Sunday, December 16, 2012

A Gun Speech for Obama

"It has become painfully obvious that we have a problem with gun violence in this country. Guns are a very divisive and polarized issue, with strong opinions on both sides. That's OK. In a democracy, what we do is talk to people on the other side, and try to find areas of agreement.

"And in fact, I think there are substantial areas of agreement between the two sides. Unfortunately, it's been difficult to find those areas of agreement, because some people benefit from polarization. Foremost among them is the National Rifle Association.

"The NRA gets its power because many gun-owning voters assume that someone who gets an "A" rating from the NRA must be better than someone who gets a "B"  rating. They assume this because they think the NRA must be serving the interests of its members.

"Actually, it's the other way around: the members are serving the interests of the NRA. The NRA is an extremist organization, and its opinions are far more extreme than those of most of its members.

"A recent survey showed, for example, that 74 percent of current and former NRA members support background checks for anyone buying a gun, and 79 percent favor background checks for employees of gun retailers. Not the NRA. What about denying guns to people on the terrorist watch list? Seems like a no-brainer, right?  If you think that, then 71 percent of current and former NRA members agree with you. Not the NRA.

"The NRA has in fact been doing it best to scare gun owners into thinking that any politician who disagrees with any of their extreme positions is "anti-gun," "anti-Second-Amendment," and waiting for the opportunity to take away all guns. Here's the fact: Guns are dangerous. Like all dangerous things, they need to be regulated to make sure they don't fall into the wrong hands. Most gun owners know that.

"I haven't seen a poll on the attitude of NRA members toward a ban on assault weapons, but the NRA's attitude toward it borders on hysteria. Yet until 2004 we were getting along fine without assault weapons. These are weapons for which there is no plausible need other than killing large numbers of people. You don't need an assault weapon to defend your home, except in some some adolescent fantasy involving black helicopters or zombies. But it's proven to be very popular among mass murderers. I know that, now these weapons have been legal for a while, people have tried them and find that shooting them is fun. Sorry. If you're going to live among other people, you can't do everything that might be fun.

"Finally, aside from keeping guns out of the hands of dangerously unstable people, we have to try to reduce the number of dangerously unstable people. That means we have to do something to make sure mental health services are available, particularly for adolescent boys and young men. That means-- let's be clear about this-- spending more. Can we do that, with our deficit problems ? Of course we can. Here's the first thing we owe our children and grandchildren: to keep them safe."

Note: I didn't start out intending to say so much about the NRA. But as I was writing, it became apparent that the politics of this issue does not work without confronting head-on the belief of many gun owners that the NRA speaks for them.

Wednesday, December 5, 2012

What Do We Call the 200 Million People Who Aren't "Job Creators"?

My suggestion: "Job Doers."

American Spring? Time for a Democracy Agenda

There are a lot of policy issues that we can expect to be politically hot over the next couple of years. There is the deficit, of course, and jobs. There will probably be (in fact, probably already is, and should be) a resurgence of interest in global warming. And so on.

But I can't help feeling that the most important issues ahead are what we might call "meta-policy" issues. Specifically, how can we hope to solve all these pressing problems with American democracy as ramshackle as it is today? We need to start talking in a more focused way about how to make democracy work better in the US.

Is this just boring "process stuff" that most voters don't care about? I don't think so. Americans feel increasingly alienated from government. There seems to be an untapped political market for changes that make things work better. What is needed now is to connect a lot of fragmented problems into a democracy agenda. For example:

Once again, we have seen the folly of having national elections run by partisan state officials. (Remember 2000, when the chief elections official in Florida was the state co-chair of the Bush campaign?)  This year we  had a sudden efflorescence of photo ID requirements, attempts to purge the electoral rolls, attempts to reduce early voting, and, finally, voting lines of up to eight hours. This happened almost exclusively in states controlled by Republicans, and certainly invites the conjecture that Republicans were trying to reduce voting by groups that lean Democratic, such as the poor and students.

That we cannot do a better job on something so simple and fundamental should be a national embarrassment. Other countries can do this; why can't we? The Constitution permits (though it does not require) Congress to oversee Federal elections. National elections should be run by a non-partisan Federal agency, which would set uniform voting days and hours and uniform registration requirements. Oh, and it would make sure there are enough working voting machines. Not rocket science.

Obviously, this will become a partisan issue, and Republicans will paint it as a Federal power grab. But with the striking level of incompetence or worse by state officials in the last election, it is time to put this issue on the table. If nothing else, that will motivate states to do a better job.

You may have heard that Republicans got a minority of the votes for the House of Representatives, even though they won a majority of the seats. The difference is attributable to the venerable institution of the gerrymander, in which state legislators redraw the boundaries of Congressional districts to make sure that favored Congressmen get reelected. After the 2010 election there were a lot of Republican-dominated state legislatures, hence today a lot of Republican safe seats. But this is a bipartisan tradition, which Democrats practice as assiduously as Republicans.

Therefore, changing it need not be a partisan issue, especially since it won't affect Congressional districts until 2022. (Redistricting is only done after the decennial census.) Congress's Constitutional authority surely extends to using a nonpartisan agency to draw districts, and to writing rules for how to go about it. In the long run, I imagine, everyone in Congress would prefer to minimize the chances of being shafted by the opposite party.

The Filibuster
In 1975, the Senate rules were changed to allow a filibuster to be broken with a vote of three-fifths rather two-thirds of the Senate, but three-fifths of all Senators, not just those present. So staying home counted as vote against stopping the filibuster. In addition, the new rules permitted other legislation to go forward while a bill was being filibustered, so a filibuster no longer required actual talking.

Over time, these rules have reduced the cost of filibustering to the point where virtually everything requires sixty votes in the Senate to  pass. It has been a sort of stealth Constitutional amendment, turning the Senate into a body where any legislation requires a supermajority. This, together with an unprecedented degree of party discipline, has made the Senate, and hence Congress, virtually unworkable, contributing to a loss of faith in political institutions.

There is a good chance, I'd guess better than 50%, that this situation will end next January, and that we will go back to what is now called the "talking filibuster," what I earlier called the "honest filibuster." (I intended a touch of irony, like George Washington Plunkitt's "honest graft.")

Campaign Finance
I was as surprised as Karl Rove and Sheldon Adelson must have been to discover that huge pots of dark money did not have discernible influence on the 2012 election. Nonetheless, our present campaign finance system is hugely corrupting, making elected officials the servants of a vast lobbying industry. If there's anything that gives voters the feeling that the game is rigged, that's it. And the public remains interested in reform.

I credit myself with discovering a key fact about campaign finance reform: if you get small contributions from a lot people, you get enough money to swamp the money from big contributors. So you can simply disregard big money, thereby avoiding all the legal and logistical problems of keeping money out.

I suggested one possible approach a few months ago: Give everyone a $100 refundable tax credit for political donations. In order words, political contributions up to $100 are, from the donor's perspective, free. If we assume that half of all tax-filers take advantage of this opportunity, that raises $7 billion a year, which is $28 billion over four years.

(This turns out to be quite similar to the proposal of Lawrence Lessig to give every voting-age citizen a $50 voucher usable for political contributions. That plan is slightly more expensive, about $12 billion a year, but I'm not clear on whether sees this as being every year-- presumably at least every other year, since it's aimed at Congress. He proposes requiring candidates to decline large contributions if they are accepting vouchers, but, as I noted above, I doubt the necessity of that.)

Imagine a world where members of Congress didn't have to be anxious about money.


That's a first stab at a democracy agenda. Is it politically feasible? If political feasibility is determined by elected officials and opinion-makers probably not. If by voter support, probably so. The problem, as always, is to coalesce individual opinions into popular opinion.

Saturday, November 17, 2012

Puzzles of Oenopolitics

The talks also began on a friendly note: With reporters and cameras briefly allowed in the room, Mr. Obama wished a happy birthday to Mr. Boehner, who turns 63 on Saturday. The president gave the speaker, who favors merlot, a bottle of 1997 brunello wine, a pricey Italian red.

Questions: How does The New York Times know that Speaker Boehner favors merlot? Is this common knowledge inside the Beltway? If so, why did the president give him something else? Why did the Times even mention merlot? Is it trying to imply that president deliberately slighted Boehner? Why would he give a bottle of Italian wine, be it ever so pricey, instead of American wine, especially when there are so many California merlots? What message was he trying to send? And why 1997?

Let's get Fox News working on Brunellogate. To start with, what did Obama give Susan Rice for her birthday?

Sunday, November 11, 2012

Who Voted for Obama?

The world, or at least the political world, would be a better place if journalists knew something about statistics. For example, we now know that the following groups voted heavily for Obama:

  • Single people
  • People with incomes below $50,000
  • Younger people
  • Gays and lesbians
  • Nonwhites.
But what does this actually tell us? One would guess that the young are more likely to be single and to have  incomes below $50,000. One would also guess that gays are less likely to be married, and that nonwhites tend to have lower incomes. So which of these things actually matters, controlling for everything else?

