coming in, it makes him a person to consult about economic matters (consulting fees being a big big deal), and its positive externalities very probably overshadow the pittance Harvard teaches him to corrupt the minds of the young. The government, however, doesn't tax the P.R. value of his work for the NYT. If he is serious about his incentives, then he will continue to do exactly what he is doing even if they raise the income tax to 50 or 60 percent of his income. This is because he will not be paying that tax alone - alll of his income bracket will be paying it. And their incentive, vis a vis competing with each other and making money, will simply have to swallow another cost. It is a cost they don't like, unlike paying, say, 4 to 5 thousand more per year each year for tuition at the best schools. The reason is that

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the latter is a cost that bars entrance to competition to any of the people in the class below Mankiew. But he feels, justly, that the tax will probably help the people below him - the great mass of people in the U.S. - and aid upward social mobility, thus producing competition for him and his children. The rich, of course, want to entrench their positional goods. Tax cuts for the wealthy are an excellent way to do this. The tax on the wealthy should aspire to go back to pre-Reagan levels. It is the only way to right the economy to save the middle class. Not, of course, that there is a chance in hell that this is going to happen. Reply October 11, 2010 at 08:13 AM Jose Padilla said... "the corporation in which I have invested pays a 35 percent corporate tax" Last year Exxon paid $0 in US Corporate tax. GE's US corporate taxes owed were negative. That is, the government had to pay GE. If Mr. Mankiw is investing in companies that truly pay 35% in US corporate tax, he is a very poor investor and this indicates a poor understanding of economic fundamentals. Perhaps he should find anothe line of work. Reply October 11, 2010 at 10:29 AM Jason said... Mankiw's argument applies to each "last $1000" above the highest tax bracket. Yet many lucky people make more money than $370k or so. I've never understood people being disincentivized from making more money. Wasn't that in Seinfeld? The thing that distinguishes us from the other animals: we don't turn down money? Reply October 11, 2010 at 10:52 AM lopes said... Yes Indeed, it would be better if Mankiw quits writing his column. Reply October 11, 2010 at 11:05 AM DrDick said in reply to howard... Yes, but Eisenhower provides such a large and substantial club with which to pummel him rather than the more modest differences with the Clinton Administrastion. You are, of course, correct on the merits. This is simply more of Mankiw's signature partisan hackery. Reply October 11, 2010 at 11:11 AM rationalrevolution said... Greg Mankiw must be a total moron. First of all, if you use the "all else being equal" argument, then what he's saying *might* remotely make sense, but all else ISN'T equal, and thus the whole argument is nonsense. #1) Obama is talking about raising the rates on wage income in this particular care, not capital gains, so his whole argument is irrelevant from the start. #2) All else ISN'T equal. If, by collecting more tax revenue, we are able to more quickly balance the budget and reduce the debt, then this extra tax revenue will lead to GREATER ECONOMIC GROWTH, and so by raising the taxes, growth is increased, leading to larger pre-tax gains, and most likely, larger post-tax gains as well. By his logic no one should ever invest at all, because any money invested is just a total loss and has no effect on increasing revenue. http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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#3) "Investments" in the stock market do barely anything to raise capital for companies. The only capital that companies raise is from the sales of IPOs, the rest is all just baseball card trading and a means of redistributing value from workers to share holders. What a tool he's complaining about the prospect of getting less free money for doing nothing. Gee, I want to be able to out a few dollars down and have it magically turn into a small fortune for my kids without me doing any work, yeah, yeah. Well, that type of thinking is EXACTLY what's gotten us into this problem in the first. I have news for Greg Mankiw, your chances of getting an 8% return on investment if we don't increase government revenues is almost zero. The real question you should be asking is this: Am I better off getting a 2% return on investment and paying lower taxes on it, or getting an 8% return on investment and paying higher taxes on it. The fact that he can't understand this makes him a total moron. All in all the world is a better place if this guy is no longer writing economics columns because he clearly doesn't have a clue about economics, and I say score one more for Obama on this one! Reply October 11, 2010 at 12:35 PM Kunda311 said in reply to howard... If there is one thing clear from our present day and time, is that the architects and enablers of the most malfeasant, corrupt Administration in U.S. history, the Bush presidency, have no shame at all and are more than happy to continue peddling their sophomoric rationales and pedantic "expertise" like Mr. Mankiw, presumably because they believe a majority of Americans are indeed morons who will never be able to figure out that these sociopaths crying about deficits and taxes are the same greedy little pigs who spent years dismantling and rigging the system so they could profit from it. Reply October 11, 2010 at 12:57 PM Robert Ricketts said in reply to TB... If you "quit" your column because your tax rate is going to go up by 4.6 percentage points, then I'm not sure what your other incentives for writing the column are, but they must not be very significant ... Reply October 11, 2010 at 12:57 PM DailyScrawl said... The blatant failure of logic is obvious if we establish that our goal is to get us out of this recession. For that to happen, money must be spent. It must be put into the economy. What is Mankiw's self-professed intention? To save. Now consider these scenarios: If the tax cuts expire and Mankiw works less, then the money that he hasn't earned might go to someone who will actually make immediate use of it, helping our economy. If the tax cuts expire and Mankiw doesn't work less, then he helps pay off our nation's debt. If the tax cuts do not expire and Mankiw doesn't work less, then he does us no favors by storing that money away when it could be floating through our economy. If the tax cuts do not expire and Mankiw works less, then at least I'll have one thing to be thankful for.

