Dear Bill Maher,
I’m gonna level with you- you and I have pretty much the quintessential love-hate relationship going on here. (Granted, this relationship is most likely asymmetric in a rather Red Sox-Yankees sort of way.) Sometimes I think you are super funny and insightful and just want to sit and smoke some weed with you, and sometimes I kind of want to punch you in the face. (The latter attitude is largely a result of that time that Simon Johnson tried to teach you something about math and you covered your ears and went “lalalalala” like a small child. Willful ignorance is not endearing or funny, for the record.)
That said, I very much respect that you have real people on your show and not just the Christine O’Donnells of the world. Case in point: Joe Stiglitz, Columbia professor and winner of the 2001 Nobel Prize in Economics:
Now, I am pretty sure that Stiglitz is making the media rounds in support of his latest book, The Price of Inequality: How Today’s Divided Society Endangers Our Future, and you distracted him with a discussion regarding the financial crisis, but that’s okay because it was pretty entertaining. (The random misunderstandings between you and Stiglitz are also worth a chuckle, mostly because I can’t tell whether they were on purpose or whether you just aren’t good at talking to nerds. I will also give you full credit for making potentially relevant Three Stooges references.) You did lose me a little, however, when you tried to tell me how much tickets to Disney World *should* cost- granted, Disney may have a monopoly on Disney World, but Disney World seems pretty full at a price point of $87 per ticket, so I’m not sure how $28 tickets and mass shortages would make things better. (It’s also worth noting that I find Stiglitz’s outrage over student loans to be a little surprising- I, for one, am glad that student loans are not expunged during bankruptcy, since this makes financial institutions more willing to issue student loans and means that I don’t pay as much of an interest rate premium to compensate for those people who declare bankruptcy rather than paying their loans. But I digress.)
What I find particularly interesting is that you seem to have taken a shine to Prof. Stiglitz because he appears to share your ideological views on topics such as income distribution and inequality. I don’t want to disappoint you too much, but I have a suspicion that Joe is, for the most part, less ideological than you would like to believe. For example, in his recent book excerpt in Vanity Fair, Stiglitz argues that inequality is bad not because it’s not fair but because it’s not efficient and doesn’t even always benefit those at the top of the wealth pile. He even goes so far as to use the statement “Put sentiment aside.” Granted, he does make some strong generalizations about the social value created by top earners and the benefits of explicit redistribution, but, in general, his logic is sound on an objective level and not too much of an ideological rant. (I just wish he would be more careful about implying some sort of “use it or lose it” mentality regarding income and consumption and leaving investment almost entirely out of the equation.)
On a random note, I really like that Stiglitz gives the best explanation that I’ve ever seen of the concept of an “economic rent,” since I’ve wondered for a while now why rents were called rents:
The word “rent” was originally used, and still is, to describe what someone received for the use of a piece of his land—it’s the return obtained by virtue of ownership, and not because of anything one actually does or produces. This stands in contrast to “wages,” for example, which connotes compensation for the labor that workers provide. The term “rent” was eventually extended to include monopoly profits—the income that one receives simply from the control of a monopoly. In time, the meaning was expanded still further to include the returns on other kinds of ownership claims. If the government gave a company the exclusive right to import a certain amount of a certain good, such as sugar, then the extra return was called a “quota rent.” The acquisition of rights to mine or drill produces a form of rent. So does preferential tax treatment for special interests.
At the very least, now I can sleep easier at night not having to wonder where ubiquitous economic terms come from.