Category: Political Science

From The Economist, there is an entire symposium.  Here is my bit and it closes as follows:

I thought these sentences from Mrs Romer’s piece were excellent: "As
someone who has written somewhat critically of the short-sightedness of
policymakers in the late 1930s, I feel new humility. I can see that the
pressure they were under was probably enormous."

That's the
bottom line. With Mrs Romer's piece we have one of the world’s great
macroeconomists, yet not quite being allowed to play that role.

In part I was referring to this:

I am least happy with the sentence: "By coupling the expansion of
coverage with reforms that significantly slow the growth of health-care
costs, we can dramatically improve the long-run fiscal situation
without tightening prematurely." So far we have every reason to believe
that Congress–and indirectly the American voter–will not allow the
growth of health-care costs to be slowed. Mrs Romer's sentence could
have been rewritten: "Congress is unlikely to significantly slow the
growth of health-care costs, so we cannot dramatically improve the
long-run fiscal situation without tightening prematurely."

If you're wondering, all that talk of "Mrs Romer" is a Britishism added by The Economist (should I have offered her a "lovely biscuit" as well?).  I get a kick out of seeing myself having "written" that, but being from New Jersey what I sent in was simply "Romer"; next in line would have been "Professor Romer," "Ms. Romer," or even "Mrs. Romer."

Of the total loans, Bt500 billion will be earmarked for mega projects under the jurisdiction of the Bhum Jai Thai Party. The remaining Bt300 billion will be shared by the Democrat and the Chart Thai Pattana parties.

How's that for a way to break through parliamentary logjams?  Just give the money to the parties themselves, they'll find ways of spending it.  The full story is here and for the pointer I thank Air Genius Gary Leff.

Democrats on three House panels continue to meet privately to seek consensus on a single plan. Democrats on the House Ways and Means Committee said they were trying to decide whether to finance coverage of the uninsured with one broad-based tax, like the value-added tax, or a combination of smaller taxes.

The article is here.  I wasn't expecting that for years to come.  From my distant perch out here in Fairfax (and Arlington), I believe this means health care reform is falling apart.  It means the unions won't let them tax health insurance benefits and the CBO won't let them punt on the issue of finance.

But they do understand that price may signal quality; the price was raised from $500,000 to $1.5 million:

A former Khmer Rouge official photographer has put on sale for 1.5
million dollars what he claims to be Pol Pot's clothes, sandals and
toilet, along with thousands of photographs and other artifacts he
collected during the genocidal regime's 1975-79 rule. "I will sell Pol
Pot's sandals, toilet, his uniform and cap, thousands of photographs
and the two cameras I used during the Khmer Rouge period," said Nhem
En, who was recruited to take photographs of detainees when they
arrived at Tuol Sleng torture prison in Phnom Penh.

Forgive me if I am skeptical that the government is going to show GM
how to streamline its bureaucracy.  Nor do governments historically
have a good record as cutting-edge auto designers.

All the government can give GM is money.  Our money.  Perhaps we should change the name to American Leyland.

Here is more, from Megan McArdle.

I saw the political bigwigs here give public speeches.  Normally they go to great care to promote the use of the Catalan language, including by legal means if necessary.

Yet when speaking here in their own Barcelona, in front of the King of Spain, those same bigwigs use the Spanish language, albeit with random Catalonian sentences thrown in or used to close the talk.

Apparently they do not wish to displease the King or force him to wear a translation headset.

If I apply some very naive versions of signaling theory and coalition-building economics, I arrive at the prediction that these people do not intend to secede.

First, I agree with Will Wilkinson that a seasteading community would likely evolve back to non-libertarian political visions. 

Second and more fundamentally, I am for the seasteading idea.  There are today many oil derricks, owned and run by energyl companies.  There are many cruise ships, with more or less autonomous legal governance.  More and bigger cruise ships would be better and if some of them moved more slowly that would be fine too.  But when I step on to a cruise ship (well, actually that's the sort of thing I don't do; personally I hate cruise ships), I don't feel I am moving from an inferior political order to a superior political order.

I've wondered whether I should retire on to a cruise ship of the future, but I'm not attracted per se by the "politics" I would get there.  I would expect more freedom in the Lockean sense but less of the positive freedom that comes from living in a larger, more diverse, and yes also a more stupid society.  I wouldn't live on the Mensa cruise ship either.  I'll take some of the stupidity of modern society (the landlubbing version) to get the diversity and the greater number of open niche spaces and free possibilities. 

On a smaller scale, I live under different kinds of corporate, non-profit and university governance all the time.  That's great, but I don't view their totalized extension as my preferred utopian path.

