Military service and health

As discussed by the New York Times, the New England Journal of Medicine published a research article on mild brain trauma among Iraq War veterans and psychiatric symptoms like PTSD.

A colleague of mine, Alair MacLean, studies combat exposure and life outcomes among veterans. The costs of military service are considerable, and I think it is an open question whether the government compensates veterans enough for having borne them.

An inversion of a notorious inequality

In 2006, the Times reported a key finding of Andy Beveridge's group at Queens College, City University of New York, about the black/white income differential in Queens County.

Beveridge found, in the Census Bureau's 2005 American Community Survey, that median household income for African Americans in Queens County was $51,836, nearly even but still surpassing that for whites, $50,960. The median Asian household received $52,998.

The article discusses a number of reasons why this might be true. An unanswered question I'm interested in: does this inversion of the race differential show up in health statistics as well?

Tax rebate details

The Washington Post presented a clear overview of the tax rebate (a.k.a. fiscal stimulus) package agreed upon by House leaders and the White House.

Unlike the 2001 cut, the rebate checks will phase out to zero beginning for individuals above $75,000 and couples above $150,000 in adjusted gross income.

It only sounds insane

Len Burman of the Urban Institute dropped a bomb on the Times op-ed page today. He suggests rolling back the Bush income tax rate cuts a year early, in 2009, rather than in 2010, when they are currently set to expire.

He sounds nuts, but Burman makes a subtle point: if taxpayers expect a higher tax rate in 2009, they will shift some taxable activity, in this case working, into 2008 instead. And that should help stimulate the economy.

Despite what Burman and others have said regarding the 2001 fiscal reform, I doubt this would have as stimulative an effect as a broad-based tax cut that placed rebate checks in the hands of a lot of folks. But it is an interesting, although a completely counterintuitive and probably DOA, proposal.

Child sex preference and development

Back in December, the New York Times reported on the evolution of child sex preference in South Korea. The view advanced was that increased female labor force participation, a necessity of industrial progress, had raised the economic value and social status of girls.

Fiscal stimulus and macro impacts

Events have moved quickly over the past two weeks, and chances of a fiscal stimulus package passing Congress and getting signed by the President look surprisingly good.

Policymakers and their advisors are struggling to settle on the optimal design of the package, and as reported by the NY Times, it's because we don't know exactly what happened in July and August of 2001 when the tax rebate checks were sent out. The events of 9/11 produced basically a coincident shock, and it is tough to disentangle the responses.

Schumpeter, innovation, and growth

David Brooks mentions Brad DeLong's review of a new 2007 book on Joseph Schumpeter. Brooks doesn't write much about it, but it's a good, quick read for those interested in economic growth.

I don't teach anything about entrepreneurship and competition to undergraduates in my intermediate macroeconomics class at Queens. But as Schumpeter and many others after him pointed out, the process of innovation produces losers as well as winners.

As reviewed by DeLong, Schumpeter thought democracies were ill-equipped to manage innovation by compensating the losers while rewarding the winners, and he apparently made many predictions about politics that were flat-out wrong. From an aggregate perspective, it appears that the American political system is successful at either compensating losers or minimizing their numbers.