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.”

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.

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.

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.

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.

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.

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...

Headline Whose First Six Words I Misunderstood

From The NewYork Times:

Doctor Who Helped Find Bin Laden 

Given Jail Term, Official Says

Wouldn't it be great, though?

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.