There is a relatively simple way to answer this question-- multiple regression. Essentially that gives us an estimate of the separate effect of each of these characteristics. If you gave me exit-poll data on an Excel spreadsheet, I could do it in a couple of hours. If I didn't have the software, I could still get pretty far with cross-tabs.

As it is, though, we'll never know, at least not until the political-science journal articles start appearing. Pity. In the meantime we'll have to listen to a lot of blather from pundits who don't even know what they don't know.

Thursday, October 18, 2012

A Debate Question, Answered

QUESTION: Your energy secretary, Steven Chu, has now been on record three times stating it's not policy of his department to help lower gas prices. Do you agree with Secretary Chu that this is not the job of the Energy Department?

This was a question from the second Presidential debate, and as you may have noticed both candidates dodged it and talked about their own energy policies. But I think this question was answerable, and an answer would have advanced public debate. In particular, it would have dried up a couple of perennial Republican talking points.

"The main thing that determines gasoline prices is the world price of oil. We're a part of the world oil market. The oil that we produce doesn't remain in a separate pot marked "American oil;" it goes into world oil supply, and the oil that we consume comes out of world oil supply. So the question you're asking could be asked as: what can Secretary Chu do to reduce world oil prices? 

"The answer, unfortunately, is not very much. If supply increases, then the price will go down. So world oil prices will go down, somewhat,  if we produce more. However, oil prices will also go down if Norway or Saudi Arabia produces more. Similarly, if demand decreases, the price will go down, so we can lower the price, somewhat, by using less energy. But again, oil prices will also go down if other countries use less energy.

"The best way that we can insulate ourselves from higher gasoline prices is to make gasoline a smaller part of our budgets. Back when people were getting around by horse, a big increase in the price of oats would have really hurt the economy. Now most people wouldn't notice. As more fuel-efficient cars get on the road, the price of gasoline will be less and less important.

"So I would say Secretary Chu's job is not to lower gas prices, which he can't do very much about; it's to help us get to a future where gas prices are not so important. And he's doing a good job of that."

More Meaningless Numbers

What on earth makes journalists write things like this?

Australians, as it turns out, watch lots of telly. According to the survey data, in 2008, the year that the researchers chose as their benchmark, Australian adults viewed a collective 9.8 billion hours of television.

A collective 9.8 billion hours! OK, quick, how much television does the average Australian watch in a day? I have no idea, but if you paid them $10 per hour of TV watching, it would form a stack of dollar bills 6000 miles high. That's lots of telly! Or maybe not. Again, I have no idea. (Do Australians say "telly," by the way? I thought that was more a British thing.)

I think the problem here (and here and here) is an attempt to make numbers look big by multiplying them by other big numbers, such as the population of a country or the days in a year. But what actually defines a number as big is comparison to similar numbers. A large number without other numbers for comparison looks big, but doesn't give much information about whether it actually is or not.

This may be the intended effect if you're a politician trying to avoid scrutiny of your ideas. Classic recent example: cite cost of Obamacare by giving total cost over a ten-year period (almost a trillion dollars!) without comparing it to, say, total health-care costs over the same period (30 trillion dollars!).

But journalists should have higher aspirations than that.

Note: If you're wondering, it comes out to about an hour and fifteen minutes per day. Not real couch potato territory, but that's just the average. Apparently, though, the reporter decided the story needed a big number to make a point (about an Australian  study that finds sitting is bad for you), so she threw in an impressive-sounding but meaningless number.

Sunday, October 7, 2012

Just Give Us the Facts

As I was commenting just the other day, OK, I'm a bit partisan at times. But I am also a small-d democrat. I would like to see the electoral process work.

That's what's really upsetting about Obama's performance in the first debate. Yes, he definitely did himself some short-run damage in public opinion. But the long-run damage is that Romney was able to win the debate while egesting a huge amount of misinformation  and deception.

You probably have heard about some of the more blatant, um, inaccuracies: that under Romney's proposal for health care people with preexisting conditions would be covered (they wouldn't), that half of all the green-energy companies that got support in the stimulus went bankrupt (not even close), and of course the famous $716 billion raid on Medicare. None of these was effectively countered by Obama.

 If this is allowed to stand, democracy in America is pretty much a lost cause. Candidates who are approximately truthful will be crowded out by the most creative, morally untethered fantasists. If there is no price to pay for misleading the public, then it's a race to the bottom. All that is necessary for the triumph of gibberish is for the informed to do nothing.

But the whole debate was just a particularly egregious example of a political failure of Obama throughout his administration. There's a hackneyed old lawyers' adage that begins, "When the facts are on your side, pound the facts." What this administration has consistently neglected to do is pound the facts, even though usually the facts are on their side. We saw this clearly in the health care debate, when neither fact (we're worse than Cuba on infant mortality, yet we have by far the most expensive health care system in the world) nor fiction (death panels, government takeover of health care) was clearly labeled as such by the administration.

The New York Times reports that Obama and the Democrats raised $181 million in September (back when Obama was far ahead in the polls). How about spending some of that money calling out some of the false claims that Romney made in the debates? That would be good for Democrats. And democrats.

Saturday, September 15, 2012

In Which I Shovel Against the Tide

OK, I'm a bit partisan at times. But I am also a small-d democrat. I would like to see the electoral process work. So it is depressing to see the sheer level of evasiveness and deception in the Romney campaign. Even the evasions contain new deceptions. Perhaps this is by design: either you correct the deceptions, or you persist with the original question. No one has the energy to do both.

Thus, this report from

When we asked the Romney campaign for more information on his plan to balance the budget, spokesman Eric Fehrnstrom sent us this statement:

Fehrnstrom: Governor Romney has balanced many budgets over his career, in private business, at the Olympics and in government. His track record speaks for itself. President Obama doesn’t even have a budget. Before Obama’s election, America had never run a trillion dollar deficit. Since Obama’s been in office, we’ve had four trillion dollar deficits in a row.
So, we’re left to wonder how spending possibly could be reduced in the next decade to balance the budget. The Center on Budget and Policy Priorities, which has liberal leanings, ran the numbers in May and found that, assuming Social Security is not cut, all other non-defense programs would have to be cut by 29 percent in 2016 and 47 percent in 2022, if the cuts were spread evenly across the board — and if Romney’s tax plan was revenue-neutral. has chosen the second strategy, to persist with the original question. This runs the risk of implicitly accepting all the claims in the evasion. Let's unpack Fehrnstrom's claims.

Governor Romney has balanced many budgets: State governors running for national office are always making some variant of this claim. "I balanced the budget X years in a row" is popular. Journalists sometimes point out that state governments are required by law to balance their budgets, so that doing so may not indicate exceptional frugality.

But this misses a larger point, that the budgets they are balancing are not comparable to the Federal budget. States are required to balance their operating budgets, but not their capital budgets for long-lived investments. The Federal government makes no distinction; long-lived investments are just lumped in with everything else. How much easier would it be to balance the budget if long-lived investments were not included? Capital investments are not a huge part of the Federal budget, but they would normally include things such as military equipment and weapons, highways, land purchases, and possibly scientific research. Say $300-400 billion a year.

President Obama doesn't even have a budget: The Obama Administration did indeed submit a budget to Congress this year, the usual fat book.  The President is not in charge of passing a budget, Congress is. A key role is played by the chairman of the House Budget Committee, who is currently Paul Ryan.

Before Obama's election, America had never run a trillion-dollar deficit: I had thought this was merely a deception based on the difference between the date of Obama's election and the date of his inauguration, but it turns out to be factually untrue. The first trillion-dollar deficit, and still the largest deficit in US history, was for the fiscal year that began in October of 2008. (No, the stimulus bill of 2009 was only a small part of that.)

That's a lot of mendacity for one short paragraph. Who has time to keep up with it?

Saturday, September 8, 2012

Some Missing Pages From Obama's Speech

"Republicans often accuse me of not believing in 'American exceptionalism.' Well, I believe America is an exceptional country. My own life is testimony to the truth of that.

"Where I differ from Republicans is that they seem to believe that we can be exceptional just by saying we are. I think that being exceptional is hard work. Previous generations did that work for our benefit. Now a lot of people who claim to be concerned about future generations think we should just shirk our responsibilities.

"For example, Americans' deep belief in individual liberty and individual responsibility led us to establish free public education in this country, first at the elementary and then at the secondary level. And we established state universities and the G.I. Bill, to make college education feasible for millions of people who would never have had that opportunity otherwise. As a result, we had exceptionally well educated workers, and that is one of the reasons America became an economic powerhouse and a land of opportunity.

"Today, local governments are being forced to lay off teachers, state governments are raising tuition at universities, and Federal tuition assistance has lagged far behind college costs. Do we think we can continue to be an economic powerhouse and a land of opportunity if that keeps up?

