Arnold Kling  

Economic Arguments

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A few days ago, controversial radio personality Rush Limbaugh created a controversy. As a commentator on a football pre-game show, he said

(1) The Philadelphia Eagles' quarterback was overrated by others in the media.

(2) The reason that the quarterback was overrated was because the reporters were trying to promote a black quarterback.

The second point, for which Limbaugh was fired, is an example of what in this essay I call a type M argument--an unprovable speculation about the motives of the ones with whom one disagrees. I contrast those with what I call type C arguments, which are about the consequences of policies, which in principle makes them subject to empirical verification.

My essay, which was written before the Limbaugh incident, is addressed to Paul Krugman.

Paul, your columns consist primarily of type M arguments...

You could express your point of view using type C arguments and still take strong stands for what you believe is right. In fact, you might find that doing so would make you more effective. Even if that is not the case, even if there is a sort of media version of Gresham's Law in which specious reasoning drives out careful analysis, then that is a challenge for all of us who are trained as economists. I believe that we have a professional duty to try to be part of the solution, not part of the problem.

For Discussion. Can you think of a situation in which an economist should focus on the motives of policymakers rather than the consequences of policies?



COMMENTS (91 to date)
Bernard Yomtov writes:

I think it is wildly wrong to claim that the Right uses what you call type M arguments only because they are provoked to do so by Krugman and other liberals.

To take just one example, the Bush Administration has consistently criticized the patriotism of those who oppose its policies. Indeed, this message has been a staple of Republican politics back tothe 50's.

Let me add that Bush and his supporters rely on a third type of argument, Type F, for fantasy. They live in their own world, where tax cuts increase revenue, where Saddam was a major supporter of al-Qaeda, where dividend cuts go mostly to the middle class, where an experienced career diplomat is a raving left-winger, etc.

Type C arguments don't have much effect on psychotics.

Brad Hutchings writes:

Arnold, you have outdone yourself with the Krugman article. It is too bad the underlying contexts (Bush tax cuts, war in Iraq, school vouchers, Krugman himself) won't be around in quite the same proportions years from now to make that essay an enduring classic, but the sentiment is timeless.

In answering your question... Marketing (products, ideas, politicians, movements, etc.) consists of two things: having your "stuff" together so that it can survive scrutiny of the experts and sugar-coating it for mass appeal. Charts and graphs and studies interest the wonks. Charges of kicking puppies or hating old people ignite the masses. (A side note... in California, we seem to be weirdly immune to that today with regards to another Arnold, and I see that as a positive sign.)

So the answer to your question is that Krugman is going to run for office. His economics pedigree will lend credibility to his over-the-top Type M demonization of his opponents. We all know that people on the other side don't want to pluck the eyes of bunny rabbits, but we kind of figure that if an economist says so, then he must have his reasons (which we're happy to let him sort out offline).

-Brad

GT writes:

Maybe the distinction between type M and type C is not as clear cut as you make it to be?

Just maybe?

Mcwop writes:

Bernard wrote: "To take just one example, the Bush Administration has consistently criticized the patriotism of those who oppose its policies. Indeed, this message has been a staple of Republican politics back tothe 50's."

Please cite specific examples. I might take the same idea a step further that democrats state that Republican policies will harm education, and children. Here is a quote from Nancy Pelosi's site: ""Today’s announcement by the Census Bureau confirms what many Americans already know - President Bush’s economic policies are making it more difficult for middle-class families to succeed. After seeing their incomes increase steadily during the 1990’s, middle-class families are now bearing the burden of President Bush’s economic mismanagement, the worst economic record since Herbert Hoover.

"President Bush’s only economic plan -- ill-advised tax cuts for those who need them least -- has not created jobs. It has only created obstacles for Americans working hard to get ahead.

"Since he took office nearly three years ago, President Bush has lost 3.3 million private sector jobs, so it should come as no surprise that incomes are down and poverty is up."

I would ask Nancy for direct proof that this is Bush's policies versus other factors beyond the administrations control (tech bust anyone? - unemployment up in Nancy's district too. http://www.bizjournals.com/sacramento/stories/2003/08/04/daily43.html

You also wrote: "They live in their own world, where tax cuts increase revenue"

And liberals live in their own world that ALL tax increases automatically increase tax receipts. (I cite Bush I tax increases as problematic for that argument, and the luxury tax on boats is another).

Lastly, you provide a perfect example of a type M argument. All conservative ideas are wrong, because our motives are psychotic.

Eric Krieg writes:

>>the Bush Administration has consistently criticized the patriotism of those who oppose its policies.

Eric Krieg writes:

My favorite is when academics slant their research to make a type M argument. For example, the recent "study" out of Berkely that "proved" that conservatives (including such FAMOUS conservatives as Hitler and Stalin) are all insecure people with an intorelrance for ambiguity and a need for social dominance.

We should expect more from academics, but for some reason we don't.

Eric Krieg writes:

McNab is over-rated as a quarterback (but not as an athelete).

He's no John Elway. He's not even of a calibur of a Jim Kelly.

But he is young. Perhaps if his team ever got to the Superbowl, I would think differently. But my suspicion is that he will end up like Randall Cunnignham, another fantastic all around athelete who didn't make it as a quarterback.

As for the media, sports guys like Keith Olberman are undoubtedly liberal. But like Arnold said, there is no way to know if political correctness accounts for the over-rating of McNab.

Funny thing is, type M arguments are the bedrock of sports talk! Ever listen to WFAN in New York? It is sad that political correctness trumps all, even in sports.

Patrick R. Sullivan writes:

Regarding Rush Limbaugh, Arnold is wrong. He was making a "type C" argument, it was his critics who were making the "type M" argument (aka, an ad hominem).

There is scholarly support for Limbaugh's point from three Duke University economists in this paper from October of 2002:

http://trinity.aas.duke.edu/~jvigdor/nfl5.pdf

" Race, Football and Television:

" Explaining the black quarterback effect"

These economists find that NFL games with at least one black quarterback have higher television audiences. That the reason is an apparent "taste for diversity". And that television network executives are aware of it, and schedule accordingly.

Further, the Philadelphia newspapers have published articles about McNabb and how it is good that Philly has a black quarterback. McNabb's family has, in the past, expressed pride in him being a black quarterback, and at one time the highest paid quarterback in the game.

As to him being overrated, that is what his official QB rating indicates. His latest game (a victory over the Redskins) also supports Limbaugh. McNabb completed barely 50% of his passes, for only a net 140 yds, was sacked 3 times and threw 2 interceptions.

dragoon writes:

Eric Krieg, remember Ashcroft's lovely little crack about not scaring people with phantoms of lost liberty?

Eric Krieg writes:

>>Eric Krieg, remember Ashcroft's lovely little crack about not scaring people with phantoms of lost liberty?

Mmm, hmm. And he was denigrating your patriotism how, exactly?

Eric Krieg writes:

>>These economists find that NFL games with at least one black quarterback have higher television audiences. That the reason is an apparent "taste for diversity".

Bernard Yomtov writes:

The attacks on Max Cleland, and more broadly the 2002 campaign theme.

Ashcroft as cited by dragoon.

The statements by Ari Fleischer that people have to "watch what they say."

You want more history? Go back to Nixon's political career. Go to Bush Sr. questioning Dukakis' patriotism and then suggesting that Clinton was somehow a subversive for visiting Moscow when he was student.

Go to "card-carrying member" of the ACLU.

Go to the calling of opponents of the Vietnam War subversives, opponents of the Iraq war pro-Saddam.

There's lots more, but if you want to talk about American political history then you should learn some.

Bernard Yomtov writes:

McWop,

Are you claiming that Bush's tax cuts have created jobs? Might we have some proof of that?

And if employment were up since Bush took office, which it isn't by a long shot, you would be falling all over yourself giving his policies credit.

Quit playing the objective economic analyst. Your logic simply refuses to hold Bush acountable at all for the situation. However bad the employment situation might be, you will always say that except for Bush's policies it would have been worse.

Eric Krieg writes:

>>The attacks on Max Cleland

Nope. Nothing was EVER said about the man's patriotism. The comments were of the Type C variety concerning his behavior and voting record concerning homeland security.

It is another urban myth that Republicans, and Dubya specifically, ever denigrated Max Cleland's patriotism.

Try again.

Eric Krieg writes:

>>There's lots more, but if you want to talk about American political history then you should learn some.

And I am just STAGGERED at the SPECIFICITY of your examples.

Jesus, you need a trip to snopes.com to debunk all the leftist urban myths that you have absorbed hook, line, and sinker. Some would call it deprograming.

It amazes me how thin skinned you liberals are. Newt Gingrich was accused of killing grannies and starving children, but make the littlest complaint about a Democrat's voting record on homeland security, and you are impuning his patriotism. What a bunch of babies.

Look at what they (DEMOCRATS) are doing to poor Arnold.

Once again, politics ain't beanbag. If you can't stand the heat, get out of the kitchen.

And way to bring up Vietnam! And Dukakis! What was that, like forever ago? That's the best you can do?

