Given a conflict between “good for us” or “good for me,” people generally pick the second. That proposition, obvious as it is, underlies most of economics. Thank goodness, human beings often rise above self-interest in ways that redeem human society.
But politicians shouldn’t push their luck. Consider what the European Union is asking of the Greeks. The austerity imposed as a condition of the bailout goes beyond expecting Greeks to behave like Germans, which would be heroic enough. No, the Greeks are expected to do penance for their past profligacy, the “sackcloth and ashes” Full Monty.
Kidding ourselves
Reluctant to think ourselves selfish, we have a remarkable capacity to convince ourselves that “good for me” is also “good for us.” That capacity for self-delusion is evident in results from the Pew Global Survey: Respondents in Britain, France, Germany, Greece, Spain, Italy, Poland and the Czech Republic were asked to identify the “hardest working” people of Europe. Seven picked the Germans. The Greeks picked themselves. For the title, “least hardworking,” five picked the Greeks, but the Greeks fingered the Italians.
Is it any wonder that the Greeks’ penance is insincere? Or that support for austerity among voters proved to be so tenuous in Sunday’s election? Read more »
School districts share needs that can be more efficiently provided regionally, just as individual schools share needs that are more affordably provided by districts. What are we to think when the State Comptroller reports that New York’s approach to regional service sharing in the schools (BOCES) costs more than it saves? Read more »
There is nothing like the IRS Form 1040 and NYS Form 201 to get you in the mood for tax reform.
We need a simpler system. Complexity is expensive by itself—we spend money simply keeping records and paying professionals to figure out what we can and can’t claim. The Taxpayer Advocate’s Service (TAS) of the National Taxpayer Advocate (appointed and funded by Congress) estimated in 2010 that taxpayers spend 6.1 billion hours filling out taxes each year (down from an estimated 7.6 billion hours in 2008, probably courtesy of tax software). 60% of Americans pay someone else to complete their tax forms. In 2008, TAS put the total cost of compliance at $163 billion, about 11% of total tax receipts. Read more »
On assignment out here in Arizona, I’m led to compare it to my adopted state of New York. First, there’s the weather: no snow, warm temps, bicycle-friendly year-round. Out here, of course, that’s a normal winter.
The big city dominates state politics. Here the city is Phoenix. With two-thirds of the state’s population, the Phoenix metro area carries a big stick. Arizonans living elsewhere complain that they have but a small, quiet voice in state political circles and that the interests of Maricopa County (Phoenix, Tempe, Scottsdale, etc.) rule. We’ve got our big city, of course: New York City alone accounts for just over 40 percent of the state’s population. Add in Long Island and Westchester and Rockland counties, and metro New York’s share rises to 61 percent. Read more »
“And which retirement plan do you want?” Retirement?!! As a newly appointed Assistant Professor of Economics at Potsdam College of SUNY, I was 28 and starting my first real professional job. I was being asked to make a decision that would have little impact on my life for 37 years.
I was offered two options: The first was the NYS Employee Retirement System (ERS). If I stayed in state service and retired at age 65, I would be eligible for annual benefits equal to 70.5% of my final average salary (defined as the highest salary earned in three consecutive years). My contribution would have been 3% of salary for the first ten years. The remainder of the cost would be paid by the state. This is what is called a “defined benefit” retirement plan. Regardless of what happens to the invested money, NYS promises to pay out a specified benefit for as long as I live. Read more »
In Triumph of the City, Harvard economist Ed Glaeser attempts to explain why some cities—think New York or London or Bangalore—have prospered, even as the cost of communication has plummeted. The “death of distance” suggests the death of cities. Why do some defy the prognosis?
Glaeser reminds us that cities are “density, proximity, closeness. . . . [T]heir success depends on the demand for physical closeness.” He asserts that electronic communication is not a substitute for face-to-face contact (a proposition anyone who has endured a few conference calls will accept). Even sophisticated “virtual meeting” suites fall short. (Maybe it looks like Nathan is in the same room, but you can’t go out for a beer after the meeting.) Read more »
“What (or whom) should we occupy?” has become shorthand for a bit of communal soul searching. We know that our economy fails to measure up. For some the pain is very personal, “Why can’t I find a job?” or “Must I work so hard for so little?” or “Why can’t employers see what I see in my daughter or my son?” Or one step removed, “What do we do about single moms stuck in a continuing cycle of poverty?”
We want answers. We blame globalization or automation or the school system. Or we blame government or regulation or some shadowy conspiracy. And we blame each other. The Occupy Wall Street movement blames the greed of the rich and powerful and their agents in government. The Tea Party movement blames the power of Big Labor—and their agents in government.
What we want changed depends on who we think is guilty. The Tea Party wants less government. The Occupy movement wants more. Read more »
Pessimism about the economy comes easily to most of us. We’ve been told that it takes fewer muscles to smile than to frown. Nonsense. Pessimism is our natural state.
And when the Rochester economy outperforms the state consistently over a three-year period, we suspect either mischief or incompetence: Someone at the Department of Labor made a mistake that will soon be discovered. Yet while the rest of the state has been shedding jobs since September 2008, we’ve pretty much held our own here in Rochester. Read more »
Governor Cuomo set November 14 as the deadline for the state’s ten regions to submit economic development strategies. Led by Wegmans CEO Danny Wegman and University of Rochester President Joel Seligman, many in our community are working furiously to articulate plans, goals and measurable objectives.
While we hope to be one of the winning regions—earning a promised $40 million in state support—the process itself has already been valuable. In my 20 years here, I cannot recall a time when leaders of business and government from the Finger Lakes’ nine counties have gathered to talk about what makes our economy successful and what might make it better. The process would have been even more valuable had it been less of a fire drill—a February deadline would have been better, although still ambitious—but we can be proud of the diligent efforts of the Council members and participants in eleven workgroups. The plans they have developed are a testimony to the vitality of particular economic clusters and the many vital economic institutions in the region. Read more »
Last Christmas my father-in-law asked for investment advice. Folks he’d been reading were recommending gold. “Gold?” I responded. “No, I’d definitely stick with the stock market. Gold is up 30% since the start of 2010—hard to believe it’s going to keep rising. Corporations are profitable. And they’ve got cash. Besides, Congress just passed that payroll tax cut. I’m not placing any bets on 2012 or 2013, but 2011 should be a decent year.” Good thing I’m spending THIS Christmas with MY family. If you’ve been hiding under a rock, the stock market hasn’t had a good couple of months (although prices were stable or rising until May)—As I write this, the Dow Jones Industrial Average is down 4% since Christmas. And gold? Up 34%.
Growth in employment—already anemic—ground to a halt in August. GDP growth for the second quarter was first estimated at 1.3%, which was mildly depressing this long into a “recovery.” Then it was revised down to 1.0%. Although few indicators have slipped into reverse, none have shifted out of first gear and many, like employment, are slowing, not accelerating.
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Given a conflict between “good for us” or “good for me,” people generally pick the second. That proposition, obvious as it is, underlies most of economics. Thank goodness, human beings often rise above self-interest in ways that redeem human society.