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Remember, we don't need Mankiw to work. We don't have a shortage of potential workers in this country, so his value as an earner is only to himself. We have a shortage of spenders. Imagine how the above scenarios would change if this were a tax cut for earners who fall below the poverty line. Saving wouldn't be part of the equation and virtually all of that money would be pumped right back into the economy. Death to trickle down BS. (and before you even think about feeding me that line about how businesses drive the economy... don't. Let's just get this clear: DEMAND COMES FIRST because BUYERS ALWAYS INITIATE THE SALE) Reply October 11, 2010 at 01:22 PM Bob Athay said in reply to DrDick... Let's take this a little further and examine Mankiw's using some basic math. Assume for the moment that some sort of Laffer curve accurately models revenue as a function of marginal tax rate. That is, rv = L(x) where where rv is revenue, x is the marginal tax rate and L(x) is a function defined over the interval 0 0 at the marginal rate that would result from letting the Bush-era tax cuts expire on schedule. This fundamentally contradicts Mankiw's argument that L'(x) << 0 at the Bush-era tax rate. In other words, even if I accept the fundamental argument of Supply Side theorists, Mankiw doesn't know what he's talking about.

Reply October 11, 2010 at 02:16 PM Bob Athay said in reply to Bob Athay... Yuch... I lost a quite a bit of text somehow. The idea was just to use a little basic calculus plus some benign assumptions to show that Mankiw isn't making sense even from a supply side perspective. Reply October 11, 2010 at 02:21 PM Jeff Hoffman said... Greg: Todd Henderson called. He would like his self rightous sense of entitlement back. Greg: Your children called. They would like the money the Bush administration took from them to give to their father and his ilk back. Reply October 11, 2010 at 02:36 PM Chris Gaun said... Yeah, when I plotted the number of articles he has authored by date I saw no fluctuation with tax rates (graph is in link): http://twitpic.com/2wtd41/full Granted he may make more money on each article now then in 1999, but I doubt it. Reply October 11, 2010 at 02:39 PM Bob Athay said in reply to Bob Athay... The gist of my first comment was supposed to be: Supply-side theory, aka Reagonomics, rests on the Laffer curve construct which implies that revenue, rv, is a differentiable function of marginal tax rate, x: rv = L(x). A basic theorem of calculus, Taylor's theorem, states the revenue resulting from a small change in marginal tax rate, dx, is approximately L(x) + (x+dx)*L'(x) where L'(x) is the derivative of L(x). Since revenue declined after the 2001-2003 tax cuts, it follows that L'(x) > 0 http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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at the Clinton-era rate. But Mankiw asserts that at least as far as he's concerned, productivity will fall sharply if the 2001-2003 tax cuts expire as scheduled, which implies that L'(x-dx) << 0. From a purely mathematical perspective, either Mankiw's "case study" is irrelevant, the logic behind the standard Republican arguments in favor of tax cuts is fundamentally wrong, or both. From a systems engineering / Operations Research perspective, the mathematical assumptions I made are very benign. Reply October 11, 2010 at 03:15 PM z said... Reducing your labor supply in response to higher taxes is a moral hazard. Much like how people reduce their fire-prevention efforts after getting fire insurance, Greg is reducing his work effort to get out of paying the "social insurance premium" (the high taxes rich people must pay in return for the social insurance cushion they would have gotten if they were poor). Its amazing how candid he is about changing his behavior specifically to avoid this responsibility. Reply October 11, 2010 at 04:14 PM Steve Friedmann said... At first I thought this column was a spoof. How could a Harvard Professor write an essay that is so foolish, selfish, and filled with errors and illogic. Then I saw ,"Inside Job" the documentary, and discovered that there are a whole lot more just like Mr. Mankiw out there. It's frightening. And half a page in the Sunday New York Times. Are their no minimum standards? Does anyone read these essays before publication? It's embarrassing. I am embarrassed for the Times and for it's readers. Reply October 11, 2010 at 07:03 PM Nathanael said... Mankiw's not an economist, he's a fool. I'm mostly embarassed that my college used the crappy so-called textbook which Mr. Mankiw wrote (at least I assume he wrote it; it's full of enough embarrasingly obvious inaccuracies that it seems unlikely to be ghostwritten). Reply October 12, 2010 at 01:51 AM Nathanael said... For Mr. Mankiw's information: (1) We would very much like him to stop "working", as he is actively harming the rest of us. Raising his taxes is obviously a win-win. (2) Many of us rich people are considering emigration *because* the US does not provide remotely decent public services. Unless the Bush tax cuts are reversed, it will be unable to provide decent public services, and we will do our best to emigrate to somewhere with higher taxes and better services. (3) Mr. Mankiw, on the other hand, might prefer a low-tax paradise such as Somalia. Oh, he doesn't? -- he's just another hypocritical liar, then. Reply October 12, 2010 at 01:54 AM shallow sage said... We're reminded that this has been an issue throughout history. Apparently it's the mark of oppressive regimes that one can become so comfortable by protesting the government that $1000 just isn't worth the effort anymore.

