politics isn't about policy
New rules barring public bodies from putting Shetland in a box on official documents have come into force.
Islands MSP Tavish Scott had sought to change the law to ban the “geographical mistake” which “irks” locals, by amending the Islands (Scotland) Bill.
The bill’s “mapping requirement” has now come into force, although it does give bodies a get-out clause if they provide reasons why a box must be used.
Mapmakers argue that boxes help avoid “publishing maps which are mostly sea”.
The Islands Bill, which aims to offer greater protections and powers to Scotland’s island communities, was unanimously passed in May.
Here is the full story, via Glenn Mercer. You can’t call it “racist,”or “sexist,” might someone coin a future term for the objectionable act of…”putting my islands into a box”?
Matt Yglesias writes:
To borrow an idea from Robin Hanson, I think it’s useful to think about political conflict in terms of valorized figures. On the right, you see a lot of valorization of businessmen. On the left, you see a lot of valorization of pushy activists who want to do something businessmen don’t like. Formally, the right is committed to ideas about free markets and the left is committed to ideas about economic equality. But in practice, political conflict much more commonly breaks down around “some stuff some businessmen want to do” vs “some stuff businessmen hate” rather than anything about markets or property rights per se. Consequently, on the left people sometimes fall into the trap of being patsies for rent-seeking mom & pop operators when poor people would benefit more from competition from a corporate bohemoth.
Jerry Taylor has made some positive noises about her on Twitter lately, as had Will Wilkinson in earlier times. I genuinely do not see the appeal here, not even for Democrats. Let’s do a quick survey of some of her core views:
1. She wants to ban fracking through executive order. This would enrich Russia and Saudi Arabia, harm the American economy ($3.5 trillion stock market gains from fracking), make our energy supply less green, and make our foreign policy more dependent on bad regimes and the Middle East. It is perhaps the single worst policy idea I have heard this last year, and some of the worst possible politics for beating Trump in states such as Pennsylvania.
2. Her private equity plan. Making private equity managers personally responsible for the debts of the companies they acquire probably would crush the sector. The economic evidence on private equity is mostly quite positive. Maybe she would eliminate the worst features of her plan, but can you imagine her saying on open camera that private equity is mostly good for the American economy? I can’t.
3. Her farm plan. It seems to be more nationalistic and protectionist and also more permanent than Trump’s, read here.
4. Her tax plan I: Some of the wealthy would see marginal rates above 100 percent.
5. Her tax plan II: Her proposed wealth tax would over time lead to rates of taxation on capital gains of at least 60 to 70 percent, much higher than any wealthy country ever has succeeded with. And frankly no one has come close to rebutting the devastating critique from Larry Summers.
6. Student debt forgiveness: The data-driven people I know on the left all admit this is welfare for the relatively well-off, rather than a truly egalitarian approach to poverty and opportunity. Cost is estimated at $1.6 trillion, by the way (is trillion the new billion?). Furthermore, what are the long-run effects on the higher education sector? Do banks lend like crazy next time around, expecting to be bailed out by the government? Or do banks cut back their lending, fearing a haircut on bailout number two? I am genuinely not sure, but thinking the question through does not reassure me.
7. College free for all: Would wreck the relatively high quality of America’s state-run colleges and universities, which cover about 78 percent of all U.S. students and are the envy of other countries worldwide and furthermore a major source of American soft power. Makes sense only if you are a Caplanian on higher ed., and furthermore like student debt forgiveness this plan isn’t that egalitarian, as many of the neediest don’t finish high school, do not wish to start college, cannot finish college, or already reject near-free local options for higher education, typically involving community colleges.
8. Health care policy: Her various takes on this, including the $52 trillion plan, are better thought of as (vacillating) political strategy than policy per se. In any case, no matter what your view on health care policy she has botched it, and several other Dem candidates have a better track record in this area. Even Paul Krugman insists that the Democrats should move away from single-payer purity. It is hard to give her net positive points on this one, again no matter what your policy views on health care, or even no matter what her views may happen to be on a particular day.
All of my analysis, I should note, can be derived internal to Democratic Party economics, and it does not require any dose of libertarianism.
