It’s one of the most fundamental disputes in Washington: what effect do taxes have on the economy? On this week's episode of the Weeds, Ezra, Matt, and Sarah work through some of the top papers to explain. Also on this episode: why a third party won't save American politics, and a new working paper that shows a surprising way to encourage students to attend high school.This episode is brought to you by Squarespace. Start building your website today atSquarespace.com. Enter offer code WEEDS at checkout to get 10% off. Squarespace—Build it Beautiful.For a limited time, The Great Courses Plus is offering The Weeds listeners a chance to stream The Fundamentals of Photography and hundreds of other courses for free! Go to TheGreatCoursesPlus.com/WEEDS to take advantage of this special offer.
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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
This week's episode of the weeds is brought. You buy square space start building a website today it square space, dot com and your offer code weeds a check out to get ten percent off swear space, build a beautiful this week
observe the weeds has also brought to you by the great courses plus good at the great courses plus dot com, slash weeds to take advantage of free streaming. Of course, the fundamentals of photography the following podcast contains experts
said language I do so excited, but it was an old and new letter to me about about. Allow welcome to the lady separated the weeds foxes policy, Pakistan Panoply Network, a Matthew Glossiest with these
you are my colleague, Sarah Cliff and as reclined low? I were digging.
From the snow here in Washington sordid and it's turning like grow simple everywhere on the street, where those star crazy. I ain't gonna, happen here, ready to talk about public policy. I feel really good.
I've gotta go crazy, like very focused for this discussion. I've done a lot of reading for this discussion. Great, that's great
I think we want to start by talking bout, a subjective. A few people have suggested over the course of the months and
think is, in some ways the sort of central access of dispute in american politics today and it's the idea of making wealthy people pay higher tax rates, which is appealing to some, because wealthy people have a lot of money and there aren't that many of them. So it seems like a good way to get money to pay for things, but, on the other hand, is a very strong feeling from people in the conservative move
that high taxes on the wealthy are very detrimental to economic growth and this disagreement about lots of things in politics. But this is a disagree
about one thing that serves to sort of block possible agreement on all kinds of other things, because Democrats any time they sort of haven't idea about something they want to pay for it by making the wealthy pay higher taxes- and Republicans don't want to do that because they say it's incredibly damaging to the economy.
Long term prospects, and so it seems oftentimes we sort of can't do in and, conversely, one Republicans which has not, I think so much been, has not been so presence is twenty done, but when republicans want to cut,
the government and want to cut the deficit by large amounts. They don't want to do with any taxes at all and Democrats might agree with that. Have is a reduction in theory, but will not allow an agreement that doesn't include tax increases on richer american, so it ends up blocking both part.
this agenda simultaneously and also when republicans cut programmes its often explicitly or implicitly, in order to finance these kind of tax got right for Democrats. If you don't believe that tax cuts on the wealthy are going to spur economic growth, then these kind of programme cuts look very uncompelled thing, even if the programme itself doesn't look that great if it's not like, while average,
We're gonna get a ton of money back and taxes, but just a handful of ceos are than running. Almost anything clears that bar
so so. The question of is this actually important for the overall economy is like really central to shaping up people. Think about these things, and it would be great if we could google around for ten minutes and fine like a clear experts. You know like climate change right. It means a very contentious political issue, but in this sort of expert world, it's really really
contentious right, and that's not the case on tax. So so we we were circulating a bunch of weeds homework to do this, and one thing that I was really.
It was interesting to read, but also very amusing to read- was that tax foundation,
Is a conservative think tank their primarily thinking dedicated to making the case for lower taxes, and they did a big literature view of various academic papers on taxes and
Read all these papers me some resolve these papers and you can read it. They haven't online, it's a very interesting document and they said,
You will like it. If you look at this fairly, basically every paper says: raising taxes harms growth than this
budget and policy priorities
Did a soldiers are left, which is a luxury left, leaning disorder in budget oriented. Think tank, which is much more friendly to tax increases review,
that same set of studies and argued that, in fact, the tax Venetian had immediate crucial conclusions and then also emitted a bunch of other studies which would complicated their case, and I do not quote one part of this sea BP.
Review, because I actually thought this is where I come down on taxes. They wrote the proper answer to a question as broad as whether tax increases are positive or negative, for growth is wait for it. It depend
and I really think that's right, because one thing we do in Washington a lot is look at the tax issue on its own. So it will ask
question, right, our taxes, good or bad, but but the point C, P p.
point frankly, a lot of academics will make when you talk to them are look at their research is ok. How
raise taxes. Who did you raise him on what
spend the money on and what did the
central bank do in response to that end.
how you answer those questions. Attacks increase can be good for growth or it can be bad for gross you can you can increase taxes in an efficient way? Let's say you increase taxes by putting down
one percent value added tax and use tax to fund badly needed investments in education and infrastructure. That is probably going to be really good for growth and there's a fair amount of research to suggest that
On the other hand, if you do a very narrow tax increase in a way that is very complicated and will lead to our tax aversion,
you spend that money on something with does do your economy really any good, a government programme, the answer being very wasteful, then you pry part B our economy, and this is something that we really have a good way to talk about, because we often talk about taxes on their own. So France's we look at the republican taxpayers right now. They have a huge task, a plan
but they do not say how they will pay for them, and then we can really say what to do with the money. So to say, like anything about what these taxpayers will do is completely impossible.
For any one of the central questions in how you come down on this is: who do you think can do better spending that money? Should you leave it with rich people?
maybe, though, by yachts now stimulate the yacht economy and then you'll create jobs or like the articles in the vague or will they be either yacht abroad, and they actually that doesn't really help the? U S, economy,
better going into medicated, which will help people get healthier and then to stimulate the? U s
economy better, but I think, like that's one of the fundamental questions that you get,
out here, and I think that kind of goes back to the court as a result
from the sea. We say always mix up. There see BP four areas mixed
you do not know the Senator Mccain upon his arms and legs Mps. Anyways goes
that kind of EC. It depends
Both on what the investment is, who you think can spend better and one of them,
I found really interesting and going through this literature, it's really
hard to measure tax increases in their fact. There's this
Roma and Roma study that tries to look at different taxes
I really so David Roma, Christina Robbery, ass, their memories of Ecevit, edges, eyes like seeing the Roma, the Roma and rumours that consumers the first shot that, yes, I want to give her. She said ass. She should be also former council economic gap as our chairman, so
her and her husband, ozone economists do this study where they try and like differentiate
between tax increases that we're done to normalize the economy. Like the idiotic, we see we're going into this recession. We want to prevent that and the ones such as happened for other,
his ends, and you guys there's a lot of subjectivity
like even measuring will, when does it tax increases,
I was thinking about a cigarette tax, for example, it lets say we implemented cigarette tax. We start measuring at on January. First, when the cigarette tax starts well, that's not quite right,
He's. Probably people read about the cigarette tax on they stopped paying cigarettes is
really hard to
measure the effect of taxes, which I think is one of the reasons you end up in this really difficult.
duration of trying to understand how they affect growth,
Don't even really know the right metric to measure the effect of tax increases on the economy in the
but the woman warmer paper as ideologically interesting conclusion and supports a saying from the start that these are relatively lower. All researchers in Christina Roma I worked in part, is politics.
Briefly at Least- and this is actually the case. So point of clarifications: I'm not sure I've never try to describe it. If you join in admitted
strange- is that working in parts of politics. I think that right, yes, is actually working on a campaign
is working and participation are they gonna? Usually, Obama do need. Like now was Robert Gates involved and partisan politics for being Obama's defence secretary? I don't think he was, but I think it's a little bit different. I mean, I think, the work that the Council of Economic advisers does but we're having this discussion is very sharply. Partisan,
in a way that managing the Pentagon, that's actually so let us have yet to achieve. Did like studies designed to bolster Obama Stimulus agenda during the year. You ve come to
I withdraw my just so that we can continue the body on you. You could give a very sort of conservative glass to what this paper says, which their big economic effects of tax cuts, that they boost growth a lot and that tax hikes produce grope. I've been if you dive deeper thou. They are throwing out of the sample tax increases that were designed to finance new programmes which is sort of like the classic leftwing thing. You would do us a here's, a new programme using tax because they're interested in fiscal stimulus as an issue, so they're looking at
What did they say? We Ronald Reagan, nineteen, eighty one we're just gonna cut taxes to get the economy moving or are they gonna say as Bill Clinton? Ninety ninety three: we need to raise taxes to reduce the deficit and get the economy moving, and so there really finding here is that fiscal stimulus done through the tax code.
