Category: Political Science

Here is Dani Rodrik defending Hillary on trade, here is Paul Krugman.  Here is the very good critique from Clive Crook.  So what’s up?  My uninformed default assumption is that Hillary wants to win the Iowa caucases.  That means her goal is to signal protectionism to Iowa activists and voters, and sophisticated non-protectionism to the more trade-oriented elites and donors.  Congratulations if you were able to pick out the latter signal, but don’t confuse it with a defense of what she said, why she said it, or when she said it.

The voting weights implied by the estimated model demonstrate that
early voters have up to 20 times the influence of late voters in the
selection of candidates, demonstrating a significant departure from the
ideal of "one person, one vote."

Here is the paper, I cannot find non-gated versions.  If we were aiming for efficiency, and the saving of time, rather than democratic equity, in which state should the first primary or caucus be held?

Here is the story.  Nick Gillespie says:

"We’re the Sith Lords of American politics," he says, referring to
the "Star Wars" baddies.  "We can show up in any group.  We’re both
terrifying and devilishly attractive."

Since I’m not either of those things, and I’ve made other claims about the Sith Lords, I said something different:

Libertarian economist Tyler Cowen of George Mason University says
the new breed of Swiftian commentary found on shows such as "The Daily
Show" and "The Colbert Report," though not explicitly libertarian, also
has contributed to the current libertarian moment.  "The way to be funny is to make fun of something," Mr. Cowen notes.

There is more by me at the very end of the article (yes, you too can look into my heart).  In part libertarianism has become cool because Republicanism has become so uncool, thereby leaving a cultural gap which Hillary Clinton alone cannot fill.

Megan McArdle tells us:

…why is America’s high-speed rail so dreadful? The Acela delivers
you, at enormous added expense, to Boston one hour ahead of the
regional. On the DC-to-NY run, the added benefit is 10-15 minutes. The
answer is that the Acela uses existing track, which is twisty, the
better to serve every congressional district between here and Boston.
Real high speed rail needs to be fairly straight, for the same reason
you don’t take hairpin turns at 120 mph in your car.

I had never heard the Congressional district argument before.  I’ve also heard that freight railways crowd the lines and Amtrak doesn’t pay a high enough prices for access; the freight services had, way back when, pledged to the government to give Amtrak trains priority but of course that kind of cheap talk is not enough to get the job done; here is some relevant background, and more here.  Here is a good summary of Amtrak critiques.  It comes from a whole blog devoted to criticizing Amtrak.

Why buy votes when you can buy the Bay Area Center for Voting Research?  The BACVR analyzes voting trends in California and nationwide; they are best known for their ranking of the most liberal and most conservative cities (pdf) in the nation.  The founders, however, want out and are selling all of BACVR’s intellectual assets, including the organization’s web site, past research, and well-known name on eBay.  The perfect Christmas gift for that political junkie on your list.

Of course some people believe that all think tanks are for sale.

Mankiw says no, Caplan says the real problem is voting itself.  Of course we let private shareholders sell their votes all the time, and uncontroversially, so the real issue is how politics is different. 

Say society has a 9999 people.  The marginal private value of a (political) vote is almost zero, except for its feel-good benefit (see also Gelman on altruistic motives to motivate voting).  Yet the total value of 5000 votes — a winning tally — is the size of the largest wealth transfer that the winner could impose on everyone else.  The result will mimic a model of self-interested voting but with only one self-interested voter — the owner of the purchased votes — having a say.  And that winner will be the conscience-less (non-liquidity-constrained) person who has the most to gain from buying up votes and getting things his way.

Of course Bryan, in other contexts, has shown that expressive voting is more likely than the self-interested voting model, at least under standard democracy.  I would rather have expressive voting than what is explained directly above, even though expressive voting is somewhat irrational. 

Maybe voters will end up with sudden attacks of conscientiousness and be unwilling to sell their votes; to that extent vote-selling won’t much matter and of course then it can’t bring gains either.

