Sinners in the Hands of an Angry Blog

I accept that this post isn’t really arguing for 100k a year max incomes, as Matt says:

Similarly, one important reason high-end consumption items are so expensive is that the people who buy them have so much money. If there weren’t all these rich people around, that house on the Hamptons would be much cheaper and you wouldn’t be so desperate to earn enough money to buy it. These points are important, underappreciated, and should shape our thinking about policy to a greater extent than they do, and I think the Grief piece is a welcome contribution to dramatizing that fact even if the specific proposal has some problems.

Some problems still remain, though.  Though surely the wages of some CEOs are driven primarily by prestige competition, what about doctors?  Medicine is actually a field where the income is necessary (and 100k a year is not enough) to compensate the doctor for the immense losses (both financial and otherwise) they have suffered on the route to becoming a physician.

- Educational costs: Now,  on some level, the prices of education, both undergraduate and medical school, are driven by the higher wages one can expect to reap as a physician, but it’s still going to cost a lot.

- Hours worked/work conditions:  100k seems like a decent hourly salary at 40 hours a week.  It’s not so nice at 80 hours a week, especially when you consider that those extra 40 hrs are probably worth a lot more to you as luxury time.  Plus, what’s the cost of literally having people’s deaths on your hands?  Even the best doctor will one day, have a patient die that they could have done something about.  One of the best features of my job is that I don’t have that kind of responsibility, and it would take an immense amount of money (much higher than the difference between my salary and 100k) to get me to change that.

- Opportunity cost:  you could have earned a lot of money working, instead of the 4 years of medical school, or having a part-time job in college (you may not have time for that as a pre-med),  and the 3-4 years as a resident, during which you make a very small amount.

- Intangibles: what’s the proper wage for someone who has sacrificed personal relationships or time with kids to the extent that a doctor has?  I’m not sure that I can put a price on that, but I’m pretty sure it’s high.

- Value of what they’re providing: certain surgeons actually can save lives that no one else in the world can.  Now, I’m not saying that we should compensate them at the going insurance rate for life-years or whatever, but I think most of the people in the world are fine with the idea of people who save lives making more than 100k.

So yes, I accept that for some jobs, the high salary is driven by competition instead of real compensation.  But there are quite a few where it is not — there are “real” as opposed to positional reasons for their paychecks.  I know Matt’s not actually recommending the max income policy, but it’s hard to imagine any policy that we might propose that reduces the positional component of a CEO’s pay without similarly affecting doctors, who may have little or no positional income.  After all, it’s hard to show off all your conspicuous consumption if don’t get home until after all the other Maserati owners have gone to bed.

From Boing Boing:

Starbusians throughout the United States are no doubt cheering today’s news from the mothership: “We’re very excited to announce that coming July 1st: Free. 1 click. No registration WIFI at all US locations!”

But in fact, it’s actually going to be cheaper than free:

According to Starbucks, this new service, called the “Starbucks Digital Network,” will give users who surf the Internet from U.S. company owned stores access to “various paid sites and services such as wsj.com, exclusive content and previews, free downloads, local community news and activities, on their laptops, tablets or smart phones.” Besides the Wall Street Journal, Starbucks’ partners include Apple’s iTunes, The New York Times, Patch, USA TODAY, Yahoo and ZAGAT.

So they’re actually giving you money when you use their service — Starbucks wifi will essentially have a negative cost to you, which most economists would label with the highly technical phrase “free money.”

On a public policy note:

As my friend @sfslim replied, “Sadly, given @Starbucks ubiquity, this may be the closest we get to nationwide municipal Internet access for years.”

[...]

Related: Did you know McDonalds also offers free WiFi at more than 11,500 locations? (I didn’t, until I read @docpop’s tweet.)

Perhaps Boing Boing readers and writers could ponder why two for-profit megacorps are more interested in providing free public goods to citizens than municipalities?  I realize Starbucks and McDonald’s probably are only offering their free wifi to customers, but I imagine the ease of “stealing” their wifi without buying their crappy coffee (that’s Starbucks — McDonalds actually has good coffee) will render irrelevant any attempt to actually enforce this restriction.

This is what I assumed would happen when people started wanting to raise tax dollars for cities to provide free wireless.  Eventually people who own buildings will install services that the people who go into those buildings want, both private and public.  They were perfectly content to provide air conditioning and restrooms (at no additional cost) in order to satisfy the desires of their occupants, so why not wireless connectivity?  This isn’t even a decent public goods question.

What’s the proper capitalization/hyphenation of wifi?  Wi-Fi?  Wifi?

This is one of these times where something fits my confirmation bias so perfectly, that I’m hesitant to believe it’s true: (via Megan McArdle)

Recent research at Harvard Business School began with the premise that as a state’s congressional delegation grew in stature and power in Washington, D.C., local businesses would benefit from the increased federal spending sure to come their way.

It turned out quite the opposite. In fact, professors Lauren Cohen, Joshua Coval, and Christopher Malloy discovered to their surprise that companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses. Indeed, in the years that followed a congressman’s ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent[.]