"Or take infrastructure. Government has an important role to play in making sure that we have good transportation systems to knit this country together and lower the cost of getting goods to market. Americans have always understood this, from the Erie Canal in 1825 to the interstate highway system begun under President Eisenhower.

"But today there are more than sixty thousand state and interstate bridges, and almost another eighty thousand city and county bridges, that are rated structurally deficient or obsolete. Overall, the total infrastructure backlog in this country is more than $2 trillion. Do we think we can continue as the world's most powerful economy without taking action on this? The work will have to be done sooner or later. The best time to do it is when we have large numbers of workers and large amounts of capital sitting idle, as we do now.

"The truth is, the Republican path, of empty boasts and unnecessary wars, of paying lip service to future generations while making no investments, is not what made America great. That path is the path to American decline."

Sunday, August 26, 2012

Never Thought I'd Live to See the Day: The Times Uses the F-Word

The Romney campaign is airing an advertisement falsely charging that Mr. Obama has “quietly announced” plans to eliminate work and job training requirements for welfare beneficiaries, a message Mr. Romney’s aides said resonates with working-class voters who see government as doing nothing for them.

Saturday, August 25, 2012

Another Romney Secret?

Mitt Romney probably does know a lot about how things work in the private sector. But is he telling us what he knows?

The reason I ask is that his plan for getting people back to work makes no sense. Just a gentle prod makes it completely fall apart. I would guess that he's aware of that.

Romney adheres to the current Party line that reducing taxes on the rich, or "job creators," will lead to a surge in hiring. Let's suppose for the moment that all the rich are actually entrepreneurs, as opposed to people like him who are just living off their investments.

The problem is that employee pay is what is known, in economics and accounting, as a cost. Other things equal, entrepreneurs want costs to be as low as possible.

Therefore, businessmen will produce as much as they can with their existing workforce. Only when they are unable to meet demand will they go out and hire more people.

If you hand a businessman some money, say from a tax cut, he will say (maybe), "Thanks very much." But he will have no more reason to go out and hire people than he did before. Why should he? That would just reduce his profit.

Hiring someone will increase his profit if it enables him to bring in more revenue, that is, if he's unable to keep up with demand using his existing workforce. That suggests that the way to increase hiring is not to hand out more money in tax cuts, but to increase demand... for example, through more government spending.

Two caveats. First, if businesses can't expand because they can't get loans, then giving them cash might help. But it turns out that companies in the US are sitting on huge amounts of cash, so it looks like that's not what's keeping them from hiring.

Second, increasing the rewards to entrepreneurs should, over the long term, lead to some increase in the amount of entrepreneurship. But (1) it may not be a large increase, (2) tax cuts for the rich may not be an efficient way get that result, (3) it's not much help in the near term.

Is there something I'm missing, Governor?

(And speaking of entrepreneurship, here's an idea to encourage it: Let's set up a system whereby people can leave their current jobs and continue to get affordable health insurance. We could call it the Affordable Care Act.)

Saturday, August 18, 2012

Guns: Lost Opportunity?

It seems to me that Obama missed a golden political opportunity on gun control to seize the center and box Romney in, as well as look Presidential and bipartisan. Here's how that might have gone:

"The tragedy in Aurora is forcing us as a nation to talk about the issue of guns. There are at lot of temptations not to. This s a very politically divisive issue. Some people who are gun owners are convinced that people on the other side want to take away their guns.

"Perhaps they do. That's completely beside the point. The way American democracy is supposed to work, and the way it used to work, is that people will have differences, but sometimes they set those differences aside to focus on things they agree on. And there are substantial areas of agreement that we should be acting on.

"The main obstacle to action is the leaders of the National Rifle Association. The NRA leadership holds positions that are far more extreme than most of its members. A recent poll of current and former NRA members found that 74 percent favored background checks for gun buyers, 63 percent believe concealed-carry permits should be limited to those over 21, and 71 percent believe those on the terrorist watch list should not be able to buy guns. Those positions do not agree with the positions of the NRA's leadership.

"Yet many legislators would tremble like a leaf at the thought of voting for any bill opposed by the NRA. NRA ratings of legislators' voting records carry weight with members, perhaps because they don't realize how extremist an organization it has become. They may think a candidate with a 100 percent rating from the NRA  is better than one with a 95 percent rating, not realizing that the different might be that one candidate voted to keep people on the terrorist watch list from getting guns.

"The. fact is, there's agreement among a large majority of Americans that some measures are necessary to keep dangerous weapons from getting into the wrong hands. If we can't debate this publicly, and then take action, what can we do? What hope is there for American democracy?"

This puts Romney on the spot, and probably leaves him retreating into yet another verbal fogbank. Does he favor letting people on the terrorist watch list get guns or not?

That's the short-term electoral calculus. The longer-term policy calculus is that the Overton Window on guns has shifted far to the right, and will probably continue doing so until someone calls out the NRA as an extremist organization.

Guns: Antonin Scalia is a Lunatic

Chris Wallace interview with Justice Scalia on Fox:

"So yes, there are some limitations that can be imposed...I mean, obviously, the amendment does not apply to arms that cannot be hand-carried. It's to 'keep and bear' (arms). So, it doesn't apply to cannons. But I suppose there are handheld rocket launchers that can bring down airplanes. That will have to be decided."

Please let us know what you decide so we can adjust our travel plans accordingly. Really scary part? The media reports this as Scalia saying some limitations on guns might be constitutional.

Friday, August 17, 2012

Letter From a Former Obama Supporter

Ah, I see we have a lot to talk about, especially on the matter of Israel. But, on politics, you have me about 180 degrees wrong. I despise Wall Street. The more I learn, and I had ample opportunity for that while working for the hedge fund, the more I consider most of Wall Street to be a criminal conspiracy. And, in fact, Romney took great advantage of that criminal conspiracy to buy private companies, cut some costs, put lipstick on the proverbial pigs, and have Wall Street help those companies put it back on the public market. I short-sold Burger King, which was something that Bain privatized and then took public again. I could not figure out how the company, after I short-sold, continued to report robust sales and profit growth, when I could see that McDonalds was kicking its ass up and down the block. I finally capitulated, admitting that I must have been wrong about it, perhaps by relying too much on anecdotal evidence. But, over time, the real truth, as opposed to the phony accounting-chicanery-truth, emerged. The stock tanked, another private equity firm took it over, and we will go through the same process enabled by Wall Street once again.

So, you definitely have me wrong on Wall Street and I can cite a dozen other examples of Wall Street criminality and, in fact, since I trade actively, can see it on levels in which you could would never imagine. No, in fact, one reason I dislike Obama is that he, too, has become a puppet of Wall Street. Not only did banks receive a bailout, but they received front-door, back-door and side-door bailouts as well. Most people have no clue as to the extent of the bailout. Even the ultra-low interest rate policy, at some point, serves no purpose other than to allow banks to borrow at 0% and put the money into Treasury bonds with implicit support from the Fed to keep Treasury yields from spiking, i.e., free money for banks. If I could start a bank tomorrow, take deposits at 0% and buy Treasuries, I would.

Yes, I understand that politicans are bought and sold by corporate interest these days, with Wall Street purchasing both parties, and oil and gas purchasing the Republicans. But, although I have a friend who makes fun of me for having given Obama money TWICE, I don't believe I was ever snookered by him. I don't believe in God or lesser gods on earth. I did not believe that Obama was the savior of the modern world. What I did believe was that, for whatever reason, he had won over the hearts of the American people (other than the racists), and had a political as well as psychological mandate to do great things. But, instead, Wall Street beckoned and the Republicans intimidated, and instead of demonstrating leadership, he started to plot and plan his re-election.

So, here is where I stand now on the US, and much is backed by my training and knowledge as an economist. I believe that the US has become a hopeless case. It started with Reagan, who, after teaching us to unlearn the lesson of Vietnam by calling it a "noble cause," proceeded to teach us (and we were so willing as a people to embrace) that making lots of money was noble, in fact, almost godly, no matter how you made the money, so long as you did not get caught and wind up in the slammer. So, the reigning principle was that anything that made money was good so long as you did not get caught.

Bush I, in restrospect, was relatively benign. Clinton gave us complete control by Wall Street, thanks to the likes of Rubin and Summers, who, of course, was embraced by Obama, too, along with that horrible Geithner. We also had to deal with the Great Emperor with no clothes, Greenspan, who, after suspecting a stock market bubble, decided that, in fact, the stock market was merely responding to his "wizardry," pre-Harry Potter, and that it was therefore all justified. And, then, after bubble was burst, decided to replace it with a real estate bubble.

And, while I am on the subject, the North Koreans got the bomb because of Clinton, not because of Bush. Clinton, who was concerned with appearance over substance, was easily con-able into signing agreements that the North Koreans had no intention of honoring, and then not wanting to the writing on the wall as it was being written.)