Now let’s go back to the corporate case.  When it comes to policy, shareholders might not agree on means but everyone favors the same end of profit maximization.  A winning coalition of shareholders can’t do much to extract rents from other shareholders, unless of course they are exploiting those other shareholders in their other roles as consumers or input suppliers.  But such effects are usually small (as opposed to the widespread possibilities for redistribution through politics) and thus vote selling works just fine for corporations.  There is no simple way that shareholder A can buy up the votes of shareholders B and C and then just screw them over.

Coda: There is a potential problem with vote-selling in corporations, again relating back to the difference between marginal and average value for a vote.  Shareholders might be afraid to sell to a takeover artist, instead wishing to hold on for the ride and reap gains from the change in corporate control.  But if no one sells the takeover cannot take place and no one reaps the gains.  In other words, there is too little vote selling; that’s Grossman and Hart, 1980.  Alex once wrote an excellent paper on this problem (but where is the link Alex?) and showed that the free-rider problem among shareholders can usually be solved by random Nash strategies; note that the final outcome will depend on whether there is a countable or uncountable infinity of shareholders; please don’t laugh!

The bottom line: There are good economic arguments for why we allow corporate vote-selling but not political vote-selling.

One loyal MR reader wrote in the comments:

He’ll [Kasparov] be fine. Killing him would be too bad a move in terms of PR.

But that is exactly my worry.  Putin has many would-be enemies.  What better retaliation than to do something evil and make it look like Putin is possibly at fault?  (That is in fact one theory about the polonium poisonings.)  Maybe you think Putin has already signaled credibly that he wouldn’t kill Kasparov, but if that is the case then he could in fact turn around and order it done and not take the blame.  Either way the equilibrium looks like assassination.  The going rate for an assassin simply isn’t that high and surely somebody has at least that much at stake in the outcome.

When I was a little kid I saw TV coverage of the assassinations of Bobby Kennedy and Martin Luther King.  I recall wondering why every famous politician, or at least every reachable famous politician, isn’t assassinated.  Or why isn’t the equilibrium quantity of product sabotage — accompanied by options trading of course — very high?  The sabotage doesn’t have to hurt people to lower share prices.

If some people find it worthwhile to send spam, why don’t many more?  Is the cost structure really that heterogenous on the production side? 

I might add these are important questions for understanding a future of extreme nuclear proliferation.

Joseph Stiglitz writes:

You’ll still hear some — and, loudly, the president himself — argue that
the administration’s tax cuts were meant to stimulate the economy, but this was
never true. The bang for the buck — the amount of stimulus per dollar of
deficit — was astonishingly low. Therefore, the job of economic stimulation
fell to the Federal Reserve Board, which stepped on the accelerator in a
historically unprecedented way, driving interest rates down to 1 percent. In
real terms, taking inflation into account, interest rates actually dropped to
negative 2 percent. The predictable result was a consumer spending spree. Looked
at another way, Bush’s own fiscal irresponsibility fostered irresponsibility in
everyone else.

Stiglitz seems to claim that Bush will go down with a lower reputation, in economic terms, than Herbert Hoover.  I have not been a huge fan of Bush’s fiscal policy, but I can add: a) Bush is not to blame for loose Fed policy, b) it remains debatable among honest Democratic economists whether loose Fed policy was bad, c) U.S. consumption has been robust for a long time, and d) changes in real interest rates do not explain much of the variation in private consumption, and that’s even assuming you manipulate the ex ante vs. ex post distinction to suit your convenience.  The first two sentences of this paragraph are plausibly true but then the text deteriorates rapidly and is determined to blame as many things on Bush as possible.  The paragraph ends up attacking Bush for promoting a "consumer spending spree" when Stiglitz had started by arguing for traditional Keynesian fiscal stimulus, the purpose of which is to promote…a consumer spending spree.

