Category: Political Science

The total population of terrorists ebbs and flows all the time.  When the number goes up by one hundred, no one much notices.  If the number goes up by one hundred because we release some previously identified terrorists, there is or will be a public outcry.  But it's the same consequence.

Fewer terrorists are better than more terrorists, to be sure.  But a terrorist we release is not obviously worse than a terrorist who was free in the first place.

We evaluate outcomes differently when we feel we are in control or should be in control.  We should examine this intuition carefully, since it is not always justified.

We also treat an outcome differently when we feel it allows an enemy of ours to "get back at us."  I suspect this difference in feeling is not usually justified and that it is the primary driver behind the fear of releasing terrorists.

I can think of "political theater" reasons why an attack from a released terrorist would be worse than an attack from an "already free" terrorist.  Overall I do not yet feel that we are thinking about this issue rationally.

A new tax favor for the relatively wealthy is now in the stimulus package:

In place of those business credits, Democrats expect to include a
"patch" for the Alternative Minimum Tax, a provision meant to prevent
upper middle class wage earners from moving into a higher tax bracket.
The AMT was originally designed 40 years ago to assure that the
wealthiest Americans were not able to shelter their earnings from the
Internal Revenue Service.

Estimates peg the cost of this year's AMT fix at around $70 billion,
and congressional leaders and key members of the tax-writing Senate
Finance and House Ways and Means committees would prefer to deal with
it now rather than wait to make it part of an end-of-the-session crush,
as it has in recent years.  Rep. Charles Rangel
(D-N.Y.), the Ways and Means chairman, said yesterday that plans were
"more than tentative" for including the AMT provision in the stimulus
package.

Furthermore, Congress is expanding SCHIP, but maybe it's not as progressive as it sounds:

If Democrats thought health care reform was going to happen this
year, said health policy consultant Robert Laszewski, they would have
leveraged the popular, bipartisan children's program to build support
for the much bigger universal coverage plan that will need every vote
they can find.

Quick passage of the children's health care bill reveals "a lack of
confidence" by Democratic leaders, Laszewski said. Asked what's going
to stop health care reform this year, he said, "$2 trillion of special
interests."

Check carefully the new authors' photo on EconLog (upper right hand corner of the page).  If you scan the crowd with the requisite attention you will see there are now three people, with David R. Henderson (formerly a guest blogger) as the addition.

We welcome David to the blogosphere!

“We expect that discussion around entitlements will be a part, a
central part” of efforts to curb federal spending, Mr. Obama said at a
news conference. By February, he said, “we will have more to say about
how we’re going to approach entitlement spending.”

I am no expert at reading the political tea leaves, but given the political costs involved, it is unlikely he said this as a mere feint.

But evidence is mounting that Obama is already losing ground among
key Arab and Muslim audiences that cannot understand why, given his
promise of change, he has not spoken out. Arab commentators and
editorialists say there is growing disappointment at Obama’s detachment
– and that his failure to distance himself from George Bush’s strongly
pro-Israeli stance is encouraging the belief that he either shares
Bush’s bias or simply does not care.

The Al-Jazeera satellite
television station recently broadcast footage of Obama on holiday in
Hawaii, wearing shorts and playing golf, juxtaposed with scenes of
bloodshed and mayhem in Gaza. Its report criticising "the deafening
silence from the Obama team" suggested Obama is losing a battle of
perceptions among Muslims that he may not realise has even begun.

Here is more.  Under one interpretation of the signaling game, these observers might have inferred that the very timing of the Israeli attack implies Obama’s disapproval or at least an uncertain reaction; the Israelis could have waited for the Obama Presidency but they did not.  Under another interpretation, signals aren’t just about information but signals also show caring and solidarity as valued for reasons not directly related to the initial information.  Message recipients care about who sends the signal, and how the signal is sent, not just the revelation of the underlying information.  Under this second interpretation (relatively neglected by economic theory, I might add, though not by Robin Hanson), it is much harder for things to go well.

Alex J., a loyal MR reader, asks:

How come no prominent politicians carved out the underutilized political resource of opposing TARP?

The Democrats thought they will get their hands on some of the money (true) plus they were happy to see a Republican President take part of the fall.

As for the other party, how many prominent Republican politicians are there?  John McCain thought, rightly or wrongly, that he was acting in the national interest by supporting this part of the bailout.  McCain supporters were scared away from challenging him on that issue.  So only some of the more radical and less recognized Republicans opposed the bailout.  Sooner or later a few of them will become prominent and then the premise of this question will no longer hold.

Dr. Holdren, now a physicist at Harvard, was one of the experts in natural resources whom Paul Ehrlich enlisted in his famous bet against the economist Julian Simon
during the "energy crisis" of the 1980s. Dr. Simon, who disagreed with
environmentalists’ predictions of a new "age of scarcity" of natural
resources, offered to bet that any natural resource would be cheaper at
any date in the future. Dr. Ehrlich accepted the challenge and asked
Dr. Holdren, then the co-director of the graduate program in energy and
resources at the University of California, Berkeley, and another
Berkeley professor, John Harte, for help in choosing which resources
would become scarce.

He’s been named as Obama’s chief science advisor.  Here is more information.  Read this too.  I was disconcerted to see the close connections between Holdren and Ehrlich. 

