Disqus - Latest Comments for Luke Lea

Re: Happiness, Adaptation, and Bigger Breasts

Luke Lea — Fri, 02 Dec 2005 05:27:24 -0000

My comment is beyond the expiration date, but I just discovered your blog. Anyway, in my own life marriage and kids were a much bigger contributor to happiness than income level. I drank the same beer (Heiniken)and had a better sex life when I was young, with an income of $20K/yr, as now, with an income of $100K/yr. True,I don't have the same economic anxieties. OTH, absence of anxiety has a kind of lulling effect: there is a rhythm to happiness, such that you can't separate the bad times from the good. And keep in mind what Aristotle said: happiness is not something that belongs to the moment, but to an entire life well lived. None of this is to disparage the concept of the declining marginal utility of income, or, what is closely related, the concept of a general welfare function for a society as a whole.

Re: Again: Why Worry About Inequality?

Luke Lea — Sun, 01 Oct 2006 18:46:12 -0000

First let me say that, as an old man whose has long thought about these issues, I find your remarks on economic inequality both fresh and challenging. I'm a greatest-good-of-the-greatest-number kind of guy there is nothing I would like better than to stop torturing myself over the distribution of income in America, especially public policies (such as free trade with low-wage Goliaths and massive immigration of unskilled workers) which impact real wages at the bottom of the wage scale.

In particular I was struck by your distinction between nominal and material welfare, and your argument that the material conditions of the less well off are not so different from those at the top in qualitative terms. I think that is a point that is well worth pondering, and with a good deal of truth to it which I had not adequately considered in the past.

That said, I would like to make a couple of quibbles. First a minor one: it is true that total compensation, including fringe benefits, is a better guide than wages when looking at what workers earn. As an employer myself however I would like to point out that some of those fringe benefits do not in fact benefit the typical worker to the degree you might think. Take worker's compensation: are you aware of the massive amount of fraud that goes on in that area? In my own company -- a landscaping firm -- there have been only a few piddling claims in twenty years if you don't count the fraudulent ones. But they were massive, and had the effect of depriving honest workers of a big peice of their earnings (the tax rate in Tennessee for workers comp is close to 10%). Unfortunately there is no effective way to police this problem, at least so far.

Employee medical insurance is another problematic area: the huge escalation in the costs of medical care do not reflect real improvement in care and are largely beyong the power of employees to do anything about (or employers either, for that matter). There is enormous waste in the medical system which impacts workers with lower nominal wages disproportionately. You might acknowledge this reality which only qualifies but hardly refutes your main point.

Another area of consideration: material conditions are a matter not only of what we consume but also what we have to do in order to get the things we consume. Many low-skilled married couples find themselves forced to work full-time (both of them) outside the home, even when their children are only a few weeks old. This is a real issue of quality that does not impact many wealthier families. I think you should acknowledge that.

I believe you do acknowledge the problem of poor public schools: in low-income areas, and often throughout entire metropolitan areas (such as the one I live in, Chattanooga, TN)the conditions are abominable. In these communities private schools are the only quality alternative, and only affluent families can afford them.

Neighborhood safety is another fundamental problem that impacts low and high income families very differently. If you live in a leafy suburban neighborhood such as I live in you do not even have to lock your doors. Shoot, we don't even have locks. Contrast that to people who have to worry and care about robbery, assault, etc.

Don't get me wrong. I think you make a powerful argument. It might be even more powerful if you would candidly admit some of its shortcomings. This is not a perfect world even if it is infinitely better than any other world that has ever existed for most people.

In fact I

Re: The Great Populist Divide

Luke Lea — Fri, 12 Sep 2008 22:03:32 -0000

What would a liberal, Democratic platform look like that would appeal to ordinary, working-class Americans of a red-state complexion? Well, here are ten things that might be on it: BornAgainDemocrats.com

Re: Thinking The Unthinkable: The Treasury Black Swan, And The LIBOR-UST Inversion

Luke Lea — Wed, 10 Jun 2009 22:10:06 -0000

Freigners, as a whole, cannot "dump" their dollar holdings onto other foreigners. The only thing they can do is spend them -- in the US ---- which would be good for US exports, especially manufacturing. It is precisely what the American economy needs.

Re: A populist interpretation of the latest Boom-Bust cycle

Luke Lea — Mon, 16 Mar 2009 23:06:00 -0000

A few brief comments: Real wages are determined by supply and demand. Three things increased the supply of labor relative to demand: 1. labor saving devices especially in the home; massive immigration; rapid expansion of trade with low-wage countries. The latter two of these were a result of decisions by policy elites, the other a consequence of technological advance. The answer to labor saving technology is a shorter workweek (cf. 19th century). The answer to immigration is a moratorium. The answer to trade is . . . no, not protectionism, but wage subsidies fincanced by a tax on the income of the wealthy. It can be done.