So, you take Reagan, who replaced logical thought with "feel good" thought, add Greenspan, the father of the bubble, and then you add Bush II, the worst president in history, and it leaves you really needing a transformative figure to reverse the horror show that had become the US. And, Obama found himself in the position to be that person, but was consumed with his re-election practically the day he took office. So, we have had another Clinton-like, Republican-lite presidency when, unlike Clinton, we could no longer afford to fiddle while the US burned.

The American people, as result, have not been transformed. Our economy still depends on an unsustainable way of life of overconsumption that we can no longer afford, while Bernanke tries to prop up stock prices so that we continue to overconsume. Our entitlement programs are out-of-control, and Obama's great contribution to that argument was to try to make a game-changing agreement with the Republicans in which he would maybe delay Medicare coverage until 70, while doing nothing to bring down health care costs and/or make private insurance more affordable, since he caved completely and immediately on single-payer. All I can say is that, thank God, the Republicans were so stupid that they refused a deal that would have savaged Obama's liberal constituency.

So, here I am. Iran is getting a bomb. Even if Romney does not feel warm and fuzzy over Israel, Republican politics, if nothing else, makes it more likely that he will attack Iran. And, yes, I am for the US attacking Iran, because I do not see Israel as being able to get the job done, and I see WW III if Israel does attack Iran.

At one point, I mused about a Great Compromise between Obama and Israel in which Israel agreed to stop all settlement building outside of East Jerusalem TOMORROW for a quid pro quo that Obama would take care of Iran. But, it is not happening.

Am I happy about settlement building? No, although I do not think that all settlements were created equal. I find the settlement building provocative and biting the American hand the helps feed Israel, even if I do not necessarily disagree with some of the settlement activity, especially in East Jerusalem, which I do not think that the Palestinians are entitled to as their capital. Having said that, I believe that is something that is up to the Israeli people, and not armchair American Jewish quarterbacks, since I and mine will not be dying to keep East Jerusalem. And, of course, the Palestinians were offered East Jerusalem under at least Ehud Barak, and seemingly Olmert.

If Israel has a hard-liner as PM now, it is because of the Palestinians themselves. Israel is a democracy that was responding to Palestinians intransigence. And, if the Palestinians ever learn to play nice, they will once again see a dovish Israeli PM. But, they have to spend some time in limbo on good behavior and find, somewhere among their heap, a real leader, as opposed to a real terrorist (Arafat) and a cowardly waffler (Abbas).

And, no, I don't trust Obama to "have Israel's back." He has proven himself to be most untrustworthy. Israel will change back to a more dovish government when Palestinians grow up a little. But, right now, the problem is not peace with the Palestinians, it is Iran with its henchmen Hezbollah and Hamas on two of Israel's borders. Just a dirty bomb in the hands of the those two is a very bad prospect for Israel and hardly mitigated by MAD [Mutual Assured Destruction] theory.

Yes, Obama fell way short of his potential. I don't think, though, it was because he was focused on reelection, though contributions he got from Wall Street certainly played a role, particularly in who he chose for his economic team. I think his formative life experience was being editor of Harvard Law Review and surprising everyone by making peace in a bitter conflict between left and right, so he thought, wrongly, that he could do the same in Washington. Other than that, his big mistake was in thinking of being President as being a matter of making deals with Congress, rather than getting voters on his side (or at least telling them what the hell was going on).

I know Larry Summers slightly, so I cut him a lot more slack than most people do. He may have been Rubin's protege on Wall Street, but he is first and foremost an academic economist. (Took some flak as President of Harvard, btw, for being outspokenly pro-Israel.) The latest I've heard is that it was Geithner who insisted that all the counterparties, if I'm using that word correctly, get 100%.

I think Reagan's biggest sins were (1) destroying the consensus that budgets should be more or less balanced in normal times, (2) legitimating the attitude that government can't do anything, is staffed by lazy incompetents, etc. It's still hens' teeth to find a politician who will say anything good about bureaucrats. (Though this is partly due to politicians' wanting to shift the blame for laws they passed.) 

Greenspan had two big contributions to our current problems, neither of which is monetary policy. One was his belief that market forces could regulate Wall Street (followed by his "oops" moment). The other was his saying that the Bush tax cuts were perfectly OK, in fact a good thing, lest the economy run out of government debt.

You may be right about Clinton and North Korea, but as I recall, Bush and his neo-cons decided to show how tough they were by refusing to deal with North Korea anymore, and we saw how well that worked out. Quite possibly there was no way to stop North Korea. That doesn't stop people from second-guessing and saying, "If I'd been in charge...." Talk is cheap.

Our entitlement programs are out of control for one reason, that health care costs are out of control. Obamacare actually does some good on that, though not enough. Republicans have transformed the health-care problem into an "entitlement problem". Actually, of course, the 60% or so of costs that go through the private sector have the same effect on people's disposable income as the part in the public sector, even though one is called "consumption" and the other "government spending". By calling it an "entitlement problem", Republicans can imply without saying that the problem is really Food Stamps and minorities. They can also offer a plan to deal with it that does nothing about health care costs and cuts the budget by shifting Medicare costs above a cutoff back onto recipients, then attack Obama for making "cuts" to Medicare.

I have no objection in principle to attacking Iran. I just doubt that at this point the likely consequences-- Hezbollah attacks on Israel, terrorist attacks on Americans worldwide, increased world support for Iran, increased Iranian support for the regime, closure of the Persian Gulf-- are worth it just to kick the can down the road two or three years. What then? If Iran wanted Hezbollah to have a dirty bomb, they could give it to them now. Is that less or more likely to happen after the US attacks them?

You don't have to tell me that the Palestinians shape Israeli politics. I was there in the late nineties, when the Israeli public believed that peace was coming, and then the second intifada cut off the Israeli left at the knees. The trouble with Arafat wasn't that he was terrorist, as if that's some kind of unchanging characteristic like eye color. The problem was his cowardice and completely self-seeking behavior: "I must follow the people, for I am their leader." I often say that the reason the Jews have a state and the Palestinians don't is that the Jews had Ben-Gurion and the Palestinians had Arafat.

At the time of the second intifada, I thought that the appropriate response would be to draw a line down the middle of the West Bank, annex everything west of the line, and say the Palestinians could have it back when they made peace. The problem is, that's not what the settlers (and no, they're not all alike, I mean the movement) want-- they want the Arabs out, and intend to push them out through harassment, intimidation, and if necessary murder. By supporting the expansion of settlements, the Israeli government is saying that it has no intention of leaving the West Bank. So, if you're a Palestinian, why negotiate? What's to negotiate about?

Again, Israeli politics responds to what the Palestinians do, and Palestinians have been dumb and self-destructive. But the influence runs both ways. Actually, Israelis influence Palestinian politics as much as vice versa. For all of Netanyahu's bleating about not having a partner for peace, it's not obvious that the Palestinians do either. And it's certainly not obvious that subjecting them to more years of petty humiliations is going to make them more inclined toward peace. In any case, expanding the settlements makes no sense regardless of what the Palestinians do. 

I'm not sure why you say that Obama is "most untrustworthy"... are you talking about the Middle East or Wall Street? If the former, I can't think a single thing he has done or said that hasn't been US policy for decades. I myself would have talked a lot tougher to Netanyahu (and the Palestinians) than he has. But anyone who tells both sides the truth will be cast into the darkness by the AIPAC crowd. In any case, what US politician does have Israel's back, and what does that mean anyway?

I certainly can't see how Romney is more trustworthy in any way than Obama. He seems completely devoid of political beliefs, and has hardly uttered a true sentence since the campaign began, starting with his first campaign ad. You seem to be saying that you're just going to worry about Israel because things couldn't get any worse in the US. But that's an overly optimistic view-- things can easily get worse. A US where any attempt to rein in Wall Street is completely abandoned, where any attempt to either control health costs or cover everyone is completely abandoned and every health insurance company is based in South Dakota, where there are six right-wing judges on the Supreme Court, where the top 0.1% scoop up an even larger share of GDP, and where the intolerant and anti-scientific rule the roost-- that would be lot worse.

Friday, July 20, 2012

What Do AIPAC and the NRA Have in Common?

The NRA provides voters who care about guns with a single summary measure of politicians' stand on issues related to guns. But many of these voters have no idea that the organization's positions are actually far more extreme than the voters' own. As a result, the organization has great political clout, and can intimidate politicians into supporting extreme positions, lest they be labelled "anti-gun."

Substitute "Israel" for "guns," and you've got AIPAC. Interesting phenomenon.

The Real Scandal Is What's Legal, Colorado Div.

From The New York Times:

Another law enforcement official said that information investigators had obtained about the purchase of the AR-15 rifle indicates that it was bought locally and apparently legally, as were the other guns, adding, “there’s nothing nefarious there.”

Friday, July 13, 2012

How to Save American Democracy. Really. No Kidding.