Eric Krieg writes:

>>Are you claiming that Bush's tax cuts have created jobs?

How do you "prove" that a situation wouldn't have been worse if something hadn't been tried?

We were in a historic bubble economy at the end of the '90's, one to rival the bubbles of the 19th and early 20th Centuries. And we just went through one of the mildest recessions on record.

Don't you see a disconnect there? Isn't it at least plausable that the tax cuts did their keynsian job, if not their supply side one?

I'm like Arnold. I am at my wits end with the partisanship of certain neo-Keynsian economists. Bush has done EVERYTHING by the Keynsian book. He has primed the pump like literally no President since FDR. And he get NO CREDIT FOR IT!!!

Bernard Yomtov writes:

Eric,

I went back in history a bit to support the argument that this had been going on a long time.

Cleland was associated with both Bin laden and Hussein in a TV ad. He was accused of breaking his oath to defend the Constitution over a 1997 treaty vote. Not urban myths, Eric. Facts.

Bush accused Democratic Senators of not being interested in national security because they didn't support his version of the Homeland Security bill. he didn't make an argument (Type C) that the Democrats were wrong for the following reasons... No. That's beyond him. If you disagree you're unpatriotic.

The Chairman of the Rep Congressional Campaign Committee accused Daschle of "giving aid and comfort to the enemy for questioningthe success of the war on terrorism."

Rush Limbaugh accused Daschle of wanting to destroy the country. among the things he said,

"You are a disgrace to patriotism, you are a disgrace to this country, you are a disgrace to the Senate, and you ought to be a disgrace to the Democratic Party but sadly you're probably a hero among some of them today..."

So there are a few specifics.

As far as the economic argument is concerned, you're like McWop. If something bad happens, it would have been worse except for Bush. If something good happens it's because of Bush. This type F argument is unanswerable.

Micha Ghertner writes:

To answer your discussion question, isn't almost all of public choice economics focused on the motives of policymakers (self-interest) rather than the consequences of policies?

Arnold Kling writes:

"To answer your discussion question, isn't almost all of public choice economics focused on the motives of policymakers (self-interest) rather than the consequences of policies?"

Good question. The way I look at it, public choice economics makes an *assumption* about motives, and then makes predictions based on that assumption. I would argue that it is only the predictions that are interesting. Just as in the economics of markets, we do not care whether people *really* are rational and self-interested; instead, we care whether we can make accurate predictions by making that assumption.

GT writes:

Arnold,

It seems Patrick Sullivan's post proves my point, that the C and M distinction is not useful becasue what is C to some will be M to others and vice versa.

If you do care to address Krugman a more productive approach would be to talk about the specific points he makes.

Take fiscal policy, for example. Rather than try to determine what is C and what is M tell us if you think Bush's policy is sustainable. And if not, what you think his motives are.

Mcwop writes:

Bernard, I never said his tax cuts created jobs; you are putting words in my mouth (posts), and being misleading. I don’t appreciate it.

I would argue there is zero proof the Bush tax cuts or any other policies caused a loss in jobs. In fact, I feel Bush’s policies have had no effect positive or negative on the job situation.

You continue with: “However bad the employment situation might be, you will always say that except for Bush's policies it would have been worse.”

Never once said that. Again putting words in my mouth. You are right, in that I am trying to be more objective (especially more than you who seems to just want to post partisan dribble today) in looking at the effects, or lack thereof, of presidential policies on the economy. Even I can point out the good things Clinton did from a policy perspective, and the bad Bush is doing (expensive prescription proposal, no control on gov't spending).

The trend for government, and this includes both parties is bad. They keep piling on the spending obligations, and ignoring real problems (e.g. adding expensive drug benefits, not dealing with Medicare and Social Security). Shame on Republicans and Democrat do-nothings.

Albert Cheng writes:

Dr. Kling,

Mr. Donald Luskin, devout critic of Dr. Krugman, has written a piece on your open letter to Dr. Krugman.

Here's the link:
http://www.poorandstupid.com/2003_10_05_chronArchive.asp#106559950095458455

dsquared writes:

I think it's entirely clear from this thread that this distinction is much easier to make in principle than in practice.

As an Oakeshottian conservative, I'm massively in favour of Type M arguments. To try and establish the consequences of any economic policy is a horrendously difficult, thankless task with very little hope of success. To simply apply the rule of thumb that liars and hacks typically lie and hack has all the appeal of Occam's razor.

Arnold Kling writes:

Patrick wrote, "There is scholarly support for Limbaugh's point from three Duke University economists..."

I have not read the paper, but I suspect that what the economists found had something do with attendance and the race of the quarterback or somesuch. I doubt that they did an investigation of the motives of the media personalities who praised McNabb.

I still think that Limbaugh used a type M argument. I still think that those are bad arguments to use, and I regret my occasional use of such arguments in the past.

JT writes:

"To simply apply the rule of thumb that liars and hacks typically lie and hack has all the appeal of Occam's razor."

Occam's razor is supposed to simplify arguments and deductions, not to complicate them with seemingly pre-formed assumptions about the character of one's opponents. dsquared: how do you know a given group of people are either liars or hacks? Is this their astrological sign? What if I consider the opponents of this given group of people liars and hacks how do we discuss a specific area of disagreement?

I think Arnold is on to something important and I think dsquared's comment is a silly, offhanded comment so I'm not going to spend any more time on responding.

Eric Krieg writes:

>>If something good happens it's because of Bush. This type F argument is unanswerable.

No one here is making that argument, so why don't you just drop it? Did you actually READ Arnold's original post?

Okay, smartypants, how do you explain the dichotomy between the biggest bubble economy ever vs. the following recession that BARELY met the definition of such? Dumb luck?

Eric Krieg writes:

>>Bush accused Democratic Senators of not being interested in national security because they didn't support his version of the Homeland Security bill.

Again, I don't see how that has anything to do with patriotism. That may be a type M argument, but it doesn't question anyone's patriotism.

Questioning someone patriotism is more like saying people who drive SUVs send money to Saudi, which ends up in Bin Laden's hands.

Bernard Yomtov writes:

Eric,

I note that you select only one example to attack. Do you think that acusing someone of "offering aid and comfort to the enemy" is NOT questioning their patriotism?

As for SUV's, the fact is that a large share of the world oil supply comes from Saudi Arabia, so SUV drivers, and everyone else who buys gasoline, is sending money to Saudi Arabia. Further, it is well known that the Saudis finance Wahhabi Islam sects, and that some of this money finds its way to terrorist groups. That does not mean that gasoline buyers are unpatriotic, but it does mean that reducing our dependence on gasoline would make the country marginally safer.

As for Bush and jobs, I admit that neither you nor McWop specifically said his policies made things better than they otherwise would have been. Still, you are attempting to claim that they didn't make things worse. Now, Bush himself claimed that his tax cuts would create large numbers of new jobs. They haven't. In fact, there's a strong chance that his will be the first presidency since Hoover to see an actual decline in employment. So it seems just possible that his policies are somehow mistaken. One thing we know for sure is that they are anything but "neo-keynesian."

Patrick R. Sullivan writes:

Arnold, it's always a bad idea to comment on what you think is in a paper you haven't read. In this case you only need to get through the abstract to see that the paper (published almost a year ago) supports Limbaugh's point about a "social concern":

" First, quarterback race might proxy for other player or team attributes.
Second, black viewership patterns might be sensitive to quarterback race. Third, viewers of
all races might be exhibiting a taste for diversity. We use both ratings data and evidence
on racial attitudes from the General Social Survey to test these hypotheses empirically. The
evidence strongly supports the taste-for-diversity hypothesis, while suggesting some role for black own-race preferences as well."

Their "taste for diversity" is Limbaugh's "social concern". BTW, the economists seem to be pleased by it.

Eric Krieg writes:

>>I note that you select only one example to attack. Do you think that acusing someone of "offering aid and comfort to the enemy" is NOT questioning their patriotism?

What was the context? Daschle was bad mouthing the war while it was in full swing. He needed to shut the hell up, quite frankly. And it had nothing to do with patriotism, it had to do with conduct during a war. I said the same thing about Republican critics when we were bombing Serbia. Things change when soldiers are in harms way.

Again, it isn't a patriotism thing.

Eric Krieg writes:

>>That does not mean that gasoline buyers are unpatriotic, but it does mean that reducing our dependence on gasoline would make the country marginally safer.

See, I just reject that argument out of hand. The increase in safety is nothing, nada, zip. It cannot be measured.

And the same people who bitch about SUVs are the one who don't want the TSA to ethnically profile, who want to give drivers licesnes to illegal immigrants, who have so emasculated the INS that we have effectively open borders. Fixing any one of these problems would increase safety by many orders of magnitude more than even eliminating the use of all SUVs.

Eric Krieg writes:

>>One thing we know for sure is that they are anything but "neo-keynesian."

Why not? Decreasing taxes and increasing spending sounds Keynsian to me. Perhaps you don't like the taxes cut, or the things we are increasing spending on, but that hardly makes it non-keynsian.