Fifteen percent!  That’s… insane.  I would like to see a lot more takes on this data.  It seems too bad to be true.  I could probably read the actual paper here, and figure them out, but that’s hard work, and I’m lazy.

Because the ones that keep yelling “we’re the sane ones!” keep saying things like “oh the auto bailout was such a good idea!”  Megan McArdle then completely demolishes whatever argument he may have had and this is his response:

McArdle says I’m wrong about the auto bailout. I think the context of a spiraling depression scenario justified it – and am relieved that the results seem far better than I’d expected.

That’s it?  No discussion of the numbers she brought up?  No analysis of the opportunity cost of that bailout money?  No curiosity about how, with the expected revenue numbers, that GM is going to get back into the black, and whether or not it will just persist eternally on tax-payer life support?  Not even a blip (shockingly, from someone normally so concerned about the rule of law) about how “financial bailout money” got used as a handout to a powerfully connected car company?  Nothing?

If this is the level of economic discourse from the “sane” conservatives, then what’s the point in having this irrelevant category of conservative at all?  Just vote Democrat and be done with it.  I’m delighted to see people like Mr. Sullivan slag the stupid “insane” conservatives who don’t like immigrants, gays, or minorities, and I will continue to applaud him for doing so — but if there’s no value in the “sane” conservative economic policy, why even bother with the term?

Update 1: The absolutely balls to the wall hilariousness is that the post directly after his claim that the massive spending of the auto bailout worked is a link to Bruce Bartlett saying we need a VAT now.

Personally, I think it’s stupid to put up with a decade of unnecessary pain and suffering before we finally bite the bullet and do what has to be done to stabilize our nation’s public finances. But I don’t see any other path that will get us there.

Why is there no other alternative to a VAT?  Because we spent so much!  Why did we spend so much?  Because people like Bartlett and Sullivan supported that spending!  This like a confronting a burglar in your kitchen and he tells you: “See, I told you needed an alarm system!”

I also like this line from Bartlett’s piece:

The right-wing, tea party fantasy that we can solve our fiscal problems only by cutting spending has to be proven by experience to be a failure before rational people can finally put real solutions like a VAT on the table[.]

Yes, you crazy right-wingers, thinking that you can reduce your debt by spending less.  What insanity!  The thing is, it’s not like spending has remained constant.  It has risen dramatically.  So Bartlett’s case that an equilibrium of lower spending can’t exist is belied by the fact that it did exist before spending increases took place.  Here’s your new slogan, Mr. Bartlett: “Bruce Bartlett not only doesn’t have a 9/10 mentality, he doesn’t even believe that 2001 could have existed!”

This is the argument that I keep making to local (including mine) and state governments who are saying that spending cuts are untenable — if going to a lower level of spending is disastrous, then how were you operating back in 2000 or 2005, before spending increases that took place at all levels of government over the past decade?

To repeat, what is the point of a “conservative” economic policy that is “tax and spend more”?  We already have a party for that.  Well, to be fair, we have two.

The CEO of Cleveland Clinic gives a Newsweek interview.  Some things were pretty good, some were bad, and some were insane:

Cosgrove declared this year that if it weren’t illegal under federal law, he would refuse to hire fat people as well. The resulting outcry led him to apologize for “hurtful” comments. But he has not backed down from his belief that obesity is a failure of willpower[.]

The problem is — being fat (up to a point) isn’t unhealthy.  Being sedentary and inactive is — and to his credit, the Cleveland Clinic does encourage people to exercise more.  If Cosgrove really wanted to improve the health of both his employees and his patients, he’d do well to focus more on activity and less on weight.

The main thesis of the article is that the Cleveland Clinic might be a good model for the rest of the country — and I agree.  But there aren’t enough rich Arab sheikhs with heart problems to fund all of the rest of the hospitals.

From May 2005, Tyler Cowen:

Do we live in a housing bubble?

If you’re interested in pundits betting on their predictions, this is as good a place to start as any.

The Chinese Are Buying Hummer. Are You Outraged?

Hummers used to be a symbol of American greatness, or gratuity — if there’s a difference. Now a Chinese manufacturer is buying the company. How the mighty have fallen? Or, how the almost-as-mighty have been suckered into buying a worthless car company? 

The New York Times reports that the GM has agreed to sell its Hummer SUVs and trucks to the Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., a western Chinese machinery company that would like to start making cars. (Some advice from American experience: Don’t make Hummers.)

The best comment:

Joel |  June 2, 2009 6:45 PM

I’d only be outraged if I were a shareholder in this Chinese company.

I certainly thank this company for their kindly charitable donation to GM, as it will save my tax dollars from being used for the same purpose, but I have to wonder what the hell they were thinking.  I would not want to be the guy who arranged this deal.

So, given that the government’s 60% ownership of GM is supposed to be temporary, one assumes that they will need to sell their stake in it at some point.  What happens if GM continues to decline, and no one wants to buy it?  

Sure, you can call me a crazy free-market nut with my nasty rhetorical question, but even then — what’s the answer?