Category: Political Science

Find it here.  Here is Ezra’s version of Markets in Everything.

The classic paper is Buchanan and Faith, AER 1987.  Here is a recent extension of this classic work, with a dash of economic determinism:

Secessionist movements present themselves to the global public as analogues of colonial liberation movements: long-established identities are denied rights of self-determination by quasi-imperial authorities. Self-determination is presented as the solution to the challenge of peaceful coexistence between distinct peoples. The global public not only accepts this message but reinforces it: both Hollywood and diasporas relay it back to populations in developing countries. In this paper, we will argue that the discourse of secessionist movements cannot be taken at face value. We will suggest that a more realistic characterization of secessionist movements is that their sense of political identity is typically a recent contrivance designed to support perceived economic advantage, if the secession is successful, and facilitated by popular ignorance.

There are, of course, plenty of successful secessions.  Slovakia has been successful nation because of a language and a desire to be free of Czech rule, backed by EU free trade, EU largesse and political precommitment.  Or secession can help you break free of an evil empire, such as when Georgia left the former Soviet Union.  The most likely American state to make a success out of secession is, I think, Texas (or offer up your pick in the comments).  A Texan nation is hardly a good idea, but at least the state is big, has a diversified economy, has an outlet to the water, has a history of independence, and has a border with another nation, namely Mexico. 

The least likely American state to make a success of secession is, I think…Alaska.  The state takes in lots of federal money, has only a small natural population base, and is not too far from Russia.  Here are some data on which states receive the most on net from the federal government.  According to these numbers, only the state of New Mexico benefits more in (proportional) fiscal terms.  The states which fare the worst from federal transfers are New Jersey, Connecticut, New Hampshire, Minnesota and Illinois.

Martin Feldstein and John Taylor reassure us:

And by maintaining strong control over the growth of government spending, Mr. McCain will bring the budget into balance. His long record of fighting against excessive government spending, his plans to veto earmarks and reverse the spending binge of the past few years, and his strong commitment to balancing the budget can make this goal a reality.

Here is the full article, hat tip to Greg Mankiw.

This article claims that goldfish are as smart as mice.

Palin has an outside, straight talker, pro-reform, true blooded
American, take no prisoners image much as Perot did.  (A second point of comparison is Arnold Schwarznegger, with some obvious differences.)  And she has only begun to cultivate that image.  Do
you recall how much impact Perot had on the American people? 

Of
course if Perot actually had had the chance to be President, the
results probably would not have been pretty.  He would have been forced
to act like "just another politician," as has been the case with Arnold because in fact the job revolves around knowing how to govern. 

There is one biographical fact about Palin’s life that the critics
(Drum, DeLong, Yglesias, Klein, Sullivan and Kleiman are among the ones I read)
are hardly touching upon.  I mean her decision to have a Downs child
instead of an abortion.  This is the fact about her life and it will be viewed as such from now through November and perhaps beyond. 

If only for this reason, she will be seen as a candidate who stands on principle.  I don’t think the critics are sufficiently appreciating how tired the American people are of candidates who say one thing and do another and who abandon their principles at the first provocation.  This is a deep and very strong current and it runs through virtually every group of American political voters.  Because of her decision to have a Downs child, many voters will not view Sarah Palin in a cynical light, no matter what the critics say.  No story about firing a state trooper will break that seal.

In my jaded view, "politicians who break their word, violate their ideals, and do not follow through on their promises" is not one of the major problems in American politics.  In fact it’s often good that political promises are forgotten in the light of the realities.  So the American obsession with political promise-keeping does not resonate with me.  But the American people have been hungry for a "promise keeper, ideals believer" for decades and when was the last time they actually got one?

By the way, my mom’s first reaction to the nomination (hi mom!) was
that other mothers of "different" children (what exactly is the right word here?) would very much identify
with Palin and view her life as validating theirs and thus support her.

Go away and watch a Frank Capra movie and think about Palin again.  Larry Ribstein gets it.

I do recognize and indeed emphasize that this analysis requires that she is good on TV.  I give that p = 0.63.  I’ll also give p = 0.13 that she ends up off the ticket, but most of that chance comes from her deciding she needs to spend the time with her kids.

Addendum: The best argument against the pick is this, although it does not much revise my priors.

