Friday, April 4, 2008

Econ 101: The Backward Bending Labor Supply Curve - or - Why Does Hillary Want to Be President?

The Clintons just released the last seven years of income tax forms, as reported by the New York Times. Turns out they earned over $109 million between 2000 and 2007. That's a lot of money, quite a bit more than I expected, but what I wonder, more than anything else is: why in the world would Hillary want to be president? I mean it is long hours, lots of travel, an often thankless job and it condemns you to life in a public bubble from which you can't escape.

Economic theory suggests that as incomes rise past a point, people choose to 'purchase' or consume more leisure time which produces a backward bending labor supply curve (here is the Wikipedia graph which is nicer than the one I came up with).

It seems to me that one could spend six years fighting for, and then performing the duties of, the Oval office, or one could relax, travel, read some good books...you know, enjoy life. I know what I would choose.

I suppose being the most powerful person in the world might have something to do with it. And I don't mean that as a snarky comment about Hillary's ambitions. The President of the United States can affect hundreds of millions (even billions) of peoples lives. The ability to do (what one believes to be) a lot of good in the world could be pretty strong incentive, I suppose.

By the way, for those who don't already have $100 million, it appears the Presidency is a pretty good cash cow upon retirement...

2 comments:

Jeff Alworth said...

I believe I've let enough time go by that this comment is likely to be missed by most--relevant because I'm going off econ.

The question you pose cannot be described by economics. Or maybe it can--but you need another variable in the equation like "immortality." Buddhist philosophy holds that we are propelled in action through a desire to firmly establish our self-identity. Money is one proxy for success and self-establishment, but I'd argue that it's certainly not the only nor the most potent.

Particularly in the US, becoming president is as close as we come to all-pervasive accomplishment; those who have a chance at it cannot be blamed for being fooled that it feels like immortality (go tell that to James Buchanan). I'd hazard a guess that almost everyone in the country would take the job--for free or even if they had to pay for it. There's more than money. Not a lot, maybe...

mami mumy said...

The question you pose cannot be described by economics. Or maybe it can--but you need another variable in the equation like "immortality." Buddhist philosophy holds that we are propelled in action through a desire to firmly establish our self-identity...!!