Adam Ozimek argues that we shouldn't jump to conclusions about the ineffectiveness of a gas tax, saying that the elasticities I blogged about yesterday were from IMF estimates that are substantially lower than other estimates. You should read the whole thing, but I think there are two points worth highlighting.
The first is that elasticities of demand for oil seem to be falling; they were much higher in the seventies than they are now, especially here. This makes perfect sense: when prices spike, people invest in making their lives more efficient, and when prices fall, they don't suddenly rip out the insulation and sell the Prius. (Though anecdotally, when I bought my Mini in mid-2008, oil prices were very high, and so were prices for small cars--dealers couldn't keep small cars on the lots. A year later, oil prices had fallen, and I'm told the market for small cars had evaporated--those who were buying, were buying big, and dealers couldn't move little cars even at a loss).
When you're very inefficient, small changes in efficiency mean big reductions in fuel usage--and spending. But as your products become more efficient, the potential gains get smaller and smaller:
This graph is really important, and I think underappreciated by those who write about things like CAFE standards. What it tells you is that for both consumers, and consumption, the difference between 10 mpg and 20 mpg is larger than the difference between 20 mpg and 40 mpg.
And what about changing driving habits? The effect persists. All else equal, you can think of increasing fuel efficiency from 10 to 20 mpg as cutting someone's driving in half. Just as with MPG, the effect is largest if they're already very efficient. I use about 12 tanks of gas a year in my Mini-Cooper. Cutting my fuel usage in half--either by reducing my driving, or increasing my fuel efficiency--just won't save much energy, or money.
So it makes sense that in 1973, when prices spiked, people reacted by buying smaller, more efficient cars. It also makes sense that nowadays, people are slower to switch; unless gas runs up to $10 a gallon or above, we're already getting past the point where increasing fuel efficiency delivers giant annual cost savings for a typical family driving 8-10,000 miles a year per car.
But not all is lost for supporters of a gas tax. Ozimek also points out that price elasticity of demand may not be the same as tax elasticity of demand:
As Killian and Davis point out, another serious problem with these estimates is that they estimate the price elasticity of demand, and not the tax elasticity of demand. They argue:
"...the response of gasoline consumption to a change in tax is likely to differ from its response to an average change in price. Price changes induced by tax changes are more persistent than other price changes and thus may induce larger behavioral changes. In addition, gasoline tax increases are often accompanied by media coverage that may have an effect of its own."
To overcome these issues, they look at U.S. state level demand for gasoline. Their results shed some interesting light on how the econometric mispecifications affect elasticity estimates. Using a single equation model they estimate an elasticity of -0.10. Using a panel data method, as done in the IMF study, the elasticity increases to -0.19. And finally using changes in state level gas taxes as an instrument they find an elasticity of -0.46, which more than four times larger than the single equation model.
So a gas tax might well be effective after all. Whether it is politically possible is, of course, an entirely different question.
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
Places like St. Louis and New York City were once similarly prosperous. Then, 30 years ago, the United States turned its back on the policies that had been encouraging parity.
Despite all the attention focused these days on the fortunes of the “1 percent,” debates over inequality still tend to ignore one of its most politically destabilizing and economically destructive forms. This is the growing, and historically unprecedented, economic divide that has emerged in recent decades among the different regions of the United States.
Until the early 1980s, a long-running feature of American history was the gradual convergence of income across regions. The trend goes back to at least the 1840s, but grew particularly strong during the middle decades of the 20th century. This was, in part, a result of the South catching up with the North in its economic development. As late as 1940, per-capita income in Mississippi, for example, was still less than one-quarter that of Connecticut. Over the next 40 years, Mississippians saw their incomes rise much faster than did residents of Connecticut, until by 1980 the gap in income had shrunk to 58 percent.
One hundred years ago, a crisis in urban masculinity created the lumberjack aesthetic. Now it's making a comeback.
The first one I met was at an inauguration party in 2009. I was in a cocktail dress. He was in jeans, work boots, and a flannel shirt. He had John Henry tattooed on his bicep. He was white. Somehow, at a fairly elegant affair, he had found a can of PBR. Since then they’ve multiplied. You can see them in coffee shops and bars and artisanal butchers. They don't exactly cut down trees, but they might try their hand at agriculture and woodworking, even if only in the form of window-box herb gardens.
In the last month, these bearded, manly men even earned themselves a pithy nickname: the lumbersexuals. GearJunkiecoined the term only a few weeks ago, and since then Jezebel, Gawker, The Guardian and Time have jumped in to analyze their style. BuzzFeed even has a holiday gift guide for the lumbersexual in your life. (He would, apparently, like bourbon-flavored syrup and beard oil.)
A Chicago cop now faces murder charges—but will anyone hold his colleagues, his superiors, and elected officials accountable for their failures?
Thanks to clear video evidence, Chicago police officer Jason Van Dyke was charged this week with first-degree murder for shooting 17-year-old Laquan McDonald. Nevertheless, thousands of people took to the city’s streets on Friday in protest. And that is as it should be.