9. Breaking up the Big Tech companies: I am strongly opposed to this, and I view it as yet another attack/destruction on a leading and innovative American sector. I will say this, though: unlike the rest of the list above, I know smart economists (and tech experts) who favor some version of the policy. Still, I don’t see why Jerry and Will should like this promise so much.
Those are some pretty major sectors of the U.S. economy, it is not like making a few random mistakes with the regulation of toothpicks. In fact they are the major sectors of the U.S. economy, and each and every one of them would take a big hit.
More generally, she seems to be a fan of instituting policies through executive order, a big minus in my view and probably for Jerry and Will as well? Villainization and polarization are consistent themes in her rhetoric, and at this point it doesn’t seem her chances for either the nomination, or beating Trump, are strong in fact her conditional chance of victory is well below that of the other major Dem candidates. So what really are you getting for all of these outbursts?
When I add all that up, she seems to have the worst economic and political policies of any candidate in my adult lifetime, with the possible exception of Bernie Sanders (whose views are often less detailed).
I do readily admit this: Warren is a genius at exciting the egalitarian and anti-business mood affiliation of our coastal media and academic elites.
If you would like to read defenses of Warren, here is Ezra Klein and here is Henry Farrell. I think they both plausibly point to parts of the Warren program that might be good (more good for them than for me I should add, but still I can grasp the other arguments on her behalf). They don’t much respond to the point that on #1-8, and possibly #1-9, she has the worst economic and political policies of any candidate in my adult lifetime.
For Jerry and Will, I just don’t see the attraction at all.
That said, on her foreign policy, which I have not spent much time with, she might be better, so of course you should consider the whole picture. And quite possibly there are other candidates who, for other reasons, are worse yet, not hard to think of some. Or you might wish to see a woman president. Or you might think she would stir up “good discourse” on the issues you care about. And I fully understand that most of the Warren agenda would not pass.
So I’m not trying to talk you out of supporting her! Still, I would like to design and put into the public domain a small emoji, one that you could add to the bottom of your columns and tweets. It would stand in for: “Yes I support her, but she has the worst proposed economic policies of any candidate in the adult lifetime of Tyler Cowen.”
Dean Spears, one of the authors of Where India Goes has a new book on air pollution in India, Air. When I reviewed Where India Goes in 2017 I said it was the best social science book I had read in years. Spears is able to accurately explain academic work–much of it his own and with co-authors–in accessible language and to combine that with on-the-ground reporting to produce a book that is both informative and full of human interest. He brings the same skills to Air.
As Spears shows, pollution is killing Indians, especially babies, and those it doesn’t kill it harms as seen in statistics on stunting and respiratory disease. Spears isn’t naive, however, he knows that manufacturing is also bringing tremendous benefits. The issue, however, is that a lot of pollution in India comes from relatively low value activities like burning crops. Moreover, solar power in India is cost competitive with coal today, even before taking into account health benefits. Thus, the harms of pollution are tragic because they are unnecessary.
If the costs of pollution exceed the benefits why isn’t something being done? One of the things I like about Air is that it is clear that pollution in India is both a market failure and a government failure. The government has been slow to respond to pollution because much of the public remains unaware of pollution’s true cost and much of the true cost is born by children and future people who have no vote. In the meantime, the government enhances rational ignorance by refusing to fund even the most basic equipment to measure where and when pollution ebbs and flows. Instead the government engages in virtue-politics by banning plastic bags and creating odd-even restrictions on driving in Delhi. These activities are pointless, even counter-productive, but they are well publicized and the appearance of doing something matters more than reality.
Here’s one brilliant bit:
Just next to the Raebareli coal plant is a solar power plant. The solar plant is, in principle, capable of generating 10 MW. That capacity is 1 per cent of the 1000 MW capacity of the immediately neighbouring coal plant (which had another few hundred megawatts under construction when I talked with Gaurav).
I visited the solar plant on Independence Day. The ground around the solar panels was ﬂooded with August rain. A shoe destroying walk through the mud and water brought me to the control room in a small building. There, a cheerful young engineer from Bengaluru watched a bank of computer screens. A TV monitor reviewed a list of fifteen highlights of the Prime Minister’s holiday speech that morning. The control room was set up in a museum-like display. The apparent goal was to impress visitors with modern renewable energy and with colourful displays of General Electric–branded software. The young engineer was excited to show me the screens. He clearly wanted the message to be good.
