Category: Political Science

Who in California opposes the abundance agenda?

Labor unions are one of the culprits, environmental groups are another:

Hours of explosive state budget hearings on Wednesday revealed deepening rifts within the Legislature’s Democratic supermajority over how to ease California’s prohibitively high cost of living. Labor advocates determined to sink one of Newsom’s proposals over wage standards for construction workers filled a hearing room at the state Capitol mocking, yelling, and storming out at points while lawmakers went over the details of Newsom’s plan to address the state’s affordability crisis and sew up a $12 billion budget deficit.

Lawmakers for months have been bracing for a fight with Newsom over his proposed cuts to safety net programs in the state budget. Instead, Democrats are throwing up heavy resistance to his last-minute stand on housing development — a proposal that has drawn outrage from labor and environmental groups in heavily-Democratic California.

Here is the full story, via Josh Barro.  To be clear, I am for the abundance agenda.

My excellent Conversation with Austan Goolsbee

Here is the audio, video, and transcript.  Here is part of the episode summary:

A longtime professor at the University of Chicago’s Booth School and former chair of the Council of Economic Advisers under President Obama, Goolsbee now brings that intellectual discipline—and a healthy dose of humor—to his role as president of the Federal Reserve Bank of Chicago.

Tyler and Austan explore what theoretical frameworks Goolsbee uses for understanding inflation, why he’s skeptical of monetary policy rules, whether post-pandemic inflation was mostly from the demand or supply side, the proliferation of stablecoins and shadow banking, housing prices and construction productivity, how microeconomic principles apply to managing a regional Fed bank, whether the structure of the Federal Reserve system should change, AI’s role in banking supervision and economic forecasting, stablecoins and CBDCs, AI’s productivity potential over the coming decades, his secret to beating Ted Cruz in college debates, and more.

Excerpt:

COWEN: Okay, if the instability comes from the velocity side, that means that we should favor a monetary-growth rule to target the growth path of a nominal GDP, M times V, right?

GOOLSBEE: [laughs] Yes, and now you’re going to get me in trouble, Tyler. Here’s the thing I’ve known —

COWEN: You can just say yes. You’re not in trouble with me.

GOOLSBEE: I’m not going to say yes because, remember, I don’t like making policy off accounting identities. There’s no economic content in accounting identity. If you are trying to design a rule, that rule may work if the shocks are the same as what they always were in previous business cycles. I called it the golden path.

When we came into 2023, you’ll recall the Bloomberg economists said there was a 100 percent chance of recession in 2023. They announced it at the end of 2022. That’s when I came into the Fed system, the beginning of ’23.

That argument was rooted in the past. There had never been a drop of inflation of a significant degree without a very serious recession. Yet in 2023, there was. Inflation fell almost as much as it ever fell in one year without a recession. If you over-index too much on a rule that implicitly is premised on that everything is driven by demand shocks, I just think you want to be careful over-committing.

COWEN: I’m a little confused at the theoretical level. On one hand, you’re saying M times V is an identity, but on the other hand, it drives inflation dynamics.

GOOLSBEE: It’s why I started back from the . . . I bring a micro sentiment to the thinking about causality and supply and demand. I sense that you want to bring us to a, let’s agree on a monetary policy rule, and I’m inherently a little uncomfortable. I want to see what the rules say, but I fundamentally don’t want us to pre-commit to any given rule in a way that’s not robust to shocks.

COWEN: Now, you mentioned the post-pandemic inflation and the role of the supply side. When I look at that inflation, I see prices really haven’t come back down. They’ve stayed up, and I see service prices are also quite high and went up a lot, so I tend to think it was mostly demand side. Now, why is that wrong?

GOOLSBEE: There’re two parts to that. I won’t say why it’s wrong, but here are my questions. If you’re firmly a ‘this-all-came-from-demand’ guy, (A) you’ve got to answer, why did inflation begin soaring in the US when the unemployment rate is over 6 percent? Or we could turn it into potential output terms if you want, but output is below our estimate of potential. Unemployment is way higher than what we think of as the natural rate, and inflation is soaring. That already should make you a little questioning.

