Just came across this Templeton Foundation conversation on the role of reason in moral thought and action. Very enlightening. Over time, I have become more of a “Smithian” in acknowledging the role of moral emotion in guiding our intuitions and appropriately establishing moral commitments, though I also see a role for reason in systematizing those intuitions. My own view comes quite close to that expressed by Rebecca Newberger Goldstein. The main problem with the compatibilist-determinist view expressed by brain scientists is that the discovery that people give all sorts of reasons for their moral acts doesn’t mean that reason doesn’t play a role in establishing the truth about morality, just as the fact that people come to their understanding of the world (say, color or the laws of physics) in different, imperfect ways doesn’t undermine the validity of experimental induction to discover the truth of the matter.
Despite candidate Obama’s promises of greater openness and transparency, the last few years have not been good ones with respect to freedom of the press. As Al Hunt observes: “The Obama administration has pursued more journalists than other administrations, secretly looking at phone records and credit card transactions and surreptitiously tracking their movements.”
A new Pew survey reveals that the administration’s policies may have a chilling effect:
About two-thirds of investigative journalists surveyed (64%) believe that the U.S. government has probably collected data about their phone calls, emails or online communications, and eight-in-ten believe that being a journalist increases the likelihood that their data will be collected. Those who report on national security, foreign affairs or the federal government are particularly likely to believe the government has already collected data about their electronic communications (71% say this is the case)
Although only 14 percent say that concerns over government surveillance have kept them from pursuing a story, it has forced 49 percent to change the way they store or share documents.
Following the terrorist attack in Paris, President Obama proclaimed: “Free expression and a free press are core values they are universal values, principles that can be attacked but never eradicated.” Let’s hope he is correct.
Interest in childhood vaccinations has risen in the past few weeks, with the growing number of cases of measles. As Christopher Ingraham (Washington Post) notes: “Public opinion polling shows that vaccination attitudes don’t differ much by party affiliation. Or by income, or even education. But there is one important demographic factor: age.”
Rand Paul has run into some difficulties in the past few days when responding to questions regarding vaccinations. Perhaps his position is more complicated than can be captured in a sound byte. Alternatively, the ambiguity might be a calculated response to the beliefs of a key demographic that Paul has been courting.
In the State of the Union, President Obama proclaimed the good economic news. He declared 2014 a “breakthrough year for America,” noting “our economy is growing and creating jobs at the fastest pace since 1999.” He also made the case for “middle-class economics,” promising a budget that would focus on “lowering the taxes of working families and putting thousands of dollars back into their pockets each year.”
Things appear far less rosy a week and one-half later. The Commerce Department’s growth figures for the final quarter of 2014 (released Thursday) reveal a slowing economy: 2.6 percent for the fourth quarter, compared with 4.6 percent in the second quarter and 5 percent in the third. That places real GDP growth for 2014 at 2.4 percent. The “breakthrough year” seems to be but a marginal improvement over 2.2 percent (2013) and 2.3 percent (2012). The Commerce Department also released the figures on the seasonally adjusted homeownership rate: 63.9 percent, the lowest level in 20 years.
Perhaps these figures only strengthen the case for “middle class economics”? Unfortunately, the Tax Policy Center’s analysis of the tax provisions in the SOTU reveal that the middle class (the middle quintile) would actually incur a tax increase of $7. Certainly, the provisions would have a significant impact on the top quintile (an average increase of $1,818) with the greatest hit on the top 0.1 percent ($168,006). But the increased revenues would give the greatest relief to the bottom quintile ($174), rather than the middle class. As Max Ehrenfreund (Washington Post, Wonkblog) notes: “There’s no point in calling this tax plan ‘middle-class economics,’ since its main effect is to help the poor. After all, they’re the ones who need it most, and there’s no reason to shy away from policies that benefit them.”
Well, there is a reason for calling this “middle-class economics” just like there is a reason for calling 2014 a “breakthrough year.” Unfortunately, the reason is not grounded in the empirics.
Critics of the President’s State of the Union address noted it did little to promote bipartisanship. Yet, it has already stimulated bipartisan agreement on one of the President’s education proposals.
In the State of the Union, President Obama proposed free community college:
“I am sending this Congress a bold new plan to lower the cost of community college—to zero.
