Wednesday, March 3, 2010

Response to some comments from Ted

Ted, as usual, has contributed several interesting comments -- on the last two blogs:
Nothing leads like leadership
What part of beneath contempt.

I agree pretty much with the things he has to say, but I'd like to make a few points. First of all, I don't think we need be that concerned about the few folks who aren't really interested in working, and would gladly trade a low-wage job for more free time. Most of these people are living in their parents' basements and mooching meals. It is difficult to live on under $20,000 per year; many hard-working grad students do it, though not because they are slackers and prefer it to having a decent job. As we all know, this recession has idled millions of workers who want to have a good life for themselves and their families; these are the ones we should care most about. Larry Summers may not understand their problems and desires, but I think it is safe to say that they would be very eager to take a job that pays their bills and gives them some disposable income. As Ted suggests, John Kyl doesn't care about the poor in any case, and is only latching on to Summers' argument in order raise himself from beneath contempt to being merely contemptible. (Don't get me started on Jim Bunning.)

As far as the ability of the Chinese to develop sophisticated green technologies, I have read that they are making good progress, both in developing a workforce trained in the appropriate skills and in supplying the ncecessary resources. They have been willing to license developed and developing technology from other countries to give them a leg up. If you want to read more, I suggest this article from the New Yorker (12/21/09): Letter From China.

Thanks Ted.

1 comment:

  1. As a side note, behavioral economists question the entire theory behind employment benefits arguing that because a lot people feel a sense of shame when they take unemployment benefits the disincentive to find a job effect might be much smaller than I even belief (and my belief on it is that it is much smaller than most economists even think). It's actually an argument I'm interested in, but it's pretty hard to get empirical evidence on how big a role "shame" plays. I also want to point out unemployment benefits can be quite stimulative in a depressed economy even with the small disincentive effect (and I think it's really, really small - especially in a recession), so it does actually create jobs (I think the multiplier is put around 1.4 - 1.6 if I remember correctly).

    On China, let me make clear what I meant. First, that was a pretty good article so thanks for the link, they had done a bit more in the area than I thought. I think China can adopt a lot of green technology and expand on it, that I don't doubt at all. What I do doubt is whether China is going to be an innovator in green technology. China hasn't been an innovator in much of anything as of late, educational attainment for the general population is still relatively low and their is a massive brain-drain in China mostly because their economic system isn't conductive to entrepreneurship. They've been trying to reduce the brain drain, but it's only been marginally successful from what I've read. Can they change that? Absolutely, but it would require a lot of economic reforms and the central government would have to give up more economic control than it would like too. I could be entirely wrong and they could be the green tech innovators rather than just the green tech adopters. But, I just don't think they are at that point yet. I'm still betting on Denmark. If the United States puts in place a carbon tax (I'll settle for Cap-And-Trade I guess) and expands NSF and business grants and tax incentives (maybe a green investment tax credit whose value discounts over time?) for green tech R&D we will absolutely blow every nation away - but I don't see that happening so I'm putting my money on Denmark.