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Random Observations for Students of Economics
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25 июня, 17:58

An Effective Marginal Tax Rate

Interesting numbers from Phil Gramm and Robert B. Ekelund Jr.:The bottom quintile earned 2.2% of all earned income in 2013, but after adjusting for taxes and transfer payments, its share of spendable income rose to 12.9%—six times its proportion of earnings. The second quintile’s share more than doubled, rising from 7% of earned income to 13.9% of spendable income. For the third quintile, middle-income Americans, the increase was much smaller, from 12.6% to 15.4%.To put it another way, the effective marginal tax rate when a person moves from the bottom to the middle quintile is 1 - (15.4-12.9)/(12.6-2.2), or 76 percent.

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23 июня, 15:51

A Response, along with a Movie Recommendation

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A couple readers emailed me about yesterday's post, asking me whether I want to enforce the law. The implicit suggestion is that President Trump's immigration policy is simply law enforcement.Of course, I believe in law enforcement, but enforcement has to be proportionate. Double parking is illegal, but we don't execute people for double parking. We give them a ticket.The Trump administration's response to illegal immigration is vastly disproportionate. He paints a picture of the nation being ruined by illegal immigration, but that is just not true. He is doing great harm to many people to solve a problem that is largely fictional.I don't pretend to fully understand Mr Trump's goals and actions, but his supporters seem motivated by a combination of understandable economic and cultural anxiety, misdirected blame, and in some cases latent prejudice. Mr Trump seems to play to that combination for purposes of self-aggrandizement.Yesterday, I saw the movie Burden, a story about a man raised within the KKK community and his personal struggle to escape from it. I highly recommend the film. Along with the book Hillbilly Elegy, it does a good job of explaining the culture and perspectives of less educated white Americans, who are Mr Trump's base.

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22 июня, 14:14

Anti-liberal Trolls

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David Brooks:For centuries, conservatives have repeated a specific critique against state power. Statism, conservatives have argued, has a tendency to become brutalist and inhumane because a bureaucracy can’t see or account for the complexity of reality. It tries to impose uniform rules on the organic intricacy of human relationships. Statist social engineering projects cause horrific suffering because in the mind of statists, the abstract rule is more important than the human being in front of them. The person must be crushed for the sake of the abstraction. This is exactly what the Trump immigration policies are doing. Families are ripped apart and children are left weeping by the fences constructed by government officials blindly following a regulation. This illustrates something crucial about this administration. It is not populated by conservatives. It is populated by anti-liberal trolls. 

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15 июня, 22:50

Why Aren’t More Men Working?

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Click here to read my column in Sunday's New York Times.

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31 мая, 22:14

On Tariffs, Blame Congress Too

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The tariffs just imposed by President Trump are, of course, terrible policy. Mr. Trump deserves the first line of blame for making decisions that no sensible economist would advocate.But let's not let Congress off the hook. Over many years, Congress has passed the laws that give the President a lot of discretion over international trade policy. The assumption is that the President could be counted on to act responsibly. That assumption has now been proven wrong. Congressional leaders should think hard, in a bipartisan way, about how to revoke, or at least severely limit, those discretionary powers.Update: Several senators are proposing a bill to rein in the President's power.

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11 мая, 17:26

Open Letters from Economists

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Some sign a letter opposing tariffs. Others sign a letter supporting President Trump. You can guess which one I signed.

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15 апреля, 23:12

Digital Textbooks

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This podcast (from last summer, but new to me) offers a good discussion of the benefits of digital textbooks.

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14 марта, 00:32

A T-shirt for the Times

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Perfect for wearing when you teach Chapter 9 of my favorite textbook. (Make sure to check out the image on the back.)

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04 марта, 16:08

What I've Been Watching

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The End of the F***ing World.  A compelling coming-of-age/crime/love story, like a merger of The Breakfast Club and Bonnie and Clyde. On Netflix in eight brief episodes. Most definitely binge-worthy.

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02 марта, 22:06

President Trump unites the country

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How often do Jeffrey Sachs and the Wall Street Journal editoral writers agree?

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21 февраля, 18:02

Summer Camp at Hoover

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A weeklong program for undergrads.