House of Eratosthenes

So I took the time to research this casually, which I’ll freely admit means next to nothing…I submitted a Google search and skimmed through what came up. Everything was conjecture, in the sense that everything about economic cause-and-effect is conjecture. But this was particularly flimsy. No evidence that anyone, anywhere, did some actual digging except for the hardcore progressive cases with an agenda to push, like Sen. Chuck Schumer and Congresswoman Carolyn Maloney for example. And Ezra Klein seems to think there’s something to this, if his name is still credible with you.

So I got sucked in again. I wanted to see just how hard this evidence would get. The answer is not very. And, predictably, although it was the other fellow who posited something, it soon became my job to prove everything. That’s one of the fundamental definitions of how Darrellogic works.

One of the points I made was that a low Gini coefficient does not seem to be helpful to a nation’s economy, in fact, it seems the more productive nations overall have a higher Gini. These international plot-jobs on income distribution within the nations seem to more or less agree with each other, and the “equal” countries overall contribute less to world commerce than the “unequal” ones. Now this is all very casual, not scientific in any way, we’re not looking up national exports divided by population & cross referencing or anything like that…more a test of, “can I think of anything Canada produces that I want or need to buy, or that is used to assemble/produce/grow something I want or need to buy?” I also linked Professor Laffer’s editorial, or at least my own post that linked it anyway…

Frankly, I think this was all way above-and-beyond the call. If the other side is speculating about something it’s up to the other side to prove it. Ed Darrell has a track record of “winning” these things, in his own mind, the way most liberals “win” which is by making the other side prove everything while he doesn’t even bother to substantiate. That’s why I’ve added “Darrellogic” to the dictionary. In Darrellogic, there are different thresholds of proof required to prove different things; whatever tenet fails to produce the proof commensurate with its threshold, is ipso facto falsified; and these different thresholds are decided, from the best I can tell, by nothing more complicated than whether Ed Darrell happens to like them.

But we’re still having our nice little chat here. Until, because of some gremlin residing on his server or WordPress installation, my comment is no longer being accepted. Hmmm…maybe there’s an income inequality snake choking off the comments on Ed’s blog.

So my witty rejoinder will have to go here instead.

To prove the Laffer Curve, you would have to create two universes going through two time lines, with all other economic factors meticulously replicated between the two time lines. This is why the discipline of economics exists in the first place; we can’t do that kind of experimentation. The same applies to your position “I could concede to you the validity of the Laffer curve, but point out that we’re far on the left side, where increasing tax rates increases government income in greater proportion…” What can you offer to prove this might I ask? Can’t I say that’s refuted the first time we use simple multiplication to predict how much additional revenue a tax increase will create — and then it falls short?

No of course I can’t. In the same sense you can’t really produce economic data to “prove” or refute anything. In the field of economics, every single experiment in the real world is conducted in a test environment that is as polluted and dirty as it can possibly be. We don’t know Reagan’s tax cuts helped the budget picture because spending went up, we don’t know Clinton stimulated the economy because those dot-com technologies were taking off, we don’t know the real impact of the Bush tax cuts because of 9/11. There’s always a contagion somewhere, and since the test bed doesn’t have a perimeter, the primary contagion is usually an enormous one.

But in fact, on a macro level the Laffer Curve is easily provable and you don’t need to jot down a single paragraph or produce a single table, you can rely entirely on the nature of human incentive. If tax rates are zero, you have zero revenue — that’s simple math; if tax rates are 1, so that the minute you make any money you’re obliged to hand it in, the government’s revenue would be negligible at best. Somewhere in between, there is revenue at a level greater than what you find on the extreme ends (every time a tax is levied and revenue comes in, there’s your proof for the last of these three). Now, if those three offerings are accepted then the curve is “proven.” So which one of the three are you going to debate? If you think it isn’t your job to say which, but insist the debate still must rage onward, then it’s time for the universe-splitting experiment. So, yes, it is laughable and that’s probably why you didn’t see the paper. Laffer was probably laughing right back at you, and he’d have been right to.

But you still haven’t explained why the Gini coefficient is irrelevant to a discussion about “income inequality: the snake that threatens to choke the economy.” What exactly is the meaningful difference between the discussion you are seeking to have here, and what the Gini is intended to measure?

To me, this stuff doesn’t even get into the conservative/liberal aspect of it; it’s much simpler than that. If there’s a requirement that your feet can never be more than a few inches apart from each other, you can’t walk. This progressive vision of super-duper-sameness ultimately has to rely on: We’re going to pass some new tax policies that ream you right up the butt when you produce, and you’re just going to keep on producing.

I personally know this is not true. In my early twenties, my distaste for the process of exchanging technical information with people became so palpable and so intense that I made a conscious decision to type for a living just so people would leave me alone. I made minimum wage and I was content to make minimum wage. That didn’t last long; financial obligations crept up, and eventually I decided the proper outlook would be to save first and anticipate whatever might go wrong later. I grew up.

