Please Consider Not Voting

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Greg Mankiw reprises the argument for why you might consider not going out and voting:

Anyone who has ever entered a polling booth can easily see why roll off occurs. You come ready to vote for your favorite candidate in some race you’ve been following closely, but then you face a whole list of races and ballot questions, most of which you know little or nothing about. What do you do? You could quickly make a decision based on your scant knowledge. But what if the contest is very close? Do you really want the outcome based on your almost random vote?

So you choose another course: You skip the item. In practice, this means that you are relying on your fellow citizens to make the right choice. But this can be perfectly rational. If you really don’t know enough to cast an intelligent vote, you should be eager to let your more informed neighbors make the decision.

(Of course, it clearly does not apply to readers of this blog. Right?)

More Elasticity

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Here’s another remarkable measure of “income elasticity” – the consumption response to being (or feeling) broke:

That’s EIA’s “petroleum product supplied”, which is a good proxy for gasoline consumption. Contrary to a bizarre story in the New York Times last week, gasoline consumption has fallen off a cliff since early September. The Times story suggests that people are returning to their cars as prices drops. But if you look at the EIA data, it looks like the Times’ Clifford Krauss has cause and effect reversed. Prices seem to be dropping because people are consuming less.

Income Elasticity

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Elasticity – consumers’ changing demand for a good – comes in two flavors. When prices go up, we consume less. But we also consume less when we’re broke, which is what’s happening today in the auto market. Gas prices are dropping like a stone in a pond, but as James Hamilton notes, we’re not buying SUVs:

Rising gasoline prices earlier this year unquestionably contributed to the slide of domestic autos in general and SUVs in particular in the spring and summer, and the lost income and jobs that resulted may have been the factor that tipped the economic slowdown into a recession. But national losses in jobs, income, and consumer confidence are now exerting a separate influence of their own, as consumers cut back wherever they can. Domestic automakers take the brunt of that second, more damaging blow as well.

Obama 19, McCain 4

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I completed the eagerly awaited annual non-partisan Fleck Yard Sign Survey today while Lissa and I took a long walk through the surrounding neighborhoods in search of lox, bread products and coffee. The talley:

  • Obama 19
  • McCain 4

The results are in too late for Nate Silver to incorporate in today’s model runs, but they should be included in tomorrow’s results.

Remember Prop. 8

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Breeders unite:

[W]hat’s wrong with all the straight folk? Do you have something better do with with your Thursday night than all these gay people? I doubt it – I’m sure they’ve all got fabulous dinner parties to attend or those awesome bars to go on Castro St and I’m sure their tiny dogs need walking, but they were there giving up their Thursday evening to protect your right to marry whoever you choose.

Canadian Economists for a Carbon Tax

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Economists sometimes get a bad rap – the unfair belief that they worship at the alter of markets above all else, ignoring real problems as a result. In fact, a great deal of contemporary economics is focused on the opposite – understanding the places where markets fail, and helping craft policies that can make up for the markets’ resulting shortcomings.

That thinking is in evidence in this, an open letter signed by 255 Canadian economists arguing for a carbon tax:

One of the few issues on which most economists agree is the need for public policy to protect the environment. Why so much agreement? Because in the absence of policy, individuals generally don’t take the environmental consequences of their actions into account, and the result is “market failure” and excessive levels of pollution. Environmental degradation diminishes the quality of life for all of us. And without a healthy environment, we can’t sustain a healthy economy.

Their missive is realistic about the fact that there will be costs:

Any effective carbon-reduction policy will necessarily entail changing the way we live and do business. All forms of regulation, taxes, or markets for the exchange of emission permits that have a significant impact on greenhouse gas emissions will affect the prices of carbon-intensive goods.

They argue for a carbon tax over a cap-and-trade system because of both price certainty on the tax side and unnecessary complextity on the cap-and-trade side:

With a well-designed carbon tax strategy, the tax will be introduced gradually and increased in pre-announced increments until the environmental target is reached . This provides investors with a degree of certainty that is good for business, and allows consumers to make adjustments knowing what is coming. The exact impact of the price increase on the quantity of carbon emitted can be predicted, although with some margin of error. A carbon tax thus involves choosing price certainty but accepting some uncertainty in total carbon emissions.

(h/t Greg Mankiw)