Eric Krieg writes:

I repeat the question:

How do you explain the dichotomy between the biggest bubble economy ever vs. the following recession that BARELY met the definition of such?

Why aren't we in a depression to rival 1929-1941?

Patrick R. Sullivan writes:

Eric speculated:

" How about a taste for a slightly chaotic and extremely exciting game? It is really hard to defend against a quarterback that can scramble. It can make for some exciting plays, arguably more exciting than the quarterback that stays in the pocket waiting for a hit."

The Duke guys found the opposite to be the case:

" Column (2) adds controls for quarterback characteristics, and shows that games featuring quarterbacks with higher passing efficiency and fewer yards rushing tend to attract more viewers. Controlling for these two observable measures of player quality, the passing-based quarterback rating and yards rushing, the black quarterback effect nearly doubles in magnitude."

Eric Krieg writes:

Some people think that National Review is a waste of their time. But would you get an article like this in the New Republic?

http://www.nationalreview.com/comment/lott200310080943.asp

Rush was making a Type C argument, and he didn't even know it! Sometimes COMMON SENSE is worth more than an advanced degree.

Eric Krieg writes:

>>Column (2) adds controls for quarterback characteristics, and shows that games featuring quarterbacks with higher passing efficiency and fewer yards rushing tend to attract more viewers. Controlling for these two observable measures of player quality, the passing-based quarterback rating and yards rushing, the black quarterback effect nearly doubles in magnitude."

GT writes:

Patrick,

it seems the authors of the article you linked to disagree with your interpretation of it.

http://www.prospect.org/webfeatures/2003/10/vigdor-j-10-07.html

Patrick R. Sullivan writes:

Thanks for the url, GT. Apparently this issue is so emotionally charged even one of the authors of the paper can't accept his own findings. With this level of intellectual confusion, ESPN should hire Vigdor as an analyst.

Vigdor is trying to change the subject from what Rush actually said: "I think the media has been very desirous that a black quarterback do well."

To the motivations of network executives. But Rush didn't address that, and as savvy as he is about the broadcasting business, he wouldn't be confused about their motivations. He was talking about the people who write and talk about McNabb, not the business people. And Vigdor et al clearly do support Limbaugh's "social concern" with:

" The 'black quarterback effect,' as we called it, persists even after controlling for more objective measures of quarterback quality, such as passing efficiency. It is most pronounced among females and young adult males, cohorts that express racially tolerant attitudes on social surveys."

I'm going to make a type C argument that no doubt some will misconstrue as a type M; it's embarrassing for a Duke academic to find that he unwittingly provided evidence that supports Limbaugh. So, he's desperately trying to find an "out".

Eric Krieg writes:

>>I'm going to make a type C argument that no doubt some will misconstrue as a type M; it's embarrassing for a Duke academic to find that he unwittingly provided evidence that supports Limbaugh. So, he's desperately trying to find an "out".

Eric Krieg writes:

Prof. Vigador replied!

I stand corrected again.

>>Mr. Krieg:

Previous studies have shown exactly the effect you posit: ratings and attendance are higher for NBA games that involve a higher proportion of
white players, holding other statistical measures of team quality (won-loss percentage, etc.) constant.

Jake Vigdor

Patrick R. Sullivan writes:

" Prof. Vigador replied!"

But had nothing to say about his confusing media executives with sportswriters?

Arnold Kling writes:

Patrick,
I am still a bit confused about your point, because in no way do I see the article as proving Limbaugh's point. The excerpt you quoted is not about the motives of sports broadcasters.

Are you trying to say that the authors were speculating on the motives that would explain their findings? If so, then you may be right. I guess that an economist might sometimes do something like that, and speculate on a "taste for diversity." But that is really a thinly-disguised way of saying "I cannot explain this result." To me, positing a taste to explain a result is an act of desperation.

Bernard Yomtov writes:

Let's see.

Accusing someone of giving "aid and comfort to the enemy" is not questioning their patriotism.

Gasoline doesn't come from Saudi Arabia. Or Saudi Arabia is not a sponsor of terrorism. Or something.

Saying "I reject that argument out of hand," is a convincing way to refute anything you disagree with.

The nineties were "the biggest bubble economy ever," and therefore should have been followed by a massive depression.

Neo-Keynesian economics is silly (earlier thread) but Bush's brilliant application of neo-Keynesian principles averted Great Depression II. (Yes, I know you didn't say that, but it's what you're implying).

All tax cuts, all spending increases, are Keynesian. No difference between short-term and long-term, permanent and temporary, stimulative of demand or not.

John, "the dog ate my homework" Lott is a reliable statistical analyst.

Great stuff.

Patrick R. Sullivan writes:

Arnold, you are going to have to read the paper to understand what they did. Which they tell us about in the abstract: "In this paper, we consider competing explanations for this surrisingly robust effect."

Though, if you want to call econometrics, "speculating", be my guest.

Eric Krieg writes:

>>But had nothing to say about his confusing media executives with sportswriters?

To be fair, that wasn't the question he was asked.

Eric Krieg writes:

>>Neo-Keynesian economics is silly (earlier thread) but Bush's brilliant application of neo-Keynesian principles averted Great Depression II.

You are a master of taking things out of context.

Remember my perspective. I'm the one pissed off that people like you, of the liberal persuasion, are not giving Dubya the props he deserves because he has followed YOUR ECONOMIC POLICY.

I don't agree one whit with Keynsianism. I don't agree one whit with Dubya's spending. I agree with the tax cuts, but for supply side reasons.

The inconsistancy is with you.

You can rationalize all you want about long term vs. short term, yada, yada, yada. They're just talking points from someone who is more partisan as the people he is accusing of partisanship.

I'd call your behavior projection, but I don't believe in Freudianism either.

Eric Krieg writes:

I'll ask one more time. Bubble economy. Pop. Mild recession. How can you explain it?

I'm not saying that the tax cuts did it all. Greenspan gets lots of the credit (although we will see if there is now a bubble in the housing market of his making).

But you know damn well that if we had 2000 level taxes, things would be much, much worse.

I am enjoying the 10% bracket immensly. Best thing since post-it notes.

Bernard Yomtov writes:

Let's add "yada, yada, yada," to "I reject it out of hand," on the list of really persuasive arguments.

It wasn't Keynesian, and it wasn't smart. Do you really believe repeal of the estate tax is Keynesian stimulus? Go back to your "well-thumbed" (what a laugh) copy of "The General Theory."

The only sensible aspect ofthe Bush cuts was the Democratic idea of the rebates.

David Thomson writes:

"Do you think that acusing someone of "offering aid and comfort to the enemy" is NOT questioning their patriotism?"

It is not a matter of questioning someone's patriotism if you believe they are INADVERTENTLY offering aid and comfort to the enemy. They may not realize the logical consequences of their actions.

Mcwop writes:

With all the type M talk of Bush’s tax cuts being good or bad, we may soon find out the truth. The 2004 election will be close (though not razor thin like last time), and probably come down to Florida again. If the Democrats get in, they can raise everyone’s taxes (they can even make it retroactive to the start of Bush’s presidency erasing the “negative” effects of his tax cut), and enact all their new spending programs (universal healthcare, increased Medicare funding). We will then see if the deficit closes significantly, and 3 million jobs get added. I welcome the test.

I am confident that 3 million new jobs will not be added between now and the next election, because the anomaly (unusually high tech upgrade cycle) responsible for those new jobs in the second part of the 90’s, is not going to return anytime soon. This will allow the Democrats to start from a clean slate. Let’s also make it clear that Democrats argue that repeal the tax cuts, and new government spending will solve all of these problems. Example from Dean’s website:

“My economic policies for America are based on four fundamentals:
1) Repeal the Bush tax cuts, and use those funds to pay for universal health care, homeland security, and investments in job creation that benefit all Americans.
2) Set the nation on the path to a balanced budget, recognizing that we cannot have social or economic justice without a sound fiscal foundation.
3) Create a fairer and simpler system of taxation.
4) Assure that Social Security and Medicare are adequately funded to meet the needs of the next generation of retirees.”

For you see, many of us are just stupid, because we don’t realize that these four simple steps will solve all the economic and government budget problems.

GT writes:

I don't agree with your interpretation Patrick.

Rush said that black quarterbacks were hyped by a media that wanted them to succeed. A "supply-side" perspective, if you will. The liberal media, in his view, is "supplying" succesful black quarterbacks due to their biases.

The linked research says that there is clear evidence the public prefers to see black quarterbacks. A demand side perspective. The public is demanding to see black quarterbacks in the NFL (and white ball players in the NBA)

These are two very different things you are confusing. The research says that there is demand for black quarterbacks. It is only natural that TV executives will notice this and react to it.

The research does not address Rush's point at all, that black quarterbacks are getting more favorable reviews because of a desire for them to succeed.

Eric Krieg writes:

>>The only sensible aspect ofthe Bush cuts was the Democratic idea of the rebates.

I've been throwing around the terms keynsian and neo-keynsian a little indiscriminantly. I would think a neo-keynsian would have learned from the mistakes of the keynsians.