Is highly effective. The way we normally manage the economy now is by letting the FED do interest rates up or down, but before the nineteen seventy is. It was more comment actually see the president's say things like where we need a tax cuts to boost short term growth, or we need higher taxes to control inflation and their finding primarily that stuff had bigger factions. There may be bad reasons to try to do it that way, because the process of legislation drafting in getting past by Congress tend to be pretty slow compared to them
of the economy but their finding, that it worked sort of port and, quite rightly, economy, moved in the intended direction, which is really should neither here nor there in terms of the arguments set that we have about politics, but it still suggested that in general, something like a cordon quote: irresponsible republican tax got just come in car taxes, alot not necessarily offset it, not really care would. In fact
increase economic growth. Other then you have to ask questions about with the FED off said Edward, something terrible minded being cut started down. The road
It is an interesting case of them taking up what sort of lichen unfashionable old, timey left wing idea, but that corresponds more closely to what Republicans tend to
actually propose other than the really interesting thing about this is that they find that the growth boost happens when the taxes actually go down, rather than when the tax cuts is like announced or pass
asked, which suggests that is happening through the demand response. We actually have the money as other, then things happen right,
There then you're more likely to hear from conservatives about incentives if tax
low. Then you know you work harder. You say things like that and the simple for knowledge that the press
just signed. A new law ought to be enough to like alter companies, investment behaviour.
presumably ceos are capable of reading the newspaper
I do not like taken by some holy shit, taxes and other who knows Sabena
a lot of these papers for my sins and one of my big conclusions
sitting about them, is that within
reasonably normal parameters. It's just not that important, not that it isn't important budget
we can get very motto: maniacal in DC, because taxes are such a central part of the toolkit about trying to almost imagine that he be listened to predict a lot of repair
can rhetoric somebody's. It will seem as if the American
on me, is the outcome of of like this single
put variable on the input variables is marginal tax rates. We something that I can become convinced. I visit you know within reasonable parameters, stuff matters, but it is so
swamped by other effects. Where did we spend the money on what was going on in the economy? At that time you know where you, in a period when we had a lot of demand, a very little demand where you and peered we have a lot of savings, are very little savings. That,
to some degree. We overweight the taxes question and I would actually be drawn analogy here, loaded to the minimum wage, where that also has a similar taxes, a very common
lacks literature behind it and you have some very
studies showing very little effect you some some also pretty good, steady, showing some effect and that in
right now. My my view on the minimum wages that you know you can easily raise it to ten dollars, maybe even eleven or twelve dollars, without much negative effect. When you start getting up to fifteen
cars are higher than fifteen dollars? I think we are in territory this
but uncharted, and I would worry- and taxes I think, are pre similar
that I think that, when you're talking about some of the tax increases, you know that maybe Hillary Clinton or Obama talking about, I think you're looking at taxation levels that are just knocking
that differently economy, one where the other Bernie Sanders is looking at a very, very, very different kind of tax, equal, every em and similarly every republic and looking at a very different tax equal over him and so
there. If we were to go so sharply up or so sharply down in terms of either increasing taxes or cutting taxes and other blowing up the deficit are or cutting programmes.
they were really and territory. We don't actually know how to think about it, because one thing I think I've seen a lot of tax literature. Is it economies it don't very frequently make huge tax changes all at once. They will make big tax reforms, as we did in nineteen
the expert in terms of very very sharply increasing the tax burden up five percentage points of GDP or down five percent twenty GDP. You don't we
they see that and so, and when that happens is usually causes of war yeah so that it gets us. I think very, I don't think we know too much about
huge changes, but it doesn't look at his literature and end the answers. You should probably be smart and prudent about
changes, but you shouldn't they're, not the be all and end all of economic policy
boring taken in taxes or kill the economy or save it will leave the calm of idle they good, I'm actually not given. So we can reasonably bunch something, I think, is a real problem for for democrats having, if you read this literature, something you do get into a lot is that there is a real efficiency argument for broader based tax increases. The Democrats are comfortable with that. It would oftentimes make a lot more sense,
to do something like a value added tax or something that had a lot more people, even if in a smaller way, in order to finance highly progressive spending. But Democrats want to
hit only a very small group of rich people in order to finance a spending, and that will magnify the costs of the taxes on those people so that it becomes a question of well how port and do you think the productivity and incentives are really rich people or to the economy, and also what do you think those incentives are rather think you can make an argument that you're, on the one hand, the people who were at that level the economy there, often working as a workaholic, causing Carlotta
status, conceal other jobs, and it's not quite the same as somebody doing a job they hate for minimum wage rather about those people. I also thought through getting a lot of different done,
that's. Salary is probably not the only thing that they are working for their stock up.
and maybe like at the upper echelons like a here there's jets are things
that that there's a lot of different benefits, there's a good benefit packages and
that's another reason why you end up sing like taxes arch,
be all and all because salary is not the be all and went on some pressure over this common sense consensus. You guys are forged
what's interesting about that is, I think,
it seems like a reasonable reaction to the range of literature out here and there's a certain bid, a rational, prudent,
in short of the Obama Hillary Clinton, let's just proposed small changes, but you very rarely find
civic research agenda that supports that conclusion. You tend to see
very, very polarized literature where you either have models or empirical basis in which high marginal tax
it's heavy strong disincentive effect on people to develop the kinds of skills and make the kind of investments that lead to high incomes and a big long term decline, and it strongly supports these republican style initiatives. And then you have this counter literature that Thomas Picky
a certain most famous parts and end, but his colleague I mean your says, is part of this. Whole Krugman has endorsed this letter. Dear Peter Diamond, I contributed greatly to the theatre diamond yeah, which says that the optimum top marginal tax rate is only seventy to eighty percent range, which is where sir
there's this campaign, I m you wanting to fine optimal rocard, focusing its import, sure yeah I mean, but so is it. What would they mean? Basically, is that that gets you the most revenue that you can that, obviously the sort of the higher the tax rate, the more incentive people, have just not be paying the taxes at all
sort of laughter curve, tat phenomenon, but they say that the Ben point, for that is that a very, very, very high level, and then you have this even further literature, which is very undeveloped, but that Glenn while and a couple co authors have an interesting paper on, in which he says that the big
problem with the Reagan. Tax cuts is precisely that that a sort of worked in elaborate curve type way that the old, marginal tax rates overhead, but like ninety percent, were better because at that level smart people did necessarily father to go, be lawyers or to go be.
Wall Street traders that they were more likely to seek prestige or just a pleasant lifestyle by doing things like teaching and scientific research and that those contribute more to the overall sort of growth of the economy. And so I think it's like. If you're in the hot chair, you know you got a like make. The tough policy calls. It seems really compelling just kind of split the difference between these two radically different theories
think that maybe that smart way to proceed in life, but it does seem to be true that the sort of most rigorous must advance thinking about this, pushes you towards either these flat tax type schemes or else to incredibly high rate son on high earning people politically. Fortunately, taxes are a question of numbers and he really can just put the differences and walk away, but if yours
interested in the pursuit of truth. It's it's really challenging some. I know who is right there,
The one thing I was thing about reading a lot of literature is like this
question about legal. What's your call? Is your
GDP output like is that your metric eatin there's a
its homework that man gave us. There's an I'd Prescott Paper from Minneapolis, FED, looking
how Americans work more than french people and other Europeans, and that an Ebay
They traces add to that the Europeans of higher tax rates and
we use, as this is a case against higher tax rates, one things
thought through reading that paper like what is GDP growth? Our goal are french.
ball perfectly fine and happy with their big social support system and their like very long summer. Vacations and
getting along in that sort of way is like another thing you to think about the text.
is like well. What are you aiming towards this objective
The thing you want are there, like other things, that are your media in their success in two things that I think are actually worth bringing in two here: cause it the they relate in interesting
orthogonal ways, one is it we are.