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Greg Mankiw Quits the New York Times? - Grasping Reality with Both Hands

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http://shallowsage.com/post/1298318819/his-audience-was-hopeful-but-doubted-hewould Reply October 12, 2010 at 05:13 AM Mara Fridell said... Your economic point is excellent. And you bring up a political-sociological point, rightly insisting on the (currentlyunfashionable) value of the social contract. You cite Burke, who was of course rebuked by liberal social contract theorists such as Rousseau, Paine, and Wollstonecraft, for placing excessive emphasis (inter alia) on using social contract to lash the citizenry to past relations of power (made sacred through identification with social contract). We can in fact similarly observe that modern conservatives condemn not chaining ourselves to past relations of power (although a fringe of them tries to frame it that way in po-mo rhetoric), but to past relations of broad and deep liberty, equality and justice. In any society, we wrestle over what is to be preserved and enhanced, and what needs to be destroyed. It's remains class warfare. Let me suggest a further sociological perspective on our modern, whining, threatening, expert-conservative class: What if Greg "GW Bush spend-and-tax deferment advisor" Mankiw doesn't write columns for the cash, but for sowing conservative propaganda? If this is representative, and in a labor market that has been increasingly divided into a small highly-paid managerial class and a large crisis-beset working class in fact it is representative, believe me, I am not worried in the least about losing such "services" provided by highly-paid professionals. Let them eat high-fat, corn-based, highadditive, processed, CAFO-manufactured quasi-food. Reply October 12, 2010 at 10:43 AM The Working Class said... Hayek/Class warrior, I know you see me as the enemy. What you haven't realized yet, is that we see you, in all your limitations. In all your pretension. In all your corruption. In all your abject unworthiness. And I don't think we're as completely powerless as you've been hoping. Continue to sleep deeply. Reply October 12, 2010 at 11:03 AM gman said... Harvard prof...cannot grasp the concepts of marginal v. effective taxes! Reply October 12, 2010 at 12:23 PM Lisa said... All you need to know about Mankiw is that he is so confident he can put his kids through college that he's moved on to putting aside money so his grandkids can go to college. Must be nice to live in his world. Reply October 13, 2010 at 08:21 AM RobW said... This from the guy who, with the overt collusion of thousands of his lazy peers, runs the biggest textbook scam in the U.S. (and thus, by implication, the world). Oh god, yes, this. I was forced to buy that book/webpage access for an Econ 101 course. The guy's textbook was so full of assertions without citations and illogic, I became convinced that if this was the basics of economics then the whole field must be

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Greg Mankiw Quits the New York Times? - Grasping Reality with Both Hands