Short terms tax cuts don't do what the keynsians said they did. You know it. I know it. The American people know it. People don't spend tax rebates. Tax cuts need to be permanent to do what the keynsians say they do.

The estate tax is a non-issue. It is yet another tax that doesn't work as the keynsians said it did (because there are so many loopholes that the truly rich don't pay it anyway).

Again, I think that a NEO-keynsian would have the honesty and integrity to admit these things. Assuming, of course, that said economist put his economics before his politics. In another words, NOT Paul Krugman.

Let's go back to 2000. Remember back that far? Taxes as a % of GDP were the HIGHEST they ever were. It seems sensible that, in a recession, these high tax rates should be cut. Even a Neo-keynsian could agree with that.

Eric Krieg writes:

>>The research does not address Rush's point at all, that black quarterbacks are getting more favorable reviews because of a desire for them to succeed.

Yeah, but John Lott's research does say that.

Of course, you could argue that columnists and commentators are a part of a market system as well, and have to write about things that their readers want to read. And their readers, having a "taste for diversity" (I love that phrase) want to read over-hyped pandering to black quarterbacks (and maybe even white basketball players. Lott should investigate Chris Dudley's press coverage).

Patrick R. Sullivan writes:

GT, sportswriters are part of the general population in which Vigdor et al found "a taste for diversity". Further, sportswriters are journalists, and journalists are much more liberal than the population as a whole. So, what the paper said applies even more strongly to the "demand" of sportswriters.

Your claim that it is sportswriters who supply the black quarterbacks is ridiculous. They supply emotional support, because, as Rush accurately said, they have a "social concern".

Btw, Rush didn't just conjure this idea out of thin air. He claims that the same Philadelphia writers who now castigate him, have themselves written articles praising the idea of having a black quarterback (for social concerns) on the Eagles.

Bernard Yomtov writes:

"The estate tax is a non-issue. It is yet another tax that doesn't work as the keynsians said it did (because there are so many loopholes that the truly rich don't pay it anyway)."

If the truly rich don't pay it why was Bush so hot to repeal it?

Don't try to tell me it was to protect small businesspeople and farmers. Despite all the rhetoric hardly any of these people pay estate taxes, a fact supported by research into probate court records. Just to be safe, though, the Democrats proposed retaining the tax, but raising the exemption to $5 million. This was rejected by the Republicans. After all, Bush and his cronies stand to inherit a lot more than that piddling sum.

Eric Krieg writes:

>>If the truly rich don't pay it why was Bush so hot to repeal it?

It's welfare for lawyers. Plain and simple.

You can avoid the tax, but you have to hire lawyers to set up trusts and things like that.

It isn't an efficient tax. All it does is make people go out and waste good time and money avoiding it. Better to just repeal the damn thing and force lawyers to earn an honest living.

Eric Krieg writes:

>>After all, Bush and his cronies stand to inherit a lot more than that piddling sum.

Type M argument.

GT writes:

Patrick,

You keep reading in the research what is not there.

The research simply says that there is a demand, from the public, for a diversity that leads to higher ratings for NFL games with black QBs (and according to Eric to NBA games with white players).

That's why Vigdor, in his Prospect article, says that " if Limbaugh had done any research on the subject, he would have learned that the media's desire to see black quarterbacks succeed is not rooted in "a little social concern," but rather in good old-fashioned attention to the bottom line."

Rush is saying that black QBs are hyped because sportswriters are liberal but he offers no proof of this other than his opinion.

Vigdor accepts that black QBs may be hyped but says that his research indicates it is not because of any biases from the sportswriters but preferences (or biases if you will) from the viewing public.

Notice the crucial difference. In Rush's model hyping QBs is explained simply by MEDIA liberal bias.

In Vigdor's research it is the POPULATION AS A WHOLE (or, to be more specific, the NFL watching public) that has this bias or preference.

Those are two very different things.

If Rush had said "NFL fans prefer to see black QBs and that may lead the media to hype them" it would have had a much different impact. Among other things he would have had to 'accuse' the NFL watching public of bias, not just the media. Rush could have said that the public wants to see more of those that are underrepresented (black QBs or white NBA players) but that would have left him without the easy "it's all the liberal media's fault" argument he uses for everything.

If Rush had bothered to think and research he could have made an interesting point. Instead he went for the simplistic liberal media meme that has made him so succesful with his dittoheads.

Bernard Yomtov writes:

>>After all, Bush and his cronies stand to inherit a lot more than that piddling sum.

Type M argument.


Yes, but a true statement nonetheless. Bush will inherit substantially more than $5 million, and many of his supporters, or their kids, will also. And with dividends taxed at only 15%, these true "lucky duckies" will have very little need to work. So much for structuring the tax code to give people incentives to work.

Patrick R. Sullivan writes:

GT, you are proving my point, as well as providing Arnold with an example of a type M argument (directed at Limbaugh). As I said the sportswriters are a subset of the general population, and are even more liberal than the general population. Thus the sportswriters have at least the same demand for diversity as the general public that Vigdor et al found.

What Limbaugh didn't say can't be held against him, but he did provide evidence, on his radio program after he resigned, that supports him: Philadelphia sports writers had written articles praising the employment of a black quarterback. Further in Slate a Philadelphia sports analyst admitted he did just what Limbaugh claimed:

http://slate.msn.com/id/2089193/

Good grief, there couldn't be a sounder case. A classic example of The Emperor's New Clothes. And I'm sure you'll be delighted to find that James Taranto sees it my way:

BY JAMES TARANTO
Thursday, October 9, 2003 3:14 p.m. EDT

'The Black Quarterback Effect'
Here's an odd twist on the Rush Limbaugh football kerfuffle: It turns out that an academic paper published last October lends support to Limbaugh's comment, which critics denounced as racist, that "social concern" led people in the NFL and the media to hope Philadelphia Eagles quarterback Donovan McNabb to do well. The study, by Duke University economists Peter Arcidiacono, Jacob Vigdor and Eric Aldrich, is titled "Race, Football and Television: Examining the Black Quarterback Effect."

The three economists analyzed ratings for ABC-TV's "Monday Night Football" between 1997 and 2001 and found that "Monday Night Football games featuring black quarterbacks have Nielsen ratings 11% higher than otherwise identical games with two white starting quarterbacks." What accounts for this? Here's Vigdor's explanation, in an article posted Tuesday on the Web site of The American Prospect, a left-wing magazine: "The racial tolerance of the American public has increased dramatically over the past 20 years, at least in the world of sports. With this tolerance has come a true preference for diversity."

Now, here's where things get weird. In his article, Vigdor attempts to use his study to discredit Limbaugh's views. "If Limbaugh had done any research on the subject, he would have learned that the media's desire to see black quarterbacks succeed is not rooted in 'a little social concern,' but rather in good old-fashioned attention to the bottom line." Network executives, that is, cater to viewers' "preference for diversity" in an effort to drive up ratings and therefore profits.

Vigdor is setting up a false dichotomy. What is a "preference for diversity" if not a "social concern"? What's more, Limbaugh referring not to executives and programming choices but to the opinions of sportswriters and commentators. Is there any reason to think they don't share the football-viewing public's preference for diversity?

At the same time as he is trying to distance himself from the congruence between his own findings and Limbaugh's views, Vigdor has removed the study itself from his Web site. Click here, where the study used to appear, and you get this message:

The paper "Race, Football and Television: Explaining the Black Quarterback Effect" has been removed from this site. Our contract with Neilsen Media Research requires us to refrain from posting the results of this study online.

Yet the study, published Oct. 29, 2002, apparently was available online, notwithstanding the Nielsen contract, for nearly a year. Yahoo has it cached here, though it's a PDF file rendered as HTML, which makes it hard to read in places. A comment in this blog entry, dated Oct. 4, links to the page where the study appeared. It would appear Vigdor decided to suppress the study only when it was linked to the Limbaugh comments, and he now expects interested parties to rely on his tendentious anti-Limbaugh explanation rather than see for themselves what the study said.

Jim Glass writes:

"Notice the crucial difference. In Rush's model hyping QBs is explained simply by MEDIA liberal bias. In Vigdor's research it is the POPULATION AS A WHOLE (or, to be more specific, the NFL watching public) that has this bias or preference.