The perennial issue of money in politics is back with a vengeance this year. We have seen Republican primaries where money from corporations and the very rich has had a decisive impact. This trend is particularly worrisome to Democrats, of course, who can expect to get the short end of the stick from large contributors, and who have begun looking around for solutions.

The approach that's now popular among Democrats is a Constitutional amendment saying that corporations do not have a Constitutional right to free speech, thereby making it possible to restrict their political spending. This approach has been advocated by Nancy Pelosi, several Democratic senators, and others.

But there are a couple of obvious difficulties with that solution. First of all, it's not serious; nowadays it’s wildly implausible that anything controversial could get the votes of two-thirds of both houses of Congress and three-quarters of state legislatures. Second, even if that happened, it would leave untouched the ability of a small number of billionaires and hundred-millionaires to drown out the opposition.

In fact, the whole approach is wrongheaded. The most effective cure for the problem of money in politics is... more money in politics. The real issue is not that billionaires and corporations are giving too much money; the real issue is that they are giving too much relative to everyone else. Instead of relying on support from the voters, politicians have to court big donors, because that’s where the money is.

Yet economy-wide the amounts of money involved are not very large. According to the Center for Responsive Politics, expenditures on all Federal elections totaled about $9 billion in 2008 and 2010 combined. Meanwhile, U.S. GDP over the four years from 2007 to 2010 was more than $56 trillion.

So how do we tap the power of small contributors? Here’s a simple way: Every taxpayer gets up to a $100 tax credit (not deduction) for political contributions. This means that contributions up to $100 have no net cost to the taxpayer. The credit could be refundable so that those with no tax liability could still get it.

In 2010, there were 143 million tax returns filed in the U.S. Suppose that, after some period of adjustment, 50% of filers take advantage of the opportunity to make political contributions of $100 at no net cost to themselves.

That comes out to $7 billion a year (somewhat more if we give two credits to joint filers), or $28 billion over a four-year election cycle. Even allowing for state and local elections, it is clear that the hundred-dollar contributions would dwarf everything else.

Over the years, we have devoted a huge amount of energy to trying (in vain) to keep money out of politics. It's time to stop. If we get enough small contributions, we won't need to worry about keeping money from billionaires out. It just won't be very important anymore.

It becomes plausible, in fact, that a Senator or Congressman could get reelected with no special-interest money, and without devoting huge amounts of time to fundraising. Instead, legislators would have to spend more time on appeals to constituents.

Voters’ relation to the political process would be different, too. Political contributions today are the province of a small minority of the electorate, and voters justifiably feel that their own voices are less important than those of big donors. This would change, not so much by raising the importance of individual voters (that’s always going to be difficult, given the large number of individuals) as by lowering the importance of big donors.

And politically this plan seems far more achievable than a Constitutional amendment. It would only require a simple majority (or three-fifths in our modern Senate). While Republicans are likely to be unenthusiastic, it will be hard for them to come up with an ideologically consistent and politically compelling argument against tax credits.

As to how we pay for this, it hardly matters. We could tax an additional 1% of the income of the richest 0.1%. Or we could just say that the national debt will go up by an additional 0.05% each year. I don't think future generations will mind.

Saturday, July 7, 2012

The New York Times Finds a New Synonym for "Lie"

Delicate Pivot as Republicans Blast Rivals on Medicare Cuts

WASHINGTON — For much of the past year, Republicans assailed President Obama for resisting the Medicare spending reductions they say are needed to both preserve health benefits for older Americans and avert a Greek-style debt crisis. Representative Paul D. Ryan, the House Republicans’ point man on the budget, has called the president “gutless.

Yet since the Supreme Court upheld the Democrats’ 2010 health care law, Republicans, led by Mitt Romney, have reversed tactics and attacked the president and Democrats in Congress by saying that Medicare will be cut too much as part of that law.


...the $500 billion in reductions would come through cuts in the projected growth of Medicare and would mainly affect hospitals and other providers of medical care, some of whom supported the health care measure nonetheless because it would extend coverage to up to 30 million uninsured Americans, raising the number of paying customers. Other savings would result from lower subsidies for private insurers selling Medicare Advantage plans, which offer older people extra features like vision care and gym memberships. The insurers could not cut basic Medicare benefits. 

Democrats used the projected $500 billion in savings to help pay for expanding older people’s benefits. The health care law says that some preventive care services like mammograms must be free to patients, and it closed the “doughnut hole” in the Medicare prescription drug program, which had left many older people paying full price for prescriptions above a certain level.

--NYT, June 6, 2012

I don't think it's too much to say that this article exemplifies what's wrong with American journalism. There are two ways to control Medicare costs: by reducing benefits or by controlling medical costs. The Republicans have chosen the first, the Democrats the second. Now Republicans are desperately trying to muddy the waters. Yet the Times is too delicate to make the story about the truthfulness of the claims, so it's about how the Republicans have "reversed tactics." Elsewhere, they say, "The result is a messaging mess...

A messaging mess? Really, New York Times, who cares? Your foremost responsibility as journalists is not to give us knowing insider stories. It's to help us distinguish fact from fiction.

Wednesday, June 27, 2012

Egypt and California

Democracy is trickier than people think. The boring parts, like voting systems, turn out to be really important.

Good news: Egypt finally has an elected president. Bad news: He's what people had in mind when they invented the phrase "the lesser of two evils." He is a pretty hard-line Islamist; he ran against the last prime minister of the now-ousted President Mubarak. Neither candidate represents what a lot of those in Tahrir Square thought they were fighting for. How did this happen?

Egypt had a presidential primary, in which these two candidates were the top vote-getters, with 25% and 24% of the vote, respectively. The next three candidates, all more moderate, got 49% of the vote collectively. What we have here, in short, is the familiar problem of vote splitting, where all the moderate candidates are saying, "Get out of the race?? No, you get out the race."

To be more analytic about it, there's a result in political science known as the "median voter theorem." It says that, given certain assumptions, the candidate who gets elected is the one whose position on the issues is closest to the position of the center of the electorate. The intuition is not difficult: if you have one candidate in the center and one on, say, the right of center, the one at the center will get the 50% to the left, plus those who are on the right but close to the center, and will win.

Here's the thing about the median voter theorem: it only works in a two-candidate race. For more than two candidates, candidates with extreme positions can sometimes win, as in Egypt.

So what happened in Egypt was not a problem with democracy. It was a problem with a particular electoral system.

Today, the primary system used in Egypt seems like the obvious and intuitive one. But the ancient Greeks used negative voting, where the person with the most votes lost (specifically, was exiled). The medieval Venetians used approval voting, in which electors vote for all the candidates who are acceptable, and the winner is whoever gets the most votes. Then there is instant-runoff voting, known in Britain as alternative voting, in which voters rank the alternatives in order of preference. Any one of these systems would probably have changed the outcome of the election, and thus Egyptian history.

The Egyptian system, of one big nonpartisan primary, is known in the U.S. as the "jungle primary," which, under the rubric "top-two primary",was recently adopted in California. It was intended as a way of favoring more centrist candidates than would be produced by a party-primary system. California just had its first top-two primary, for Diane Feinstein's Senate seat. It was a bit of a circus: there were more than twenty candidates, and Feinstein got 49.5% of the vote. (Even if she'd gotten over 50%, there still would be a runoff.)

How did they do at avoiding extremism? There was some speculation that Orly Taitz, the Queen of the Birthers, might come in second, but in the end she placed fifth. The second-place finisher was Elizabeth Emken, a Republican who is a former vice-president of Autism Speaks.

So the jury is still out on how well the top-two primary works. But the example of Egypt is unsettling.

Monday, June 18, 2012

This Month's Irritating New Journalistic Tic

All of a sudden, everyone is using "the food chain" to dress up plain sentences.  Here's an example from a recent issue of The New York Times article about China: "The secrecy, Ms. Sapio said, is intended to shield the public from details that might harm the party’s image and to limit any collateral damage to those higher up the food chain." Does this add anything to just saying "to those higher up"? It gives it a certain patina of cynicism--it's a fish-eat-fish world out there--but since the higher-ups are not in fact eating their subordinates, even figuratively, it doesn't actually mean anything.

Wednesday, June 6, 2012

Piercing the Government Veil

David Brooks got all huffy in The New York Times recently about the Occupy Wall Street folks. He says they wanted to raise taxes on the rich, and he thinks that's not enough to do something meaningful about the deficit.

When you've got one percent of the population getting almost a quarter of the income, it's simply not true that there's no money out there. And the most recent year where data is available, 2009, happened to be the year the stock market really dove, and so a bad year for the rich. But all this is beside the point.

The OWS people weren't just talking about the changes in the distribution of income. They were talking about changes in the distribution of wealth, which is even more unequal than the distribution of income. This doesn't register with Brooks, because how does that affect the Federal government? The feds don't tax wealth. (The very prospect sends a chill down the spine of right-thinking people, though local governments do it all the time, at least for real property.)

