Climate change win-win

I read earlier in the week about an interesting report suggesting a cost/benefit analysis on the economic aspects of policy response to climate change might actually come out neutral.  That’s pretty good when you consider the huge upside of, you know, possibly preventing global climate catastrophe (or at least serious, serious disruption to many, many people).  Anyway, Krugman has a really good column on it:

Where is the new optimism about climate change and growth coming from? It has long been clear that a well-thought-out strategy of emissions control, in particular one that puts a price on carbon via either an emissions tax or a cap-and-trade scheme, would cost much less than the usual suspects want you to think. But the economics of climate protection look even better now than they did a few years ago…

On the other side, it turns out that putting a price on carbon would have large “co-benefits” — positive effects over and above the reduction in climate risks — and that these benefits would come fairly quickly. The most important of these co-benefits, according to the I.M.F. paper, would involve public health: burning coal causes many respiratory ailments, which drive up medical costs and reduce productivity.

And thanks to these co-benefits, the paper argues, one argument often made against carbon pricing — that it’s not worth doing unless we can get a global agreement — is wrong. Even without an international agreement, there are ample reasons to take action against the climate threat.

But back to the main point: It’s easier to slash emissions than seemed possible even a few years ago, and reduced emissions would produce large benefits in the short-to-medium run. So saving the planet would be cheap and maybe even come free.

But here’s the part I really love:

You mostly hear this from people on the right, who normally say that free-market economies are endlessly flexible and creative. But when you propose putting a price on carbon, suddenly they insist that industry will be completely incapable of adapting to changed incentives. Why, it’s almost as if they’re looking for excuses to avoid confronting climate change, and, in particular, to avoid anything that hurts fossil-fuel interests, no matter how beneficial to everyone else. [emphasis mine]

Now what we need is some brave leaders on the left to make this argument strongly and repeatedly.

Income stagnation and political polarization

Interesting hypothesis from John Cassidy:

The release from the Census Bureau includes a chart showing inflation-adjusted median household income going all the way back to 1967. Perhaps this picture is already familiar to you. If it isn’t, it should be: it goes a long way toward explaining why Washington politics are so dysfunctional.

cassidy-chart.jpg

Looking at the chart, two periods stand out. In the nineteen-seventies and nineteen-eighties, median household income zigzagged up and down, but, by 1989, it settled at $52,432, which meant that it had risen by about eleven per cent in the previous twenty years. Relative to the so-called “Golden Age” after the Second World War, this was a poor performance. But look at what happened next. In the quarter century between 1989 and 2013, median household income didn’t rise at all. In fact, it fell by about one per cent…

With fewer gains to go around, distributional squabbles intensify—not just among various income groups but also among different social classes and ethnic groups. (As the Census Bureau data show, income disparities are still highly correlated with race.) Meanwhile, those lucky folks at the top of the income distribution, where almost all of the incremental income has accumulated over the past couple of decades, have a big incentive to get more involved politically: to prevent the adoption of redistributive policies.

To oversimplify a bit, income stagnation paired with rising inequality is a recipe for political polarization and, under the American system of divided powers, political gridlock, which is what we have. Based on the latest Census Bureau figures, there’s no sign of that changing anytime soon.

Of course, Cassidy does get one thing wrong.  Those “lucky” folks at the top are not just lucky.  Mostly, they deserve credit for choosing to be born to the right parents in the right neighborhoods.

Raising the minimum wage will ruin the economy!

Well, not quite.  But would you believe conservatives have made that complaint every time raising the minimum wage was contemplated?  Of course.  And would the fact that they have been wrong about this every time before stop them now?  Of course not.  Nice post from the New Yorker’s William Finnegan:

ecause the federal minimum wage has never been indexed to the cost of living, the debate over its efficacy and morality is regularly reëngaged as its value sinks and Congress is called upon to act.

The arguments against—a hundred years’ worth—were recently collected by a group of scholars calling itself the Cry Wolf Project. They sound hair-curling. “The minimum wage has caused more misery and unemployment than anything since the Great Depression,” Ronald Reagan said in 1980. “Rome, two thousand years ago, fell because the government began fixing the prices of services and commodities,” Guy Harrington, of the National Publishers Association, told Congress in 1937. The Fair Labor Standards Act, which set a national minimum wage of twenty-five cents an hour, in 1938, and also abolished most child labor, “constitute[d] a step in the direction of communism, bolshevism, fascism, and Nazism,” according to the National Association of Manufacturers. In the view of its opponents, the minimum wage—or raising an existing minimum—will always and inevitably damage the economy, kill jobs, doom American freedom, and/or harm the very people that it is meant to help. This litany of alarm has a dismal record as a description of reality, and yet has not changed much over the past century…  [emphasis mine]

Raising the minimum wage is not, by any stretch, a poverty panacea. Its knock-on economic effects are in fact complex, its redistributive aim less well targeted at the working poor than, say, the earned-income tax credit. But opponents who insist that a raised minimum wage only hurts low-wage earners by eliminating entry-level jobs—a popular conservative position today—often have a weak grasp of the lives of the people involved. In March, Representative Paul Ryan, attacking the proposed hike at a town-hall meeting, said, “The majority of these workers are younger people just getting into the workforce.” This is not so. According to the Economic Policy Institute, the average age of workers who would benefit from a higher minimum wage today is thirty-five. Eighty-eight per cent are over the age of twenty

The proposed hike would ease present hardship, not abolish it. It would be a move in the direction of “the wages of decent living”—a performance, one might say, of decency itself.

Again, just to make clear, while the minimum wage is far from perfect the ruinous predictions from the right have simply never come true.  And they won’t this time. And there’s little doubt that there is a real positive benefit to many workers.  And, while it is far from perfect data, the fact that states that have raised their minimum wage are doing just fine is a pretty strong rebuttal to the argument that it is a bad economic idea to do so.

Teach your children well

This subject deserves more than a hasty post with a couple of graphs (especially since I wrote an APSA paper on the topic), but for now I want to throw out some basic results from a recent Pew report that I think are fascinating.  The survey looked at values parents want to instill in their children and how it differs for liberals and conservatives.  And boy, am I liberal because I certainly value empathy and curiosity and am not the biggest on obedience (I like it from my kids, but as a key value, not so much).    Here’s the key graphs:

Conservatives Prioritize Teaching Faith, Obedience; Liberals Value Tolerance

Consistent Liberals More Likely to View Teaching Curiosity as Important

Seriously conservatives?  I get most of this stuff, but why shouldn’t any human value empathy.  This, more than anything, is why I am liberal.

Good stuff.  I’m going to have to take a deeper dive and come back to this.  Also, can’t wait to get my hands on the actual data when it comes off embargo in a year.

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