COWEN: I can cite M2. You may not like it. M2 went up 40 percent over a few-year period, right?

GOOLSBEE: Two, the fact that the inflation is taking place simultaneously in a bunch of countries of similar magnitudes that did not have the kind of aggregate demand, fiscal or monetary stimulus that we had in the US is also a little bit of a puzzle.

Then the third is, if you don’t think it was supply, then you need to have an explanation for why, when the stimulus rolls off, everything about the stimulus is delta from last year. We pass a big fiscal stimulus, we have substantial monetary stimulus that rolls off, the inflation doesn’t come down. Then in ’23, when the supply chain begins to heal, you see inflation come down. Those three things suggest there’s a little bit of a puzzle if you think it was all demand.

COWEN: No, I don’t think it was all demand, but you mentioned other countries. Switzerland and Japan — they import a lot. They were more restrained on the demand side. They had much lower rates of price inflation. That seems to me strong evidence for being more demand than supply.

GOOLSBEE: Wait a minute.

COWEN: I’m waiting.

GOOLSBEE: You’re going to bring in Japan?

COWEN: Yes.

GOOLSBEE: And you’re going to try to claim that Japan’s low inflation is the result of something in COVID? Japan had lower inflation all along, for decades before. They were going through deflation.

COWEN: But if it was mostly supply, a supply shock would’ve gotten them out of the earlier deflation, right? A demand shock would not have.

Recommended.

How constrained is the NYC mayor?

I thought to ask o3, here is the opening of its answer:

New York City has a “strong-mayor / council” system, but the City Charter, state law and an array of watchdog institutions deliberately fragment power. In practice the mayor can move fastest on implementation—issuing executive orders, running the uniformed services, writing the first draft of the budget, and appointing most agency heads—yet almost every strategic decision runs into at least one institutional trip-wire.

He does appoint all police commissioners and has direct control over the police.  The mayor also has line item veto authority, although that can be overriden by the City Council.  The entire response is of interest.  More generally, who will and will not feel welcome in the city after this result?

The Effects of Ranked Choice Voting on Substantive Representation

Ranked choice voting (RCV) is an increasingly popular electoral institution that has been posited by reformers and media outlets to produce transformative effects on electoral outcomes and representation. However, there is little social scientific evidence available that evaluates these claims. I test the effects of RCV on municipal fiscal outcomes and the ideological composition of city councils. I also estimate RCV’s effects on these outcomes relative to public opinion — in other words, whether RCV narrows the gap between outcomes and mass policy preferences. This article finds no empirical support for the proposition that RCV changed fiscal outcomes or the ideological composition of city councils — both on absolute terms and relative to mass opinion. Furthermore, the roll-call based ideal points of legislators serving before and after RCV did not change, and the relationship between city district opinion and city legislator ideology is unchanged post-adoption. Taken as a whole, this article does not find evidence that RCV has produced the types of transformative political effects that reformers have postulated.

Here is the full paper by Arjun Vishwanath.  Source.

The tech right and the MAGA right

The contrasts there are the theme of my latest column for The Free Press.  Excerpt:

The MAGA crowd, starting with Trump and including J.D. Vance, Stephen Miller, and Steve Bannon, has a different set of beliefs. Again, the actual views here are diverse. (After all, Trump himself can hold multiple views in the course of a single paragraph.) But if I had to summarize the doctrine, I would take the slogan “Make America Great Again” very literally—with an emphasis on again.

Their desire is to bring back an America that was more nationalistic, had a more cohesive elite, was less infatuated with globalization, was more masculine and less feminized, and had a stronger manufacturing base, among other things. That also means fewer immigrants—especially immigrants who don’t come from Europe, which the MAGA crowd views as the font of American civilization.