Talking primarily, and I think we should we should state this may be clearly. We are talking here
about taxes as a fiscal tool.
More or less I guess it as a way to pay for things went his way to pay for your government. There is also a class of taxes. Cigarette tax
our version of this, where fundamental with trying to do is change behaviour right now,
You fund a lot of things through taxing cigarettes, but I think on
level alot of people created. Those tax would be perfectly happy if they got no money at all from that tax because nobody spoke the cigarette ever again or
The version of this is people talk about carbon taxes lot. We don't have one in the economy, but one way to deal with climate change immediately.
carbon and so that the price of goods and include high levels of greenhouse gas emissions would go up, and here again the point of the tax
tax probably will raise a lot of revenue, but the point of the tax in
is rather than it is that in the long where would you wanted to decline, which is one reason you ve heard sometimes Democrats talk about swapping up payroll taxes for carbon taxes, which are
How does an idea, because of the carbon tax works eventually Medicare and socially
It would be more and more under funded. So that's one thing here that it is worth key,
in mind some taxes are there not to help the economy. Are there to do very, very specific things. Another thing I think that is worth
and in this really deals with the first group of thinking you're talking about the question of high marginal tax rates.
one reason march on tax rates are higher than they need to be even to support current levels of revenue. Is we have a lot of
and the tax system and politicians will often talk about. This is like loopholes, and you know, and an expenditures and whatever
hear them say that I was a God. I hate loopholes and I don't like being people being able loophole on taxes, but when you
it into it. This is
judge interests tax deduction. This is the employer healthcare tax exclusion. This is the deductibility of
for corporations. I mean that there are reasons we do. These things actually dont like a lot of these, but there definitely case
for them and reasons we view them and one thing there's a very deep in
here and so on in our political system is whether cutting a tax expenditure, close
mortgage interest deduction, is tax increase or spending.
and this is something the actual split the republican coalition pretty sharply. So I've talked with a lot of republican icon
who will tell me Glenn Herbert and others, people served a pretty high levels in a public administrations. It yeah
economically cutting attacks. Expenditure is like a spending cut not like a taxi. Greece had actually can lower
original rates in a republican budget author by Paul,
Rhine. It said that these tax expenditures are another form
government spending but Grover. Nor
who is the head of Americans for tax reform and is a guy behind the pledge to the Anti Tax pledge it most republican politicians have signed here.
Cutting attacks, expenditures are raising taxes and Republicans do not agree wanting it.
because you're willing to you say that cutting attacks expenditure is akin to
raising. Taxes and Republicans could say cut and everybody could agree there, and that would be a way
tat to unlock things in the Obama administration, tried that ended and actually get anywhere, because so much
economically. That seems to split the difference between between the army.
you're, making a that the two ways of thinking about taxes in practice, politically Republicans
they use that money to cut taxes and Democrats want to use it to to fund
This is also because so that's why a lot of these aren't, which has actually come down to that question of what are you really trying to do here right? What in the Anti Tax coalition there's two different things driving people? One is a question about incentives, and one is just a question about money and that's like why are you have this? This kind of dissonance rights of like one benefit we sort of get to work, but also, if it through the tax code, is that I am able to pay for a certain amount of my babies. Child care expenses with untaxed money through of one of these, like special savings, account swayed and that's a benefit that is valuable to me. I pocket
several hundred extra dollars a year than I would have? We got rid of that loophole, so you know I like that if you took that away, I would be sad in the same sense that if you did anything to take a few hundred dollars away from me, I would be sad, but it has no impact on my for consent
gives because the amount of money is so low its meaning for but
It is less than the full cost of paying for child care. So it's not like it's presence or absence is actually contributing to the decision of whether I should work or not right so in the sort of academic case against taxes. Getting rid of that is fine because it doesn't change. My incentives and if you could get rid of that, and even very very slightly
produce marginal rates. It would be great because I would have more and set to work than ever. On the one hand, I would have less money, so I'm up need to get more money, but on the other hand, marginal rates would be lower, so be even.
For me to work and got money would be worth mortally exactly so so that's a win win, but I think in a normal coffin sense universe. The thing that people don't like about taxes is that they wish they had more money
just so. You know this kind of like complicated argument about marginal rates and the fact that you having less money, can be economically than officials because it's like the government is like it
I think we should pause my s point from existing. It's complicated issues worth noting one of the arguments you find attacks literatures his argument between different kinds of responses to tax increases right. Why
response to tax increases. If taxes go from twenty percent to fifty percent of my income, on the one hand, maybe I don't work anymore
because all of a sudden, instead of getting paid, aided US dollars, I get paid fifty thousand dollars, and that would make me really sad more than that I made to site it's not worth working this hard for fifty thousand more than eighty
and but another version of that and the other argument
literature. Is it because it takes money away from me, now have to work,
harder to make more money wasted
The way in which a tax increases simultaneously unaffected, incentivize is more working, less work and applied does is to different people and in different ways.
but it's a real argument. Enlargement printed, paying it how you structure, attacks, increase people, work for money,
and just how you understand that sentence can run,
really change how you think about TAT, grand and argument that probably works differently in different lab exotic. If you think of someone who you notice that the minimum wage in like needs us
out of money to pay rent. It's easy in theory, at least
me to see that person picking up extra shifts, but then you, I don't know,
about someone mid level who has you wants to spend more time with their kids? To give one example, I think that's your point. A great man you, whose conservatively new economists once wrote a piece about how you know if you stack up all the marginal tactically rates on him, and you know it and pretty few increased more than like for him to go. Give a speech is like worth v.
very, very little money, so why would he do that and then people? I got well Uno Carefree, making speeches, but it gets to your point that, like for people
who have more money and maybe you're doing a little bit of extra work. You know that they didn't want to be doing in the first place, but wanted to take the money that can really distances
Our work is an interesting point here, right because you're talking about the impact of a marginal tax rate and people's incentives at the margin and so important question, there is what is your marginal? We try and for certain kinds of people for famous academics and also for journalists. We have meaning
full marginal wages. Swayed. We agree with you on a defined. What about your weight, which is to say if people in our line of work want
to her. So a little harder we could get more
freelance assignments or more. You know, random speaking eggs. Things like that people in our line of work often will turn down certain potential money, making things and the grass
too much hassle and their offering you like really little money to bother flying to California for and solely these kind of tax things, you could really sort of imagine being being a factor. Then, at the other end,
if this sort of elite, Netscape low wage service sector workers, often time
have a meaningful, marginal wage. They could pick up extra shifts, but they might not want to is a trade off
but there's a so broad middle ground of sort of like normal people in
some very elite. People right TIM Cook cannot decide that he wants to cut back
is hours and accept slightly low
salary, ceo of Apple read, the job is just the job he has to do the job or he can retire, but he can't
fuck sit up and down, and he can I mean. Maybe he could do some freelance writing for fortune or something, but it's ridiculous said I think of him doing that right and so that's a case where a lot of people in truly elite occupation, others want to note that the left him cook is filling little strapped. We would welcome a first
and from him what it's like to be like. I'm ahead of apple and eco, come on the weeds, weeds ground, some money together, I mean you know a lot of Cambodia's there, but you know this is the way it is four for lots of normal people. I mean, on the one hand, seals but also just salaried workers they just like you, have a job to do,
Oh, you sort of where you are now. You can get raising get a different job, but you,
decide to do to more hours of work a week and get a little bit more money, which is to say, and in a technical sense, people like that have a marginal wage, zero, in which case it doesn't matter what with a marginal tax, but the eats like two populations that we care about a lot in the past,
world, which is to say poor people and people who write about policy both have meaningful marginal wages. So I think this may get like more attention than he really
He deserves, if you think about it and like a population average sense. Other you never know, I mean what I have never seen is like a really solid statistical headcount, of how many people actually have the option
of working right over here? Was that other? Because I think I got one I think, the Middle classic, I think, of a key tool, for example, who can do tutoring on the side like if their feelings strapped, if there's a marginal wage there for teachers?
healthcare sectors a little harder to see something that's aligned with them, but maybe you picking up
here- and there is a good thing they wish me to do something I almost everyone could do something everybody can drive a neuber. Yes, you are
two to a first about women's rights. But I mean just in terms of Antonio world about children, and I was just talking to a guy yesterday. He teaches second, he just does his job. He can't just teach three days less a year
If he wants to do it now, you know you you can come up with something, but in terms of would you expect
small changed have even small effect. You would say with him now
You might really say yes for someone who works at Starbucks and as a certain number of ships a week. You know us
change in their in their taxes. Whether through the eighty see up or taking away, you could really ship,
you can. You can really gonna run this in a bunch deploys. I think one interesting factor in here is: what do you think is going to happen with the so called gig economy?
