Via James Joyner, Kevin Drum complains about lack of conservative responses to two issues: global warming and income inequality/wage stagnation.
For global warming, my preferred response is an initially-small carbon tax indexed to global average temperature anomaly (so it automatically increases if the warming trend continues) and offset by across-the-board tax cuts.
For income inequality and wage stagnation, we need to seperate the two issues. Income inequality is only a problem in a zero-sum world; if my income doubles while yours goes up by a factor of ten, I’m still a happy guy. Wage stagnation is the real problem. It’s less of a problem than those on the left often claim (inflation-adjusted household income has been consistently increasing over the long term, albeit at a fairly slow rate (~1% a year), and household income underestimates wage growth because of the increasing number of single-adult households), but it’s still a problem.
The good news is that wages grow along with productivity, which points to raising productivity faster as the best way to raise wages faster. Ways to do so include:
- Reducing barriers to capital investment by cutting capital gains and corporate income taxes and by expanding tax-deferred investment accounts.
- Improve economic efficiency by allowing perennially unprofitable companies to fail.
- Reduce and simplify business regulations.
- Abolish tax breaks, subsidies, and regulatory preferences put in place to benefit specific established businesses at the expense of the public as a whole.
- Improve the quality of education. This is a complicated issue deserving of its own post, but possibilities include:
- Freeing local schools from useless or counterproductive centralized mandates.
- School choice, either through private school vouchers or through magnet and charter schools and open enrollment at different public schools.
- Modifying government support for higher education to give equal support to vocational schools and apprenticeship programs for the benefit of those whose learning styles and professional goals make those paths more beneficial than a four-year college degree.
{ 18 comments }
Global Warming:Â
Continue funding research to validate or invalidate the theory that man made carbon emissions contribute to warming, or whether we are just seeing evidence of a continued 10,000+ year natural trend.Â
Continue funding research into how to cope with global warming regardless of whether it is a man made or natural phenomenon.Â
Income inequality:Â
That’s a feature, not a bug.
Income inequality is only a problem in a zero-sum world; if my income doubles while yours goes up by a factor of ten, I’m still a happy guy.
Empirically, no, this is not the case. I’d have to look up the research to give you firm cites, but there is social psych work showing that if a person’s <good thing> doubles while everyone else’s goes up by a factor of ten, that person is going to be pretty unhappy about it. You may think that person should be happy, but he’s not going to be. It’s the same phenomenon as the fact that people waiting in lines don’t care as much about the absolute length of their own line as they care about how quickly or slowly it’s moving compared to the other lines. People are a problem.
Now, you may or may not think that this is a problem we need to actually craft policy about, but that’s a somewhat different issue.
The beauty of temperature indexing is that if the solar input theory turns out to be correct, temperatures will decline over the next few years and the carbon tax will automatically be cut to zero.
I’m skeptical of the broad applicability of those studies. Would you really prefer to live in poverty, provided nobody is richer than you?
Introspection is notoriously unreliable.Â
My gut reaction is that if the person is being lifted out of poverty, you’re probably right that most people would be made happier by that change. However, if we’re talking about a person who is already past the point of being truly poor having their income doubled, while everyone else becomes ten times as wealthy, then yes, I suspect most people derive little satisfaction from that.Â
 Eric, But what if carbon’s impact on the environment is insignificant?  Â
I’d much rather see a tax on something we KNOW is a hazard, such as sulfur dioxide or ozone.  Or maybe soil run off, or used oil, or even birth control pill hormone excretions. Â
The science is much more firm with those pollutants.  Let’s walk before we run….
My understanding is there are two major theories about the warming trend over the past century. The by far more popular theory is that it’s due to industrial emissions of greenhouse gasses. The minority theory is that it’s due to normal variations in solar input. For the past several decades, temperatures have been going up, along with solar input and industrial greenhouse emissions.
