Friday, October 13, 2006

For a guy who's not running on ideas, this is a good one

Over at Daifallah's Blog, Adam trots out Bob Rae's polluter pays proposal as an example of the desire for Liberals to tax anything that moves. Of course, he doesn't acknowledge that Rae concurrently proposes an equivalent cut in income taxes, and he more or less ignores the empirical evidence that cogestion charges do reduce congestion.

Frankly, Bob's idea is a good one, and it's not terribly out of line with what the vast majority of economists believe (even or especially conservative ones). You know, the ones who accept that taxes are more or less a reality, and that you can use them to incent some behaviours and discourage others. Economists like this guy, this guy, this guy, and this guy. You know, the types who win Nobels and Clark and lead organizations like the IMF. Rather than the type of analysts who ignore facts for politics.

6 comments:

Adam Daifallah said...

Your description of Paul Krugman as an economist who puts facts before politics made me laugh.

Peter Loewen said...

Well, he didn't win the Clark medal because of his NYTimes column.

Daniel said...

Peter is of course right. Krugman's NYT column has little if anything to do with his work as an economist. He is almost assured a Nobel for the new trade theory.

The reactions that Krugman generates are interesting. On the one hand, people on the right who know his column think he's a left wing crank. But they seem to knowingly (or more likely unknowingly---fess up Daifallah) disregard his academic work which is anything but that of a left wing crank. On the other hand, liberals (in the American sense of the term) see him as a hero. But they seem to knowingly (or more likely unknowingly) disregard his academic work which is anything but that of hero of the liberal left.

Having said that, I think it is a fair criticism against Krugman that he sometimes uses his position as an acclaimed economist to lend credibility to his political opinion. However, that is orthogonal to the point at hand: whether economic incentives such as "polluter pays" works or is a good idea. It probably is.

Aaron Unruh said...

Where is this empirical evidence to be found?

Peter Loewen said...

This (http://www.bized.ac.uk/current/mind/2003_4/230204.htm) gives a nice summary.

But, I should like to say, whether the charges actually reduce congestion is only half the question. Drivers cause externalities. If they do not cover these with their gas taxes, then they can be reasonably expected to pay them somehow else. Congestion charges and toll roads are part of this. That they also happen to reduce congestion and increase use of public transit is all the better, if somewhat besides the point.

Aaron Unruh said...

Thanks for the link.