"Those are two very different things. "
~~~

I haven't really followed this argument and don't have a dog in this fight, but just as an observation...

Is the press notably immune from biases held by the population as a whole? And from the biases held by its target audience? I didn't realize that.

In fact I'm sure that I've heard arguments that such biases often coincide and that there are causal relationships in them doing so. Causation could run either way or both ways of course.

But in any event if Rush said the press had a preference and thus hyped the guy, and in fact the press does have that preference in common with the public/audience and did hype the guy, it's not apparent to me that Rush was grossly wrong.

But like I said I haven't been following this, and the basic question may be whether McN was hyped or not. If not, that would falsify the entire hypothesis.

This may be viewed as a subjective question, of course, and one would want more rigorous analysis of it than would be found in the typical battle of opinions amount sports fans. So looking around for it I was happy to find this dedicated computerized "McNabb Simulator"
http://www.bangahaha1.com/mcnabb3.htm

Eric Krieg writes:

>>Bush will inherit substantially more than $5 million, and many of his supporters, or their kids, will also. And with dividends taxed at only 15%, these true "lucky duckies" will have very little need to work.

And this is different than now, how?

All these people have trust funds that do esentially the same thing. The estate tax would not have been paid by them anyway.

But the way I understand it, you can't put a business into a trust fund. This is the problem for small businesspeople and farmers. They have to sell out in order to create the trust to avoid the tax. If they simply pass on the business, they have to pay the estate tax, which often results in the business needing to be sold to raise money.

Anyway, it's all about envy anyway. What's it to you if someone works or not?

Jim Glass writes:

>>Bush will inherit substantially more than $5 million, and many of his supporters, or their kids, will also. And with dividends taxed at only 15%, these true "lucky duckies" will have very little need to work

Patrick R. Sullivan writes:

QUARTERBACKS GRAB THE SPOTLIGHT IN NFL DRAFT
DAVE GOLDBERG, Associated Press writer. Columbian. Vancouver: Apr 11, 1999. pg. c.3
...

This year's draft could also be socially historic. The probable first-round quarterbacks are Couch of Kentucky, Smith of Oregon, McNabb of Syracuse, Culpepper of Central Florida and Cade McNown of UCLA. Smith, Culpepper and McNabb are black, as is another possible first rounder, Shaun King of Tulane.

For whatever reason, only three black quarterbacks have been taken in the first round Doug Williams in 1978, Andre Ware in 1990 and Steve McNair in 1995. Warren Moon, third behind Marino and Elway in career yards passing, went undrafted in 1978.

Patrick R. Sullivan writes:

Black quarterbacks set to lead NFL teams
Anonymous. Jet. Chicago: Sep 11, 2000. Vol. 98, Iss. 14; pg. 51, 4 pgs


Toung, Black and talented; these are words that describe a growing number of
quarterbacks in the National Football League (NFL).

The new millennium welcomes four brilliant, young Black signal-- callers who
are well-equipped to lead their teams to victory-Akili Smith (Cincinnati
Bengals), Daunte Culpepper (Minnesota Vikings), Donovan McNabb (Philadelphia
Eagles), and Shaun King (Tampa Bay Buccaneers). They were all top 1999 draft
picks.

Though it's their second year in the league, this 2000 season marks their
chance to shine.

The pressure is on, but it comes with the territory. They all had impressive
college careers. Smith at Oregon, McNabb at Syracuse, King at Tulane and
Culpepper at Central Florida. Together, they have broken and set numerous
National College Athletic Association (NCAA) records and been placed on
various All-American teams.

Do they feel they have to play better on any given day simply because they
are Black?

"I'm not too concerned with that," Akili Smith tells STET. "I am a
quarterback and I have to worry about going out there and making smart
decisions." Smith, 25, signed a sevenyear contract that could pay him as
much as $56 million if he reaches various performance goals.

McNabb adds,"We're always going to be looked at as Black quarterbacks
because that's what we are."

Jim Glass writes:

"...the way I understand it, you can't put a business into a trust fund."

Sure, a trust can own a business. But that won't stop it from being subject to estate tax.

"This is the problem for small businesspeople and farmers. They have to sell out in order to create the trust to avoid the tax."

Nah, the estate tax is a such a lousy tax that one doesn't need to make false arguments against it. To begin with, when estate tax is owed on a private business it can be paid over 10 years, making it typically easily financed. And Lord knows farmers don't deserve any special breaks compared to anyone else, but they do get special property valuation breaks that can greatly lower the tax from normal rules.

Beyond that, the tax is so riddled with ways around it that anyone who plans for it can avoid it, no matter how *huge* the estate. Why do you think Warren Buffett isn't bothered by it? It's not because in the end Uncle Sam is going to be collecting 50%. ;-) George Soros wrote an op-ed a couple years back in which he actually argued that this was a *virtue* of the tax -- you could avoid it! ;-)

The estate tax is a lousy tax because it grossly fails every test of a good tax: equity, transparency, efficiency.

1) It is grossly inequitable, in that persons with like wealth pay hugely varying tax bills. In fact the very *largest* estates on average pay a lower tax rate than smaller ones -- in more than a few cases $0. (Warren? George?)

2) It is opaque, loophole-ridden, and incomprehensible to the average person. This is a big part of the real reason why small businesses get hit so hard and the very biggest estates pay less tax on average than smaller ones. The person building his own business doesn't think about it, understand it or want to think about dying. He puts things off until it is too late. Warren has his experts plan it out for him decades in advance -- the Kennedys and Rockefellers have it all planned out for them before they are born!

3) It is inefficient. It imposes very high transaction costs (legal, compliance, asset arranging) whether people end up owing any tax or not. And the major ways of reducing the estate tax also reduce income tax too -- so while nominally the estate tax generates only a very small percentage of total federal tax revenue, in reality it produces much less than that and some economists think it is a net *revenue loser*.

So why does this inequitable, opaque, inefficient tax exist? To keep the Kennedys from passing their wealth and political influence from generation to generation without ever having to work any harder than young Congressman Patrick? ;-)

It exists for political purposes only, to enable political posturing over an issue.

Heck, if Ted Kennedy ever was sincere enough about the goals of the estate tax to propose *strengthening* it to eliminate the loopholes so that the next generation of Kennedys would be reduced to going to work and earning their political influence on the same terms as everyone else who needs a job to pay the bills ... well, I might take him seriously for a moment!

Patrick R. Sullivan writes:

Hard-Hitting Truths To Pass On to Vick

Mike Freeman. New York Times. (Late Edition (East Coast)).New York, N.Y.: Apr 20, 2001. pg. D.8

This week the small but growing club of black National Football League quarterbacks will add another member, Michael Vick, the explosive player from Virginia Tech. He will be called a potential star, applauded for being a great athlete and hailed as the savior of the San Diego Chargers, the team that holds the first pick in the N.F.L. draft and that is expected, after much internal debate, to select him tomorrow.

But Vick may soon discover what other black quarterbacks have learned, which is that his status as a high-profile professional football player does not immunize him from society's racial pitfalls.

Black quarterbacks, who have some of the highest profiles of African-American athletes, have discussed this privately many times. They are a tight-knit community -- last season eight black players had at least one start at the position among the league's 31 teams -- and it is not uncommon for black quarterbacks to talk about everything, from which coach is best to play for to which city's fans are the most hostile to them.

In some cases, a veteran black quarterback will act as a mentor for a rookie black quarterback, and many times the instructions are the same: Remember that no matter how big a star you become, some people will always view you as a black man first and a quarterback second. That is something, they are told, their white counterparts do not have to concern themselves with.

''I'll always try to help a young black quarterback understand not just what to expect when playing in the N.F.L., but the pressures that come from outside football,'' Donovan McNabb, the Philadelphia Eagles' quarterback, said last season.

Bernard Yomtov writes:

"All these people have trust funds that do esentially the same thing. The estate tax would not have been paid by them anyway."

Somebody's been paying close to $30 billion a year in estate and gift taxes.

"But the way I understand it, you can't put a business into a trust fund. This is the problem for small businesspeople and farmers. They have to sell out in order to create the trust to avoid the tax. If they simply pass on the business, they have to pay the estate tax, which often results in the business needing to be sold to raise money."

This is urban, or rather Republican, legend. During the debate over estate taxes the repeal advocates were unable to come up with examples of ths sort of thing. If it does happen it's very rare. And I repeat that the Democratic proposal of a $5 million exemption would have solved this virtually non-existent problem anyway.

"Anyway, it's all about envy anyway. What's it to you if someone works or not?"

It's nothing to me. But I seem to recall that advocates of cutting marginal rates often argue that such cuts are good in part because they increase the incentives to work. I guess that's only good when it justifies tax cuts.


Jim Glass,

"And I've never once heard Ted Kennedy argue for strengthening the estate tax to prevent the ongoing perpetuation of such concentrations of financial wealth and the political influence that goes with it."

There's a cogent argument. What next, an attack on Clinton? Kennedy opposed the estate tax repeal, by the way.

And are you really claiming that the Kennedy family is the only example of political influence due to concentrations of wealth? Or that such influence is usually used in support of causes Kennedy favors?

GT writes:

Patrick, Jim:

Hopefully we won't start another never-ending thread.

On the main topic (the distinction between Type C and Type M arguments) I won't say much more. I made the argument above that it's difficult to know which is which but I think better points have been made here:

