1. It assumes that his only incentive to do any work outside of his regular teaching and research is to make money. This seems so counter to what the idea of academia is for, and is passed over so easily.It appears to me that Tim is suggesting that tenured professors should not be paid for speaking engagements or consulting services. Since that can't be what he really means, I feel that Tim is being disingenuous. He is using the Professor's occupation to deny Mankiw the opportunity to freelance by implying that speaking and consulting are somehow part of his professorship. Neither Tim nor I know what the Professor's compensation includes, but I would not be surprised if it explicitly allowed and even encouraged Mankiw to pursue consulting and paid speaking engagements.
Tenured academics like Greg M. have an incredible luxury: the time, freedom to work on what he wants, and a guaranteed paycheck (in his case, a large one). To say in that position you’ll only do “more work” if paid seems an offense to the idea of academia itself. Academics aren’t supposed to be on sale or work only on commission.
Greg M. himself is disproof of his own ideas. He spends alot of time blogging, and writing advice for junior professors and so on, all for free. If Obama wins, it looks like he’ll be doing more of that in the future. Obama, if his blog post is right, will alter the balance of commercial and non-commercial work he does. The irony is that that result might be better for society than Greg M. doing a bunch of consulting or paid-speaking.The professor does not blog "for free." He blogs to receive the accolades of people like me, to improve his name recognition to advantage himself in future salary negotiations, and (perhaps most importantly) to sell his favorite text books. Similar, I blog in the hope of someday receiving a free, signed copy of the Professor's wisdom for defending him against economically illiterate attacks.
As to what is best for society, I do not think Tim is the one to judge. Surely a teenage neighbor of the Professor would benefit from a sitting job while Mankiw lectures out of town. Or perhaps one of his own children is old enough to be entrusted with the care of their siblings and the stimulation of the local economy. With a more favorable tax structure, the good Professor might hire a nanny or au pair to help raise the children, prepare meals, and clean the house. This would not only employ someone directly, but on that rare Friday night when the Professor has no speaking engagement, he and his wife could go out for a truly spectacular dinner at Aujourd'hui thus employing, in part, a few more people.
All of that is the work of the invisible hand.
2. The implication, taken by other writers like “Beldar” though not by Greg himself, is that Greg working less is proof that Obama’s tax cut will hurt the country. But hold on - Greg represents 5% of the country. The rest — the 95% percent who get a tax cut, will presumably have reasons to want to work harder, because their taxes are going down.Roughly 40% of wage earners pay no income tax. They do pay payroll taxes, but then a plan to return Social Security revenue is surely a plan to accelerate the collapse of that great ponzi scheme.
It’s a simple calculation. The tradeoff is those who make more than $250,000 doing less commercial and more non-commerical work, versus 95% percent of the population who have reasons to do more.I agree with Tim; however, I think that the "Pigovian" income tax that I propose creates even greater incentive for lower wage earners to do additional work while also potentially increasing the Professor's incentives. It's not an either or.
Its at least ambiguous. And since the money is worth more, on the margin, to people who make less than $250,000, they have more reason to want to work for it. $1000 means more to someone who makes $60,000 than to Greg M.
The upshot: Obama’s tax plan will encourage a rich man like Greg M. to devote more time to the public and his children instead of paid speaking gigs, and gives a lot more other people more incentives to earn more money. Sounds pretty good to me.I do not know if the Professor is rich since I only know that his income is in the upper middle class. Perhaps he is not particularly frugal, but would become so if allowed to work for and save more money. I'll agree that it "sounds pretty good" in one respect: Joe the Plumber can lowball Mankiw on a lot of those speaking gigs and probably do a reasonable job at the lectern.
Update: Welcome Instapundit readers!