Category: Political Science

"Why does one person have the right to grant $85 billion in a bailout
without the scrutiny and transparency the American people deserve,"
asked House Speaker Nancy Pelosi (D., Calif) a reference to the loan
the Fed gave AIG with the Treasury’s blessing.

And:

"No one in a democracy, unelected, should have $800 billion to spend as he sees fit," said Mr. [Barney] Frank.

He was referring to Bernanke’s balance sheet and not to Gerald Ford, in case you were not sure.  Here is the link, courtesy of Arnold Kling, who responds: "I just get a chuckle hearing a Congressman complain about someone spending other people’s money."  Here is Arnold on RTC-like plans.

Research by UCLA political scientists into the "facial competence" of candidates puts the Republican VP hopeful in the top 5%.

Their paper (http://renos.bol.ucla.edu/AtkinsonEnosHill.pdf ) shows that facial competence explains a significant portion of the vote — about 4% of independent voters in a congressional election.

Here’re some more details: http://renos.bol.ucla.edu/AtkinsonEnosHill.pdf

This was "unscripted", from Sarah Palin:

Disappointed that taxpayers are called upon to bailout another one. Certainly AIG though with the construction bonds that they’re holding and with the insurance that they are holding very, very impactful to Americans so you know the shot that has been called by the Feds it’s understandable but very, very disappointing that taxpayers are called upon for another one.

That’s via Andrew Sullivan.  It’s the phrase "very, very impactful" I object to.  The point about construction surety bonds is actually correct, as indeed AIG did issue them and it doesn’t seem that any regulation or state authority will make good those guarantees (readers, correct me if I am in error but I can find no record of such guarantees).  That means a lot of people bought insurance against adverse construction events and will be left without that protection.

Of course this matters less at lower levels of construction.

The real lesson of this quotation is that the Republicans have no good language for discussing recent events.  They’re not allowed to say anything that sounds like "showing sympathy for Wall Street," so they have to find someone else to show sympathy for but they can’t turn to traditional Democratic rhetoric about how an unregulated capitalist economy is failing us.  Citing the construction bonds is like worrying that the financial crisis will postpone the retirement of many professors.  Yes that is true but it’s odd (though not unprecedented) if that’s the first thing that comes to your mind or for that matter to your talking points.

Here is John McCain on the crisis, again unscripted, from The Today Show:

LAUER: So if we get to the point middle of the week as we heard in that report where AIG might have to file for bankruptcy, they’re on their own?

McCAIN: Well…quote, "on their own"…we have to – we cannot have the taxpayers bail out AIG or anybody else…this is something we’re gonna have to work through — there’s too much corruption, there’s too much access, we can fix it, I believe in America – we can have a 9/11 commission such as we had after 9/11, ’cause this is a huge crisis and we can come up with fixes and we can make sure that every American has a safer future and that is to make them know that their bank deposits are safe and insured.

Here is more of the session.  He did worse than she did and that’s after decades on the national scene.

The empirics on beautiful women imply that, in a great many cases, a) they have their own agendas, b) they stick to those agendas, no matter what they may say in public, or no matter what "more experienced" men tell them to do, c) they are very good at fooling the men they associate with and they are used to thinking they can get away with it, and d) agendas are often more local and less global than you think.  If you don’t believe me, read the final act of Henry V.

Andrew Sullivan is calling Sarah Palin "Rovian."  Maybe, but her first order of business has been to fool the Republican establishment, not
the American people.  (Read this silly AEI guy.)  Her few genuine words on foreign policy indicate her positions are hardly the modern Republican norm.  She is "unusual" on pot smoking and benefits for gays and juror nullification.  The Republicans are underestimating her role as a Hegelian agent of world-historical change, just as the Democrats did at first.

Which narrative do you find more plausible?:

"Lovely Sarah, she’s saying and doing everything we want her to.  What a quick learner.  How pliable she is.  Remember Descartes on tabula rasa?"

"Once John and I are elected, they’ll need me more than I need them."

The people who are right now the happiest may end up the most concerned.  For better or worse, they’re about to lose control of their movement.

The official told FOX News there are no signs of
instability in North Korea now, but the likelihood of a smooth
transition of power in that country is not high.

Here is the story, fully speculative throughout.  Many people think Kim is in very bad shape.  Apparently the U.S. and China are drawing up contingency plans for what comes next, financed in part by those interest payments on the agency debt.

One topic at today’s lunch was to guess the chance that the North Korean communist regime might collapse forever in the next few years.  I said p = 0.3, which others found to be a high estimate.  A second topic was, if reunification of the Koreas occurred (itself an open question), how long it would take for the South to grow again, given the amount of reconstruction it would have to finance in the North.  I said twenty years, though upon reflection I’ll revise that downwards a bit.

