Econoclasm

Following Friday’s passing of Jon Stewart as host of The Daily Show, “The Concept Of Creating A Daily Show For Public Radio” died in quiet obscurity over the weekend, surrounded by a lingering handful of nervous program directors. The Concept had been on life support in recent years, sustained by occasional desperate brainstorming sessions and the fact that “Wait, Wait…Don’t Tell Me!” is not cutting it with people who aren’t eligible for Medicare. Causes of death include trying too hard, cowering before crotchety core listeners, and the fact that program directors never understood that the Daily Show’s appeal includes rampant sexual innuendo and copious use of the f-bomb.

“The Concept Of Creating A Daily Show For Public Radio” was preceded in death by offspring including NPR’s “The Bryant Park Project,” PRI’s “Fair Game,” and six sanitized episodes of “WTF with Marc Maron” that a few stations tried out that one time. It is survived by a handful of relatives, including “Plateauing Membership Numbers,” “The Need To Find A Replacement For Prairie Home,“ and—somehow—reruns of Car Talk.

First, I’m a big fan of the “put a woman on our money” thing. Frankly, I’d also be a big fan of the whole “put a not-white person on our money” thing, should anyone ever suggest anything so bold. Given how the whole Women on 20s project came out, we might get both, but let’s not get ahead of ourselves.

I thought ditching racist, Indian-killing, seems-like-he-was-probably-kind-of-an-a-hole Andrew Jackson from the 20 was the way to go. But people actually use 20s a fair amount, so evidently that would have just been too great a shock for the country to handle. Or something--I don't really get it. Something about the 10 being up for redesign anyway, which seems like a silly thing on which to hang such a permanent change.

But the 10-spot still seems like a decent option; at least it’s not the 50 or the 2 (which would have made some sense since Jefferson already has a coin, but would have seemed patronizing in the extreme). Of course, the announcement has caused a national discussion about Alexander Hamilton—which is not a discussion most of us have ever probably had with anyone. I’m admittedly no PBS Newshour-level presidential historian; but based on what I know, I’ve been thinking about it.

Hamilton belongs undeniably among the Founding Fathers. He fought in the war for independence. He was a self-made man, and undoubtedly a genius; although great with words, he was also a numbers guy when the country deep in debt badly needed one. There’s a strong argument that he saved our nation in the early days, when our debts to Europe and our monetary chaos threatened to undermine all the best ideals of the framers. He was materialistically selfless; by most accounts, he did what he thought was best for the country. For as much as conservatives like to lionize and invoke the founders, Hamilton is perhaps the Patron Saint of American liberals, with his belief that we could turn debt into strength and that a strong national government was our future. At the same time, he was a believer in the power to raise up the country through trade (something from which modern liberals might take a lesson).

He is also, in some important ways, a national shame.

And I find this angle fascinating as I think about his face on our money and his statue in front of the Treasury building, next to the White House. Hamilton was a schemer, a liar, and stands apart from his fellow Fathers in that he freely violated the fragile Constitution if it meant pursuing what he thought was right. As a Cabinet member, he behaved in ways that are almost unimaginable in any administration—much less under the nose of our most deified president. He submitted legislation to Congress without the president’s consent; he actively undermined the work and influence of his fellow Cabinet members—especially his ideological enemy Jefferson, who had plenty of dirty tricks of his own but who retained enough ethical scruples to prevent him from truly competing on Hamilton’s level. Even after leaving office, he maintained a level influence with Washington that has a certain Rasputin-like quality if you look at it right. His continued machinations, via his disciples, arguably poisoned the presidency of John Adams, leaving a legacy of bitter partisanship from which we arguably still suffer (Jefferson shares some blame here, of course).

I found one aspect of Hamilton’s doings perhaps most disturbing—and a good enough reason on its own to move him aside on our money. Throughout the early days of the republic, Hamilton—Secretary of the Treasury, mind you—conducted secret and unauthorized diplomacy with the British. He frequently and to great effect undermined the Secretary of State (Jefferson), our attempts to establish a credible diplomacy abroad, and the official diplomatic policy of the United States. He passed state secrets and tipped off the British on many critical occasions, violating the trust of a president who reserved a special place of trust for Hamilton. Later, he used his influence to push the country toward war with France, and appears to have abused his continued sway over an aged George Washington to make himself defacto head of a new American army—without the blessing of the actual President, Adams. 

Only a brilliant political operator could have pulled all this off. But all of these actions risked the loss of public faith had they become known, and might well have smothered the country in needless conflict.

Digested some interesting news today in my Wall Street Journal suggesting the founder of Chobani may have sunk in over his head. I interviewed him back in 2012, and it was one of the more fun CEO interviews I can recall doing. But I also recall a certain jolly nonchalance about those deep-pocketed competitors eager to gobble up some of the new market category he had cooked up. 

Interesting to get in the whey-back machine and stir up some new thoughts about this old interview.

(Ah, Marketplace. I wasn’t precisely paid by-the-pun, but they did appreciate my sense of humor.