I'd like people to be smarter, more thoughtful, more tolerant, and more loving of liberty, yet in ways which do not drain away the diversity of the United States, which I feel is the best available foundation to build upon.  No matter how good a seasteading charter may sound, any given venture just can't be that credible until it has succeeded for a very long time.  History and precedent matter and by the way have you checked in on Estonia lately? 

Addendum: Here is Alex on seasteading.

Here is my latest column.  Excerpt:

It’s not that anyone is behaving illegally or unconstitutionally,
but rather that Congress seems to want to be circumvented and to
delegate more power to the executive branch as well as to the Fed, at
least temporarily.

While Congressional leaders are consulted on
the major policies, Congress is keeping its distance, perhaps to
minimize voter outrage. This way, Congress can claim credit if a
recovery comes, but deny responsibility if the price tag ends up higher
than advertised or if banks seem to be receiving unfair benefits from
the government.

The Fed and the FDIC have become the major tools for enhancing executive power and working around Congress:

The traditional division of labor among policy makers was that the Fed
determined the quantity of money in the economy – it set monetary
policy – and Congress decided precise government expenditures – it
handled fiscal policy. These new programs blur that distinction and, in
essence, the Fed is running some fiscal policy.

The FDIC issues guarantees under the expectation that Congress will have to ratify them ex post but ex ante the executive branch is calling the shots.

Is this all good or bad?  For any single choice, it is probably good.  Congress does not, in general, improve the quality of economic policy, relative to the executive branch.  But it is also a kind of deficit spending on the quality of future governance.  The more Congress is accustomed to being allowed to punt, the worse Congress will become in the longer run.  The executive branch will overreach more and also voters will apply successively more cynical standards to evaluating Congress, leading to a self-fulfilling prophecy. 

To put it more concretely, this Congress shies away from accepting responsibility for the various bailouts, yet we think it will somehow solve far tougher problems?  I, for one, am worried.

Rep. Maurice D. Hinchey (D-N.Y.) vowed to force the White House to accept delivery of a new
presidential helicopter Obama says he doesn't need and doesn't want.
The helicopter program, which cost $835 million this year, supports 800
jobs in Hinchey's district. "I do think there's a good chance we can
save it," he said.

Here is much more.  The Congressional Democrats don't like Obama's proposed "cuts" in spending.

To be sure, tourism to Mexico is devastated and the country will suffer many economic problems (yes, real business cycle theory still is relevant these days).  But is there any upside?

I hesitate to speak too soon but I'm actually somewhat impressed by how the Mexican government, at least at the national level, has responded.  There have been many failures of Mexican health care systems at local levels but keep a few things in mind: a) some of the problems lie with citizens who won't go see doctors, or who won't go see non-shaman doctors, b) too many Mexicans self-administer antibiotics, and c) when there is so much air pollution it is harder to discover flu cases, especially in the midst of flu season there.  Nonetheless Mexican reporting systems seem to have discovered an unusual flu fairly promptly.

Once the national government discovered what is going on, they acted decisively and without undue panic.  There has been very little denial, a common feature in the early stages of health crises (how long was it until the U.S. government acknowledged AIDS?).  No one is treating the Mexican federal government like a banana republic or a basket case or thinking that the Canadian government would have done so much better. 

Am I wrong?  Could this episode in the longer run bring Mexico closer to the community of developed nations?  Might Mexicans now be more likely to self-identify with a government that is at least partially competent?

Time will tell.

Will writes:

My quick take is that this sucks, because the more choke points in the policymaking process the better. That said, it probably doesn’t change all that much unless Senate Dems can muster reliable intraparty unanimity. A few things that wouldn’t have passed will, and those could be an important few things, but most final votes won’t be different. The one way this hurts the Dems is that it makes a narrative of GOP obstruction less plausible, and if various things go south by the mid-terms, the Republicans can more plausibly say that all of it’s the other guy’s fault.

If the guy is willing to switch parties, he was already in the first place willing to switch policies (if indeed he needed to change his mind at all).  He's suddenly lost of a lot of bargaining power (he had to hold off Pat Toomey, who presumably would have beaten him in the primary) and some of that power has been redistributed to the most conservative Democrats in the coalition.  That could be an improvement.

Note also that Democratic Senators may find it harder to oppose Obama once a policy initiative is announced, so they may work harder behind the scenes, and well in advance, to shape legislation in their preferred directions or simply just kill it off.  In contrast, a Republican veto-voice will be more reactive ex post.

On the marketing side, maybe now the Republicans, being denied the filibuster, will have to come up with some ideas that are actually appealing to voters outside their core constituencies. 

Addendum: Here is Matt's analysis.  And here is the academic evidence that voting behavior changes, following a party switch.