When Demand is Sluggish, Tax the Savers
People in the very upper tail of earnings distribution have seen their incomes rise far more rapidly than even the well-off folks in the top decile. That makes it hard to argue against President Obama’s proposed tax on millionaires, which just restores some progressivity to the tax structure. Nonetheless, we’ve seen arguments against it on grounds that it will reduce job creation (presumably because the rich have a higher marginal propensity to save than others). I’m always amazed at how concerned rich people and their apologists are about job creation (although their concerns are loudest at times when proposals are made to raise their taxes). It reminds me of arguments that got the short-lived tax on yachts in the 1990s repealed.
I don’t believe most macroeconomic arguments; but if one wants to argue on macro grounds, at a time of sluggish demand, if you want to balance budgets surely taxes should be raised on those with high propensities to save (arguably the well-to-do) and reduced on the rest of society, so as to stimulate consumer demand. You can’t have macro arguments both ways!
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Picking the NFL Playoffs: How the Experts Fumble the Snap
Our latest Freakonomics Radio podcast, “The Folly of Prediction,” is built around the premise that humans love to predict the future, but are generally terrible at it. (You can download/subscribe at iTunes, get the RSS feed, or read the transcript here.) But predictions about world politics and the economy are hard — there are so many moving parts.
In the podcast, you’ll hear from Freakonomics researcher Hayes Davenport, who ran the numbers for us on how accurate expert NFL pickings have been for the last 3 years. He put together a guest post for us on football predictions.
Picking the NFL Playoffs: How the Experts Fumble the Snap
As careers in journalism go, making preseason NFL predictions is about as safe as they come these days. The picks you make in August can’t be reviewed for four months, and by that time almost nobody remembers or cares what any individual picker predicted. So when Stephen asked me to look at the success rate of NFL experts in predicting division winners at the beginning of the season, I was excited to look back at the last few years of picks and help offer this industry one of its first brushes with accountability. Read More »
The Latest from the Brookings Panel
I’m back from my favorite conference of the year—the Brookings Papers on Economic Activity. It was a terrific line-up of papers. And to call the discussion lively would be an understatement. (Full disclosure: David Romer and I are the co-editors.)
While a close reading of technical research papers is my idea of a good time, I’m told not everyone is wired this way. So I went into the studio to record a very simple summary of my thoughts on the papers. You won’t quite get the whole two days of economic policy wonk-ery, but this video is a start: Read More »
and 
. If you haven’t seen it yet, the movie features Steven Levitt and Stephen Dubner, and was made by a dream team of documentary directors. Paste Magazine named it one of the 