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worthless bullshit intended only to provide conservative propaganda for the benefit of oligarchy. Fortunately, I've done a bit more reading since then. And yes, this whole column clearly is a lie. There is no way, no damned way, that an economist of Mankiw's stature makes such errors by accident. He knows what marginal vs. effective tax rates are. A few have called him an embarrassment; I think the NYT is thinking the same thing. He's on his way out the door, I figure, and has written this whining screed so he can claim to have quit rather been let go. At least this explanation makes more sense than his stated reasons which make none. Reply October 14, 2010 at 03:35 PM Jonathan Revusky said... That Mankiw column is quite amazing, just the sheer density of logical fallacies and intellectually dishonest arguments. Let me try to break this down. Okay, the point of the article is to repeat for the umpteen millionth time some sort of utterly trite rightwing talking point -- how raising taxes on rich people will reduce their incentives to work. (And thus be bad for us all....) Already I find it incredible that somebody supposedly of his stature as a scholar and public intellectual would write something so utterly stale, so completely unoriginal and uninteresting. Surely, a Harvard professor, someone who is posing as a public intellectual writing in the New York Times, would feel that there is some onus on him to... well... actually have something to say. (I mean, at least not just some idea that any lowbrow on Fox News could express better in his sleep.) But I guess not. Maybe that is normal now, seeing as how utterly debased public discourse in the United States has become. What is truly remarkable about this Mankiw editorial, though, is the way he trots out examples that do not withstand any scrutiny in terms of supporting his basic argument. Just consider this one: he asks you to consider the case of a novelist who is deciding whether to write a book or not! Think about this! Do you really think that a novelist, a serious creative writer, is going to write his next book or not based on smallish changes to the tax code? Seriously. Imagine for a sec that you had it in you to write... oh, I don't know... the next great American novel. (Or you think you do, which amounts to the same thing in this context.) You just feel that there is this great literary work in you waiting to burst out and... would you write or not write this book based on smallish changes to the tax code? (Or even large changes to the tax code... it's a bizarre example to make the point he wants to make, isn't it?) The example just doesn't ring true at all. He mentions movie stars, as if a movie star netting 3 million dollars to make a movie instead of 4 million after tax, say, is going to cause the supply of movie actors to dry up!!! Is this not one of the absolutely worst examples for his argument that anybody could imagine? Still, I think the most impressive bit of idiocy and dishonesty is when he uses his own self as the example. He says that, due to the tax code, he is not very responsive to offers of extra work that come his way. Think about this a sec. I think that anybody who thinks about Professor Mankiw's situation for a minute or so would guess that the main A-1-A reason that he is not terribly responsive to possibilities of extra work is because his day job at Harvard pays so darned well! I mean if he has at least 10k a month after tax as an "iron rice bowl" (this is a very low estimate) why should he go out of his way to make an extra few grand here and there? It's simply not worth it. That's surely the reason why! It has almost nothing to do with the tax code. (I have http://delong.typepad.com/sdj/2010/10/greg-mankiw-quits-the-new-york-times.html

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Greg Mankiw Quits the New York Times? - Grasping Reality with Both Hands

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read elsewhere that Mankiw is also very wealthy, largely on account of a bestselling economics textbook, but I don't think that's central to my point here.) Mankiw's lack of interest in extra paid work is precisely because his after-tax income is already so high that any extra things are quite marginal. For example, if he only had a bit more than the after-tax income of an elementary school teacher, he would surely take all the moonlighting work he could get. But, as things stand, he has (by his own admission in this very column) every luxury he really wants anyway, so why bother to spend much energy running after a bit of extra money. So you see, when you actually consider what he is telling us, it potentially constructs an argument for a more steeply progressive income tax. The fact that his iron rice bowl after-tax salary at Harvard already pays him so far beyond anything that he really needs, he has little interest in extra paid work. So, this is what I think is really quite impressive: even when this guy is talking about himself, his own situation and motivations, it doesn't ring true. It just seems utterly disingenuous. Maybe he did not seriously introspect as to the reason that he does not energetically pursue extra money-making possibilities. He was fitting his own situation into the ideological talking point du jour. The problem is, it does not fit. It's a square peg being forced into a round hole. What else to say about this kind of fatuous asshat professor cum NYT pundit, erstwhile member of GWB's economic wrecking crew? One odd thing about this kind of person is that they spout this anti-government rhetoric that says (or implies) that everybody who works for the government is some kind of parasite, living off of the people in the private sector who produce the real wealth. Why does somebody like Mankiw think he is a wealth-producing member of society but a government bureaucrat is not? What would be the logical basis for that? All I can figure is that this is a consequence of extreme self-regard. That is also consistent with writing op-ed articles in the New York Times when you have nothing to say, and you don't need the money. One hell of an ego. Reply October 15, 2010 at 01:47 PM Comment below or sign in with TypePad

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Greg Mankiw Quits the New York Times? - Grasping Reality with Both Hands

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Greg Mankiw Quits the New York Times? - Grasping Reality with Both Hands

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Greg Mankiw Quits the New York Times? - Grasping Reality with Both Hands

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Greg Mankiw Quits the New York Times  

Economics 210a Weblog Archives DeLong Hot on Google DeLong Hot on Google Blogsearch October 10, 2010 The Semi-Daily Journal of Economist J....

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