If you discount everything back to today, the net present value of the Senate seat would be ~$6.2 million.

Here are the calculations.  One way to dispute the numbers is to adjust for the opportunity cost of the talented labor of the would-be Senator.  Still, with finance falling apart, the job market slowing down, and the option of receiving bids from wealthy but non-talented people, I remain surprised that 500K would be viewed as a going offer.  The associated fame and power is fun.  Clearly the seat was worth more than that to its previous holder, no?

I was surprised to read the first plank of Obama’s proposed stimulus:

First, we will launch a massive effort to make public buildings more
energy-efficient. Our government now pays the highest energy bill in
the world. We need to change that. We need to upgrade our federal
buildings by replacing old heating systems and installing efficient
light bulbs. That won’t just save you, the American taxpayer, billions
of dollars each year. It will put people back to work.

Maybe that is deliberately unglamorous but I was expecting a more dramatic first punch.  Here, by the way, are some simple arguments for energy-efficient buildings.  My Google search doesn’t yield much useful, however, in the way of critical analysis.  (Any leads, readers?)  And surely ten years from now our government still will have the highest energy bills in the world, unless the goal is to grow so slowly that the Chinese government will pass us.

Oddly the two goals of the plan — saving dollars and creating jobs — often stand in tension.  Let’s say we could heat all those buildings for a dollar: how many jobs would that create?  Is the goal to "spend less" or to "spend more"? The mere fact that you can write in the comments section: "Spend more today to spend less tomorrow!" does not convince me.

The second plank of the program is more roads and bridges, which for better or worse you can consider the opposite of a carbon tax.  How quickly can that money be spent anyway?  The plan mandates quick spending of the transferred funds.  But maybe state and local governments will hold off on some currently planned expenditures (which is contractionary) so they can be ready to spend immediately once they receive their "use it or lose it" allocations.  Has anyone thought that problem through?

The third plank is upgrading school buildings.  ????????????????  Maybe this is Obama’s attempt to mimic ditch-digging, under the unassailable banner of "education," but again how quickly can these projects come on-line?  I call this one total waste and an outright mistake.

The fourth plank is extending the information superhighway.  Maybe, but isn’t human capital the real constraint at current margins?

The fifth plank is internet-connected hospitals and electronic medical records.  Those are good ideas but I don’t see how they contribute to economic recovery.  Basically you either force or pay medical care providers to do it and for sure health care is not the ailing sector.

The bottom line: When it comes to fiscal policy, many projects are not very good.  Most projects take a long time to come on-line.  The fiscal stimulus should, most of all, be directed at an effective marginal incentive scheme to keep up state and local spending.  I am still enthusiastic about Obama’s economic team, but I am starting to worry a little.  How many of these expenditures actually help needy people?  How many actually will help the economy?  In fairness to Obama this was a radio address, and thus hardly the setting for meaty analysis, but still I am a little underwhelmed.

According to databases, there might be fewer than 20 Obama families in
the United States, compared with more than 11,000 Clintons and 60,000
Bushes…

Many of these people are being treated like VIPs.  But they are not mostly from Kenya:

Nicanor, like most of the Obamas in this area, is a native of
Equatorial Guinea. The name is common there — much more so than in
Kenya, in fact, where the president-elect’s father was from — and
Guineans wonder whether they can make their own claim to a branch of
the president-elect’s family tree. There are also a few Obamas of
Japanese decent.

Here is a listing of all appearances of the word or name Obama, which includes lots from Japan, including a cable TV station.  Here is the only known Obama in the UK.

Now that Brian Cowen (read the section of that link on "public image") is Prime Minister of Ireland…

This is exactly the kind of detailed political question I don’t follow so let’s try some crude, fact-poor economism.  Hillary Clinton commands the loyalties of significant segments of the Democratic Party.  The implication is that Obama will need these segments for what he is trying to do.  Since Obama already has 58 (?) Democratic Senators on his side, we should conclude that Obama will try to do lots in the first few months of his term; this is the "throw long and deep" scenario.

He can always encourage her to leave later, if the relationship does not work out.  Latinos, on the other hand, are stronger as voters than as a lobby or as an organized segment of the Democratic Party.  The implication is that they will get relatively little at the beginning of Obama’s term — when lobbies are needed — but successively more as the next election approaches.

Addendum: Andrew Sullivan considers other hypotheses.

Hail Mark Steckbeck, for sending me such content:

US elected officials scored abysmally on a test measuring their
civic knowledge, with an average grade of just 44 percent, the group
that organized the exam said Thursday.

Ordinary citizens did not fare much better, scoring just 49 percent correct on the 33 exam questions compiled by the Intercollegiate Studies Institute (ISI).   

Here’s one detail:

Asked about the electoral college, 20 percent of elected officials incorrectly said it was established to "supervise the first televised presidential debates."

Here is the clincher:

The question that received the fewest correct responses, just 16
percent, tested respondents’ basic understanding of economic
principles, asking why "free markets typically secure more economic
prosperity than government’s centralized planning?"

This one is a little tricky:

Forty percent of respondents, meanwhile, incorrectly believed that the US president has the power to declare war, while 54 percent correctly answered that that power rests with Congress.

I’m not sure if those last few numbers are for the officials or for everyone, though it doesn’t much seem to matter.  The quiz itself is here.  Here is more on the results for the non-officials.