http://www.danieldrezner.com/archives/000805.html

and here:

http://www.crookedtimber.org/archives/000651.html


I was making a very specific point to Patrick, regarding what Rush said and what Vigdor's research tells us about it.

Patrick claims that Vigdor's research supports what Rush said. It does not in my opinion. Nor in Vigdor's opinion either.

Rush's comments can be divided in 2. He said a) that a QB was hyped and b) that the reason for this was the sports media desire for a black QB to succeed due to their liberal bias. (I'm just repeating Arnold's original post here).

I have no opinion on a). Neither does Vigdor. It may be true or it may not. Certainly it would not be the first or last time an athlete has been hyped.

It is Rush's second point that caused the uproar. He claims the media's liberal bias explains the hyping. But Vigdor points out that there is evidence that the public wants more black QBs. Not the sportswriters but the public as a whole. They hype is then simply the media giving the public what it wants rather than the media showing a bias.

As Jim points out there are probably some interrelations to be explored between media and the public. That may be the topic of another study. But the fact that this preference holds for white players in the NBA strongly suggests that it is not a liberal racial preference but rather a desire to see what is not common (black QBs, white NBA players).

In any case Vigdor's paper in no way supports either Rush's point a) or point b). It contradicts point b) or at least offers an alternative explanation. Together with Eric's comment about Vigdor's email I would say it directly contradicts point b).

Arnold Kling writes:

Can I request that we take the Limbaugh discussion offline? I'd like to get back to the discussion question, which is: are there situations in which an economist should examine type M issues? The Limbaugh case might or might not be an example, but let's try to come up with another one.

Eric Krieg writes:

>>Somebody's been paying close to $30 billion a year in estate and gift taxes.

Bernard, you really need to re-read Jim's post, specifically his 3 points about what makes a good tax.

By the way, Jim, awesome post there!

People who don't plan are the ones paying the 30 large. Is that REALLY the way you want to set up your tax code?

Actually, I suppose the estate tax is like the lottery. It's a tax on shortsightedness, or perhaps stupidity.

As for the work thing, it's the difference between encouraging people to work by letting them keep more of what they earn, and forcing them to work. Once again Bernard illustrates the authoritarian streak that is at the heart of liberalism.

Eric Krieg writes:

>>are there situations in which an economist should examine type M issues?

I think Bernard has come up with a few right here. He simply cannot seperate motive from consequences. I think that he is not unusual amongst economists in this (Arnold would characterize it as) failing. Vigador certainly has it, as evidenced by his disappointing and contradictory essay in TAP.

I guess there is something to be gained by looking at who gains and who loses by any policy change. If we only look at type C arguments, maybe we lose that insight.

GT writes:

Arnold,

Fair enough.

My original point was that it was difficult to distinguish between type M and type C comments. That what is Type C for one may be type M for others.

I thought about that a bit more and I take that back, at least a bit. I still think that plenty of posts here and the other sites that are talking about this show that what is M and what is C will depend on your viewpoint. But I think a more substantial critique has been made elsewhere, probably best summarized by dsquared in his comment above. Krugamn, today, also seems to address your points.

To make the argument simpler may I ask you a couple of questions. Take Bush's fiscal policy. Do you agree or disagree with Krugman's point that it is unsustainable?

If you don't agree then you have a bigger problem with Krugman's article than simply his view on motives.

Krugman clearly believes that Bush's policies are not accidental, they are part of a pattern. Under those circumstances I don't see how you can avoid making M type arguments. If you see a doctor that consistently prescribes what you think are the wrong treatments and you suspect he is doing that purposefully you are almost obliged to make a Type M argument.

Jim Glass writes:

"There's a cogent argument. What next, an attack on Clinton?"

If you can show where Clinton has been hypocritical about the subject at hand, sure!

"Kennedy opposed the estate tax repeal, by the way."

Well, of course -- it doesn't cost him anything!
That's the point. It's so easy to support at tax on "the rich" when you as a "rich" person don't pay it.

"And are you really claiming that the Kennedy family is the only example of political influence due to concentrations of wealth?"

Of course not. Why do you think I mentioned the Rockefellers? And Buffett and Soros too, do you imagine their wealth is going to be taxed away when they die? Do you think the Gates family wealth will last for fewer generations than the Ford family wealth?

What's the *point* of the estate tax? That it actually prevents these accumulations of wealth and influence that last -- and grow -- through the generations? Hardly.

That it's a revenue raiser? It's net revenue effect is tiny-to-*negative*.

That it's in some way "fair" -- when it falls at hugely disparate rates on families with the same wealth, and the very largest estates pay a lower average tax rate than smaller ones, in some cases $0.

What is it again about this tax that makes it a *good* tax?

To get back to Arnold's original point in light of all this .... I don't want this comment to run on forever. I'll put up another on that.

Patrick R. Sullivan writes:

It's not at all difficult to find examples of when an understanding of the motives of actors shed valuable light on a phenomenon. Here's one that regularly occurs in the state of Washington:

http://seattlepi.nwsource.com/local/143329_marysville10.html

___________quote___________--
Gov. Gary Locke yesterday called for striking Marysville teachers to return
to their classrooms Monday with or without a contract. But the teachers
union rejected his proposal to end what is now the longest school walkout in
the state's history.

Attorney General Christine Gregoire also weighed in on the dispute, writing
both the Marysville School Board and the union to remind them of their
students' right to a full 180-day school year -- and of the potentially
diminishing opportunity to provide that instruction if the strike, now in
its 39th day, continues.

Neither Locke nor Gregoire threatened legal action to force the teachers
back to work. Nor has the School Board.

Although teachers have argued that the law is vague on whether their strikes
are illegal, courts generally have granted requests by school districts for
back-to-work orders -- and teachers generally have defied them.

Negotiations between the union and the district are scheduled to resume at 2
p.m. today with a state mediator.

"This strike has gone on far too long, and neither side has shown a sense of
urgency to resolve these issues," Locke said after meeting with both sides
in Olympia. "That is unacceptable.

"We think it's important they put the interest of the kids first. We cannot
force them to do anything."
--------endquote___________

Now, why would the governor make such a counterfactual assertion as in the last sentence of the above quote? Why does the AG not use her power to force the teachers back to work?

Is it not relevant that the AG is running for the Democratic nomination for governor? That Locke, a young man, is not without further political ambitions? And that no one who crosses the WEA is going to have a future in the Democratic party in Washington state?

Eric Krieg writes:

I think that we have established that type M arguments CAN be useful in trying to understand an issue.

BUT, you need to realize that, as a human being, you are not omnipotent, and that you can't possibly have true insight into people's motives. There is a real danger that type M arguments become simplistic, and instead of giving insight, they blind you to the real issues.

So there needs to be a balance.

Bernard Yomtov writes:

"People who don't plan are the ones paying the 30 large."

Type F. Typical National Review argument. If the known facts don't fit your preconceived notion, make up some that do. No evidence needed.


"Once again Bernard illustrates the authoritarian streak that is at the heart of liberalism."

Actually, I said I didn't care. Just pointing out that there's a bit of a contradiction in the arguments. And aren't you making a type M accusation there?

As for Jim's points:

I'd like a little more than his assertions that a tax that brings in $30 billion is a "net negative," and that it hits at hugely disparate rates. I'm also curious as to how he got access to Kennedy family financial data.

He repeats the lie that small businesses get hit hard.

Sure, clarity is important in a tax, but achieving both clarity and equity in a complex modern economy is very difficult. Anyway, most people don't have to worry about this. The number of estate tax returns even filed is only around 4.5% of deaths, and about half of these owe no taxes at all.

Ross N. writes:

I think the answer is no, an economist should never focus on the motives of policymakers and the reason is that such an analysis has an inferior predictive capability compared to an incentive-based analysis like rational/public choice theories.

Consider President Bush and the belief that he is motivated by a desire to dismantle the New Deal and end the welfare state in general. How does that explain his support for a prescription drug benefit for Medicare?

Eric Krieg writes:

>>Actually, I said I didn't care. Just pointing out that there's a bit of a contradiction in the arguments. And aren't you making a type M accusation there?

There's no contradiction, as I explained. We should endevor to encourage people to work, but not force them to.

It isn't a type M argument. It is arguing the consequences of liberal policies, which seem to center around telling people what and what not to do, which I think is a bit authoritarian. A type M argument would be to argue that your authoritarian streak is because your mother pottie trained you too early.

Jim Glass writes:

**"As for Jim's points:
I'd like a little more than his assertions that a tax that brings in $30 billion is a 'net negative,' and that it hits at hugely disparate rates...."**

I note your implicit position that only one side in an argument is expected to have data to support its claims and beliefs. Fine. ;-)

OK then. First let's look at IRS statistics of income estate tax data for 1996 as being readily available.

The data show 367 estates in the "largest" category, with >$20 million gross assets and average assets of $59 million. Of these 88 (24%) with assets totaling $4.6 billion paid a total combined estate tax of zero dollars ($0).