Around the blogosphere you will see many left-wing writers criticizing Palin for lack of experience.  Maybe this criticism is correct, but these commentators are falling into The Trap.  Most American voters do not themselves know much detail about foreign affairs and their vision of an experienced leader does not require such knowledge.  Was it demanded from Reagan?  Doesn’t everyone agree that Cheney and Rumsfeld knew plenty?  Rightly or wrongly, many American voters will view Palin’s stint as mayor of small town, her background in sports, her role in a beauty contest (yes), her trials raising teenage children, and her decision to stick with her priinciples and have a Downs Syndrome baby as all very valuable and relevant forms of experience.  The more the word "experience" is repeated, no matter what the context, the more it will hurt Obama.  Palin needs to appear confident and capable on TV and in the debates, but her ticket is not going to lose votes if she cannot properly spell Kyrgyzstan or for that matter place it on a map.

Addendum: Here is early response over at The Clinton Forum.

Trying to appear moderate is not always the best strategy for capturing votes during an election, reveals a new study. Extreme positions can build trust among an electorate, who value ideological commitment in times of uncertainty.

Here is the full story, with a hat tip to Eduardo Pegurier.  And here’s Robin Hanson:

In a TV game show, pretty contestants were not better or more cooperative players, but other contestants seemed to act as if they were.

I don’t know much about the substance or qualifications of Sarah Palin, but I believe that Democrats should be a little worried right now.  The otherwise-expected Romney and Pawlenty gifts have been taken off the table.

Addendum: Here’s Palin talking economics with Larry Kudlow.

Now over 80 percent in the betting markets.  And here is the gossip behind that.  Electorally this is a very effective pick I think (if indeed it is true), though it is hard for me to imagine a President with five (young) kids.

Addendum: No, that wording isn’t quite right.  How should I put this…?

Second addendum: Her stock in the market is now plummeting, now down to about 35, as there is a report she is still in Alaska.  I am told that last night Pawlenty was up to about 85 but then fell dramatically as well.  It has been a wild ride in this market.  And now Palin is back up again, etc.  Whatever.  Now it’s at 96.  Now confirmed.

More: Credible signals, in one link or less.

Here are some of her votes.  Her ACU voting lifetime record is 91 percent.  She is strong on free trade and seems to be a relatively conservative and corporatist Republican on economic issues.  She’s way up in the betting markets for the Republican VP spot, about 30 percent last I looked.  Note that she is not pro-life according to conservatives.  She has been very pro-drilling and very active on energy issues.  Since picking Mitt Romney would violate all known economic models of rational choice, and picking a woman would pop the Democrats’ post-convention bounce, I suppose this is a rumor to be taken seriously.  Here is her Wikipedia page.

Ezra wins:

…the campaign against Obama has metastasized into a variant of class
warfare. It’s the resentment of the meritocracy. What the GOP realized
was that Obama did come across different than the average American, but
not so much because he was black as because he was effortless. The very
set of supercharged talents and qualities that allowed Obama to
levitate past the boundaries of race and class make him different than
those who haven’t rocketed upward on the strength of their intelligence
and charisma and charm. After all, if you’re a fumbling, struggling
individual out in suburban Ohio, how can you believe that this guy who
doesn’t look to have struggled a day in his life cares about your
pathetic problems? Obama, in other words, is elite. As in "A group or
class of persons enjoying superior intellectual, social, or economic
status." Obama isn’t an economic elite, but he is a social and
intellectual elite. And it’s that creeping sense that he’s different,
that he’s better and knows it, that McCain is trying to exploit.

The Obama campaign, similarly, has realized that McCain is an elite,
and that voters won’t believe that a guy who has so many houses that he
can’t keep track of them will care if they lose the small condo they
call home. This election, in other words, is becoming a contest to
decide which type of elite voters hate — or fear, or mistrust — more:
A social elite or an economic elite?

Here is the first Google Images entry for "mediocre."

Obama has many good qualities but this does not prevent the circulation of massive amounts of "Obama insecurity," as evidenced by some of the comments on a recent post.  (It’s not about disagreeing; note how the tone changes.)  For some people no comment on Obama, other than the purely laudatory, is anything other than a hackish right-wing attempt to forge an alliance of lies with Karl Rove and his ilk.  But an election need not be framed as a war where all remarks must be strategically proper and in line with the objective of electing a preferred candidate; a blog is a discourse first and foremost.

The mood on Obama reminds me of the response of some MR commentators to Eric Lyon on Radiohead.

I cannot imagine how devastated and hopeless the Democratic left would feel if Obama loses.  That response would be a big mistake but in part it explains "Obama insecurity."  The left is uneasy that so many of their hopes are pinned on this man and as Paul Krugman points out he is somewhat unknown.  There is a secondary fear that Obama is in fact committed to the notion of America as a center-right country or at least is unwilling to challenge that idea. 