It is not my purpose to debate these views one by one, but I will note that these have not been the natural trends of our time. Due to birth control, the influence of feminization has risen, because women are taking on increasingly important roles in the workplace, politics, and education. Due to automation and foreign competition, manufacturing employment has declined. The rise of Asia has propelled globalization, and many of the most talented students at U.S. universities are no longer Americans. And because of proximity, mobility, and instability in many Latin American countries, immigration, both legal and illegal, has been rising.

The MAGA recipe thus requires ongoing and quite serious government intervention, in both the economic realm and in culture. Otherwise MAGA is doomed to fail, as its desired ends will be swept aside by the broader currents of history, which favor the tech right. Since the America of earlier times had a much smaller government than today, MAGA advocates, if they are to implement their desired ends, have to war against libertarian tendencies, and thus MAGA is unlikely to end up evolving in libertarian directions.

So whereas the tech right wants freedom to build, MAGA wants the government to manage the building in some very specific directions—like rekindling manufacturing as a core part of the economy, for instance—and to prevent some kinds of globalized building altogether.

Recommended.

Annie Lowrey on ranked choice voting as a form of democracy

Seeing a no-name upstart attempt to upset a brand-name heavyweight is thrilling. But the system has warped the political calculus of the mayoral campaign. Candidates who might have dropped out are staying in. Candidates who might be attacking one another on their platforms or records are instead considering cross-endorsing. Voters used to choosing one contender are plotting out how to rank their choices. Moreover, they are doing so in a closed primary held in the June of an odd year, meaning most city residents will not show up at the polls anyway. If this is democracy, it’s a funny form of it…

Whether Cuomo or Mamdani wins this month, New Yorkers might have another chance to decide between them. After this annoyingly chaotic primary, we could have an annoyingly chaotic election: If Mamdani loses, he might run in the general on the Working Families Party ticket. If Cuomo loses, he might run in the general as an independent, as will the disgraced incumbent, Eric Adams. At least, in that election, voters won’t be asked to rank their favorite, just to pick one.

Here is the full piece.  I do not myself see a big advantage from this system.

My 2018 Politico piece on whether we are descending into fascism

In 2018 I published an article in Politico, arguing that fascism would not come to America.  In part that is because of our very long democratic traditions (much longer than Weimar!), and in part because American bureaucracy has become unmanageable, thus limiting the power of the executive.  DOGE in particular has been a quite vivid representation of the latter point, as I made it in 2018 — “The net result is they simply can’t control enough of the modern state to steer it in a fascist direction.”

A few people have asked me to revisit that prediction, and frankly I think it is looking great.  (I do not doubt, however, that the Trump administration represents a major increase in blatant corruption, and a deterioration of norms of governance, most of all in the areas of public health and science but not only.  I think of America as evolving back to some of its 19th century norms, and often bad ones, not fascism.)

Noah Smith wrote recently:

Trump is cosplaying as a dictator. But so far he’s backed down on: * tariffs * ICE sweeps * Abrego Garcia * Greenland/Canada/Panama * Ukraine aid * DOGE He does care about public opinion, a lot.

Here is Noah’s longer essay.

Here is a recent NYT headline: “Trump Loses Another Battle in His War Against Elite Law Firms.”  The judiciary has stood up to Trump firmly, and he has backed down.  The Army parade, by the way, was mostly pathetic and hardly served as a call to fascist arms.  The Kennedy Center is not the new Haus der Kunst.

It was some while back that Trump pulled the nomination of Stefanik to be UN ambassador, on the grounds that the Republican margin in the House was extremely thin.  All I can say is that Hitler would have done it differently.

Updating our views of nuclear deterrence, a short essay by o3 pro

I asked o3 pro how very recent events should update our perspectives on Schelling’s work on nuclear deterrence.  I asked for roughly 800 words, here is one excerpt from what I received:

…Deterrence models that ignore domestic legitimacy under‑predict risk‑taking.

6. The United States is both referee and participant

American destroyers shooting down Iranian missiles create a blended deterrence model: extended defense. That blurs the line between the traditional “nuclear umbrella” and kinetic participation. It also complicates escalation ladders; Tehran now weighs the prospect of an inadvertent clash with the U.S. Fifth Fleet every time it loads a Shahab‑3. The war thus updates Schelling’s idea of “commitment” for the 21st‑century alliance network: digital sensors, shared early‑warning data, and distributed interceptors knit allies into a single strategic organism, reducing the freedom of any one capital to de‑escalate unilaterally.