You are someone who believes it is gonna, become much much much more common for people to be continuously picking up a couple of hours,
it's here or install card or whatever it might be right. This kind of on demand work. It's getting a lot easier for people to schedule, then, all of a sudden a lot more p.
Have a marginal wage. It is meaningful and- and you need to worry about this more- I think, you're very much right about where this has been traditionally blue.
You think, is an interesting question of where it will be in twenty years. One other
The point I want to make is
thanks to the very top level and will think I think we're saying that were often talking appear about the very, very, very rich,
the majority of arguments we have about taxes in this country right now, while we send our democratic president are about, should we re?
taxes on the top one percent, roughly or maybe the top three percent and.
Go a little more anecdotal. You brother came Cook here, and this been a piece of always wanted to write about Steve jobs and taxes and that he did, which is really interesting. When he comes back to apple
He asks for a dollar a year. Righty basically makes no money off being Apple, CEO, even as he's turning the company around this most spectacular fashion and
dollar a year thing goes on for a long time for years and then-
surely the board, which has been bugging him for years now to take a salary and important nuance hears it Steve jobs at the time he came back to apple was rich because of that
Disney Stocky, arriving from having found it Pixar but had
ready, sold all of the apple stock that he had had for having founded apples. It was weird situation marks,
Copper takes a dollar year salary, but he also owns faced by EU jobs. At that time did not. Yes, I should eventually it, which is: what
eventually the board of directors prevails in him to take a salary, and he comes back with a request that is unbelievable to that right. It is just
one of the most lavish salary requested a debate it ever seen before, and they were sort of our house
You go from from this too that like why, if you're willing to take a dollar a year, are
demanding now a salary that is so much beyond many of your peers, and these basic answer was a bit.
Status right at me, not in so many words, but that a lot of what is going on and very high level executive compensation has to do with not how much
did you need or how much money? Is it worth it for you to do your work
How does the amount of money you're making make you feel VIII, Severe Pierce, because people really care there's an old line about the real
initiative being rich is: do you make more money than your brother in law and for ceo is very much a thin.
You know something like thought of what I was reading. This was. There is a story about George Washington when he is a soldier for the British are
If I'm remembering the store rights in its internal biography and they are paying him kind of a pittance
we need a certain number soldiers and in one of the very early wars before independence, and he is really offended by Heaven
they're paying him any basically rights did Emily says. Listen, please either pay me a lot or let me do this is a volunteer, but don't insult
with this amount of money that is in between either get something that
really do under play at high levels of income is how much
money becomes a kind of status competition. How much? What you're really doing with money? If you're using
as a measure of worth, not a storehouse value and there
is research and and forgetting who did Matt you may remember, but about
ways in which one one factor behind some of the rising second compensation is that back
when you, these very, very, very high top marginal tax rates. When making more than a couple of does, he earned mean you're getting packs at ninety percent.
getting really loud as she could have competitions kind of that matter to you that much because nobody else could get it either to everybody was constrained when those top marginal tax rates go down.
Often becomes very worthwhile for seals. You begin fighting to get more compensation and then they all have to do it even
don't care about the money that much because otherwise, it's kind of insulting its insulting to be the CEO of Ex company that you think that is doing well and make lesson we see of your competing company.
Because that is a signal to the market that you're not worth as much as they argue that the high levels of research on this is that you
see that sea or compensation norms very by industry, and they also vary by country enormously, so that media company scenarios are systematically paid more than see us
Other kinds of industry is as we as if I am happy to hear,
yeah. Well, it's it's exactly.
You know is if it's just a localised norm, and also american ceos are paid me
more than two years and other English speaking countries, an English speaking, countries are paid more than ceos in Europe and European ceos are paid more than japanese egos
So the idea here is that a japanese ceo is unlikely to spend a lot of time hanging out with
can see, egos and feeling bad about himself. He hangs out in Japan with other japanese people. Watching
chinese language media and his lighter yeah. I get I get like a ceo level. Salary at this came up in a really concrete way in the nineties. Daimler Benz bought Chrysler briefly and they merged
than mergers are always really complicate. Exact emerge competing Sally schedules and the ceo of the hall,
company was like a german guy and he had bought
This is urgent and they were like tons of people at Chrysler who we're making more money than he said. He was gonna, be a crisis because war, they gonna, cut the salaries of all the american executives, we're going to raise the salaries, while the german executives like what we
german unions going to say if it was like we're
giving ourselves a giant raised, because we just bought an american company full of overpaid executive, any it toward the company apart and the whole merger with complete disaster.
It's because it actually, because of that, was one or several hangs that I mean they just cap fighting
American Union. The german union, the american executors, the german executives they like could not focus on building costs.
Is because people get really insulted
I mean it's just the economy is in part about money, but it's in part about human.
Cooperation and money is meant to facilitate that cooperation, but it can.
come a real sort of blocking point.
when Cultural norms collide with each other in a weird kind of what one question raises for me is looking at the productivity of these differences, and maybe you guys know some studies on the spot. Like are we're paying Americans see egos alot, presumably be cause. They can earn a lot more of our tax rates, but are they like? Are they more productive? My hunch,
is no based on absolutely no research that when you think of people are rising to the top day, I know of a bit of research on it and and I've not review, did know all sensible hazy wanting I'll say that just funny it one of the papers. I read before this, which it was the
Emmanuel size paper. They actually say one problem in their paper. Is it's really hard to know how productive tat one percent?
Sarkozy. Get us be it's not as clear a lot more has to do with a view of bodies on the compensation committee
but I have seen research and in and it does what I think the research shows is that the value,
having a really good ceo. What that would mean
The company is really profound, so the
the Betsy owes even other paid. A tremendous amount are potentially actually even underpaid, still relative to their productivity. If your place, and with someone worser, I think,
also a question of values and of thinks I'm not trying to get into that, but I think that the really high
thing an end, my sense of again readings, and we such a while ago, you have a medium. That's been put,
up by norms in industries, so Alatas here supply way. Overpaid and parachutes are too big and whatever else, but the reason it happens is it and then the reason compensation committees will do this? Is it in order to get the best people which you don't even know, if you're getting
it's actually worth a ton, it could be the difference between Europe. You
beneath the numbers or sell c grades alike. The apples worth five hundred sixty billion dollars so for placing TIM Cook with someone better, would increase the value of that company by zero point five percent,
it would be worth paying a billion dollars right this equation of, like how would you know right, but I mean in a very strict pence,
what out it's like, not like. You can totally goodbye with the second best genius bar guy, we're like if you could know who the best ceo, what you would have a strong economic incentive to pay
but money. But then I think this is in a way the the argument for
higher top marginal tax rate schedule,
I'd suggest is to be welcomed, but what I'm saying here right now, we wrote recently few marginal tax
I remember how many off hand, but it's like five or something
We have, however, out of hundred fifty found even already look it out of the ground and that it we'd amazed Alvin meeting as enemies. We are not very many many fewer than we had fifty years ago and something that people proposed
occasionally, Bernie Sanders has proposed doing this is begin, creating gradients that are much higher in the income skills. You can imagine
if you're, making more than a million dollars commercial tax rate, is forty seven percent for making more than five million income above that is taxed it. Fifty nine percent for making more than ten million income above that is taxed at seventy two percent and in the point there is that these super productive see owes are not going to drop.