The needlessness of the killing is clear and unambiguous:
Yet that dash-cam footage was suppressed for more than a year by authorities citing an investigation. “There was no mystery, no dead-end leads to pursue, no ambiguity about who fired the shots,” Eric Zorn wrote in The Chicago Tribune. “Who was pursuing justice and the truth? What were they doing? Who were they talking to? With whom were they meeting? What were they trying to figure out for 400 days?”
Highly-poisonous botulinum toxin (the stuff in Botox), played a formidable role in the history of food and warfare. It is still a factor in prison-brewed alcohol and some canned foods, and can quickly kill a person.
After tanking up on “pruno,” a bootleg prison wine, eight maximum-security inmates at the Utah State prison in Salt Lake County tried to shake off more than just the average hangover. Their buzz faded into double vision, weakness, trouble swallowing, and vomiting. Tests confirmed that the detainees came down with botulism from their cellblock science experiment. In secret, a prison moonshiner mixed grapefruit, oranges, powdered drink mix, canned fruit, and water in a plastic bag. For the pièce de résistance, he added a baked potato filched from a meal tray weeks earlier and peeled with his fingernails. After days of fermentation and anticipation, the brewer filtered the mash through a sock, and then doled out the hooch to his fellow yardbirds.
As the public’s fear and loathing surge, the frontrunner’s durable candidacy has taken a dark turn.
MYRTLE BEACH, South Carolina—All politicians, if they are any good at their craft, know the truth about human nature.
Donald Trump is very good, and he knows it better than most.
Trump stands alone on a long platform, surrounded by a rapturous throng. Below and behind him—sitting on bleachers and standing on the floor—they fill this city’s cavernous, yellow-beige convention center by the thousands. As Trump will shortly point out, there are a lot of other Republican presidential candidates, but none of them get crowds anything like this.
Trump raises an orange-pink hand like a waiter holding a tray. “They are not coming in from Syria,” he says. “We’re sending them back!” The crowd surges, whistles, cheers. “So many bad things are happening—they have sections of Paris where the police are afraid to go,” he continues. “Look at Belgium, the whole place is closed down! We can’t let it happen here, folks.”
Students at Princeton University are protesting the ways it honors the former president, who once threw a civil-rights leader out of the White House.
The Black Justice League, in protests on Princeton University’s campus, has drawn wider attention to an inconvenient truth about the university’s ultimate star: Woodrow Wilson. The Virginia native was racist, a trait largely overshadowed by his works as Princeton’s president, as New Jersey’s governor, and, most notably, as the 28th president of the United States.
As president, Wilson oversaw unprecedented segregation in federal offices. It’s a shameful side to his legacy that came to a head one fall afternoon in 1914 when he threw the civil-rights leader William Monroe Trotter out of the Oval Office.
Trotter led a delegation of blacks to meet with the president on November 12, 1914 to discuss the surge of segregation in the country. Trotter, today largely forgotten, was a nationally prominent civil-rights leader and newspaper editor. In the early 1900s, he was often mentioned in the same breath as W.E.B. Du Bois and Booker T. Washington. But unlike Washington, Trotter, an 1895 graduate of Harvard, believed in direct protest actions. In fact, Trotter founded his Boston newspaper, The Guardian, as a vehicle to challenge Washington’s more conciliatory approach to civil rights.
It was widely seen as a counter-argument to claims that poor people are "to blame" for bad decisions and a rebuke to policies that withhold money from the poorest families unless they behave in a certain way. After all, if being poor leads to bad decision-making (as opposed to the other way around), then giving cash should alleviate the cognitive burdens of poverty, all on its own.
Sometimes, science doesn't stick without a proper anecdote, and "Why I Make Terrible Decisions," a comment published on Gawker's Kinja platform by a person in poverty, is a devastating illustration of the Science study. I've bolded what I found the most moving, insightful portions, but it's a moving and insightful testimony all the way through.
Meet the bald Norwegians and other unknowns who actually create the songs that top the charts.
The biggest pop star in America today is a man named Karl Martin Sandberg. The lead singer of an obscure ’80s glam-metal band, Sandberg grew up in a remote suburb of Stockholm and is now 44. Sandberg is the George Lucas, the LeBron James, the Serena Williams of American pop. He is responsible for more hits than Phil Spector, Michael Jackson, or the Beatles.
After Sandberg come the bald Norwegians, Mikkel Eriksen and Tor Hermansen, 43 and 44; Lukasz Gottwald, 42, a Sandberg protégé and collaborator who spent a decade languishing in Saturday Night Live’s house band; and another Sandberg collaborator named Esther Dean, 33, a former nurse’s aide from Oklahoma who was discovered in the audience of a Gap Band concert, singing along to “Oops Upside Your Head.” They use pseudonyms professionally, but most Americans wouldn’t recognize those, either: Max Martin, Stargate, Dr. Luke, and Ester Dean.
Twitter stock fell more than 10 percent after the announcement.
Since it went public two years ago, investors have rarely considered Twitter’s prospects rosy. The sliver of Twitter’s users who are interested in how it fares as a corporation have gotten used to this, I think: There’s an idea you see floating around that, beyond avoiding bankruptcy, Twitter’s financial success has little bearing on its social utility. Maybe there are only 320 million humans interested in seeing 140-character updates from their friends every day after all. If you make a website that 4 percent of the world’s population finds interesting enough to peek at every month, you shouldn’t exactly feel embarrassed.