Bowles-Simpson: What am I missing?

The Bowles-Simpson deficit reduction plan is causing consternation among people with whom I usually agree.  But it has a couple of important features that I like--it cuts tax expenditures that tend to be both distortionary and regressive (such as the mortgage interest deduction) and it taxes investment income at the same rate as ordinary income.  This second feature essentially ensures implementation of the Buffet rule.

As it happens, the Tax Policy Center at the Urban Institute and the Brookings Institution evaluated the distributional impact of Bowles-Simpson relative to current policy.   Here is what they found:

Look at the column entitled "Percent Change in After-Tax Income."  Everyone takes a hit, but the hit in the lowest quintile is near zero--for the top one percent, the hit is almost three times higher than average; for the top 0.1 percent, it is four times higher than average.   This looks awfully progressive to me...

Can a name depress rents?

I needed to go to the Brazilian Consulate to apply for a visa yesterday--it is located at 8484 Wilshire Blvd.  The building at that address is called The Flynt Building, as in Larry Flynt.  I can't help but wonder if the name discourages tenants from locating there, and whether that in turn means it commands lower rents than it otherwise might.

It would be hard to know--if one ran a hedonic regression, there would not be sufficient degrees of freedom to determine whether the name mattered or not.

Dependence

So far as I can tell, Casey Mulligan and I have but two things in common: an economics degree, and eyeglasses (he is wearing a pair in the picture on the UofC web site).

I don't know about Professor Mulligan, but I am completely dependent on my glasses.  The first thing I do before I get out of bed is put them on, and the last thing I do before turing off the light is take them off.  I cannot do the basic functions of modern existence without them.  I suppose this reflects badly on my character.

Frank Popper on Academia

He comments on my friend Lisa Schweitzer's blog:

As an alternative to this kabuki, let me describe specific kinds of experiences I see a lot, but that rarely show up in journalists’, academics’ or adminsitrators accounts:
1. Right- or more usually leftwing bigotry to the point where it becomes part of the intellectual air one breathes. A few years ago I took part in a search that produced a candidate who was mildly libertarian. S/he was treated as a Martian. The questions at the presentation were patronizing, extended to actual laughter. The initial daylong interview schedule ended at midday, sending the candidate home early. 

2. The vacuous meetings, where nothing of substance gets discussed and everyone–EVERYONE–would rather be somewhere else. Precisely because the meetings are so comprehensively boring, no one ever admits it at them, though there is plenty of backchat afterward. Somewhere there must be a Balzac of American boredom, perhaps whiling away time in the Ohio Public Roads Department or a backwater of the Gates Foundation or maybe even a university, who could convey all this. We need this person to emerge soon. 

3. The public corridor conversations about students in general, which are public, deeply insulting, and clinical. They seem to get worse when students are in earshot. 

4. The lack of knowledge about popular culture, which of course is most of it and the part likeliest to last. (Shakespeare in his time was popular culture, as was the Bible.) I have run across professors ignorant of Barbra Streisand, Clint Eastwood, American Idol, Saturday Night Live, etc., far into the night and keeping on ’til morning. They invariably have firm opinions about where America or the world is going or should do. It is hard to argue with them because, well, they don’t have much of a fact base and don’t care about it anyway. The comparison with Sarah Palin or Glenn Beck seems inevitable. 

5. It’s startling how much overt anti-intellectualism exists at the middle and top ranks of American universities. I know deans who couldn’t tell you two coherent sentences about what most of their professors do or why they do it. But they can give you precise figures about the grants (some of) them bring in. They actually remark on how dull the professors’ work is, not that they’ve lifted a finger to try to find out about it. Most professors themselves are remarkably ignorant about what their colleagues do and feel no guilt about it. 

6. The mistreatment and bullying of graduate students: an endless topic. One of the (many) low points of my graduate experience was submitting the first draft of my thesis to a committee member, who sneered at me that it read like “a long piece in the New Yorker,” as if that was bad. This fellow told me that I should “look to my education,” his phrase, then refused to be part of my committee. He was for some time quite well-known, and one of the joys of my adult academic experience has been watching the utter eclipse of his reputation. Another faculty member then took me on as a project, told me that part of my problem was that I “wrote better than 95% of our graduate students,” thus arousing controversy others avoided. He gave me tips on how to make my writing better while academically grounding it so as to anticipate people like his grump colleague. My savior died recently, got remarkable obituaries and had a spectacular memorial service, which I went out of my way to attend. 

7. There’s a softness in intellectual culture as universities purvey it. That is, one can get away with studying topics or subjects (in our field e.g., zoning, Chicago, Robert Moses) without having any actual ideas about them. All you have to do is write about them, and after a while you doesn’t even have to do that. One of the results is large numbers of high-status mediocrities who’ve never really done or contributed much and who, like the I-want-out committee member described, typically find their reputations slipping by late middle age and mercifully don’t get to see them disappear posthumously. Other results: dull papers in dull journals, both with microscopic readerships; ditto for dull books published by dull university presses; vacuous presentations at conferences; a general sense that almost anything is good enough for academic work if only it is sufficiently pedantic or obscure; and ceremonial for-wider-consumption overpraise for ordinary work (“This pathbreaking idea,” when no one can credibly tell you what the idea is, much less what the new path is or what old path it supplants.) 

I’m sure others can add further items, but that seems like enough from me for the day.

Let me say one nice thing about my place--I think the profs here really like our students.  It is certainly part of the culture for faculty to spend time with students (and not just Ph.D. students).  The students here are also pretty easy to like--while there is certainly variation in intellectual capacity and work ethic, the students here seem happy to be here, and I hear very little whining.    

Why do lenders and borrowers do things like this?

I was talking with a real estate broker today about the process of short sales, and why they are so difficult to do, and she told me a rather sad (and she said typical) story.  A borrower in Compton had an $800,000 mortgage, and was about to close a short sale for $170,000.

Everything was all set to go, when the lender told the borrower that if she didn't sell, she would get a modification.  The borrower in the end did not sign off on the short sale; she never did get the modification, and was foreclosed on 60 days later.  Both the borrower and the lender would have been better off had the short sale happened--the borrower's credit history would have taken a smaller hit, while the lender would almost surely recover more money.

A Painting by Morgan Green

Could Ted afford his apartment? Probably not.

In the movie Ted (one that I am embarrassed to say I rather liked), Ted has a minimum wage job as a checker.  In Massachusetts, that means he makes $8 an hour, or around $1360 a month (I assume 4.25 weeks per month and no overtime). 

His apartment in Boston is pretty bad, so I am going to put it at the 25th percentile of the rent distribution, which puts it at around $750 per month.  This means Ted is spending far more than  half his money on his apartment (so I am not sure where he is getting his, ahem, beer money from).