It’s hard to say much about these topics with any grounding, but since no one else in the econ blogosphere is talking about them, I will.  It’s by far the most important drama going on in the world right now.

I know this is serious stuff and it shouldn’t cause me to snort.  But it does.  I loved this dual question:

What is the European Union, and how does it function?

Not quite as good is:

What is the function of the Federal Reserve?

The link is from Ezra Klein.  Bear Stearns, Ireland, Georgia, and Denmark are invited to submit their answers as well.  How about Lehman Brothers and Turkey?

Addendum: On this list, questions #2, 4, 6 and 17 bear some pondering too.  Nor is #3 as simple as many people think.

In case you had forgotten:

"Have you ever heard of insect politics? Neither have I! Insects don’t
have politics…. they’re very brutal. No compassion…. no compromise.
We can’t trust the insect. I’d like to become the first insect
politician. I’d like to, but…. I’m an insect…. who dreamed he was a
man, and loved it. But now the dream is over, and the insect is awake."

That’s from David Cronenberg’s The Fly.  I was reminded of the scene by this post.  Best of all, the YouTube of that scene is here.  I will genuinely be glad when this campaign is over.

Addendum: The new operatic version of The Fly is receiving negative reviews.

First, war.  War is the antithesis of the libertarian philosophy of
consent, voluntarism and trade.  With every war in American history
Leviathan has grown larger and our liberties have withered.  War is the
health of the state. And now, fulfilling the dreams of Big Brother, we are
in a perpetual war.

A country cannot long combine unlimited government abroad and limited
government at home. The Republican party
has become the party of war and thus the party of unlimited government.

With war has come FEAR, magnified many times over by the governing party. Fear is pulling Americans into the arms of
the state. If only we were better at
resisting. Alas, we Americans say that
we love liberty but we are fair-weather lovers.  Liberty will flourish only with peace. 

Have libertarians gained on other margins in the past eight years? Not at all. Under the Republicans we have been sailing due South-West on the Nolan
Chart – fewer civil liberties and more government, including the largest new
government program in a generation, the Medicare prescription drug plan, and
the biggest nationalization since the Great Depression. Tax cuts, the summum bonum of Republican
economic policy, are a sham. The only
way to cut taxes is to cut spending and that has not happened.

The libertarian voice has not been listened to in Republican politics for a
long time. The Republicans take the libertarian wing of the party for granted
and with phony rhetoric and empty phrases have bought our support on the
cheap. Thus – since voice has failed – it is  time for exit.  Remember that if
a political party can count on you then you cannot count on it.

Exit is the right strategy because if there is any hope for reform it is by
casting the Republicans out of power and into the wilderness where they may
relearn virtue. Libertarians understand better
than anyone that power corrupts. The
Republican party illustrates. Lack of
power is no guarantee of virtue but Republicans are a far better – more libertarian –
party out-of-power than they are in power. When in the wilderness, Republicans turn naturally to a critique of
power and they ratchet up libertarian rhetoric about free trade, free
enterprise, abuse of government power and even the defense of civil liberties.  We can hope that new leaders will arise in
this libertarian milieu.

No country with a McDonald’s outlet, the theory contends, has ever gone to war with another….

Thomas
Friedman, who invented the theory in 1996, said people in McDonald’s
countries "don’t like to fight wars. They like to wait in line for
burgers."…

The Russia-Georgia conflict has finally blown this theory out of the water.

From the Guardian.  Clearly the theory was over-identified.  Perhaps no two countries with Taco Bell’s every go to war with one another.

Hat tip to Chris Blattman.

Ezra Klein channels Andrew Gelman:

…small states tend to be more approving of their governors. Why? Gelman
has some theories: "In a large state, there will be more ambitious
politicians on the other side, eager to knock off the incumbent
governor; small states often have part-time legislatures and thus the
governor is involved in less political conflict; small states (notably
Alaska) tend to get more funds per capita from the federal government,
and it’s easier to be popular when you can disburse more funds; large
states tend to be more heterogeneous and so it’s harder to keep all the
voters happy. As the graphs show, the pattern isn’t perfect, but it
looks real to me."

I have an additional hypothesis.  People from small states, especially atypical small states, sometimes have an inferiority complex vis-a-vis the other states or regions.  Taking pride in their politicians is one way of compensating for that.  Furthermore there is often less to do in underpopulated states and is not pride sometimes a substitute for action?  New Yorkers are not in fact so proud of the Metropolitan Opera, but in parts of Wisconsin the Green Bay Packers are king.

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.