Category: Political Science

How to run a successful blog

by  Tyler Cowen in

…They understand that public opinion matters…they understand that it’s a little harder to criticize someone after you’ve met him and he’s given you free cookies…they couldn't possibly have expected to change anybody’s mind, they understand that it’s better to talk to your critics than to avoid them. Waldman talks about some of the techniques used to make the attendees [readers] feel like they were being treated as special guests.

Whoops!  That's not advice for running a successful blog.  Those are James Kwak's comments on how Treasury tries to trick visiting bloggers.  We bloggers should know.  We give away lots of free stuff too, more than cookies even if it is sometimes sour rather than sweet.

Impressions from Treasury

by  Tyler Cowen in

I will enumerate a few (you can trace other accounts here):

1. Tim Geithner is very smart and he was conceptually stronger than one might have expected.

2. I believe that the long, L-shaped hallways encourage "visits to offices" rather than hallway conversations; this is a speculation and perhaps some reader can confirm or deny it.

3. The quality of the painted portraits of Treasury Secretaries declines as time passes.

4. The free cookies were good and fresh, with a warm, fluid chocolate interior.  There was water to drink, but no mineral water.

5. For all their talk about outreach, etc. I believe at least a few of them wanted to hear from an outside source whether we think they are totally ****ed or not.  They heard. 

6. I worry less than did some of the other bloggers about the Treasury awareness of major economic problems going forward.  As governmental institutions go, Treasury has a real incentive to a) worry about the fiscal future, and b) worry about worst-case scenarios, including for financial institutions.  Their daily interaction with the bond market gives them a longer time horizon and a more economics-friendly perspective than most of their bureaucratic counterparts.  The problem is Congress.  For instance if someone at Treasury had a Yves Smith view of the banking system, they could not much act on it.

7. "You guys are a welcome change of pace," or something like that, remarked one senior Treasury official.  Although this was flattery, I believe it was meant sincerely.  They were also a welcome change of pace.

8. I asked one senior Treasury official which book, thinker, or economic theorist had most shaped his thinking about the financial crisis.  In the ensuing discussion the book Lords of Finance was recommended, though I could not say whether it was intended as a totally direct answer to the question as stated.

I have a bad feeling about this

by  Tyler Cowen in

Here is the latest on Tysons redevelopment:

Remaking Tysons Corner
into the second city of Washington will take a lot more than a new
Metro line and a downtown of tightly clustered buildings designed for
walking. It will take almost $15 billion in new roads and public
transportation.

Even in this age of sticker shock, that's a lot of money for a local project.  You'll recall my earlier prediction that Tysons will get the road widenings but not enough of the other changes needed to make it a walkable downtown; the road widenings will on net make things worse. Call me an apologist for suburbia if you wish, but I sooner view myself as an apologist for public choice theory.  Some parts of the redesign will be more popular than others and we will get a very unbalanced mix of reforms.  This is indeed what I predict:

The numbers also have prompted some proponents of dense development in
Tysons to argue that if the county pushes too many costly road
improvements and makes room for more cars, the vision could unravel. 

To simply insist that it "should be different," or to charge that I do not spend enough time criticizing interstate highway subsidies, is to miss the public choice point.  Now that the stimulus is up and running, you can see road widenings all over NoVa and they will be finished.  Who will put up the money for the rest of Tysons reform?

For funding, Fairfax officials say, they will look to the Obama
administration, which is committed to subsidizing growth projects in
urban areas. They hold out little hope from the Virginia Department of
Transportation, which this year slashed the county allocation for
secondary roads to zero. Given the millions of dollars Northern
Virginia has gotten for big projects such as the HOT lanes and new
Woodrow Wilson Bridge, "More state funding is pretty much politically
doomed," said Kathy Ichter, the county's chief of transportation
planning.

Stay tuned…

Successful government bureaucracies

by  Tyler Cowen in

Jason asks:

What are some examples of successful government bureaucracies?

Wars aside, here is a short and very incomplete list: the NIH, the Manhattan Project, U.C. Berkeley, the University of Michigan, Fairfax County, the World Trade Organization, the urban planners of postwar Germany, some of the Victorian public works and public health commissions, most of what goes on in Singapore, anywhere that J.S. Bach worked.

The European Union has been very good for eastern Europe.  I'll leave aside the health care issue because we've debated that plenty already.  The real question is what all these examples have in common.

Elinor Ostrom and the well-governed commons

by  Alex Tabarrok in

Elinor Ostrom may arguable be considered the mother of field work in development economics.  She has worked closely investigating water associations in Los Angeles, police departments in Indiana, and irrigation systems in Nepal.  In each of these cases her work has explored how between the atomized individual and the heavy-hand of government there is a range of voluntary, collective associations that over time can evolve efficient and equitable rules for the use of common resources.  

With her husband, political scientist Vincent Ostrom, she established the Workshop in Political Theory and Policy Analysis in 1973 at Indiana University, an extraordinarily productive and evolving association of students and professors which has produced a wealth of theory, empirical studies and experiments in political science and especially collective action.  The Ostrom's work bridges political science and economics.  Both are well known at GMU since both have been past presidents of the Public Choice society and both have been influenced by the Buchanan-Tullock program.  You can also see elements of Hayekian thought about the importance of local knowledge in the work of both Ostroms (here is a good interview).  My colleague, Peter Boettke has just published a book on the Ostrom's and the Bloomington School.

