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EP

Regarding the Transparent Nevada figures, it might be worth noting that the large majority of the highest paid faculty in the Nevada System of Higher Education are in the School of Medicine. These faculty typically are M.D.s in specialties, who see patients and train medical students to boot. They are expected to bring in much more in revenue than their salaries, and the doctors they train are more likely to stay in Nevada if we train them here.

Also well-paid are also athletic coaches, and while we may not like the fact that coaches make so much, that is the reality of the marketplace. In the better-paid sports, these salaries often come from sources of revenue other than the state-funded budget.

Finally, NSHE competes for faculty talent in a national market. These people have Ph.D.s from top universities, and we want to attract them to Nevada. In fields like engineering and science, many of these faculty bring in research dollars from federal and private sources far in excess of their pay, and these dollars fund graduate students and other researchers, and produce work of benefit to the state.

There is a national market for talent, and hiring in these top areas continues even in a recession like this one. If we want our universities to be competitive with the rest of the country, then we need to consider what those highly-trained faculty would earn elsewhere. We don't need to pay them more than necessary to attract or retain them, but we can't pay them less for long, not unless we want to see the best ones leave.

If we don't want to compete, then we should just have community colleges, and tell our brightest students they would be better off moving out of state. Of course, you know they won't come back, and our beloved Nevada will forever remain at the bottom of the rankings.

Pardon the umbrage, but one blogger above (Mr. Teatime) called Miller and Parker the worst economists in the state. Actually, if you look them up on RPEc, Miller is the top-ranked economist in the state, and Parker is ranked 7th in the state. Both are ranked in at least the top quarter of economists internationally.

Dear Sgt. Rock,
The sentence you quote is out of context. The ellipsis you used covered up a "but" which showed that the column was making an alternative argument.
Second, a value-added tax is not an income tax, corporate or personal. While all taxes have distortionary effects on incentives, creating economic inefficiencies, a VAT has less than an income tax, and less than our current tax on a firm's payroll (the modified business tax). It also does not contain the progressivity conservatives hate, the idea that people with higher incomes should pay at a higher rate. However, it is not as transparent to the taxpayer as an income tax or a sales tax.
It is clear that our current tax structure cannot generate the revenue it once did. What sort of taxes would you advocate instead? Or do you simply oppose all taxes, no matter the type?

[continued from prior post]

Markets are systems of exchange. Mark 4:25 says "For to the one who has, more will be given, and from the one who has not, even what he has will be taken away." Nowhere does this apply better than to market economies. People without education, skills, property, family, or luck can work very hard for many years and make scant progress. If we can help level the playing field, we help more people compete in a market economy by giving them something of value to sell to employers.

I believe in public universities. You obviously do not.

You use the word "elitist" to describe universities, but what is more elitist than not funding public education? Wealthy students go to private schools, while most of our students come to us because they cannot afford to go where the rich go. We try to provide them with a good education nonetheless, one they can be proud of and one that makes them more likely to stay in Nevada.

Could public education be better? Of course! Could we use private incentives to help improve it? Great idea! But it still needs public funding, regardless of how we provide it. I would support meaningful reforms, and an experimental approach that encourages Schumpeterian creative destruction (an area of my research), but your solution of cut, cut, cut does not get us where we need to be, and it makes you seem less the objective analyst and more the ideological hired gun for those who don't want to pay state taxes.

Sincerely,
Professor Elliott Parker

Dear Patrick,

A failed state is, by definition, one without a functioning government, which should be libertarian nirvana, as I remember my Nozick. Once you need a state to define and enforce private property rights, you admit the need for a legal system, courts, police, and even national defense. Private markets cannot provide this because it is a classic free-rider problem: the person who benefits most from catching a crook is the next victim, not the last one.

But now you are on an ideological slippery slope, because you are admitting the potential existence of externalities and public goods. What about roads, technological infrastructure, education, banking regulation, vaccination, or social insurance? Private interests don't always align with public ones, and one doesn't have to be a loony-tunes Marxist to admit that the state can actually benefit us, though one could not work for the NPRI.

You speak of bureaucracy and the misincentives of those spending other people's money, and of course you are right that the state has these problems. But the private sector has these problems too. What caused the financial crisis but too-big-to-fail private bankers spending other people's money for their own benefit?

Do I think externalities and other market failures are common? Absolutely. But I think in most cases they are outweighed by public failure, the problem of having government come up with better outcomes. I am a pro-market economist. The difference between you and me is that I would use the word "most" while you would say "all." Inefficiency is present in most human organizations, and sometimes the inefficiencies of the private sector outweigh the inefficiencies of the public sector.

[to be continued]