Stiglitz also argues that Bush is in large part (he won’t say how large) to blame for high oil prices.  In his view the war in Iraq led to political instability and stifled investment in the region, I say that Saudi oil wells are running dry anyway and increased demand — most of all from China — is the fundamental issue.  Note also that for many plausible parameter values, political instability leads to more pumping today and thus lower prices; the counterweighing cycle of less exploration and exploitation can take a long time to kick in.

It’s also worth noting how much the arguments run counter to Stiglitz’s own (earlier) writings on macroeconomics.  He used to preach that a) banks are excessively reluctant to lend to risky borrowers (compare to his discussion of the subprime crisis), b) changes in real interest rates generally don’t matter much, c) adverse selection makes it hard to sell non-transparent assets for a reasonable price (compare to his discussion of securitization), and d) we cannot expect monetary policy to be especially effective but rather we must focus on the extent of credit rationing.  Stiglitz of course has the right to change his mind, but if the shift is so big surely this is news.

There are many good arguments against many of Bush’s economic policies, and many other arguments which are maybe wrong but at least plausible or possibly true.  But essays such as this are not promoting the public’s understanding of economics.

The pointer is from Mark Thoma. 

I used to think that short meetings were best.  Clearly, I confused the private with the social optimum.

For bonus points compare the picture with Tyler’s discussion of meetings.  How many items can you spot?

Meetings are not always about the efficient exchange of information, or
discovering a new idea. Meetings can be about displays of power,
signaling that a coalition is in place, wearing down an opponent,
staging "theater" to make someone feel better, giving key players the
feeling of being insiders, transmitting information about status, or
simply marking time until something better happens. It’s one thing to
hate meetings. But before you can improve them, make sure you know what
meetings are all about.

Hat tip to J-Walk Blog for the picture.

The subtitle is The Political Economy of Exporting Democracy, and the author is Chris Coyne, a former student of mine and now professor at West Virginia University, also blogger at The Austrian Economists.  Excerpt:

What do the data indicate regarding the effectiveness of reconstruction as a means of achieving liberal democracy?  In short, the historical record indicates that efforts to export liberal democracy at gunpoint are more likely to fail than succeed.  Of the twenty-five reconstruction efforts, where five years have passed since the end of occupation, seven have achieved the stated benchmark, resulting in a 28 percent success rate.  The rate of success stays the same for those cases where ten years have passed.  For those efforts where at least fifteen years have passed, nine out of twenty-three have achieved the benchmark for success, resulting in a 39 percent success rate.  Finally, of the twenty-two reconstruction efforts where twenty years have passed since the exit of occupiers eight have reached the benchmark, resulting in a 36 percent success rate.

You can buy Chris’s book here.  I view the key analytical point as focusing on the power of on-the-ground expectations to make the reconstruction "game" either a cooperative or combative one.  This is a difficult variable to control, but Chris offers a very good look at the best and worst attempts that the United States has made to manipulate these variables and thus export democracy.  If you want to know why the Solow model doesn’t seem to hold for Bosnia, or a deeper more analytic sense of why Iraq has been a mess, this is the place to go.

I used to think so, but not any more:

We assess whether there is a strong causal relationship
between congressional districting and polarization. We find very little
evidence for such a link. First, we show that congressional
polarization is primarily a function of the differences in how
Democrats and Republicans represent the same districts rather than a
function of which districts each party represents or the distribution
of constituency preferences. Second, we conduct simulations to gauge
the level of polarization under various “neutral” districting
procedures. We find that the actual levels of polarization are not much
higher than those produced by the simulations. We do find that
gerrymandering has increased the Republican seat share in the House;
however, this increase is not an important source of polarization.

That’s from the very accomplished Howard Rosenthal.  The paper is here, hat tip to BookForum. 

So what does cause voter polarization?  Here is a counterintuitive hypothesis: political extremists are most active when they fear that the extremists from the other side might win.  Each candidate requires those extremists for support and resources, and when a candidate wins he or she then must polarize to some extent.  If you think of the extremists as motivated by fear of the other side, in a lopsided district they are more likely to stay at home and keep their mouths shut, thereby allowing the candidate to straddle the center.  It’s a close race that brings out the partisans and gives them some measure of ex post control.