Elinor Ostrom's work culminated in Governing the Commons: The Evolution of Institutions for Collective Action which uses case studies to argue that around the world private associations have often, but not always, managed to avoid the tragedy of the commons and develop efficient uses of resources.  (Ostrom summarizes some of her findings from this research here).  Using game theory she provided theoretical underpinnings for these findings and using experimental methods she put these theories to the test in the lab. 

For Ostrom it's not the tragedy of the commons but the opportunity of the commons.  Not only can a commons be well-governed but the rules which help to provide efficiency in resource use are also those that foster community and engagement.  A formally government protected forest, for example, will fail to protect if the local users do not regard the rules as legitimate.  In Hayekian terms legislation is not the same as law.  Ostrom's work is about understanding how the laws of common resource governance evolve and how we may better conserve resources by making legislation that does not conflict with law.

Can a Nobel Peace Prize make peace harder to achieve?

by  Tyler Cowen in

David Axelrod spoke:

“I’d like to believe that winning the Nobel Peace Prize is not a political liability,” said David Axelrod,
a senior adviser to Mr. Obama. “But this isn’t something I gave a
moment of thought to until today. Hopefully people will receive it with
some sense of pride. But I don’t know; it’s uncharted waters.”

Putting aside domestic responses, can holding a Peace Prize make it harder to bring about peace?  I believe the answer is yes.  The positive scenario is that holding the Prize signals strength and induces other bargainers to jump aboard your winning bandwagon, for fear of being locked out of an eventual agreement.  The more negative scenario arises when the Prize holder is expected to pressure Country X, Ruritania.  If the Prize holder secretly wishes to favor Ruritania in negotiations, a President without a Prize can to some extent feign or credibly signal weak bargaining power: "I'm sorry, Ruritania just won't budge; you'll have to move closer to their position."  It's harder for the Prize holder to send this same signal, since everyone expects him to get Ruritania to budge (if not, the Prize holder also doesn't have any bargaining advantages either).  The Prize holder may find it harder to deal with truly intransigient nations; fortunately we don't have many of those in the world right now. 

Related arguments are that a Prize can make it harder to practice strategies of "creative ambiguity" or "low expectations."

David Frum suggests the Prize makes it harder for Obama to be hawkish. 

China committee of the day

by  Tyler Cowen in

Today's Financial Times writes about the Central Organization Department of China:

To glean a sense of the dimensions of the organization department's job, conjure up a parallel body in Washington.  The imaginary department would oversee the appointments of US state governors and their deputies; the mayors of big cities; heads of federal regulatory agencies; the chief executives of General Electric, Exxon-Mobil, Walmart and 50-odd of the remaining largest companies; justices on the Supreme Court; the editors of The New York Times, The Wall Street Journal and The Washington Post; the bosses of the television networks and cable stations; the presidents of Yale and Harvard and other big universities and the heads of think-tanks such as the Brookings Institution and the Heritage Foundation.

All equivalent positions in China are filled by people appointed by the party through the organization department.

I would not want to be on the bad side of the Central Organization Department.  The full article, which is interesting throughout, is here.  It's also related to why I don't see China just evolving into a normal democracy.

“Too big to take a pay cut”

by  Tyler Cowen in

Here is my latest column.  It's about how politicization is behind the financial crisis (in part), why we haven't learned very much from the financial crisis, why we are treating the health care sector just as we have been treating the banks, and why Atlas Shrugged is selling so many more copies.

Excerpt:

We should stop using political favors as a means of managing an
economic sector. Unfortunately, though, recent experience with health care reform
shows we are moving in the opposite direction and not heeding the basic
lessons of the financial crisis. Finance and health care are two
separate issues, of course, but in both cases we’re making the common
mistake of digging in durable political protections for special
interest groups.

One
came over the summer when it was reported that the Obama administration
had promised deals to doctors and to pharmaceutical companies under the
condition that they publicly support health care reform. That’s another
example of creating favored beneficiaries through politics.

If these initial deals are falling apart, it is only because reform
met with unexpected resistance. Even after Mr. Obama’s speech Wednesday
night, we’re still at the point where the medical sector is enshrined
as “too big to take a pay cut,” which is not so far removed from the
banking motto of “too big to fail.” In finance and health care, a
common political dynamic has created similar trends, namely,
out-of-control costs, weak accountability, and the use of immediate
revenue patches to postpone dealing with fundamental problems.

Even
worse, these political deals threaten open discourse. The dealmaking
may be inhibiting some people in health care from speaking out in
opposition to the administration’s proposals. Robert Reich, who served
as secretary of labor in the Clinton administration, deserves credit
for complaining about this arrangement, but not enough people are asking where such dealmaking might stop.

The banking sector has been facing similar constraints; if bankers criticize the Treasury
or the Fed, they risk losing their gilded cages and could get a bad
deal when the next bailout comes. When major economic sectors can be
influenced in this way, are we really very far from the nightmare
depicted by Ayn Rand in “Atlas Shrugged”?