Every dollar I spent on a CD

Every hour I ever spent watching live TV in a hotel room (except for the other day, when "Meet the Parents" was on HBO)

That $10,000 in WorldCom stock I got for my college graduation

My two front teeth

That Ethiopian meal that made me go home and puke through my nose

The one really mean thing I can ever remember saying to anyone, which I said to a good friend for no reason at all

Those wads of water-soaked toilet paper I threw and stuck to the bathroom ceiling in first grade, back when I was still finding my way

Should the Secret Service get any credit for saving a life other than the President’s?

The coverage of this thing has focused overwhelmingly on the breach of security. And surely this kind of thing just shouldn’t happen. But I’d like to hear more about another outcome that shouldn’t happen — and didn’t: Secret Service snipers should not be gunning down mentally ill people (not to mention those who earned their illness serving the country).

There are good questions to be asked, and additional security measures to be taken, but it seems to me there’s also a victory here. As I recall, an initial Secret Service statement praised agents for their restraint, but unfortunately the agency recoiled because of someone’s negative assessment of the optics of that sentiment. For whatever reason, the snipers we all know are on the White House roof did not pull the trigger.

“Sunk costs” is one topic with which economists love to regale laypeople and fresh-faced economics students. It goes like this: The Rational Economic (Wo)Man makes decisions based upon a present-day calculation of costs and benefits. Thus costs that have been incurred and can never be recovered (“sunk”) are irrelevant to sound economic decision-making.

It's kind of the economists' version of, "No use crying over spilled milk." Yes, you may have put in lot of money (or time, or effort) into something. But leave your emotions out of it! If you don’t, you will only make things worse. And, perhaps worst of all, you are acting (gasp!) irrationally. (This, by the way, is a word you should never, ever use with your wife. Even if you think you are just sharing fun, fascinating stuff about economics.)

Even in Econ 101, economists acknowledge that people in the real world act against their own self-interest all the time. But kind of like Scientologists are encouraged to master their emotional responses (or so I’ve…um… been told?), thinking about sunk costs leaves one inspired to be a more perfect human.

I’m rather a fan of my emotions, most of the time—but I do admit to believing in the mantra of sunk costs. That’s why it especially ate at me to be carrying my own, mounting sunk cost around, apparently paralyzed by my human emotional frailty. Two years ago, with the best of intentions, I signed up for an LA Fitness membership. It was near my house, the rate seemed like a good deal, and I was in a narrow period of my career when my schedule actually allowed me to go to the gym.

The honeymoon lasted about three months. New job, second kid… forget it.

At least I was in touch with reality enough to eventually put the membership “on hold” for $10 a month. But that only postponed my difficult decision, and wound up costing me more money in the end (as the good folks at LA Fitness probably know all too well). As months turned into years, this monthly credit card debit haunted me. I had put all this money into keeping the dream alive… I had paid the initiation fee, and would only have to pay it again if and when I finally had the time to restore my six-pack abs. But in my heart, I knew going to the gym was not realistic, and wouldn’t be… until my kids go to college, the way things are going.

An undisclosed but embarrassing number of months-slash-years later, this month I finally cut anchor, letting my sunk costs at last fall away. Congratulations, right? I hardly feel like celebrating. Ask me in a year.

Yeah, I'm kind of an Apple crank.

Woke up to NPR demonstrating the media's usual complicity in the Apple hype machine. (On the floor outside my hotel room, USA Today's fawning spread would make NPR look restrained.) Even after Steve Jobs, Apple retains a magical charm that convinces large swathes of the press and public that a technology has only really come of age when Apple (finally) puts its stamp on it. Maybe the silliest ongoing example is "television," where pundits still seem to be waiting for Apple to step in and truly bring TV into the digital age, notwithstanding the far-reaching innovation that already constitutes a revolution in content. The company has become king of the second-mover (or third-mover, or fourth-mover) advantage, combining smart but modest design flourishes with cultish bravado, and laughing all the way to the bank.

This week's announcements are almost taunting the Apple skeptics. Big screens are not new. Nor are smart-watches, though here I'll concede Apple's approach could inject some welcome diversity. The hoopla that I find most offensive as a lover of new technology (and the subject of that NPR story) is "Apple Pay." NPR and others reported this without mentioning that the same capabilities have been available for some time to anyone with a newer-vintage Android phone. Near Field Communications (NFC) chip readers are already common in many chain stores. It's been a reality for some time, for anyone willing to download an app like Google Wallet and take a few minutes to set it up.

Just not for people with an iPhone, mind you.

But I suspect past is prologue. Once again, Apple has taken a feature that was conspicuously missing from its products, added it with great fanfare, and (perhaps most importantly) given it A NAME, bestowing a novelty to the technology that isn't warranted but quickly becomes a tenet of conventional wisdom. The exciting thing that has to be acknowledged is that in the immediate-term Apple can introduce technologies like this to wider audiences. What's unfortunate is how the media contribute to the myth, the outsize profits Apple devices can command, and ultimately the cost to consumers. 

This is the third in my epic trilogy of posts where I place generously into the public domain some obscure original research from my past. This one contains a bunch of novel number-crunching on an important question: why are people in some countries way better (or way worse) at paying their taxes?