The overall effective tax rate for this entire >$20 million group was 14.6% -- which was the *lowest* rate for any group with assets over $2.5 million. To get a look at this basic picture one can eyeball a chart for an earlier year (1993) at http://www.ncpa.org/pd/gif/pd1230t.gif

Now, much lower down the wealth scale there were 5,700 estates with gross assets from $2.5 million to $5 million -- on average 1/17th the size of the largest estates. Of these, 3,400 paid $2.9 billion tax on $11.6 billion of assets for a 25% tax rate -- compared to the only 14.6% rate paid by all the estates with assets >$20 million.

But, OTOH, there were another 2,300 estates of this size -- fully 40% of the category -- that paid a total of $0 tax, at a 0% rate, on $7.8 billion of assets. (Though this left this smaller category on total still paying a higher tax rate the largest estates.)

Gee, what could be *more equitable* than a wealth tax system that imposes a 25% tax on 60% of people with a certain level of wealth while imposing 0% tax on the other 40%? And which collects a lower rate from the wealthiest than the rest?

Nothing disparate there. That's "fairness" and "progressiveness" indeed, eh? ;-)

Now as to how the estate tax could possibly collect on net less than it's $30b face value -- this isn't rocket science, perhaps those who have strong feelings about the tax should familiarize themselves with its fundamentals, such as the fact that the basic strategies employed to reduce estate tax also reduce income tax as a side effect.

As one example of many, take all those family foundations set up to eliminate estate tax while enabling future generations of Rockefellers, Fords, Packards, DuPonts, etc. to live like millionaires while running the family business (Ford, Packard) or having a life in politics (Rockys, DuPonts) etc. None of them pay $1 of income tax. They hold billions of dollars.

You must subtract all the income tax revenue now being lost on all of these set up since John D. first set up his, *plus* all the income tax revenue lost from all the *other* many estate-tax-reducing moves (see all estates paying $0 in the IRS data above) *from* the $30b to get net revenue from estate tax. The resulting net amount is substantially below $30b. There are published studies on this. Perhaps you should familiarize yourself with them before forming strong opinions.

** "He repeats the lie that small businesses get hit hard." **

"Lie"? Tsk, tsk, Krugmanitis spreads.

You have a small business. Say 40% of its value becomes due for estate tax. Is that a "hard hit"?

Hey, isn't the *purpose* of estate tax to hit small businesses that hard? If not, why does the tax rate go up to 50% at only $2.5 million?

If you support the estate tax and believe it doesn't hit businesses that hard, you should be *complaining*.

"Lie" ;-)

** "... The number of estate tax returns even filed is only around 4.5% of deaths ..."**

"If we enact a really bad tax that affects only 5% of the people it's not bad because it affects *only* 5% of the people".

Yes, yes, rent controls and milk price supports and various tariffs and any number of very bad policies directly affect only a small percentage of all people -- so they are not bad either!

** " ... and about half of these owe no taxes at all." **

Yes!! The Soros argument! If a wealth tax is so riddled with loopholes that even the richest can get out of paying it, that's a *virtue* of the tax! ;-)

And as to the Kennedys: Publicly available information.

nick writes:

Just to make sure I follow here... so you've written a letter to a respected, partisan economist to demonstrate your mastery of a beautiful theory of argumentation in the guise of an objective conversation that will hopefully aide in the recipients ability to be "more effective" in his work.

My hunch is that you have one more reason for addressing Krugman's style of argumentation. You don't seriously intend that Professor Krugman find a more effective method of argumentation. If you associate Krugman's work to be among that which is a "part of the problem" then your entire letter is an M argument, an assessment of the motives of individuals who advoate policies.

To directly address your topic, the one situation I think an economist should focus on motives rather than consequences is when your job is an op-ed writer. The NY Times is, in part, as widely read and influential as it is because of Krugman. And, recognizing that Krugman is read & influential as he is because the popularity of the times, the two have a double coincidence of wants. The times wants readers and krugman wants to expose the flawed, rarely-merit based process in which policy is made under this administration. A process that is frequently more ideologigical than objective (which is aspect I figure would especially ignite yourself.)

As you both are part of the solution (intellectual dialogue about influence in America), I'd like to see more recognition given to Krugmans highlighting of important issues that clearly concern many.

Eric Krieg writes:

>>You don't seriously intend that Professor Krugman find a more effective method of argumentation.

Why not? Isn't one facet of being a professional that you act in a courteous manner? Krugman's foaming at the mouth, type M arguments diminish the stature of the entire economics profession. As an economist, Arnold is well within his rights to ask Krugman to tone it down.

Jim Glass writes:

Arnold Kling wrote:

"I still think that Limbaugh used a type M argument. I still think that those are bad arguments to use, and I regret my occasional use of such arguments in the past."

I'll disagree about Type M arguments, both for argument's sake and to make our host feel better about his past. ;-)

I don't believe there's anything wrong at all with M arguments (referring to motive) provided that they are *accurate and true*. The problem with M arguments -- notably in Krugman's case -- is that very often they really are just disguised ad hominem attacks that are both logically fallacious and personally nasty.

Let me give an example from Krugman's current book and promotion tour. He's been making the argument: "Behind their tax policy the radical Republicans have the motive of starving the social programs created by FDR and LBJ..."

That's a motive argument. And as it goes to there, Milton Friedman, Garry Becker (in yesterday's WSJ), James Buchanan, and a good number of other quite reputable folks one could name would say "Yes indeed! That's true, and here's why...."

So what's the problem?. If PK was saying "the radicals' motive is that they want to starve social programs .... for they have fallen sway to the perverse ideas of Nobel-winning economists such as Friedman, Becker, Buchanan, Coase ..." that'd be fine with me.

The *problem* is that what he's *actually* been saying is "the radicals' motive is that they want to starve social programs ... and I've learned from Henry Kissinger and his discussion of revolutionary France and 1930s Germany that radicals are not subject to political reason and compromise, they want to destroy ..."

So now those impressed by the intellectual position of Friedman, Becker, Buchanan, Coase et. al., have been transformed into Jacobins and Nazis! Small gov't types become *evil*.

That is just a plain dishonest slur attack made through the M argument -- but it is the false slur, not the M argument that is at fault.

(I mean, geeze, Krugman actually invokes Nazis, unless he wants to name some other radical group in 1930s German politics that he was referring to. On usenet, where this quality of argument is familiar, he'd lose right there. Godwin's law. And he does this kind of thing over, and over, and over ...)

So it's not the M argument but the truth and accuracy of the argument that counts.

That said, there is good reason to be wary of the M argument in that it can be difficult to know other people's motives -- so fair and honest and folk will be careful about claiming they do. Krugman, OTOH, openly claims it's a virtue of his that he doesn't personally know the people he's talking about -- so he's not compromised and is free to speak the "truth" about their motives ... as he deduces and imagines them to be. Ignorance is knowledge! (Beinart chastised him for this in his Times book review).

But even the combination of "M argument & slur" isn't so bad in an opinion writer. I can think of several partisan opinion writers who are very enjoyable reads who slur a lot more imaginatively and amusingly than Krugman (whose limited range of liar, liar, liar, Orwellian, liar, Orwellian, liar, liar gets tiring).

The truly annoying issue with PK is that he uses his status a social scientist to pass off *false* claims as *factually true* and then uses them as *logical grounds* for a slur/M argument -- so that when he slurs people it's not just some columnist's opinion (Ivins or Herbert or whoever) it's instead taken by many as some sort of *empirical truth* even when it's totally bogus. And that really is dishonest, and to me offensive.

For example, in one of his very first Times columns PK slurred Sen John McCain by saying McC was either "confused" or a "panderer" for trying to eliminate sales taxes on Internet Sales by supporting the Internet Tax Moratorium. http://www.pkarchive.org/column/21300.html

The problem was, the ITM had *nothing* to do with sales taxes. The whole column was a howler from beginning to end. As another economist with a column pointed out, "The only problem with Krugman's analysis is that he didn't know what he was talking about." http://www.ncpa.org/oped/bartlett/mar0100.html

(And, of course, if Krugman really wanted to write an informative column about tax policy, he could have done it without constructing a gratuitous slur at McCain -- risking adding injustice to howler. But PK is not risk averse in that direction.)

Now note the differences:
(1) "John McCain is either confused or a panderer". That's OK, politicians have to put up with stuff like that every day.
(2) "John McCain is either confused or a panderer *because* he wants to eliminate sales taxes on the Internet". That is a simple LIE.
(3) Krugman: "Here's my fine economic explanation of how sales taxes *should* work. But John McCain wants to violate these principles by supporting the ITM to make Internet sales exempt from tax. Therefore, it follows that McCain is either pandering to special interests or confused."

Damn, it sounds so scientific! And while there's an M argument in there -- McCain is acting for the motive of pandering to special interests (or confusion) -- how can one avoid the logical conclusion that it is true?

Yet the whole damn thing is a LIE! (Why not call it that? PK would if anyone else wrote such a thing. Not without reason)

This is the problem with Krugman's M arguments. He says things that are *not true* to logically justify his M arguments that really are just slurs -- yet many people think that because he is a great social scientist with a Nobel no doubt coming to him (wait 'till next year!), and not some mere opinion writer, his false factual claims must be true, ergo the M argument/slur must be true as well. And of course he encourages this misperception. He no doubt believes it himself! ;-) Which is why he never stops.