It was not good. That cloudy day, most of the dots were red, not green. The screens reported that the solar plant was generating 60 kW. The engineer assured me that one day it had gotten up to 7500 kW. A megawatt is 1000 kilowatts. So, at 0.06 MW, the solar plant was producing less than 1 per cent of the 10 MW that the signboard at the entrance promised, which would have been 1 per cent of the coal plant.
It is not surprising that a solar plant does not generate much electricity if it is built beneath the smoke of a coal plant with 100 times the capacity. Ordinarily, one places solar plants in the path of direct sunlight. This one was placed in the path of visitors.
Addendum: Case in point. India today bans e-cigarettes because of health risks!
That is my recent essay, adapted in Foreign Policy, from my new book Big Business: Love Letter to an American Anti-Hero. Here is the opening:
The basic view that big business is pulling the strings in Washington is one of the major myths of our time. Most American political decisions are not in fact shaped by big business, even though business does control numerous pieces of specialist legislation. Even in 2019, big business is hardly dominating the agenda. U.S. corporate leaders often promote ideas of fiscal responsibility, free trade, robust trade agreements, predictable government, multilateral foreign policy, higher immigration, and a certain degree of political correctness in government—all ideas that are ailing rather badly right now.
To be sure, there is plenty of crony capitalism in the United States today. For instance, the Export-Import Bank subsidizes U.S. exports with guaranteed loans or low-interest loans. The biggest American beneficiary is Boeing, by far, and the biggest foreign beneficiaries are large and sometimes state-owned companies, such as Pemex, the national fossil fuel company of the Mexican government. The Small Business Administration subsidizes small business start-ups, the procurement cycle for defense caters to corporate interests, and the sugar and dairy lobbies still pull in outrageous subsidies and price protection programs, mostly at the expense of ordinary American consumers, including low-income consumers.
…overall, lobbyists are not running the show. The average big company has only 3.4 lobbyists in Washington, and for medium-size companies that number is only 1.42. For major companies, the average is 13.9, and the vast majority of companies spend less than $250,000 a year on lobbying. Furthermore, a systematic study shows that business lobbying does not increase the chance of favorable legislation being passed for that business, nor do those businesses receive more government contracts; contributions to political action committees are ineffective too.
If you are looking for a villain, it is perhaps best to focus on how corporations sometimes help poorly staffed legislators evaluate and draft legislation. But again, national policy isn’t exactly geared to making businesses, and particularly big business, entirely happy.
References and further support are available in the book,
Food isn’t about Nutrition
Clothes aren’t about Comfort
Bedrooms aren’t about Sleep
Marriage isn’t about Romance
Talk isn’t about Info
Laughter isn’t about Jokes
Charity isn’t about Helping
Church isn’t about God
Art isn’t about Insight
Medicine isn’t about Health
Consulting isn’t about Advice
School isn’t about Learning
Research isn’t about Progress
Politics isn’t about Policy
That's from him. No sex? Can that somehow be signaling to get more sex?
SA few days ago Paul Krugman argued (Times Select, or here is a Mark Thoma summary) that it matters a great deal which political party rules in the United States. Republicans tend to bring gilded ages, Democrats tend to bring greater income equality. So much for the median voter theorem (is this less reason or more reason to trust politics? And is this view supported by event studies of elections? I doubt it.).
Matt ("he really ought to be an economist") Yglesias sides with Krugman, noting that tax policy affects pre-tax earnings through induced effort (an unexpected yet appropriate dalliance with the supply side) and how the workplace is geared to produce maximum value.
Four additional points:
1. It is much easier for policy to liberate a "shackled top 1 percent" and boost their earnings than it is for policy to lift the huddled masses. See Mark Thoma on Australia. Measures of inequality capture the difference between these two groups, but for Krugman’s questions this is not a helpful aggregation. It is easier to toy with the lot of small groups than with very large groups.
2. Bob Tollison used to tell me: "No one other than Michael Jordan ever got truly rich selling his labor." If policy is going to liberate top earners, look to the growth in capital markets.