"Obama insecurity" hurts his electoral chances and hurts the intellectual future of the left as a corrective force in American politics.  There’s not a convincing or credible path toward painting his enemies as immoral, even if that is what you believe.  Some campaign lies are painting Obama as weak, inexperienced, and non-American or even anti-American.  Responding with a dose of "Obama insecurity" only plays into the hands of those who would turn this into a race of emotions and innuendo. 

Brought to you by Aghion, Algan, Cahuc and Shleifer, this is one of the best papers so far this year.  It’s so good I’ll give you a longer than usual quotation from the opening pages:

In a cross-section of countries, government regulation is strongly negatively correlated with social capital. We document, and try to explain, this highly significant empirical correlation.  The correlation works for a range of measures of social capital, from trust in others to trust in corporations and political institutions, as well as for a range of measures of regulation, from product markets, to labor markets, to judicial procedures. 

We present a simple model explaining this correlation. The model turns on the idea that investment in social capital makes people both more productive and more civic (e.g., Coleman 1990). Compared to people who have invested in social capital, those who have not are both less productive and impose a negative externality on others when they produce (e.g., pollute).  The community (whether through voting or through some other political mechanism) regulates production when the expected negative externalities are large. But regulation itself must be implemented by government officials, who are corrupt if they have not invested in social capital. As a consequence, when production is restricted through regulation, investment in social capital may not pay off.  In this model, when people expect to live in a civil community, they expect low levels of regulation, and so invest in social capital. Their beliefs are justified, as lack of investment leads to incivility, high regulation, high corruption, and low production.  The model has two Pareto ranked equilibria.

…The model predicts, most immediately, that distrust influences not just regulation itself, but the demand for regulation…distrust fuels support for government control over the economy.  What is perhaps most interesting about this finding, and also consistent with the model’s predictions, is that distrust generates demand for regulation even when people realize that the government is corrupt and ineffective; they prefer state control to unbridled production by uncivil firms.

…We take evidence on the demand for regulation as supportive of causality running from distrust to regulation.  To test the reverse causality, we look at the experiment of transition from socialism, which we interpret as a radical reduction in government regulation in low trust societies.  Our model predicts that such a reduction should lead to 1) a reduction in output, 2) an increase in corruption, 3) an increase in demand for government control at a given level of trust, and 4) a reduction of trust in the short run.

Many of the supposed "heroes" of the past were liars, frauds, and butchers to varying degrees.  The association of fame with entertainers, for all its flaws, departs from earlier concepts of heroic brutality and martial virtue.  Most of today’s famous people have had to persuade consumers to offer their allegiance and their dollars.  Nowadays fame is attained through a high-stakes game of pursuit and seduction, rather than a heroic contest or a show of force in battle.  The shift in fame to entertainers is a modern extension of the Enlightenment doux commerce thesis that the wealth of the market civilizes morals and manners and supports an ethic of bourgeois virtue.

…Modern politics emphasizes images, rumor, negative campaigning, and a circus-like, mass media atmosphere.  Leaders lose their stature and become another set of celebrities.  We talk about them and use them for entertainment.  Yet contrary to the views of many critics, these developments are by no means wholly negative.

Commercial society has brought the taming of fame to politics…

That is from my 2000 book What Price Fame?

Finally I have something new to report on Barack Obama:

Prior to the 2008 Democratic Presidential Primary, Barack Obama was endorsed by Oprah Winfrey, a celebrity with a proven track record of influencing her fans’ commercial decisions. In this paper, we use geographic differences in subscriptions to O! – The Oprah Magazine and the sale of books Winfrey recommended as part of Oprah’s Book Club to assess whether her endorsement affected the Primary outcomes. We find her endorsement had a positive effect on the votes Obama received, increased the overall voter participation rate, and increased the number of contributions received by Obama. No connection is found between the measures of Oprah’s influence and Obama’s success in previous elections, nor with underlying local political preferences. Our results suggest that Winfrey’s endorsement was responsible for approximately additional 1,000,000 votes for Obama.

That is work by Craig Garthwaite and Tim Moore and here is the full paper.

There is talk of a state funeral for Margaret Thatcher, for when that sad day comes.

Not everyone agrees:

"Thatcher should only be allowed a state funeral if the contract is put
out to compulsory competitive tender and awarded to the lowest bidder.
Any offers?" was one of the more polite responses from readers.

Within a given country, people who have been victims of the same kind of crime (here, a burglary) tend to be more vengeful, but not if they have been victims of a different crime, like mugging.

Of course the basic idea comes from Adam Smith.  Here is the full story, which features commentary by GMU economists.  Here is my previous post on the topic.