Of a labour force right, they it's very, very, very unlikely that can cook which stop being a ceo. If making more than ten million dollars a year was heard very highly taxed, but because it is such an important thing that you could see on because he was end up having too much power and they know the compensation committees and a million other things. You end up having this tremendous arms race- and this is, I think it's were saying- one place where
from the inequality conversation. I think your trade offs are very sharp, because one ingredient in the inequality conversation is sometimes you're talking about pots of money that could grow and some of your time I put some money, there are fixed. So there's a long running argue about whether the rise in top on presenting comes is taking one.
Away from from the average worker in a lot of ways it may not be. It may be no globalization and other things that are hopefully making the overall size of by larger. But in this
one way where see
we have a lot more bargaining power than the average worker and accompany only has so much money to spread around it compensation. There is a very sharp tradeoff now how much
money. The average worker will get. If you pay the seal ass, you can. You can argue that out. Maybe it's worth it. Maybe it's not, but it is a place where the increased incentive.
Four ceo is to bargain aggressively, for their compensation is probably very directly taking money out of workers pockets without leading to much better ceos overall so
are marginal. Tax rate is is low enough that I think we should. We should try to make some make some money on its errors and then and then talk about third parties. We love to
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start com. Slash, weeds and check it out. So Michael Bloomberg is the head of Bloomberg industries, which is make her financial terminals has a big news: business bunch, other things, cells,
the mayor of New York, Fer a number of years and was considered by many to be be quite successful, that job he
He has also primarily wanted to run for president and Bloomberg
is. A guy who ran from as Republican but clearly had a lot in common with Democrats ended up endorsing Obama in two thousand and twelve. I mean he's kind of the very classic, socially liberal, fiscally conservative Rockefeller republican type. Now he is never actually run for president, despite the fact that it clearly wants to spend a chunk of his money becoming president, because it's really hard.
turn for present into party system, but something that has begun coming out recently, as he is looking into the idea that if the Republicans denominate someone like Donald TED crews
The Democrats now made somewhat like Bernie Sanders, Michael Bloomberg thing,
it would create a lane for a sort of establishment, Harry and centrist who can sell finance to come in
and when a third party bid for the presidency, I don't really want to talk about Michael Bloomberg. What I want to talk,
that is the bigger issue, because I think that one of the questions I get from
more than any other, probably is. Is it the problem in american politics
simply that we only have two parties. Nor will we really need, is a third party or may be many more parties in that, and
A couple of years ago, I really when instead went through the literature on third parties and talk to experts on it, and I think it turns out to be pretty interesting so
say it, but my conclusions on the table here, I do not think a third party would fix many. The salient problems in american politics, and I particularly don't think I'm Michael Bloomberg Third Party would but here's why what third parties are really good at doing is fixing the problem
of there is an issue or an issue space that is being suppressed by the two parties, so
A good example by so he's running in one of the major parties is Donald Trump. The two parties were clear.
suppressing a certain level of need of his sentiment right people who wanted to build Walmart Mexico pay for
port everyone and put down a muslim travel ban and Don.
Shop has realised that sort of a space of a third party
actually inside the Republican Party and has using zone media, were cognisance and and his own money created a kind of
third party insurgency within a major party. So he's done a really effective job of doing what their parties typically do, which is force
the two main parties to pay more attention to issues that they were paying that much attention to is what Ross Prodi
the early Ninetys as well. He is given a lot of credit for Democrats, pay much more attention. Deficit reduction, much of the contract from
the Republicans Roman nineteen, eighty four was also very much out of the pro playbook with third parties are not good at doing.
is solving problems of legislative gridlock in political polarisation, and the reason is actually pretty obvious when you think about it. If the thing that
fucking with american politics right now, is it one of the major parties tends to want to see the president fail, and so they use their boy
King power in Congress to try to make the governing party
to a failure. When you have a third party president, then both of
age or parties have a reason to make the governing party fail. Both the major parties dont want to cooperate with the president and was interesting here.
it's true both on the party that really disagrees with Michael Bumper gets hit. Our publicans in this case are pry, have a lot of issues with how he would govern.
They might in some way be able to elect horribly like him a little bit, because he might make it easier for them to in future elections by shaving by
Thus, we from Democrats on either hand, though the party closer to the third party, while in theory, would have
reason to cooperate on policy has less reason, cooperate because Elect orally the third parties, more of a threat to them so think coordinator here. So I think that's. The broad lay of the land on third parties are very good, forgetting issues heard, but within the context of how American Paul
structured, they actually worse in the problem of there being insufficient region.
For cooperation. A lot of reasons for a for procedural sabotage and a general
and of inability to resolve disputes. Thinking to our people
but a third party they say, there's so much polarization like we want. Someone in the middle is kind of the idea like we want someone more sensible and doesn't seem like the third parties we gravitate towards like
are those sort of figures and liked example. Give with Bloomberg is like he does a lot of public health sofa like everyone hates liking
legal calories. He wants to ban your big so it as he has been
very much of like a very thick heavy handed,
regulator and away that's very polarizing. So maybe you can talk about
so a bed and like the research, you join the wind
sense from like watching third parties, as they end up being imposed.
that aren't that much of like bringing people together, which in like a conceptual sense,
be the idea. Sometimes when I mean I do think what this is like, what whatever were saying that
the United States are minutes is working clear upon in the United
states. Third parties have traditionally shaped and influence the country by picking up issues that are considered out of bounds by the
two parties weighed and you could characterize it as sort of extreme if Michael Bloomberg wanted to run on sort of a hard left plot
warm highlighting his views on guns on environmental regulation and public health regulation. He wouldn't win, obviously, but he might sort of waste
politics in some way or another. By seeing if there was there, wasn't a constituency for for that kind of thing, but its clear that what he wants to do is, but when that stuff,
with his right of centre, views on financial regulation taxes and other things and put himself forward as
somehow not trees. That right of centre on tax is just for the record that you want the Bush tax either actually he's I've sick he's between where the advocates of the Democrats are on taxes he's some social peace.
is of someone who is a moderate centrist. He doesn't want to be a guy who is launching an obviously doom third party campaign to talk about issue is that are outside the scope of the dialogue. He wants to run if he runs as someone who will win plausibly by somehow occupying the middle space and in american politics, but it turns out that the the middle, to the extent that exists of people who are not well aligned with either political party, his mostly composed of people who don't pay tons of attention to politics and have slightly jumbled, often extreme opinions. So you have paper showing that Donald Trump is disproportionately like
by moderate Republicans, because it turns out that what the average republican Moderate is is not deep acolytes of Olympia snows. If someone who is aligned emotionally with the Republican Party but just isn't that deep into
what conservative, Eddie Ology millions and that's like Donald Trump. This paper, I just want to draw this paper low, but more for a second. This paper, which is by David workmen and someone else, and I apologize for forgetting the other- the other person's aim, but will have it and shown us is it show, is one thing that happens when pollsters look fur for moderate voters is
the egg and up asked me about a bunch, a different issue positions and than the average amount. So your moderately
bunch of things on the left in a bunch of things on the right? The problem
is it when you actually going to look at their answers.
Have as a mishmash of very extreme position. So a lot of moderates believe both that we should support
all illegal immigrants. Right. All twelve million or eleven million of them and salmon,
see, that part should be completely legal and you dont tender
in those positions in any one party, infected hunted by those positions really either party, but they
when you average em out it's about left position and right position, so this person is in the middle and Donald
like a moderate, is, has a lot of strong positions. You don't map on to one of the two political parties, because he is not
self actually that sharply aligned with the political party, though he's running Republican, he's been all over the map in his in his life and also as someone who doesn't frankly,
without much about politics and policy. An end hasn't really cared to, I think, is fairly clear.