3. Krugman doesn’t have many data points. The 20s have a string of Republicans. Then there is Roosevelt/Truman. He tosses out Eisenhower for being centrist. Nixon was like a Democrat on social spending and regulation. Krugman tosses out Clinton for governing like a right-winger. Give this one to Andrew Gelman and let him bite.
I’m OK with these classifications of Eisenhower and Clinton. The deeper point is that how a party or president governs is itself determined by underlying social, economic, and technological forces. Which brings us back to the political party not mattering very much for pre-tax income distribution.
4. If we take the left-wing view that money doesn’t make people much happier, and hard work is an oppressive rat race, the change in the distribution of utility is much much less than the change in the distribution of income. In fact it is easy to argue that the United States has become more egalitarian in terms of well-being. Most people get penicillin, and in utility terms a $20,000 stereo isn’t much better than a $400 stereo.
Addendum: Here is more Brad DeLong summary and analysis.
Here is more complete data on police expenditures, interesting throughout, via Charles Fain Lehman. The sociology of this issue I find fascinating. Usually in Progressive lore, if you defund an agency, you lower its quality and make it all the more dysfunctional. But in this case, defunding the bureaucracy, namely the police, is supposed to solve the problem. Is there anywhere a well-worked out model of why this particular bureaucracy might be different from the others? (Maybe it is, I would gladly link to such an argument!) Or, dare I say it, is this just mood affiliation and once again…politics isn’t about policy. I’ll give 4-1 odds on the latter.
Haven’t you noticed this?
I have a simple hypothesis. No matter what the media tells you their job is, the feature of media that actually draws viewer interest is how media stories either raise or lower particular individuals in status. (It’s a bit like “politics isn’t about policy.”) That’s even true for this blog, though of course that is never my direct intention.
But now you can see why people get so teed off at the media. The status ranking of individuals implied by a particular media source is never the same as yours, and often not even close. You hold more of a grudge from the status slights than you get a positive and memorable charge from the status agreements.
In essence, (some) media is insulting your own personal status rankings all the time. You might even say the media is insulting you. Indeed that is why other people enjoy those media sources, because they take pleasure in your status, and the status of your allies, being lowered. It’s like they get to throw a media pie in your face.
In return you resent the media.
A good rule of thumb is that if you resent the media “lots,” you are probably making a number of other emotional mistakes in your political thought.
Let’s say a group of criminal defense lawyers kept a database of their confidential conversations with their clients. That would include clients charged with murder, robbery, DUI, drug abuse, and so on. In turn, a hacker would break into that database and post the information from those conversations on Wikileaks. Of course a lot of those conversations would appear to be incriminating because — let’s face it — most of the people who require defense attorneys on criminal charges are in fact guilty. When asked why the hack was committed, the hacker would say “Most of those people are guilty. I want to make sure they do not escape punishment.”
How many of us would approve of that behavior? Keep in mind the hacker is spreading the information not only to prosecutors but to the entire world, and outside of any process sanctioned by the rule of law. The hacker is not backed by the serving of any criminal charges or judge-served warrants.
Yet somehow many of us approve when the victims are wealthy and higher status, as is the case with the Panama Papers. Furthermore most of those individuals probably did nothing illegal, but rather they were trying to minimize their tax burden through (mostly) legal shell corporations. Admittedly, very often the underlying tax laws should be changed, just as we should repeal the deduction for mortgage interest too. But in the meantime we are not justified in stealing information about those people, even if some of them are evil and powerful, as is indeed the case for homeowners too.
Once again, politics isn’t about policy, it is about which groups should rise and fall in relative status. And many people believe the wealthy should fall in status, and so they will entertain the morality of all crimes and threats against them. These revelations will of course lead to some subsequent cases of blackmail, against Chinese officials for one group.
I had tweeted “Are your views on privacy and #PanamaPapers consistent? Just asking…” and my goodness what a response, positive and negative. Most interesting of all, many people had never pondered the question before. Somehow “good things” such as “privacy” and “transparency” cannot stand in such conflict because all good things, like all bad things, must come together.