It strikes me that this is an interesting example of how public conversation often gets sucked into talking about how policies affect Government as a thing, rather than how it affects individuals.  Take one of Brooks's favorite worries, Medicare. The threat to the economy is not Medicare. It's increases in health care costs--no matter who pays them.  Confusion about this leads Brooks to praise the courage of Paul Ryan's budget plan, which does nothing about rising health care costs and simply puts a cap on the government's contribution.

The belief that costs borne by government are somehow more real than those borne directly by citizens also shows up in journalists' accounts of how Europe is groaning under the burden of its generous social programs.  For example, they have universal health insurance. Yet it turns out that every European country spends a lot less than we do on health care. This is an economic advantage to them, not us. It looks like a burden to them because in countries like France, virtually all health care costs end up in the government's budget, while in the U.S. only about half do. But those are real costs, no matter who pays them.

Similarly, Republicans who want to scare you about the costs of Obamacare will sometimes suggest that it will cause large numbers of employers to drop their health plans and dump their workers in the exchanges. Never mentioned is the fact this will drastically reduce labor costs and improve competitiveness for businesses. The only question then is who should pay for the increased costs to the government.

Economists will point out that there is a second-order effect when raising taxes: higher taxes impose an additional efficiency cost on the economy by distorting people's choices away from the taxed thing. But to a first approximation, costs are costs. They don't suddenly disappear by shifting them out of the Federal budget onto individuals, businesses, or state and local governments. And they aren't always shifted through the tax system.

Monday, June 4, 2012

Happy Families Are All Alike, Even in Afghanistan

From The New York Times:

The conflict over the project, known as Aino Mena, has provoked accusations of theft and extortion, even reports of an assassination plot.

“It’s family,” Qayum Karzai said. “They get upset, and over time they get over it. I hope they get over it.”

One Karzai brother is also said to have imprisoned a longtime Karzai aide in an effort to make him disclose the whereabouts of money and assets that relatives suspect were hidden by Ahmed Wali Karzai, another of President Karzai’s brothers...

Wednesday, May 23, 2012

Monday, May 21, 2012

Greek Power (Not a Post About Fraternities)

I don't know much about international macroeconomics, to put it mildly, but I know a little about game theory. So I've been puzzled by the way the Greek government just let the Germans roll over them in the euro crisis. Not exactly Spartan, except in the life they were signing up for.

The story in brief: Greece, having run up big budget deficits and lied about it, needs to get money from the rest of Europe (which basically means Germany) to avoid defaulting on its debt.  Germany has said OK, on the condition that that Greece make savage budget cuts, which have tipped Greece into a real live depression. The questions are (1) how much to ease up on Spartan austerity, and (2) whether Germany should be asked to do anything  that might ameliorate the situation (such as following a more expansionary fiscal policy itself, or even allowing a little more inflation in Europe). Germany's answers appear to be (1) not at all, and (2) no.

The conventional interpretation is that it's a simple application of the cynic's golden rule: he who has the gold makes the  rules. Germany has the money, Greece needs the money, end of story.

But does Germany really have all the power here? One way to evaluate the balance of power is to look at how well Greece does with and without Germany's cooperation, and compare that to how well Germany does with and without Greece's cooperation.

Skipping over details, here's the choice. Alternative A: Germany bails out Greece, in return for savage austerity (think Great Depression). Alternative B: Greece defaults and, presumably leaves the euro. Greece then has a very hard time borrowing money to pay its bills, and Greeks are furious when they see that their savings are worth a lot less in drachmas than in euros. Let's assume that Alternative B is perceived  by the Greeks as somewhat worse than Alternative A.

But consider how it looks from Germany's perspective. Alternative A: Germany goes on pouring (some) money down a (small) rathole. Alternative B: German banks take a (smallish) hit on loans to Greece. Greece leaves the euro. Speculation, in both senses, arises over whether Spain and Italy will be next. Since those two countries together are bigger than Germany, and more than ten times as big as Greece, bailing them out starts to look problematic. There's a good chance of panic about lending to countries on the European "periphery," which leads to those countries' having to pay much higher interest rates, which increases budget deficits, leading to more defaults, which end up breaking up the euro altogether, with unknown consequences for the whole idea of European unity.

Looked at this way, it seems clear that Alternative B is a lot worse for Germany than Alternative A. This means that Greece has some bargaining power if it threatens to default. Default would be bad for Greece (let's assume), but also bad for Germany. There's a strong resemblance to a game of Chicken, with each side trying to bluff the other: Greece trying to convince everyone that default is an option, Germany trying to convince everyone that it's not.

Recent elections in Greece, where the two main parties were thrashed, of course strengthen Greece's bargaining power. As in any game of Chicken, it is helpful, though risky, to be able to tie one's own hands. If you're driving toward a head-on collision with some who has disconnected his steering, you will (probably) swerve before you crash. In this case Greece's negotiators get more leverage from being able to say, "I see your point of view, but my people will never go for that."

A few final words about Germany's tendency to moralize about how Greece screwed up and should pay the price. After World War One, the Allies imposed harsh reparations on Germany in the Treaty of Versailles. These are generally considered to have led to economic depression in Germany and thence to the rise of Hitler. So at the end of World War Two, the Allies decided not to repeat their mistake, and the U.S. established the Marshall Plan instead, even though Germany's responsibility for the devastation of Europe was if anything greater than in the previous war. It's ironic that it is Germany that seems most willing to engage in finger-pointing, and least willing to learn the lessons of Versailles.

Friday, May 18, 2012

We Are Everywhere

The New York Times ran a story Friday about crony capitalism in China, in which family members of high-ranking Party officials get involved in big investments by foreign companies. Obviously these family members are trying to make their foreign partners comfortable: the son of a former prime minister, now CEO of one of China's largest investment banks, calls himself Levin Zhu. Will his grandson be named Hymie? Stay tuned.

Friday, May 11, 2012

Tragically Unhip

If I just heard Andrea Mitchell correctly on MSNBC:

British Prime Minister David Cameron sent a message of condolences to his friend Rebekah Brooks when she had to resign as editor of the News of the World over the phone-hacking scandal. Oddly, he signed the message "LOL." LOL? That seems a cruel thing to say in a message of condolences. It seems he thought that meant "lots of love." LOL.

Wednesday, April 18, 2012

People, Not Places

Back around 1990, there was much talk among political commentators about the Republican "electoral lock" on the White House. The idea was that Republicans had won the last three elections relying on a solid bloc of votes in the Sunbelt. Many of these states had gone Republican all of the last five elections. Moreover, their electoral significance would continue to rise, as they were growing rapidly in population while Democratic strongholds were shrinking. So the situation would only get worse.

To anyone who bothered to think about it, it was obvious that this was nonsense. Places don't vote, people do. If a lot of people are moving from Democratic strongholds to the Sunbelt, the normal assumption would be that the Sunbelt is becoming more Democratic. People don't check their politics at the door when they move, or get a new party registration when they close on a house.

And so it turned out. When Clinton ran in 1992, the Republican electoral lock was nowhere to be found. Clinton won both the popular vote (a plurality) and the electoral vote.

Now this thinking seems to be making a comeback. In a column in Tuesday's New York Times, Timothy Egan talks about how Karl Rove's strategy for a "durable Republican majority" is being undone by demographics. Rove's plan included a focus on the "exurbs," fast-growing areas located far from city cores. But now central cities are growing faster than exurbs, and, since central cities are Democratic territory, this is bad news for Republicans. See the fallacy?

There are, of course, some legitimate reasons why city residents might vote differently just by virtue of being  city residents. They're likely to be less concerned about gas prices, for instance, and more concerned about support for public transportation. But that's a long way from changing one's party affiliation.

There are also real demographic trends that are worrisome for Republicans. They do badly among young voters; since people tend to stick to the way they voted in their first few elections, this is a long-term problem. They also are unpopular among non-Cuban Hispanics, and there's no obvious reason why new voters in this fast-growing group would like them better than old voters. But these are people trends, not place trends.

It may be true, as Egan seems to believe, that "demography is destiny." But geography is not demography.

Monday, April 16, 2012

Defending Marriage?

One thing that's odd about the anti-gay-marriage discourse is that it's so often phrased as a "defense of marriage," as in the Defense of Marriage Act, which bans any Federal government recognition of same-sex marriage. Why "defense of marriage"?

Granted, a title like the Guys Kissing Is Gross Act would lack a certain gravitas. But are people really lying awake at worrying about the state of marriage? I decided to look into what effect gay marriage was having on divorce rates.

Unfortunately, the Census Bureau's 2012 Statistical Abstract only has data up to 2009, and at the beginning of 2009 only Massachusetts and Connecticut had same-sex marriage. But it's still interesting to look at the pattern that emerges. States that currently have same-sex marriage are shown below in italics.