…Whoever you are, this plan is your chance to graduate ready for the new economy, without a load of debt. Understand, you’ve got to earn it—you’ve got to keep your grades up and graduate on time. Tennessee, a state with Republican leadership, and Chicago, a city with Democratic leadership, are showing that free community college is possible. I want to spread that idea all across America, so that two years of college becomes as free and universal in America as high school is today.”
One detail that failed to make it into the State of the Union address: The funding for the program would come by effectively killing the 529 college savings accounts, that exempt earnings from taxation if used for educational expenses.
This fact stimulated bipartisanship, albeit not the kind the President anticipated. As Jonathan Weisman (New York Times) explains:
President Obama, facing angry reprisals from parents and from lawmakers of both parties, will drop his proposal to effectively end the popular college savings accounts known as 529s, but will keep an expanded tuition tax credit at the center of his college access plan, White House officials said Tuesday.
The decision came just hours after Speaker John A. Boehner of Ohio demanded that the proposal be withdrawn from the president’s budget, due out Monday, “for the sake of middle-class families.” But the call for the White House to relent also came from top Democrats, including Representatives Nancy Pelosi of California, the minority leader, and Chris Van Hollen of Maryland, the ranking member of the Budget Committee.
Although this means of funding the community college proposal seemed particularly tone deaf, it does illustrate that bipartisanship is possible when protecting tax expenditures. Imagine if reformers focused on even larger tax expenditures (e.g. the $212 billion exclusion of employer-provided health insurance, the $176 billion expenditures for pensions and 401(k)s, or the $101 billion deduction of mortgage interest)? A new era of bipartisanship might bloom.
Related: See Josh Kraushaar in National Journal for an interesting piece on the SOTU and the implications for Hillary Clinton 2016.
The Hagedorn, Manovskii, and Mitman working paper on the effect of unemployment insurance (UI) on employment has been getting a lot of press lately. In brief, they find that the end of the federal unemployment insurance extension accounts for about 1.8 million new jobs in 2014.
Mike Konczal does a useful deep dive on the paper here and is very skeptical of the result. In particular, he criticizes as implausible and empirically inaccurate labor market search models that imply employer monopsony power, which are essential to the plausibility of the result. These models are also essential to the revisionist literature on the minimum wage, holding that minimum wage increases do not reduce low-productivity workers’ employment. Curiously, Mike Konczal has defended search models in this aspect. He’s a smart guy and clearly thinks that applications of search theory to macroeconomic variables have problems that the application to the minimum wage doesn’t – but if search theory badly explains one phenomenon, it’s unlikely to do well explaining another. There’s a clear tension between claiming simultaneously that employer monopsony power explains why raising the minimum wage doesn’t reduce employment and that ending UI can’t have increased employment so much because employers don’t have that much monopsony power, even if the latter claim is limited to slack periods in the business cycle. (Why wouldn’t employer monopsony power be greater during slack periods in the business cycle? The Marxist concept of the “reserve army of the unemployed” comes to mind here.)
Another interesting parallel between the UI and minimum wage research is that the famous Dube et al. paper in Review of Economics and Statistics relied heavily on matched-border-county estimates, as does the Hagedorn et al. paper. Having looked at these data, I actually agree with Konczal that these models are inappropriate. The logic behind using matched border counties is that contiguous counties are alike in every relevant way other than the policy discontinuity associated with the state border (say, one county has a high minimum wage and the other does not). But border counties are actually usually quite dissimilar. Take Camden, N.J. and Philadelphia, Penn. These two counties are vastly different in size, so if Camden creates jobs at a higher rate than Philadelphia, Camden’s new jobs might still be a tiny percentage of Philadelphia’s. Yet the Dube/Hagedorn approach considers these counties to be equivalent, and takes the larger percentage increase in jobs for Camden as an indication of superior New Jersey employment policy. (See also David Neumark on empirical evidence that border counties are not appropriate control groups.)
In summary, if you are skeptical of the empirical strategy and theoretical justification of the literature saying the minimum wage has no negative employment effects, you should also be skeptical of the empirical strategy and theoretical justification of the new paper showing that unemployment insurance has big disemployment effects. If you like the Dube et al. minimum wage work, you should like the Hagedorn et al. UI paper. How many wonks are intellectually honest enough to adopt one of these two, ideologically inconvenient pairs of positions?