However, the sunspot cycle has looped around to the point that solar input is now declining. If the solar input theory is correct, temperatures will decline. If the anthropogenic greenhouse theory is correct, temperatures will continue to increase. If temperatures increase, my plan will generate a substantial revenue-neutral carbon tax (which is good policy if the anthropogenic theory is correct). If temperatures decrease, my plan’s carbon tax will never grow to a significant amount and will effectively repeal itself in a few years.
The likely alternative to my plan is a cap-and-trade system which will be a net tax increase and which won’t respond to new information about the relative significance of CO2 vs the sunspot cycle.
It seems that actual measurements (as opposed to religious beliefs) by NASA and NOAA indicate we are going into a natural cooling phase and possibly a new little ice age. If you are going to do something about climate change it needs to be on how to prepare for another little ice age. Things like how to make home heating energy readily available and affordable. Carbon taxes don’t do that.
Caution: Reality can be hazardous to your beliefs.
Things like how to make home heating energy readily available and affordable. Carbon taxes don’t do that.
Maybe not, but if you index them to the temperature anomaly as I am proposing, then they go away if the decline in actual temperatures over the last year or two turns out to be a trend rather than noise.
Eric,Â
There is another theory. Actually it’s more of a scientific fact than a theory. And it’s based on solid geological science, not unproven theoretical models.Â
All evidence points to the fact that the earth has been warming for the past 10,000- 20,000 years. Â
The melting Arctic glaciers that we see receding on TV today once extended through New York to PA on the East Coast, down across Michigan, and into northern California on the West Coast. The evidence is undeniable.Â
And these glaciers didn’t occur during some distant dinosaur era (when America was no doubt a festering swamp land, btw).  They began their retreat in what is little more than a geological blink of an eye. And it’s very likely we’re living in the same age where that warming, whatever its cause, is still occurring.  Â
Now, whether we might be accelerating the warming trend is open to debate. But the general warming trend is undeniable, and certainly not caused by man. Â
Eric, your proposal seems very logical and reasonable. It appeals to me because as a believer in anthro GW, i want to start doin something to mitigate the problem. That means building concensus on forward action.
But the problem it faces is that, while punting on the cause of global warming, it accepts teh validity of the statement that warming is taking place. Someone who does not believe ther eis any genuine warming going on is going to argue, why bother having any carbon tax indexed to temperatures at all? We certainly don’t have a peel tax indexed to the price of bananas. How do you answer your critiques from the right on this? (the certainly arent going to listen to me).
If everyone else makes 10x more mney, and I make only 2x more, then the cost of living – food, rent, gas, etc – and the (extra) cost of being happy – movies, eating out, vacations, gifts, etc – are going to be priced out of my reach. Worse, basic long-term investments in health, education, etc are going to recede from grasp (college, health insurance, 401ks). Income inequality is a problem because it perpetuates social and class inequalities.
Since there are _real_ reasons to reduce oil use, my thought has been to have a gas tax that is offset with a front-loaded reduction in the payroll tax, so the poor don’t get nailed quite as hard by what amounts to a sales tax.  I’m not sure what the level should be, but it should be high enough to influence transportation decisions.
We should also drill domestically, and start improving the power grid to allow widespread use of cars with an electric powertrain component.
As for indexing it to AGW factors, determining this level is darn near impossible – after all, AGW may not be happening at all, or the level may be swamped by other factors. (For example, maybe you have a 0.5C rise due to AGW, but a 2C drop due to insolation changes)
You’ll just have to take your best shot with the tax.
foobarista’s last blog post..Political discussions, trust, and logical argument
As for training and education, this is the standard "government-centric solution" to dying areas. The problem is that without an otherwise favorable business climate, businesses won’t locate – and these expensively trained people will simply leave, especially if they’re young.
There are several countries with decent education systems but poor economies, largely due to excess government bureaucracy and bad attitudes about business. The Philippines is the best example, along with India before Rao’s reforms in the late 1980s.