The conclusion is this:

In short, we should return both the financial and medical sectors and,
indeed, our entire economy to greater market discipline. We should move
away from the general attitude of “too big to take a pay cut,”
especially when the taxpayer is on the hook for the bill. If such
changes sound daunting, it is a sign of how deep we have dug ourselves
in. We haven’t yet learned from the banking crisis, and we’re still
moving in the wrong direction pretty much across the board.

The French carbon tax

by  Tyler Cowen in

France is finding is hard to pass a stiff carbon tax, though of course they already use lots of (non-carbon) nuclear power:

Details are finally emerging about the country’s planned “carbon tax,” to be put in place next year. And the idea is anything but popular.

The center-right French government wants to levy a tax of 14 euros per ton of carbon dioxide starting in 2010; carbon taxes are popular with many economists and business leaders because they are seen as easier to implement than carbon-trading plans, which France also belongs to.

In reality, France’s carbon tax is basically just a gasoline tax–and a tiny one at that. The electricity sector, overwhelmingly powered by emissions-free nuclear power, isn’t part of the plan [TC: Duh!], Prime Minister Francois Fillon told Le Figaro. The tax will basically fall on liquid fuels–raising pump prices 3 euro cents a liter (that’s roughly 15 U.S. cents a gallon).

In theory it will be revenue-neutral but most French voters are nonetheless opposed to the measure.  Here is further information:

Large CO2 emitters, such as oil refiners and steel makers, will be exempted from paying the new tax. The government will propose special compensations for fishermen, farmers and truckers…

What is conservatism?

by  Tyler Cowen in

I've already done What is Progressivism? so here is another installment.  This isn't what conservatives today necessarily believe, it's a retranslation of a mishmash of conservatism into a language which I can understand and, in part, present to others.  Here goes:

1. Evil is real and there exist evil nations in the world; the relatively virtuous Western powers require strong states to fend off such evils.  This distinct from "big government" in the sense advocated by modern liberals. 

2. In international affairs, in the twentieth century, the United
States in particular has been unselfish to a remarkable degree.  We
therefore should trust the United States with unprecedented power.  In
fact we have no alternative.  Some cultures really are better than
others.

3. The spread of nuclear weapons, and other forms of WMD, to irrational, evil and undeterrable
powers is the number one foreign policy issue.  It runs the risk of
equalizing the balance of power between virtuous and evil agents in the
world.

4. On the domestic front, education is the keystone issue.  Societies succeed if strong family structures support an emphasis on learning and acculturation.  While this does not rule out public sector education, if public sector education works the credit is not to be found in the public sector.

5. When in doubt, side with the laws and customs that have, over time,
been associated with the Western powers and their growth into powerful
and durable societies.  It's hard to judge a lot of customs using pure,
unadulterated reason, as Oakeshott and Hayek have suggested.  Defending traditional values is an enterprise which itself requires a mix of law and custom.  If you're focused mainly on "policy proposals," you are missing the point.

7. We do not have either the resources or the norms to remake society in the direction of a fully-comfortable-for-everyone social democracy.  We do need welfare states to keep a polity in running order, but we should be modest about what such regimes can accomplish.  They cannot overcome a fundamental lack of proper values as found in many poor or disadvantaged communities.

8. Fiscal conservatism is part and parcel of conservatism per se.  A state wrecked by debt is a state due to perish or fall into decay.  This is a lesson from history.  States must "save up their powder" for true crises and it is a kind of narcissistic arrogation to think that the personal failures of particular individuals — often those with weak values — meet this standard.

9. For conservatism, small government is a means, not an end.  It is a means to the values which lie behind Western civilization and it is a means toward the prosperity we need to live well and defend ourselves.  Capitalism is important but capitalism itself relies upon particular values held by the citizenry.

10. Responsibility is a more important value than either liberty or equality.

Here is Julian Sanchez on what such exercises might mean.  I don't know exactly what they mean.  For me they are a means of thinking through ideas.

Addendum: Arnold Kling comments.

What if John Kerry had won?

by  Tyler Cowen in

A loyal MR reader writes to me:

I love when you think through counterfactuals, so here’s
one that’s been on my mind.  Imagine John Kerry wins in 2004.  What are
the implications for the 2006 midterms and more importantly the 2008
presidential election?  We probably pull out of Iraq without ever attempting the
surge, and leave the country in chaos.  But more importantly, the housing
bubble collapses on a Democrat's watch, not [a] Republican's.  Regardless of what
anyone says, the housing bubble was going to burst.  Maybe the collapse takes a
different path under Kerry than Bush, but it still happens, leaving his administration
to deal with it.  Does he win re-election?  Is McCain still the Republican
candidate?  And what becomes of a little known back bencher named Barack Obama?

I am sorry to disappoint such an excellent reader but I genuinely do not know what would have happened, if say Kerry had been more personally appealing to more voters (that counterfactual more or less holds constant other factors which are more directly political).  I do know this is a reason why I think it is very hard to forecast the net impact of a single election.  Do you remember the furor and then the agony from 2004?