Here is Ray Lopez on the same:
1. There’s a tension between US and foreign law firms and FATCA (United States Foreign Account Tax Compliance Act (FATCA) has the objective of reducing tax evasion by American taxpayers with foreign accounts). This is because law firms are exempt from reporting on clients past crimes, not future crimes, however, money laundering is considered a future crime. When a known criminal is setting up an offshore account with the help of a law firm, is the law firm an accessory to money laundering or not? The better view is they are not: it’s up to the client to report any offshore account to the government, and not the law firm’s responsibility. That’s the better view, but see point #2, which rebuts this.
2. There’s a tension between client confidentiality and tax treaties. Check this out: https://www.lawsociety.org.nz/practice-resources/practice-briefings/FATCA-and-New-Zealand-Law-Firms.pdf In New Zealand, which is probably representative of others, a passive non-financial foreign entity–which almost always will be a law firm trust account holding money from a client–has a duty under FATCA to report on the client to the US government (“know your customer” is the buzz phrase banks use, which as you know already are required to ‘spy’ on their customers).
Both points 1, 2 are relevant for the conduct of the law firm of Mossack Fonseca. Except for the alleged destruction of evidence by them, I don’t see them doing anything that bad (by law firm standards; remember, any law firm of decent size has former crooks as clients, and for a firm in Panama I would say that’s not the exception but the rule!)
From the comments, here is Kai:
I practice law in cross-border banking and finance in China. I am puzzled by how non-professionals in this field view offshore jurisdictions as categorically related to criminal activity, embezzlement and corruption, etc.
Almost all cross-border transactions involve offshore jurisdictions at some level. For instance most companies listed on the HK stock exchange are incorporated in the Cayman Islands. Anything to do with Bermuda, Cayman, BVI, etc. in cross border transactions is very, very mundane.
According to the papers, Xi Jinping has relatives who are owners of offshore companies. How is that any sort of evidence of wrongdoing by them (much less of Xi Jinping)? I doubt anyone can provide an intelligent answer.
Maybe yes, maybe no, but I don’t see that the people rendering judgment know more about it than he does.
Catherine Rampell’s excellent column considers the case for a soda tax in Britain. Here is one bit:
Why not just target the output, rather than some random subset of inputs? We could tax obesity if we wanted to. Or if we want to seem less punitive, we could award tax credits to obese people who lose weight. A tax directly pegged to reduced obesity would certainly be a much more efficient way to achieve the stated policy goal of reducing obesity.
Of course, “fat taxes,” even when framed as weight-loss tax credits, seem pretty loathsome. Why is . . . unclear.
We tax soda instead, even though that is less effective, for instance because soda drinkers may substitute into other sugary beverages. We are unwilling to humiliate the obese by taxing them directly, and so our chosen policies do less to help…the obese. (That’s assuming that attempting to shift their consumption behavior helps them at all, which is debatable.) As Robin Hanson has told us many times, politics isn’t about policy…
This is a fascinating Scott Alexander take on tribalism and how political issues are framed, starting with Ebola. As Robin Hanson would say, “politics isn’t about policy.” Here is the segment on how climate change issues might be marketed to the Right:
Global warming has already gotten inextricably tied up in the Blue Tribe narrative: Global warming proves that unrestrained capitalism is destroying the planet. Global warming disproportionately affects poor countries and minorities. Global warming could have been prevented with multilateral action, but we were too dumb to participate because of stupid American cowboy diplomacy. Global warming is an important cause that activists and NGOs should be lauded for highlighting. Global warming shows that Republicans are science denialists and probably all creationists. Two lousy sentences on “patriotism” aren’t going to break through that.
If I were in charge of convincing the Red Tribe to line up behind fighting global warming, here’s what I’d say:
In the 1950s, brave American scientists shunned by the climate establishment of the day discovered that the Earth was warming as a result of greenhouse gas emissions, leading to potentially devastating natural disasters that could destroy American agriculture and flood American cities. As a result, the country mobilized against the threat. Strong government action by the Bush administration outlawed the worst of these gases, and brilliant entrepreneurs were able to discover and manufacture new cleaner energy sources. As a result of these brave decisions, our emissions stabilized and are currently declining.