He has developed by the positions? It makes sense to him, but we have been filtered out by parties it through their policy infrastructures, have a constituent groups or whatever have decided. This is
She workable in practice right. So what Republicans emotionally grooves Donald Trump on immigration, the party for reasons of its laws,
her healthy its belief that what is feasible, both
meekly anxious and just logistically has decided. You cannot
port every illegal, every unauthorized emigrant where you have to do
instead is itself deportation is Mitt, Romney, said or build a wall and try to prevent future for people from coming into whatever, but to go back to something. Sarah sex. I think it's important
We have a. He continues. The discussion about the parties- it is really weird
what we have every year and before it was I mean bloomberg- was talked about in two thousand and twelve to, but you
pity await, which was his idea that you're gonna have Republican a Democrat run together. There is a
Genuine alliance between the sort of technocratic
media and sort of donor political donor class that is always trying to create a third party. That is this kind of socially liberal fisk.
conservative thing, which is a set of positions that have more share of political voice than they have actual political adherents.
Not that popular and she space, but it is very popular among people go on morning. Joe,
And then you have this other kind of their party, which is more like what rights per. Is it's more like? What Donald Trump was? What Papua Cannon was?
and it's something you see a lot in Europe, which is a mixture of social conservatism
an economic populism, and that
is really suppressed by the two parties for different reasons, because the democratic parties, much more culturally liberal,
Republican party is much more economically conservative and it's not something that is liked by the
when a class, not something disliked by the media right because people, the media, tend to be urbane and they really don't like
The sort of native ism of trumpets thing, and so that kind of party which has much
sheriff voice, and it has a potential share vote. There's a lot.
opportunity there, but it doesn't get much attention and it's not the thing that people are Ito making noise, but
we are, but I think when we get a third party, if we get a third party, that is what it will look like. Four to be successful.
What I think is is interesting about this stuff. That was how president focused it tends to be so one thing
That Michael Bloomberg has very strongly in common with Donald Trump, even though their issue positions are different. Is that Michael Bloomberg? Company is called
Burke Ache, mean product that Bloomberg ink cells. Is it Bloomberg terminal? The other thing it produces.
Is Bloomberg: NEWS Bloomberg TV, you don't keep, he likes.
Name it and so its clear that, but one of his main interests in a third party presidential campaign is that, like he personally Michael Bloom,
become. President of the United States he's not interested in
Meeting that money to a super pack that would allow Corey Booker to run an independent bid with
those same position. Everyone thing for bluebird: he does have a super
that gives money to candidates to political parties who support
yes, yes, no! No, I absolutely, but I mean it's not the same level of committee. S has yet to his own campaigns and, as mayor of New York, he did not found a Michael Bloomberg Party. He did not work
through even under the name, Michael Bloomberg, hidden Recruit, city, council members into his political party and then
having built that city Council, Bloomberg coalition, run statism,
We candidates put forward someone for district attorney when he decided that,
two terms he was allowed under the city charter, weren't enough to shape his vision for New York. He spent
money on changing the charter, so that he, personally, you get a third
I'm being a little bit disparaging here. But I want to say that one
had I find Michael Bloomberg Ego focus on this. A little disappointing is that I personally am very sympathetic to Michael Bookmarks
Our view is- and I would like to see Michael bloomberg- advance those political views in a more systematic and efficacious kind of way which, ultimately, if especially, if you want to talk about third party politics means you have to have an actual political party of some kind, not just you, but you. You saw with
Berger when she saw with less Peru, which is on the state level with Jesse Ventura would you saw during
his king, who is now a sort of admitting that he's a Democrat or Bernie Sanders. Who is now fully admitted that he's a Democrat? Are these kind of one man? Parties ripe so like Vermont is a great place for political.
we that is more left wing than the Democratic Party? That's why? But
Saunders got elected Mayor Burlington, that's how it got elected to the has representatives, but then he swiftly reaches an accommodation with the National Democratic Party. They don't run candidates against him. He sits in there.
guess, which is fine. I mean that that seems like a sensible arrangement, but he doesn't,
Do any more party work in Vermont tried this.
no Socialist Party Vermont Governor elected
There's no Socialist Party in Vermont people and in the state legislature is just one guy who chooses to put an eye next to his name. Rather than a D Angus king had a centrist party and in Maine, although he is drifting left, but again he didn't create the real party
when Joe Liebermann lost the democratic primary but decided to stay in the game. I think you literally named the Party Connecticut for labour. Yes, certainly in the northeastern United States right, there is interest
in a party that is more left wing than the Democrats sort of the Bernie Sanders Party,
and there's interesting, a party that is between where the Democrats and Republicans and since that whole region is to the left politically of the United States of America is what kind of me
sense to have elections that are like between Bernie Sanders and Joe Liebermann. But to get there you would have to form institutions that have multiple members
including people running for unglamorous offices and where they have like dull meetings with
they were, I think, that's like where the action happens is something to talk about the weeds before. But if you want I'll show people or what your third party is about going into, the presidency probably is not going to get
very far but like if you take over, there
Legislature, like maybe you, make another pass it single pair and like really decide. That's the thing you baby,
I want the best mission to take on right now, but you like that's the place where you're going to like show
what your agenda is about
but it's so much ass, exciting to like run Vermont District, nine state legislator.
the question I want to put to both of you guys, I think, units literature better than I do. I think a lot of people look at European,
Reason say like we're all these, like they ve done, that they have more power
when we deal with
the man, you written a lot about. There's like how do you think about the structure of their of their government
systems with many parties- and it was this exists anywhere view on this- and I think that a new view that the overall,
old view and the? U S, verses Europe on third parties. Is that the? U S had a first past the post electoral system, which is to say, if you,
yet more votes in the other guy you when the election, whereas most Europe,
countries had more proportional election system. So if you got fifteen percent of the vote, you might get fifteen percent of the seats, and so that was why Europe has
the parties, so people used to think that it lined up really well, but then tons of people in the United Kingdom started voting for various third parties of different kinds is Uk Independence Party on the kind of nationalist populist side. This liberal Democrats in this
precise this scottish independence Party, and then you started seeing similar Dynamic in Canada. The far left party gained adherents recently there was a big bad for voting for a quick separatists for awhile and Green Party at one point, ten percent of the votes and one no seats in parliament, because I don't
have a proportional system. So people started coming around. That's the kind of new opinion about this. Is that the reason we don't have multiple parties in the United States is at the? U S: primary system is really really open and flexible, and so
if you're Donald Trump and you want to propose a different kind of issue coalition- is just easier to get in the republican primary
and go on television and start talking about stuff than to go through other leg. Work of creating a new political party
the hassle, basically isn't worth that. If Michael Bloomberg, real
really really wants to run for president. What he should do is taken
look at things and see that he is basically a kind of democratic and run in the democratic primary, and so that
in the. U S, you have things like the tea party, Sir Trite, where there's a clearly a lot of conflict. Alleys perceive differences between people and indifferent sides of this, but they dont form
party and run third party bids they form sort of loose,
it organisations they infiltrate party organs. They go kind of Rhine where's. Most foreign countries have traditionally had
centralized more hierarchical party systems and use
some real evidence of their said. The Uk Labour Party recently changed its rules for how they were picking it's. A leader
more american style system, where people could just say: oh yeah, like labour, I'm gonna vote for for leadership, candidate and what
happened was like a real outsider, longshot guy Jeremy Corbett, with a very different policy view from where labour had been. He came
and he signed up a bunch of new people. He turned them out of out and he wanted
and so that to say that the UK is looks like it's maybe becoming
nice, it's more like the United States, where, if you want to represent a sort of outsider viewpoint, you can do it by going inside one of the parties and in trying to take it over. So there's no
real point, informing extra pursue just another opening. This way we like to think about this is that we do not
actually have a two party system in the way people think about that and other places. Don't have a multi party system and quite the way, people think about that that if you, if you look at save the UK couple years ago,
the governing party. That was a coalition between them.