Might this be true?

We examine DW-Nominate scores for members of the House of Representatives who served from 1993 through 2000. The most politically extreme members tended to represent politically competitive districts, a result at odds with traditional Downsian expectations.

File this one under "I’m still fundamentally confused."

Over at Mark Thoma’s, Bernard Yomtov asks a very good question:

Why should there be mercenaries at all, given the existence of a large
and well-trained Army? The mercenaries are former soldiers. Their
functions are military and could be carried out by regular soldiers.
The only reason I can see for using them is precisely to have people
doing military jobs who are outside the normal chain of command, and
not subject to normal laws, rules, and regulations governing the
conduct of soldiers. In other words, it is to have people who do not work for government in the way that they should.

Most private contractors today do not serve in the function of soldiers but rather they deliver, ensure, and guard supplies.  This should be evaluated on a case-by-case basis, but often the private sector does a better job and without major legal problems. 

Security guards, however, are often "mercenaries."  A general or top Iraqi official for instance might be guarded by Blackwater employees.  The critics have not shown that Blackwater employees misbehave at a higher rate than do U.S. soldiers, so the comparative case against Blackwater — as opposed to the more general case against the war — is mostly shrill rhetoric.  It is possible to pay Blackwater employees bonuses for good performance rather than just give medals, plus they are on a higher pay scale in the first place.  Nonetheless my judgment call is that issues of perception and accountability are important enough in contemporary Iraq that we should be using contractors less in these capacities (as the column indicated), but the temptation to use them is based on more than just sheer political abuse.

Contractors lower the cost of good operations, contractors lower the operational (but not social) cost of bad operations, contractors magnify the costs of mistaken Executive preferences, and contractors can raise new problems of monitoring.  If you don’t think the first item on this list is at work, there is good reason to cut back on contractors in Iraq.

But if you view the scope and use of contractors as a more general decision, rather than something which can be fine-tuned for each war, it is no longer such a simple choice.

Pew Research Center reports
that find "Democrats pulling even with Republicans among registered
voters with annual family incomes in excess of roughly $135,000 per
annum."

In case you were wondering.  Here is more.  In any case Americans don’t vote their economic self-interest nearly as much as you might think; Bryan Caplan’s book has the most recent debunking of this myth.

At this point it is ridiculous to claim that Hillary cannot win, but her chances are overestimated.  I apply what I call The Angry Ape Test to the candidates.  Imagine each mimicking an angry ape, and ask how pretty or appealing the resulting picture is.  Most swing voters perceive America as being at war and so they demand toughness.  They demand An Angry Ape, if not at every moment in time, at least in principle.  Most Americans don’t find an angry Hillary to be a pleasant Hillary, whereas an angry, raging Giuliana fits his basic image.  Americans claim not to be biased, but at their core they don’t much like angry women; being female remains Hillary’s biggest barrier, even when explicit prejudice is absent.  Related prejudicial forces will keep Barack Obama from the presidency.  Being black, he is supposed to sound reasonable and intelligent all the time.  He is not allowed to mimic An Angry Ape.  Americans want their first women President to be like Margaret Thatcher — firm, no-nonsense schoolmarmish strength without much radiation of anger — and they want their first black President to be like Colin Powell.  We will allow "Magisterial" — I’m too strong to need to throw a tantrum — to trump Angry Ape, but Hillary can’t play that card.  Barack is too young, too inexperienced, and doesn’t have the military record.

Mitt Romney also can’t do The Angry Ape.  This same hypothesis suggests McCain still has some chance, though obviously his path to the top is no longer clear, given his limited resources.  He can at least do The Ape.  This is the main reason why I still think Giuliani will win.

Under this theory foreign policy disasters, no matter who caused them, will help the Republican candidate.  We will demand An Angrier Ape.