Galbraith dies

by Henry on April 29, 2006

“John Kenneth Galbraith”: died yesterday. I spent several weeks earlier this year reading the “Parker biography”: which I enjoyed (although it was surely a little prolix). He comes across as having been a surprisingly patrician character for someone who grew up in a small town in rural Canada – he enjoyed hugger-muggering with the powerful, and according to his biographer never once changed a nappy for any of his several children. But for all that, he was prepared to risk serious damage to his career in pursuit of truth, issuing, for example, a quite damning indictment of the Allied bombing of civilian targets in Japan when he was director of the United States Strategic Bombing Survey and might have been expected to toe the official line. He also showed himself entirely willing to break with political friends when he thought they were in the wrong. Whether he was a first rate economist or not (and he may very well have been; Brad DeLong for one “has suggested”: that his contribution has been sorely under-rated), he was surely an absolutely first rate public intellectual, and genuinely witty to boot (Dan is fond of quoting his dictum that “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. “) Someone who will be missed.

(Incidentally, there is one rather peculiar claim in the _NYT_ obituary: that

bq. Mr. Galbraith argued that technology mandated long-term contracts to diminish high-stakes uncertainty. He said companies used advertising to induce consumers to buy things they had never dreamed they needed. Other economists, like Gary S. Becker and George J. Stigler, both Nobel Prize winners, countered with proofs showing that advertising is essentially informative rather than manipulative.

“Proofs showing” only works here for restricted notions of ‘proofs,’ and decidedly odd notions of ‘showing.’)

How Can a Poor Man Stand Such Times and Live?

by Jon Mandle on April 29, 2006

This is the title of a 1929 song by Blind Alfred Reed that was covered by Ry Cooder on his first album. Bruce Springsteen now has a version that includes one original verse and three new ones, (apparently) written in preparation for his performance at the New Orleans Jazz and Heritage Festival. The key lyric:

He says “me and my old school pals had some might high times down here
And what happened to you poor black folks, well it just ain’t fair”
He took a look around gave a little pep talk, said “I’m with you” then he took a little walk
Tell me, how can a poor man stand such times and live?

It’s not included on his new cd, but is available (at a low bitrate), recorded live at one of his rehearsals, here (turn down your volume and stop the tracks that play automatically – then play the tune in the format of your choice.)

Republicans for demogrants

by John Quiggin on April 29, 2006

No one much has anything good to say about the Republican proposal for a $100 rebate to all taxpayers to offset the impact of rising gasoline prices. There are some potential traps, but from what I’ve seen so far, my biggest objection is that the Democrats didn’t propose it first.

Obviously, a grant of this kind will have no impact on behavior or on markets for oil and gasoline (there’s not even a requirement to show that you spent the $100, from what I can see), but that’s a good thing. The increase in prices is sending a signal that oil is scarce and the rebate does nothing to change this, while partly offsetting the income effects of higher prices.

In distributional terms, this is the first time since Bush was elected (in fact, the first time I can recall) that we’ve had a tax cut proposal from the Republicans that wasn’t overwhelmingly skewed towards the top 1 per cent of income earners. In fact, a uniform cash payment to everyone (a ‘demogrant’ in the jargon of tax-welfare wonks) is a policy usually found on the left of politics.

Of course there has to be a catch somewhere. One point I’m not clear on is whether “taxpayers” effectively means everyone (since everyone pays taxes) or whether it’s only personal income taxpayers, and how many people would miss out on the latter definition. The other is that the proposal is tied in some way to drilling in the Arctic National Wildlife Refuge: I don’t understand the processes enough to know whether this package can be unbundled. Finally, it’s another $10 billion on the deficit, and that’s not a good thing. But at this point in the process, it’s just rounding error. However, the deficit problem is resolved, $10 billion here or there isn’t going to make a lot of difference.