tories and the liberals, and that party you know it
It had a lot of eternal disagreements in it, but a bit it ultimately for a period of time kind of functioned as
the unified governing force, even though you know it had to deal with a lot of internal disagreement about what it meant to governor what the right options work. That is
actually also how american politics works. It did. It can be over the conceptual mistake to think of there being a republican party in a democratic party, although
deportation is strong. I do think that there is a lot of truth to that view. These parties include a pretty broad range
players within them, and if you talked Republicans on the hill say they will routinely talk about there being a hundred report
hence who are kind of conserving
that sort of main stream and then fifty who are tea party and really confrontational and then the remainder as being a little bit more moderate right and they will talk about the need to fight.
coalitions between these different parts of their own party and backward, say, Obama,
passing. It was really common to hear people talk about
how Obama was having to cooperate with Ben Nelson and Joe Liebermann, and these people, who were much more
more moderate than say a Bernie Sanders or Sheldon White House, and that those people I could almost at all
it wasn't like they were in the same party at all, their their beliefs are so different. Now, ultimately, they figure out their disagreements and they put up or down which,
also, ultimately, what happens in other party systems, but you know I don't think people tend to give the democratic republican parties credit for the diversity of opinions they actually end up.
including, but here is where I do think it wines that making a difference in practice, which is that in a highly multi party system, words formally multiparty one thing that often
bad news is that the players who are nearer the median team up and control the system
So in Germany you have a left of centre and right of Centre party governing together, while the parties on the left and the right are sorted. Locked out of the Netherlands also has a centrist coalition of that.
And you know those kind of collisions they come and go in in european parliamentary systems, but they do definitely come some
times you ass, you have centrally
position ideological players, but because
They are formally on the same team as the people on the far side.
and their institutionally connected to them. The tendency is, from God,
thence to come. I mean governesses income from the far far extremes, but he comes from well off centre and if we get different splitting results it'll be because a democratic president bargains with a republican house.
not because a moderate Democrats and moderate Republicans control the political system,
like you could have imagined where there was this time, I guess was two thousand one when Jim Jefferson switched Party is and that switch the control of the Senate, you can republican democratic
there were many more sort of moderate people in this
at that time, you could have
legend, like a dozen of them, some Republicans some Democrats
Republicans in the Northeast Democrats from the south, all ganging up
together and saying you know
we're running the show now we're going to share all the committees we're going to control the floor agenda, but they don't do that because
the mechanisms of cooperation like that don't exist for they try to do that. I remember during Obamacare there. The various like kings of
differing number is form in the rack, ultimately just fail because it
right, but it me like they wouldn't get it done and that you know it and it's because the institutions are different. I think right I mean, if MAX Balkis
and other minor Democrats had been in it for
least separate political party and in the same thing with the motto, republican
their chances of cooperating successfully across
party lines, I think, would have been higher
it's a little hard to know. I mean that the american system has a lot of institutional differences from Germany. So
single out one of them and they like. This is why Germany has centrist governing collisions at an American. Doesn't I think, you're you're not gonna, find out
we develop centrist policymaking coalitions when we do by branch versus branch conflict much more than sort of member to member
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build a beautiful. So we are into the last section of the winds are standard research paper of the weak sued thrilled. I know I am. I am thrill the because it's another envy our paper and I hear we do have some envy Earl listeners who, like our live every day like it and be our day, National Bureau of Economic growth
its automatically so there's no way to live, because there's this great paper that they put out an education policy which is a subject we ve gone summer
swear, we haven't talked about as much, but it will keep doing those
and it looked at culturally relic,
courses and high squall, basically idea that there's an idea in education policy, particularly in Kate, through twelve, about tat
can reach kids where they are and provide classes that are looking at
for an ethnic histories. Looking at you know perhaps like the civil rights move,
different things that might speak more specifically to the background, the different kids come from.
So the study that comes out of San Francisco, where they offered not next studies class to some students, but not others, we can get into the methodology about low but later and what they find is,
actually like a shockingly large of fact, they find the gps go up for the kids, you get the ethnic studies curriculum. One point four points over the kids: you
and what's really driving. That is just kids go to school at more that their attendants goes up a lot, because, presumably courses just more interesting,
the other classes that they're taking gives them
then you go to school and she pushes them to get better GPA than in their math classes. Are their english classes is kind of the working theory on
This is one of the first papers to look at this. Its destiny,
one of those ones that falls into the more research needed category. Five,
It's an initial suggestion that some of these ethnic studies courses might actually be an interesting lever to Paul.
you're trying to bring more quality to the education system and get some could do more
Are we going to school to actually want to turn up here? I thought this
it was really interesting. I mean there is often debates better. Think studies class is that I think tend to be about the course it said
and not about ok what what is may be broader purposes it can play so one thing the paper discuss
at some length, which I thought was something worth thinking very hard about. This idea of stereotyped threat so very
is a lot of research showing that if you give kids a test and before you haven't take a test, you ask them to
down their ethnicity area of them right down there, gender you'll often find people from ethnicities, agendas had or maybe stereotyping, stopping it as good at that subject
doing much much worse, simply if their cue to think about themselves in that context, before assuming their very famous studies and really depressing for studies.
But if you have young girls before they take a math test, just write down that their girls,
it will really change the results. Are young african american boys write that down it'll really changed their results? If kids feel that they are
going to confirm that from negative stereotypes about themselves they get paralyzed, they become a
to do their work. The second guess themselves more often and end it really hurts a performance, and one argument this paper makes. Is it something ethnic studies courses end up doing is acting as a protective against stir type threat that it will
situate that question and helps people see their own heritage and our own way of learning and their own approach, and there, sir,
world more positively, and so then that in this sort of
broader, more opaque way. Stereotype threat ends up serve hurting kids during school it
racism from that pressure. It changes the way the world sees them an asset,
It allows them to operate in school, more effectively,
now let us Willy Brandt, I just cannot be no I'd, never seen research on this topic and the research around stirred up
so overwhelming and so disturbing and then every single day
and how you combat it and end
this umbrella, the similarly promising- and you know- I mean the reason that that I think this is this- we're talking bout. I mean it's. It's just one paper, the the methodology here. What they do is its color of regression discontinuity study. Basically, they there was a gpa threshold for people who got assign down to this aid.
where did class, even though they were at the age for ninth graders and the way you tend to set these as it was like a hard GPA cut off. So we can look at people were just above and just just below. So that's a good way to study this, given that there wasn't random assignment available, but it's not the greatest methodological, most powerful way to look at it, so I wouldn't,
essentially take this to the bank and like swear right, that implementing ethnic studies, classes in every american Eighth grade class will produce this enormous improvement in minority kids achievement. But it's only suggestive. We should look at it more. We should experiment more with these courses, but I was sitting at an important corrective to weigh a style of thinking that I think I've started to seek a ton of in the media and that is incredibly pernicious and is that a lot of people have gotten the idea that there is a phenomenon called political correctness.
that is running out of control in America and especially in the education system, and because they are so sure that there's this out of control political correctness in the education system any time they hear something a little funny sounding or unfamiliar relating to ethnic minority groups and educational change. This is like
laugh impulse right and what you're seeing here is that there is some evidence, at least that can be in credibly harmful, right that like,
it might sound to you like? If it was good enough for me, is good enough for them like what do you need ethnic studies and eighth grade foreign? These like weirdo books like, but I just read,
books. We read when I was at school and one reason they may be shouldn't just read the bucks if they read when you are in schools. It concludes a twenty percent increase in schools,
point four percent increase in GPA Red and the one point four point important agenda and these are being achieved
just in the course of their changes that you could do much more feasible way than other kinds of big structural policy ideas. Did you hear about like
realising school funding across the entire United States. Kind of sounds like a good idea, but also the lift. There is enormous compared to tweak what the eighth grade. Reading curriculum is.