Divorces per 1000 people, 2009
West Virginia  
New Hampshire 
United States
District of Columbia
New York

Of the six states that had the lowest divorce rates in 2009, five now have gay marriage. Of the six states with the highest divorce rates, four now have constitutional prohibitions of gay marriage (West Virginia and Wyoming have statutory prohibitions).

What are we to make of this? Beats me, but maybe people in states where marriage is weakest are most concerned about defending it. If so, I doubt they're following an effective strategy.

Sunday, April 1, 2012

L'Esprit d'Escalier, Supreme Court Edition

It's French for "staircase wit," meaning all the clever remarks that occur to you immediately after you leave the party. Not being notably quick verbally, I can sympathize with Solicitor General Verrilli for sometimes having trouble, at the Supreme Court's recent health-care jamboree, fielding questions from out of right field. Herewith, some wittier answers.

JUSTICE SCALIA: Could you define the market -- everybody has to buy food sooner or later, so you define the market as food, therefore, everybody is in the market; therefore, you can make people buy broccoli.

CLARITAS: [All the law students listening to the audio have a drink at the first mention of broccoli. Some of them will end up under the table; the index to the transcripts lists eight occurrences of the word.] No, Justice Scalia, that would be a good analogy if the health care law said that people had to have heart transplants, but it doesn't.

JUSTICE SCALIA: Mr. Verrilli, you could say that about buying a car. If people don't buy cars, the price that those who do buy cars pay will have to be higher. So, you could say in order to bring the price down, you're hurting these other people by not buying a car.

CLARITAS: No, we're saying that by not buying insurance, they're shifting costs onto other people, just like when a car doesn't have pollution control equipment. There's been an extraordinary amount of energy devoted to the claim that this law is completely unprecedented, that it's making people buy a product, that it's regulating "inactivity." Actually, it's no different from when the government makes drivers buy catalytic converters, which is clearly Constitutional. The only difference is that people can, in theory, choose not to drive, but everyone uses health care. 

It's also true that the problem is worsened by not allowing insurance companies to exclude people for preexisting conditions, which leads to higher prices, but it's hard to think of a car analogy there.

GENERAL VERRILLI: No. It's because you're going -- in the health care market, you're going into the market without the ability to pay for what you get, getting the health care service anyway as a result of the social norms that allow -- that -- to which we've obligated ourselves so that people get health care.

JUSTICE SCALIA: Well, don't obligate yourself to that. Why -- you know?

CLARITAS: Justice Scalia, since you've said you'll resign if there's ever any conflict between your duties as a justice and your Catholic faith, I hope it's not true that your best solution to this Constitutional question is, "Let 'em die!"

JUSTICE SCALIA: An equally evident constitutional principle is the principle that the Federal Government is a government of enumerated powers and that the vast majority of powers remain in the States and do not belong to the Federal Government. Do you acknowledge that that's a principle?

CLARITAS: So what you're saying is that the Constitution reserves to the states the power to make people buy broccoli?

Sunday, March 18, 2012

More Republican Contempt for Women

From The New York Times:

"This year, Mr. Adelson gave $10 million, along with his wife, to support Newt Gingrich’s presidential campaign."

Thursday, March 15, 2012

Thinking About Oil Prices

I talk often on this blog about how political debate would be much improved if people were acquainted with a few simple facts. But the discussion of oil prices requires even less: just the application of some thought.

1. Premise: Oil is sold in a free market. Therefore,

2. It will be sold wherever in the world the price (net of transportation) is the highest. Therefore,

3. Big disparities in price around the world cannot exist for long. Therefore,

4. There will be a single world price for oil. The price for Americans will be the same as the price for everyone else. Therefore,

5. Increased production and reduced consumption in the U.S. affect the price to Americans only to the extent that they affect the world price.

As logical as this is once you think about it, it's hard to give up the view that it's our oil, so if we pump more of it, we'll have more, and won't have to worry about what foreigners are doing. Alas, not true. Oil we pump becomes part of the world market, financially if not physically. That is, the oil will stay here only if prices here are as high (net of transportation) as prices elsewhere.  When world oil prices rise, prices here must rise as well. Therefore,

6. "Energy independence" is a myth. Even if the U.S. had no net imports, an increase in world oil prices would raise the price to Americans, hurting consumers and helping producers. Conversely, new production in Libya or the South China Sea has approximately the same effect on the U.S. price as new production in  the Gulf of Mexico.

So why all the brouhaha about increasing production in the Gulf of Mexico? Making production easier in the Gulf of Mexico certainly helps Americans. But it's a big help to the Americans involved in oil production, and hardly any help to those filling up at the pump.

Friday, March 2, 2012

Who Owns Our Debt?

I am constantly surprised by how much of the political discussion in this country is based on beliefs that are simply and demonstrably factually wrong. As a social scientist, I find it inexplicable that no one makes much effort to fix this, not even politicians (I'm looking at you, Mr. President) whose political interests would be served by people knowing the facts.

Take America's national debt, for example. We've heard a lot about how it's all borrowed from China, and how at any time they could decide to stop lending us money and then where would we be?

So how much of our national debt would you guess that China owns? Thirty percent? Fifty? Seventy?

Here are some figures (Table OFS-2):

Total debt, June 2011, in billions:
  Owned by US govt.(incl. Fed. Reserve, Soc. Sec. Trust Fund)
       6,220     43.4%
  Privately held                                                                            
       8,123       56.6%
                       4,501      31.4%
                                     1,166        8.1 %

That's right, China owns 8 percent of our debt. Foreigners in total own just over thirty percent. And the U.S. government owns more than 40 percent.

Tuesday, February 28, 2012

Fake Libertarians

The MSNBC commentator Lawrence O'Donnell recently called Ron Paul a "fake libertarian" because of his stands on sex and abortion, evoking predictable outrage from Paul fans on the Internet. Now, I'm not totally convinced by O'Donnell: a libertarian who believes abortion is murder would surely favor outlawing it, and a moralistic prig can be a libertarian as long as he doesn't impose his views on anyone else.

Much more troubling is Paul's pretentiously named and ludicrously unconstitutional We the People Act, which among other things would bar federal courts (including the Supreme Court) from adjudicating any claim based on "the right of privacy, including issues of sexual practices, orientation, or reproduction."

The subtext here is not only Roe v. Wade, but also Lawrence v. Texas, which struck down the Texas law against sodomy and is still a sore point among Texas Republicans. But how can a libertarian be against a right to privacy? Paul's response is that such a right is not found in the Constitution.

This is an odd argument for a libertarian to make. The Ninth Amendment (part of the Bill of Rights,of course) says, in its entirety: "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people." One would think that this view of rights--that they inhere in the people, rather than being conferred by the government--would be popular with libertarians. So is Paul a fake libertarian? What's he after here?

The problem is not really that Paul is a fake, by the standards of American libertarianism. The problem is the fundamental phoniness of American libertarianism. It claims to stand for individual liberty and against government interference in our lives. But it sees no problem in state government interference in our lives. Libertarianism is much more about keeping the Federal government off the backs of the states than keeping the states off the backs of the people.

Take a look at the other things that Federal courts would be specifically barred from adjudicating under Paul's bill: "the right to marry without regard to sex or sexual orientation where based upon equal protection of the laws," and, of all things, "state or local laws, regulations, or policies concerning the free exercise or establishment of religion." In other words, keep your Federal hands off my city's hundred-foot cross. And its practice of reciting the Lord's Prayer in public schools. And if we want, we can declare Christianity the official religion of Texas, or outlaw the practice of Islam. Does that sound like individual liberty? More like collectivist tyranny.

Unfortunately, libertarianism has identified itself with the cause of states' rights, and to say the least that's not a cause that has ever been very friendly to liberty. Don't call them "libertarians." Call them "statists."

Wednesday, February 8, 2012

Note on Contraception

You've probably heard about the brouhaha and hoo-hah that followed the decision by the Department of Health and Human Services to require religiously-affiliated employers (but not churches) to cover contraception in the health insurance it offers to employees. The Catholic Church, as you might expect, is quite exercised about this; in fact, the bishops sent out a letter to be read at Mass denouncing it.

Without getting into a long discussion, let me just make a secondary point. It is simply incorrect to say, as right-wingers have been doing, that the "morning-after pill" is an "abortion pill". The morning-after pill works by the same mechanism as conventional birth-control pills. It prevents ovulation and fertilization. It may also prevent implantation of a fertilized egg. If you, like the Catholic Church, regard a fertilized egg as a fetus, then you could call it an "abortion-inducing drug" as the bishops' letter did, but only if you're willing to make the same statement about ordinary birth-control pills.  (The bishops' letter doesn't specify which drugs they're talking about.) The bishops are doubtless willing to say that birth-control pills should be illegal; is Rick Santorum?

And I know this isn't relevant to the moral and constitutional issues, but I do wish the journalist had asked that outraged Catholic woman that I saw on TV this question: "Studies say 98 percent of Catholic women have at some time used a method of birth control other than natural family planning. Are you among the 98 percent or the 2 percent?"