Unfortunately, even as we do our part, the authoritarian governments of Russia and China continue to industralize and militarize rapidly as part of their bid to challenge American supremacy. As a result, Communist China is now by far the world’s largest greenhouse gas producer, with the Russians close behind. Many analysts believe Putin secretly welcomes global warming as a way to gain access to frozen Siberian resources and weaken the more temperate United States at the same time. These countries blow off huge disgusting globs of toxic gas, which effortlessly cross American borders and disrupt the climate of the United States. Although we have asked them to stop several times, they refuse, perhaps egged on by major oil producers like Iran and Venezuela who have the most to gain by keeping the world dependent on the fossil fuels they produce and sell to prop up their dictatorships.
We need to take immediate action. While we cannot rule out the threat of military force, we should start by using our diplomatic muscle to push for firm action at top-level summits like the Kyoto Protocol. Second, we should fight back against the liberals who are trying to hold up this important work, from big government bureaucrats trying to regulate clean energy to celebrities accusing people who believe in global warming of being ‘racist’. Third, we need to continue working with American industries to set an example for the world by decreasing our own emissions in order to protect ourselves and our allies. Finally, we need to punish people and institutions who, instead of cleaning up their own carbon, try to parasitize off the rest of us and expect the federal government to do it for them.
Please join our brave men and women in uniform in pushing for an end to climate change now.
The piece is interesting throughout, hat tip goes to MR commentator Macrojams.
Some on the left argue that consumption taxes will favor the ultra-rich because they consume a very small share of their income. But if that’s so, then no tax regime will put much of a tax burden on the ultra-rich. Just as you can’t squeeze blood from a stone, you can’t put a tax burden on misers. As Steven Landsburg pointed out in one of my all time favorite posts, society views misers like Scrooge as being selfish individuals, when actually it’s people who consume a lot who are selfish. Misers leave more for others to consume.
In my only slightly cynical view, a lot of the debate about taxation is more about showing the wealthy that they need to lose (or win, on the other side of the debate) a few political battles than it is about actual canons of efficiency or for that matter even well-specified theories of egalitarian justice. For instance I find that few proponents of a higher inheritance tax realize it will increase current consumption inequality, by encouraging the wealthy to consume more rather than paying the tax. Nor do they seem to care, once this is pointed out. I call this “the comeuppance” theory” and it is another example of Robin Hanson’s motto that “politics isn’t about policy,” but rather is a spat about which monkeys should have a higher or lower status.
Scott’s post is here, and it contains other points of interest.
When I blame people for their problems, Democrats and liberals are prone to object at a fundamental level. One fundamental objection rests on determinism: Since everyone is determined to act precisely as he does, it is always false to say, “There were reasonable steps he could have taken to avoid his problem.” Another fundamental objection rests on utilitarianism: We should always do whatever maximizes social utility, even if that means taxing the blameless to subsidize the blameworthy.
Strangely, though, every Democrat and liberal I know routinely blames one category of people for their vicious choices: Republicans…
Personally, I strongly favor blaming Republicans. I think 80% of the blame heaped on Republicans is justified. What mystifies me, however, is the view that Republicans are somehow uniquely blameworthy. If you can blame Republicans for lying about WMDs, why can’t you blame alcoholics for lying to their families about their drinking? If you can blame Republican leaders for supporting bad policies because they don’t feel like searching for another job, why can’t you blame able-bodied people on disability because they don’t feel like searching for another job?
Democrats and liberals who expand their willingness to blame do face a risk: You will occasionally sound like a Republican! But why is that such a big deal? Maybe you’ll lose a few intolerant hard-left friends, but they’re replaceable. By taking a reasonable step – broadening your blame – you can avoid the vices of moral inconsistency and moral nepotism. To do anything less would be… blameworthy.
My own view is to minimize blame in all directions, but of course Bryan is correct in pointing out this inconsistency. Most people are willing to blame those whom they seek to lower in relative status, though I can’t say I really blame them for that.
Stunningly, the postponement of marriage and parenting — the factors that shrink the birth rate — is the very best predictor of a person’s politics in the United States, over even income and education levels, a Belgian demographer named Ron Lesthaeghe has discovered. Larger family size in America correlates to early marriage and childbirth, lower women’s employment, and opposition to gay rights — all social factors that lead voters to see red.