You know- and I think an example this for historically that that I'm familiar with is that it was research
done in the nineteen A is, and it showed that, as I think people
No intuitively leave vernacular english that African Americans tend to use particularly working class. African Americans is different from the standard American English
and that you they started labeling this african american vernacular English and there were studies showing that if in an educational context, if instead of constantly scolding black kids for talking in the way that is typical of working Class African Americans in the United States, you actually gave them written material in which people spoke in african american vernacular anguish, that they found this weeding much more engaging and they learned the stuff about reading, that's important, which is not. How do you conjugate the verb to be indifferent contacts? But it's like what you letters me in and how do they relate to sounds and how do you do code whole sentences in paragraphs in the were big educational gains from this and then a public school board. I think in Oakland decided that it wanted to take this research that has been done
University Pennsylvania in Philadelphia and they wanted to really implemented their majority black school curriculum. Somehow the term Iep Onyx got labelled into this instead of african american vernacular English, and there was this wave of like national outrage, unlike
was we're Dickie, Alice and now. Schools have been me teaching kids to speak wrong, and everyone knows the whole point of school is to teach you to talk like white people like so you know it S. Just a van stood like a wave of outrage about this run, amok political correctness but the research base
still- there is still very clear. I think it's entirely obvious to read if you meant
any kind of regional acts and nobody would ever suggest that you should go into a southern school
and then any time a kid there says yeah all start correcting as they like that
and you don't even knowing threaten it, would be really demoralising. That's just that is what southern people say in a second person, plural context and like it's fine and it's entirely appropriate and supported that kid's reading might feature character
who speak the way. People in their neighborhood in their community speak
EC studies that this report from San Francisco is looking at different aspect of this, but it's the same basic idea that
School can be a bummer, and you have to make it something that people feel is for people like them, and if all of the material is about people who are not like you, then you're going to feel like you don't belong, and your may begin.
show up and that's really really harmful. One of the questions I have there's other educational
turns out here. Looking at this is a common. The actual curricula
matter is there's a bit of a description in the study about what they didn t
disco, and one thing I'm cool
about is how much like what you actually talking about in the classes.
Another is like how easier difficult it is to pull them.
Like when I think of maybe not at a high school level, that
a more elementary level. You I'm involved the breeding nonprofit here in DC and that one of the challenges we always went into his just like literally finding books with characters who looked like the kid
We too, who are mostly
African American are like first generation latino kid thick. It is a constant chow,
and to find those, and something that I
like leads up to inner. Some of this third had threat in other kids are getting to all the way
school is they spend all their elementary earth? Reading about like
Kids going on adventure is generally do not look like them to ensure this.
ask unlike interfere in some levels and push back again, stet fighting, there's a lot.
levels, you we're not talking much
It would be interesting to look at it even younger kids, on when they see characters like that. Like how do you? How do you integrate this throughout
call system? It seems like a bigger left,
the smaller left like doing one high school class period, curriculum on this. To make a broad point related to the political correctness,
discussion and and what you're saying that representation and SARA, I think a lot about something
lady Electricity, editor of OX, because a conversation that our site has definitely been. You know wrapped up in part of an and has been trying to navigate itself
is this conversation over. It isn't just political correctness and we try to offer a theory here which are not a hundred percent is right, but I think is right:
thing that happened when we moved into digital publishing, and particularly when social media made it very easy for people to share.
And generate very large audiences for material that resonated with them is all
sudden. There was an incredibly sharp rise in content. They keyed into people's court identities in some way, content keyed into their gender identity, their ethnic identity, their sexual identity, etc, etc. Their political identity obviously and was feed.
has been a very big beneficial this, but a lot of sites happen, and so I think, if you're out of your pundit and Europe should have looking round at the media. All of a sudden, you see a ton more coverage of things like
I aren't there more female or minority superheroes in Marvel movies and one
sponsor a lot of people have to that is who the fuckers every time you see people write about this. Is you see people and sailing
We have crazy levels of inequality. The world is cooking and your arguing about whether or not hope is gonna be asian like what is wrong with you
and then I think, is another way of looking at this in and MRS my view on it, but I think it's also on people's view is we
for a very long time. Institutions, Minos, publication,
our one but schools or another in and their many others. It were really dominate
in terms of their decision making by white men an addition
Domini their decision making by white men. There is
little information actually flowing up and down about what the constituencies wanted. Now, not none and obviously in schools. You have you no piquets and other things, but but its narrative publishing this not that much information about what people are actually reading and that we get all this information all of a sudden. It becomes really clear that, even if you white male political pundit, don't really care about representation and superheroes. For some reason, a lot of people who are not represented do.
and ethnic studies on campus or another thing like this about the point, the laughing is you note for some reason, this is really important to the african American Student Union and you don't understand wide support in rural and one reaction you might have to that is to say both prime, not important. Otherwise, I would think it's him
and another reaction is to say this is
the valuable information, the fact that people are not represented here feel that an ethnic cities programme be such a big deal on the college campuses and be so good for them, they're, going to fight for it and occupy offices in whatever or the fact that people care
much about representation in culture and and and and in other places, that they're gonna shit
all this is going to go crazily viral that that's actually really good,
formation- and it suggested to me it was certainly like a wake up call some anew who assigns pieces and at its them that I had
systematically underrated. How important these questions were to people
I just think that this is a real divide right now and commentary right between people who look at the stuff and say that, like straws,
and to me I don't think it's important and I'm right and people said I didn't think I support an unclear
the information here shows I was wrong. It was incredibly important that we should take seriously that the folks from the communities that that are most affected here disagree so sharply.
And I dont think that we ve had a really good way of having a conversation about this, because it has happened so fast and a lot
places, and I dont think people been very systematic and thinking about why it's happening or what
going on their side,
much attention on specific instances,
of it happening and party being specific, politically weird instances.
Happening in those tend to dominate the conversation. I think, if you step back and look at the trend, there's something really profound here and and- and I think this one to it right
not have strong view on on ethnic studies, seen open before we're in this paper and if they had a thought very much about it in context of the broader curriculum and help might affect people's
performance outside of that class run. I had always thought of it in terms of all. It seems to me that learning about latino histories, valuable thing, so we offer lotta courses will not offer that one. But I think this is
another reason like stop and and check your assumptions a little bit and so can actually there's something deeper going on here to the people are asking for,
stuff, understood and sensed, and you know I think I did intend and maybe a lot of people get an economy
I wanna make sense, then will you go back from that perspective? I think, like American. His
It is interesting because, like you, grew up in the United States
it's a liquor learning about these,
that in our part of your heritage like why
with the other not exist and like. Why would like
the narratives about, where
We know the majority Americans,
from our interesting those p,
the books that are about young people.
Not in those situations are inherently interesting because the shared experience and then a kind of things like bull. Why wouldn't that be true of everyone else's? Like pretend
our public school systems are now in a museum is interesting, but the web publishing analogy way. Is that obviously the hope is you know if he, if you do more coverage, that's like of need community interest to El Gb T readers is that they're not gonna, just three you're algae BT coverage, but there can become readers of your publication Friday, going to think of it as a place. That cares about people like them, and that cares about things that they care about, and they, of course, care about them
other than their sexual identity. It's just that one of the things that they care about and similarly with the school system right like math, is important and that just does not have a heavy, racial or ethnic connection and that's fine and that's how it is. But it's if your other stuff is all very, very, very heavily coded why it may make people feel that school is not for them and then they're, not in the math class where's. If you have an ethics
some other things that engage people and bring them in then, once you in school, there's lots of things to learn about in school, but if you're turned off from the whole process by since it is not for you that the people running the institution, don't care about you or that people like you aren't
to care about school, then you don't learn algebra right and like that's, where the sort of the biggest harms come in and where the biggest potential gains so
hope that you are not turned off by any part of the weeds and that you feel able to participate in all parts of our discussion in one way can participate in our discussion is by emailing us. It reads: it Box now come on. One way you can tell other people to visas, for them is by going to Itunes and giving us a rating. Yes, he should rate
should you you should subscribe. You can also, frankly, beyond reviewing now you could just male your friend stare and face, but you can recommend that leads to their people anyway. You like, I want to make sure where an economical than another lovely episode of the reeds thanks for listening and thanks to our producers, is about as and to add to the empty chair here with us,
Transcript generated on 2021-09-15.