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The last casualty of the cold war

Mié, 23/04/2014 - 20:24

MATTHEW YGLESIAS had an excellent piece at Vox on Monday pointing out a fundamental shift that has taken place over the past few years in our understanding of the economics of inequality. He begins by considering an "everything-you-need-to-know-about-economics" graduation speech by Thomas Sargent, a Nobel prize-winning economist, which included the line, "there are tradeoffs between equality and efficiency". But  Mr Yglesias notes that this statement is no longer a truism. We used to believe that trying to make an economy more egalitarian, while perhaps ethically pleasing, would lead to slower growth. But in the aftermath of Thomas Piketty's new book "Capital in the 21st Century", recent papers by economists at the IMF and a flood of research into the economic effects of inequality, it seems this assumption is either unsubstantiated or just plain...Continue reading

Minority retort

Mié, 23/04/2014 - 18:21

YESTERDAY, as expected, the Supreme Court upheld, by a 6-2 vote, a 2006 amendment to the Michigan state constitution banning race-sensitive admissions policies in public universities. With Justice Elena Kagan recused (she had worked on the case as United States solicitor general), eight justices took four different views on whether the federal constitution’s 14th-amendment guarantee of “the equal protection of the laws” permits Michigan voters to end race-based affirmative action programmes in their state. This decision will come as good news for opponents of affirmative action in seven other states that have enacted similar bans.

Let me briefly characterise those four positions in Schuette v Coalition to Defend Affirmative Action, before explaining why—despite the moral pull of...Continue reading

A juicy secret

Mar, 22/04/2014 - 23:29

WHAT happens when you get a traffic ticket? Probably much gnashing of teeth, perhaps a tongue-lashing from the spouse and a groaning eye-roll as you get your checkbook and slip a hundred of your hard-earned dollars into that orange envelope of shame. But what if you can't pay that ticket? Well, in some states, including Georgia, you get passed over to one of dozens of private-probation companies. Since 2001 private companies have overseen misdemeanant probation, which includes not just minor crimes such as shoplifting, petty theft and public drunkenness, but also speeding tickets and other traffic violations.

Penalties for such crimes rarely exceed a few hundred dollars, but of course not everyone has a few hundred dollars. That's where private-probation companies come in. I've written about these fees before, but here's a quick refresher: if you get hit with a $200 ticket you can't pay, then a private-probation company will let you pay it off in instalments, for a monthly fee. Then there may be additional fees for electronic...Continue reading

Enlightened intolerance

Mié, 16/04/2014 - 18:08

EARLIER this month Brandeis University rescinded its offer of an honorary degree to Ayaan Hirsi Ali, the Somali-born women’s rights activist, saying its officials had not been fully aware of some her more scathing remarks on Islam. Conservatives have accused Brandeis of muzzling Ms Hirsi Ali and bowing to Muslim pressure groups. Liberals have wondered how the university could possibly have overlooked Ms Hirsi Ali’s condemnations, not just of radical Islam, but of Islam as such. At the risk of coming off as a postmodern multi-culti squish, it seems to me that this discussion suffers from a lack of cultural context—but not the cultural context you’re thinking of. The way Ms Hirsi Ali talks about Islam strikes American liberals as strangely intolerant, but it has its roots in the prevailing discourse on religious freedom and Islam in the country where Ms Hirsi Ali first began seriously tackling these issues: the Netherlands.

As Ms Hirsi Ali noted in an interview on Fox News, the most-cited of her objectionable statements on Islam came in a 2007 interview...Continue reading

Known unknown

Mié, 16/04/2014 - 17:43

AMERICANS filed their income taxes yesterday, swearing that “under penalties of perjury...to the best of my knowledge and belief, they are true, correct, and complete.”

Former defence secretary Donald Rumsfeld has admitted that his return may be none of the above. Yesterday his office released (via Twitter) a letter to the Internal Revenue Service in which he says: “I have absolutely no idea whether our tax returns and our tax payments are accurate.” (See below.)

“The tax code is so complex and the forms are so complicated, that I know I cannot have any confidence that I know what is being requested and therefore I cannot and do not know, and I suspect a great many Americans cannot know, whether or not their tax returns are accurate,” Mr Rumsfeld wrote.

Mr Rumsfeld was wrong about Iraq's weapons of mass destruction, but in this case he is clearly right. The American tax code is a "known unknown", in Rummiespeak. It is 70,000 pages long and might as well be written in Klingon. Few Americans have a clue whether they are complying with it. Some 90% of them (including Mr Rumsfeld) pay a tax accountant or use commercial software to help navigate it (see Economist articles Continue reading

Bill of health

Mié, 16/04/2014 - 16:35

IF DEMOCRATS and Republicans can agree on one thing, it is that Obamacare is hugely important. Democrats say it is a boon, Republicans that it amounts to the apocalypse. But knowing precisely what Obamacare does is rather difficult. The law’s knock-on effects—on the broader economy, on health-care businesses and on health, such as its effect on heart disease or cancer—may never be precisely quantified. It is even difficult to measure Obamacare’s progress towards its main goal, expanding insurance. Gallup, a pollster, is the latest group to make the attempt, presenting new data on April 16th.

The figure, if it could be precisely measured, would show how many people Obamacare has benefited. It would also help Democrats argue that Obamacare is a success or add fuel to Republicans’ fiery proclamations that it is a disaster. Changes in how the Census measures insurance will make it harder to quantify exactly how many people have gained coverage. Not surprisingly, however, both the health department and independent researchers continue to produce their own estimates. Importantly, the survey from Gallup is larger than those of many competitors—the company interviews about 15,000 Americans about their health each month.

Obamacare has been...Continue reading

Cross-Atlantic extremism

Sáb, 12/04/2014 - 18:36

I HAVE long had a sneaking suspicion that Tea Party voters and eurosceptics are more or less the same sorts of people, born on different sides of the Atlantic. Both are traditionalist movements driven by economic anxiety and mistrust of centralised government power. Both have received a huge political boost due to the financial crisis (or, as it played out in Europe, the euro crisis), with eurosceptic parties expected to reap large gains in this May's European Parliament elections. This week, I got a new opportunity to test my thesis. The Dutch-based research group Motivaction International has just come out with a new study of eurosceptic voters across five countries, showing that they share certain traits and values. So I asked Martijn Lampert, Motivaction's research director, whether they could extend this comparison to America's Tea Party voters. It turned out the eurosceptics data was drawn from a 20-country survey that also included 2,185 Americans, and the comparison is pretty interesting. It suggests that I'm partly right, but mostly wrong. Eurosceptics and Tea Party supporters...Continue reading

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