That’s what work is. We put up with things that might occasionally be a pain in the ass, to make money. If at the end of it all we don’t get to keep the money, we don’t do it. Ask a waitress next time you go to a diner.

But of course “tax the rich” is not about taxing waitresses. It’s about people who make a real do-I-really-want-to-do-this decision every single time they go to work at their “jobs”…who, if they decide to go ahead, typically spend money as a first step. So their question is a little bit different: Do I want to lay out this cash. And, unlike the waitress, they can say no and not suffer too much as a result. Not suffer at all, really.

People are not automatons. They are sentient, rational, intelligent beings who observe ramifications, anticipate rewards & consequences, and make decisions about what to do that are predicated on these things. Their behavior changes with costs & benefits.

It’s just a dumb policy. That’s why those who defend it keep insisting the other side is the one that has to prove everything…so that, before it’s done, you’re on the hot seat “proving” things so self-evidently true as things like, People Like Money. And you’ll probably fail to achieve the threshold even “proving” that much. The tax-the-rich folks can’t make their plan look good by discussing it under any other protocol.

What you call Darrellogic is very similar to what Joe Huffman calls Peterson Syndrome. I have it in my Lexicon at http://www.thecompostfiles.blogspot.com

Darrellogic doesn’t just apply to economics. It applies to gun control and global warming or anything else the left wants to believe. Standard of proof, or even the mere expectation of linear logic takes on the nature of a shape-shifting alien from Star Trek.

It’s okay if the scientists who say global warming is going to kill us all have degrees in psychology or sociology or anthropology, because they still know what they are talking about, and the 30,000 scientists with degrees in things like meteorology and physics who actually spend time demonstrating the flaws in the computer models and the assumptions simply must be taking money from big oil.
- Moshe Ben-David | 02/13/2011 @ 16:22
If our so-called “progressives” didn’t have double standards, they wouldn’t have any standards at all.
- mkfreeberg | 02/13/2011 @ 17:42
“People are not automatons. They are sentient, rational, intelligent beings who observe ramifications, anticipate rewards & consequences, and make decisions about what to do that are predicated on these things. Their behavior changes with costs & benefits.”

And here’s where you hit on one of the fundamental disagreements with the Left about how people are perceived, a misconception that’s ranged from Marxism to Isaac Asimov’s fictional “psychohistory” science:

Leftists believe that when human beings are considered in large enough aggregates — the “masses” — they are all similar enough, and the rationality of some is averaged out with the irrationality of others, that they essentially become automatons, or can be treated as such for all intents and purposes, who do not make anticipatory rational decisions but only respond to stimuli. As such, they think of populations and demographic groups as essentially merely large frogs, who can be boiled even to death without jumping out of the pot as long as you are careful never to turn the temperature up too far, too fast.

This is also why no real life example of people failing to act as predicted can ever falsify this theory: any instance where the frog jumps is explained as merely inept application, not fundamental incorrectness.
- Stephen J. | 02/14/2011 @ 08:39
The Grasshopper and the Ants
In the summer, there were no “obstructions” to equal opportunity.
In the winter, “new studies” proved there was an inequality of shelter,food and heat. How fortunate for charity (not welfare) that the ants liked entertainers.

“can I think of anything Canada produces that I want or need to buy, or that is used to assemble/produce/grow something I want or need to buy?”

Bombardier commuter train, and municipal bus carriages, so us (U.S.?) worker ants can get beyond our Canadian pre-fab ant houses to amass our own “equity”?
- CaptDMO | 02/14/2011 @ 10:37
sorry, “new studies” proved should probably be “recent academic studies show”. We regret the error.
- CaptDMO | 02/14/2011 @ 10:40
My wife makes 5 time more than I do.

How come they never asked us about this? I’d like a little wage parity
- Fai Mao | 02/14/2011 @ 23:37
This progressive vision of super-duper-sameness ultimately has to rely on: We’re going to pass some new tax policies that ream you right up the butt when you produce, and you’re just going to keep on producing.

Or as I used to say, “The Left seems to think they can tax the hell out of ‘the rich’ or of businesses, and those parties are just going to sit there and take it.” They really think these entities won’t vote with their feet or react in some other way that will adversely affect the revenue that the leftists running the government (federal, state, or local) are hoping to pull in.

Here’s what really leaves me scratching my head, and I have never heard anyone else raise this point. Many of these folks who want to “soak the rich” are the same ones who are all worried about the environment, whether it be concern over “man-caused climate change” or something else. When questioned, they usually respond with, “It’s all connected. It’s a big web. Everything in nature affects everything else.” As an example, they’ll talk about how heavy metals leaked by industry, can make their way up the food chain and eventually poison people.

Fine. So why can’t they grasp that an economy works the same way?
- cylarz | 02/15/2011 @ 00:45

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Income InequalitySunday, February 13th, 2011

Income Inequality
Sunday, February 13th, 2011