Education works, but you need to make a place a good place to start up businesses as well.
foobarista’s last blog post..Political discussions, trust, and logical argument
The first fundamental problem with temperature indexing is that we don’t have a good measurement of temperature.
Lots of people refer to GISTEMP as a reference. Unfortunately, according to Gavin Schmidt of NASA GISS, less than 0.25 FTE is spent maintaining the package.
http://www.climateaudit.org/?p=4325
http://www.realclimate.org/index.php/archives/2008/11/mountains-and-molehills/
That doesn’t begin to address the problems with measurement. http://www.surfacestations.org/ has a good rundown on the US stations, and it’s not good. The rest of the world is in worse shape for measuring temperature.
We do have satellite data. Unfortunately that data is not as well accepted, and it goes back less than one PDO cycle.
How do you answer your critiques from the right on this?
I’ve been answering them in this thread by reminding people that the tax will automatically decline to zero if the solar input theory is correct. That doesn’t seem to satisfy everyone, and it doesn’t answer jaymaster’s argument of a natural long-term warming trend other than the sunspot cycle.
I could modify the proposal to make the offset of the initial tax permenant no matter what happens with the indexing, and to include in the indexing formula a sunset provision so the carbon tax gets fully repealed if conditions that contradict the anthropogenic theory occur (warming without CO2 increase, or CO2 increase without warming) over a period of several years.
With those modifications, I can tell my critics on the right:
1. It’s the easiest way to kill the left’s proposals. If your theory is right, this proposal automatically repeals the tax. This is much, much better than a cap-and-trade plan which is a net tax increase and doesn’t respond to new information about temperature trends.
2. If your theory is right, this is just a sneaky way to get Democrats to vote for a tax cut, as the carbon tax sunsets and the offsetting tax cuts are made permenant.
3. If your theory is wrong, a revenue-neutral carbon tax is the right thing to do, and this is the least harmful way to do it.
I’m not a conservative, so my input can’t answer the question, strictly.
But I don’t think anything "needs to be done" about either; global warming is, in plainest Anglo-Saxon terms, bullshit*. And "income inequality", so long as it’s not created and perpetuated by law intended to keep a group down, is not a problem.
(* By which I mean all of "it’s not human-caused to any significant degree, and thus human fixes are unlikely to be practical", "it seems to have stopped for now anyway – due to changes in solar input if nothing else – and now the chicken littles are worried about ice ages, just like in the 70s", and "we can’t really stop "climate change" even if we thought it would be worth paying for, which it isn’t, given how dramatically expensive it would be to even try and inevitably fail [Kyoto]."
And I’m not going to listen to Aziz on this, as he says, not because I’m "from the Right", but because the evidence is against him. Carbon simply doesn’t explain the data. The models are completely wrong. And even according to the UN, global warming has "stopped" for at least a decade.
What kind of madness would I have to be party to to believe in anthropogenic global warming that needed immediate action to remedy it, under these conditions?)
(Contra Elizabeth, my impression of happiness studies is that that result applies to "peers"; if my neighbor gets a lot richer than me starting from the same base, I might be unhappy.
But I’m not unhappy because Bill Gates or Magic Johnson are fabulously wealthy.)
Aziz: No, not really. <I>Real wealth</i> has increased dramatically over the past century and change, and everything has gotten, in fact, <I>cheaper</i>. If everyone becomes richer through actual wealth creation** <I>rather than monetary inflation</i>, nobody is priced out of necessities.
I imagine the confusion comes from the way that observable short-term "everyone makes more in raw numbers" surges <I>only</i> happen via inflation rather than real wealth creation.
** IE, improved productivity
It’s not a question of my income goes up by 2x while everyone else’s goes up by 10x.
It’s much more likely that me and 20 other people see 2x, those ten people over there see 3x, that five see 6x, and that one guy sees 10x. In that case, the "envy factor" would be much less apparent.
And yes, everything has been getting cheaper over the whole spectrum, so an average factor of 3.06 in income increase (using my hamfisted example) isn’t going to reduce the 2x folks to penury.
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