BTW, I've sent an e-mail to the public information office at the Archdiocese of Boston asking for some clarifications about the bishops' letter. They warn that they don't have time to answer all mail, and so far they haven't answered mine.

Monday, February 6, 2012

Pulling the Right Levers

Honestly, why is there so much political ineptitude in the world? Note to anti-Assad Syrians living abroad (none of whom are reading this, I imagine): do not take a couple dozen of your fellow citizens, break into the Syrian embassy and set fire to it, or even demonstrate peacefully outside it. This will have absolutely no effect on the situation in Syria.

Here's something that might: Gather a few thousand people and demonstrate outside the Russian and Chinese embassies.  Carry signs. Chant slogans ("Hey, hey, Hu Jintao, how many kids are you killing now?"). Burn a few flags. Invite journalists, especially Arabic-language TV stations.

Think about whom you're trying to influence and what your levers are. It's not rocket science.

Postcript February 10: Well, Syrians in Syria get it, so perhaps those abroad will catch on. From today's New York Times:

Activists said seven people were also killed in the city when troops fired on anti-government demonstrators drawn to the streets to protest Russia’s support of President Bashar al-Assad. Protesters said the theme of Friday’s demonstrations, which they hoped to stage nationwide, was “Russia is killing our children.”

Thursday, February 2, 2012

Letter to an Expat in Newt Country

A friend writes:

 "Could you please write a blog about how it isn't actually the 'entitlement' programs for the poor that  have gotten us into a recession. I could use some good information to quote down here in conservative FL. "

Wow, where to begin?

1. The Recession

Entitlements had nothing to do with the recession. The recession was caused by a bubble in housing prices (see, for example, Tampa and Miami in the chart), in which banks made loans to people who couldn't afford them on the assumption that housing prices would continue to go up. When prices stopped going up, and then started going down (around 2007), banks were left with a lot of bad loans. To make matters worse, a lot of those loans had been bundled into packages and sold to other banks, so nobody was sure exactly what each bank had. So banks didn't want to lend each other money, for fear that the other bank would go bankrupt. So nobody could get loans, so businesses started having trouble paying employees and ordering new inventory, so people got laid off. Which made everyone cut back on their buying, etc.

Republicans want to believe all this couldn't be the fault of the private sector, so they've got a story involving how Fannie Mae and Freddie Mac, which are "government-sponsored" although privately owned.... oh, forget it. The so-called subprime mortgages, which were mortgage loans to people who couldn't really afford them, were made by the private sector.

2. Entitlements

This is pretty much a scam. Entitlements are basically any program that doesn't require an explicit appropriation by Congress. Everyone says, "We have to do something about entitlements," Mitt Romney runs around  talking about the "entitlement society", and then after the election they say, "You knew we were talking about Social Security and Medicare, right?"

Here are some rough figures:

2010 Federal Spending

Social Security 
$701 billion
  520 billion
 273 billion
"Food Stamps" (SNAP)
   70 billion
"Welfare" (TANF)
   17 billion

Something does have to be done about Medicare and Medicaid, because their costs are going up very fast, but that's because medical costs are going up very fast. The Democratic solution to this is to try to control medical costs. The Republican solution is to accuse Democrats of "raiding Medicare" (because they show smaller cost increases), do nothing about medical costs, and then cap how much Medicare will pay. They thus remove the problem from the Federal budget by shifting it onto recipients. This is known as the "Ryan plan", and its fundamental cynicism is compounded by making it only applicable to people under 55, in the hope that they won't pay attention the way people 55 and over would, and that people 55 and over don't mean it when they talk about their concern about future generations.

3. Other

On the allegedly crushing burden of future debt, don't forget that Ronald Reagan doubled the national debt, and that around 60 percent of the current debt was incurred under the Reagan, Bush I, and Bush II administrations.

If you find yourself getting into arguments with libertarians, try this.

Some Remarks About the Florida Primary

1. In case you somehow missed the exit-polling results for Florida, here are are a few results I found interesting:
  • Gingrich ran eight percentage points worse among women than among men.  "The Daily Show" had a "focus group" of women before the primary, in which it turned out that divorced women hated Gingrich, while married trophy wives liked him.
  • A pretty clear demographic picture: Ron Paul got a remarkable 25% of the under-30 vote (versus 3% of those 65 and over) and almost twice as many males as females. No word on what fraction of Ayn Rand readers he got.
  • The vote for Paul steadily decreased with voter age, while the vote for Newt steadily increased.
  • Romney's remarks about "self-deporting" and Newt calling him anti-immigrant seem to have made no difference among Republicans. He got more than twice as many votes as Gingrich among non-Cuban Hispanics. His margin  among those who thought that illegal immigrants working in the US should be offered a chance to apply for citizenship was about the same (big) as among those who thought they should be deported. (To my surprise, there were more of the former than the latter.)
  • Inexplicably, Romney not only got 72% of those who thought Gingrich's positions were too conservative, he also got 52% of those who thought Gingrich's positions were not conservative enough. Poor Rick Santorum.
  • Romney did better among Catholics than the two Catholic candidates combined.
2. You may have been wondering why Gingrich was nattering on about Saul Alinsky. Most people know as much about Saul Alinsky as they do about, say, Sarbanes-Oxley. But if you're one of those people, you're not part of Newt's key demographic: those who live in the Glenn Beck looniverse. The latter is an alternate reality where America faces threats not only from Saul Alinsky, but from Sigmund Freud, Cass Sunstein, George Soros, Frances Fox Piven, and the coming Caliphate.

BTW, notice anything these people have in common? Hint: it begins with a "J". OK, except for the Caliphate.

Saturday, January 28, 2012

Krzyzewskiville: A Quick Policy Analysis

The New York Times recently ran a story partly devoted to describing a place I was unfamiliar with, Krzyzewski​ville. Named after the Duke University basketball coach (and also known, not surprisingly, as K-ville), it is a tent city that forms as Duke students line up early for admission to the big basketball game against UNC. K-ville has developed a surprisingly rule-governed culture. No tents are allowed before January 15--the big game is on March 3--and tenters are allowed to sleep indoors when the temperature is below 20 degrees F (heaters are banned). At all other times there are middle-of-the-night tent checks.

Let's leave aside the bigger questions that concerned the Times, about how even good universities have been sucked into the vortex of big-time athletics, and look at K-ville as a policy. The first question: why put students through this? Granted that K-ville is now a tradition and has a social aspect, it imposes pretty big costs on students. And those costs are what is known in economics as a deadweight loss: the loss to them is not a gain to anyone else. No one benefits from having students sleeping outdoors.

Why not, then, give away seats by lottery? This avoids the deadweight loss of six weeks in an unheated tent. But there is a slightly more subtle cost: a lottery does not ensure that the seats go to those who value them the most. Since there is little cost to signing up for the lottery, even those with a very modest desire to see the game will sign up, and some of them will get seats instead of more committed fans. From the standpoint of utilitarian philosophy, this is bad because it means that the allocation of seats will not produce as much total happiness as it could. And my guess is that it would be regarded as unfair by the hard-core fans.

So isn't there some way we can select those who really, really want to see the game, without making them waste huge amounts of time? For most goods, of course, there is such a mechanism: money.  Duke could sell tickets at a high price; only those who place a high value on tickets will end up buying them. And there is no waste because what is a cost to the students is revenue to the university (unlike the camping case, where the cost to the students is not a benefit to anyone).

This is the approach generally taken with alumni, businesses, and so on, but it would undoubtedly provoke outrage if applied to students. The problem is that students start with different endowments of money, and we tend to think that the key elements of the college experience--classes, dorms, extracurricular activities--ought  to be available to all regardless of parents' income. Most people would say that cheering for sports teams is one of those elements.

One solution would be to equalize the initial endowments, by giving all entering students artificial scrip money (call it, say, "ducats") that they can use for various things on campus. Students could then choose how to spend their ducats, and those who really, really want to see Duke and UNC play basketball could save up and spend all their ducats on that. Unfortunately, it's hard to think of what other possible uses for ducats could compete with The Game, and those that I can think of (pizza? mixers?) all end up costing the administration money.

My preferred solution goes in another direction: why not take the time now spent waiting in line and use it productively? Announce that any student who wants a seat at the Duke-UNC game must first spend, say, 100 hours (the number could be fine-tuned over time) doing pre-approved volunteer work. This not only separates the wheat from the chaff in terms of interest in the game, but also produces a hundred thousand hours a year of, for example, tutoring for disadvantaged kids in Raleigh and Durham and Greensboro. The program would also broaden the horizons of Duke students, give them an extra line for their resumes that looks a lot better than "Camped out on a patch of grass", send a message to students about what the University considers important, and polish the somewhat tarnished public image of Duke.

Sounds good to me, Duke. Get cracking.