Look at all the *factual* falsehoods. Fraga at Slate (and PK's "please don't sue me" apology). Laura Tyson (even DeLong still wants an apology). Internet sales taxes. Cato's currency board consultants. Bush's $12 million "gift" from his baseball partners. Bush's "hidden" baseball partnership terms (that were published in the newspaper). Greenspan misquoted as knowing he had an easy way to deflate the bubble (a good Dowding there!) and because he didn't do it he is in the pocket of the big investors. Only two liters of water a day for soldiers in Iraq. Revenue lost to the Bush tax cuts being "more than enough to fund SS and Medicare for 75 years". ( More!!) One could go on and on...

In each and every case there was an "M argument" -- but it wasn't the M argument that was the problem, it was the *falsehood* used to justify an ad hominem, all disguised as an M argument.

I've gone on too long. But I think there's no problem with M arguments *if* one actually knows what M is and is honest about it. And I'm sure that Arnold Kling would always pass both counts whenever using one, and so should have no qualms about ever having done so in the past.

Patrick R. Sullivan writes:

Here is an example of both M and C argument, and totally beyond the temperment of Paul Krugman:

http://www.economicprincipals.com/issues/03.05.11.html

" For 20 years US politics has been a kind of Punch-and-Judy show, in which the Republicans have tried to limit spending on government to around 16 percent of GDP and the Democrats have tried to raise it to 20 percent. Each side has availed itself of every conceivable stratagem, fair and foul, to achieve its goal — short of actually seeking to tell the truth in a manner on which both sides can agree.

" Those enormous aggregate numbers cannot meaningfully be discussed, however, until there is some rough agreement about the bourgeoning share of spending that will be devoted to health care in the coming years — much of it channeled through government insurance."

I can only fault Warsh for not noting that Brad DeLong is on record that it should be raised to 30% of GDP. And that Krugman seems to want something like that too. Yet Krugman keeps going on and on about how it is the Republicans that are the radicals.

GT writes:

I'd love to see any evidence anywhere of any budget ever proposed by any GOP president in the last 20 years that would have resulted in govt spending of 16% of GDP.

Patrick R. Sullivan writes:

GT, you're reading Warsh every bit as carefully as you did Jacob Vigdor.

Eric Krieg writes:

>>I'd love to see any evidence anywhere of any budget ever proposed by any GOP president in the last 20 years that would have resulted in govt spending of 16% of GDP.

GOP President? Forget that, how about a budget by a GOP majority leader and speaker?

Let me take you back to 1995, my friend, where Bill Clinton totally destroyed Newt Gingrich and Bob Dole (remember those 'Dolegingrich' commerncials?) because they were restraining spending. They never achieved 16% (I think they actually did get it into the 18's). But that was where they were going.

Remember, spending is set by Congress, not the President. Of course, with a GOP President AND Congress, you would think that spending would be a LITTLE more restrained than it now is.

GT writes:

I was reading you Patrick. What you quoted.

So there is no evidence for that claim then?

I suspected as much.

Bernard Yomtov writes:

###**"As for Jim's points:
I'd like a little more than his assertions that a tax that brings in $30 billion is a 'net negative,' and that it hits at hugely disparate rates...."**

I note your implicit position that only one side in an argument is expected to have data to support its claims and beliefs. Fine. ;-)###

I did supply data: the government collects around $30 billion/year in estate and gift taxes. That’s plain fact. If you claim that offsets make this disappear it’s up to you to provide evidence.

###OK then. First let's look at IRS statistics of income estate tax data for 1996 as being readily available.

The data show 367 estates in the "largest" category, with >$20 million gross assets and average assets of $59 million. Of these 88 (24%) with assets totaling $4.6 billion paid a total combined estate tax of zero dollars ($0).

The overall effective tax rate for this entire >$20 million group was 14.6% -- which was the *lowest* rate for any group with assets over $2.5 million. To get a look at this basic picture one can eyeball a chart for an earlier year (1993) at http://www.ncpa.org/pd/gif/pd1230t.gif

Now, much lower down the wealth scale there were 5,700 estates with gross assets from $2.5 million to $5 million -- on average 1/17th the size of the largest estates. Of these, 3,400 paid $2.9 billion tax on $11.6 billion of assets for a 25% tax rate -- compared to the only 14.6% rate paid by all the estates with assets >$20 million.

But, OTOH, there were another 2,300 estates of this size -- fully 40% of the category -- that paid a total of $0 tax, at a 0% rate, on $7.8 billion of assets. (Though this left this smaller category on total still paying a higher tax rate the largest estates.)

Gee, what could be *more equitable* than a wealth tax system that imposes a 25% tax on 60% of people with a certain level of wealth while imposing 0% tax on the other 40%? And which collects a lower rate from the wealthiest than the rest?

Nothing disparate there. That's "fairness" and "progressiveness" indeed, eh? ;-)###

It may have escaped your notice that there are exemptions and deductions available. Possibly the most important is the unlimited marital exemption. If Bill Gates dies tomorrow his estate passes untaxed to his wife. Surely that accounts for a fair share of the “inequities.” There are also deductions for philanthropy,etc. In addition many of the types of trusts used defer taxes rather than eliminating them.


###Now as to how the estate tax could possibly collect on net less than it's $30b face value -- this isn't rocket science, perhaps those who have strong feelings about the tax should familiarize themselves with its fundamentals, such as the fact that the basic strategies employed to reduce estate tax also reduce income tax as a side effect.###

There seem to be a few aspects you’re not familiar with either.

###As one example of many, take all those family foundations set up to eliminate estate tax while enabling future generations of Rockefellers, Fords, Packards, DuPonts, etc. to live like millionaires while running the family business (Ford, Packard) or having a life in politics (Rockys, DuPonts) etc. None of them pay $1 of income tax. They hold billions of dollars.

You must subtract all the income tax revenue now being lost on all of these set up since John D. first set up his, *plus* all the income tax revenue lost from all the *other* many estate-tax-reducing moves (see all estates paying $0 in the IRS data above) *from* the $30b to get net revenue from estate tax. The resulting net amount is substantially below $30b. There are published studies on this. Perhaps you should familiarize yourself with them before forming strong opinions. ###

Trusts pay taxes on their retained income. Distributing income eliminates the tax at the trust, but creates a tax liability on the recipient. And your analysis assumes that no one would bother trying to dodge income taxes if it were not for the estate tax.

###** "He repeats the lie that small businesses get hit hard." **

"Lie"? Tsk, tsk, Krugmanitis spreads.

You have a small business. Say 40% of its value becomes due for estate tax. Is that a "hard hit"?

Hey, isn't the *purpose* of estate tax to hit small businesses that hard? If not, why does the tax rate go up to 50% at only $2.5 million? ###

If a couple owns a small business worth $2.5 million the total estate tax owed will be zero. See below for details of small business estate taxes of which you seem to be unaware.

###If you support the estate tax and believe it doesn't hit businesses that hard, you should be *complaining*.###

Let me decide what I’m going to complain about.

##"Lie" ;-)###

I repeat. It’s a lie. Only a small percentage of estates include a small business. There is a small business exemption which approximately doubles the standard exemption. And when the small business represents a substantial part of the estate the heirs have fourteen years to pay the tax.


##And as to the Kennedys: Publicly available information.###

Get off the Kennedy thing, Jim. I know you don’t like him, but it’s just silly. You are essentially saying that anyone who favors the estate tax, but doesn’t want to increase it is a hypocrite. By that logic tere are only two possible positions on the matter: no tax at all or total confiscation.

Eric Krieg writes:

I can't say that I know a lot about the estate tax, but just from postings here I can see that it is about as convoluted as could be.

What would be the consequeces of its demise? A lot of lawyers would have to find more productive employment, that's for sure. And the treasury would be out $30B/yr, which is not even 10% of this years deficit.

And the tax code would become a HELL of a lot simpler. That's a pretty nice benefit.

All that inherited wealth is in an asset of one form or another. It could be property, or some financial instrument like a stock or bond. If sold to provide an income, it would be subject to capital gains taxation. Or, if it provides an income stream of some sort, like a dividend, then it produces income tax revenue.

So how much is the treasury really losing?

This seems like a whole lot of effort for essentially nothing.

Peabody writes:

For Discussion. Can you think of a situation in which an economist should focus on the motives of policymakers rather than the consequences of policies?

If the consequences of policies are dependent on the variable (motives), then an economist must account for the variations those motives produce.

So,
If a policymaker is motivated by 'N', and the consequence of a policy is 'P'. If 'N' changes, what effect does it have on 'P'?

I lack an example where the consequence of a policy was dependent on the motives of the author of the policy. We could easily find examples of policy creation that was dependent on motivations, but not the consequences themselves.

It follows that consequences are not dependent on a policymaker's motivations.

The statement, "George Bush is greedy, therefore supply side economics won't work," is nonsensical, unless the success of supply side economics depends on being greedy or not being greedy. I do not know too much about economics, but I do not recall ever reading that a policymaker's motives in employing it ever altered the consequences of using it.

The statement, "George Bush's supporters are greedy, therefore supply side economics won't work," may be true or false, but it is not nonsensical, since the motives of those who are affected by supply side economics may in fact have a hand in its degree of realized success. A thorough analysis by an economist would have to account for those variables.

Peabody

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