This paper (PDF) originally arose from the need for a major project for a political economy seminar (one of the most rigorous, enjoyable courses I took on the way to my degree, taught by an impressive young social scientist named Ben Ansell, to whom I have just given a well-deserved shout-out). I was simultaneously thinking a lot about taxes in a course on public economics co-taught by the then-state-economist and the state-economist-to-be. Yes, I moved in some illustrious circles back then…

Somewhere near the hazy intersection of economics, sociology, and political science sits a concept called “tax morale.” For something so important, there wasn’t a huge literature in this area, and much of it seemed to be focused on why individuals might cheat on their taxes. That’s interesting, but around the time I was working on this paper in early 2012, the tax collection plight of Greece gave the world a compelling reason why this was an even more important question at the national level.

I couldn’t find anything that had really set out to consider how the qualities of countries affect their tax compliance. So I set out to gather as much relevant data as I could in a short time, and conduct the kind of ambitious, shoot-from-the-hip regression analysis one can only really do when one knows he will not be peer-reviewed by a bunch of much-smarter people just waiting to tear him a new one.

Something like this could have been a train-wreck, but I remember thinking the whole experiment came out rather well. As with my previously posted papers on farmers markets and bilingual education, the most satisfying part was having made a credible attempt (IMHO) to plow some relevant new ground, even as a lowly grad student.

I won’t go into a bunch of detail in this post; if you’re feeling intrepid, and the topic interests you, I invite you to read the paper. I’ll warn you that even for me, glancing over my own writing two years later, this one’s a bit harder slog. But here are some of the insights:

When it comes to tax compliance, developed and developing countries are very different animals. For developing countries, for example, higher levels of political freedom do not seem to have much effect on tax payment attitudes or tax-evading business activity (though they are correlated with more effective tax collection). In developed countries, on other hand, higher levels of political freedom actually appear to depress tax compliance.

Income inequality is bad news if you want people to pay their taxes. Increasing social spending does seem to help.

Lower tax rates do not appear to a factor in cultivating more honest taxpayers.

Intractable social conditions such as ethnolinguistic fractionalization and predominant religion often play a critical role. Specifically, Catholic and Orthodox developing countries face particular challenges. Among developed countries, Protestant countries have low tax morale, but do a better job at collecting; Buddhist countries (in this dataset, Japan) have soaring morale but do not collect as well as might otherwise be expected.

I was fortunate to host the Marketplace Morning Report for a while in 2012 and 2013. When I wrapped, I collected a list of the more notable (or my favorite) interviews from my stint. Since many of them are, naturally, econ-related, it seemed appropriate to archive that list here. Have fun.

ECONOMISTS

Alvin Roth (2012 Nobel winner, on the morning he won)

Luigi Zingales (on redeeming capitalism after the financial crisis)

Jared Bernstein & John Cochrane

Alan Krueger & Glenn Hubbard

Arthur Laffer (father of “supply side” economics)

Uwe Reinhart (health economist on the day of a pivotal Supreme Court decision on Obamacare)

Dan Ariely (behavioral economist on dishonestly in the world of finance)

Diane Lim Rogers (Concord Coalition economist, on bipartisanship in the face of the “fiscal cliff”)

BUSINESS-TYPES

Hamdi Ulukaya (Founder of Chobani)

Leslie Michelson ("Doctor to the 1%”)

David Overton (Cheesecake Factory CEO, on launching in the Middle East)

Colin Angle (iRobot CEO, on the future of robots)

Robert Herjavec (of ABC’s "Shark Tank")

POLITICAL & POLICY-TYPES

Ralph Reed (Chair of Faith & Freedom Coal.)

Rep. Chris Van Hollen (D-MD)

Sheila Bair (former head of FDIC)

Neil Barofsky (former Inspector General for TARP)

OTHER FOLKS

Cornel West (activist, philosopher)

Kevin Smith (podcaster, filmmaker)

Clyde Drexler (NBA, Dream Team star)

Ann Larson (Occupy Wall Street)

Manos the Greek (stand-up comic, on the Greek economic crisis)

FUN STUFF Most of my daily kicker items vanished into the mists of time. Here are a few that somehow wound up archived for posterity:

‘Twas Five Minutes to Race Time

Workplace grammar limerick

The UBS Libor emails... in haiku

The other day I was skipping down the streets of D.C. with Stitcher in my ear, cued up a Freakonomics podcast episode called Is Learning a Foreign Language Really Worth It? The show was well done--I'm a tough crowd when it comes to economics on public radio, but Freakonomics doesn't strike many sour notes.

Hearing it reminded me that I had written a nifty paper on this very topic back in grad school, with the kind of long title you use when you're trying to impress people in grad school: Bilingual Preschool for All? The cognitive case for bilingualism leading to long-term economic benefit.

I went digging around for it in my files, and re-read it. I went somewhere this podcast--and other research, as best I could tell at the time I was writing--didn’t go, trying to rustle up the collective biological and cognitive evidence on the benefits of language study, and marry it with the (still rather thin amount of) economic research. And whereas it’s easy to dismiss—as some in the podcast do—the benefits of dabbling in a language in high school and college, my focus was specifically on the period of learning when the brain’s functions are still truly plastic: early childhood.