7. Lessons for non‑combatant nuclear states

New Delhi and Islamabad will notice that an opaque Israeli arsenal backed by high‑end defenses delivered more bargaining power than Iran’s half‑finished program. Pyongyang may conclude the opposite: only a tested, miniaturized warhead guarantees respect. Meanwhile European leaders should ponder how much of their own deterrent posture rests on aging U.S. missiles whose effectiveness presumes no adversary fielding Israel‑grade intercept layers. The Israeli‑Iranian conflict is therefore less a regional exception than a harbinger.

Here is the full “column.”

The Return of the American Model

In talking about Operation Warp Speed I repeatedly placed it in the context of what I call the American Model of emergency response. The American model is the fusion of federal spending power with the speed, ingenuity, and innovation of the private sector. It aligns the visible hand of government with the invisible hand of the market. Operation Warp Speed was the most recent example, but the most important demonstration of the American Model was the shift to a wartime economy during World War II.

As Arthur Herman recounts in the excellent Freedom’s Forge, it wasn’t centralized command or sweeping nationalization that turned the United States into the “arsenal of democracy.” It was a partnership between government and business—figures like William Knudsen and Henry Kaiser mobilized private firms to outproduce the Axis through decentralized execution and rapid innovation funded by federal investment and aided by deregulation and the ending of New Deal attacks on markets and entrepreneurs. William Knudsen, the penniless Danish immigrant who worked his way to key positions in Ford and General Motors, being commissioned as a lieutenant general in the United States Army epitomizes the American Model.

In an incredible piece, Shyam Sankar the CTO of Palantir explains why he has accepted a commission as a lieutenant colonel in the Army Reserve’s newly formed Detachment 201: Executive Innovation Corps.

I decided to join the military for reasons both patriotic but also intensely personal.

My father grew up in a mud hut in Tamil Nadu, the southernmost state in India. He was the youngest of nine children and the first in his family to attend college—an education made possible only by his eight siblings pooling their wages. After graduation, he moved to Lagos, Nigeria, to build and run a pharmaceutical plant. Through ingenuity and an enterprising spirit, he became successful at a remarkably young age.

When I was 2, our life in Lagos ended violently. Five armed men broke into our home, killed our dog, pistol-whipped my father, and threatened my mother as they demanded money from the company safe. We fled Lagos with nothing, and started over in America.

My father took a job at a company that supplied souvenirs to theme parks in Orlando, Florida. My childhood memories are punctuated by Space Shuttle launches seen from my school courtyard, and by the bone-rattling double sonic booms of the Shuttles’ reentry. Lessons about the power of American technology were literally falling from the sky around me.

My father never again saw the material success of his youth, and he faced setback after setback in America. But he always reminded me of the counterfactual: “But for the grace of this nation, you would be dead in a ditch in Lagos.” America gave him life, liberty, and possibility.

Many lessons here about immigration, markets, universities, elites and more. Read the whole thing.

Which countries won’t exist in the 22nd century?

Or sooner, that is the topic of my latest essay for The Free Press.  Excerpt:

The most radical redefinition of the nation-state may be coming from Haiti, where preexisting forms of government appear to have collapsed altogether. Haiti has been a troubled place for a long time, but when I used to visit in the 1990s you could come and go intact—at least if you exercised commonsense precautions.

But since 2023, there have been no elected officials of any kind present in Haiti. That is highly unusual for what was supposed to be a democracy. Circa mid-2025, criminal gangs took control of most of Port-au-Prince, the capital and most populous city of the country. Murder rates are skyrocketing, and if somehow I were foolish enough to show my face in the country (by the way, the main airport is not usually open) it is likely I would be kidnapped almost immediately.

The remaining fragments of the government have taken to carrying out drone attacks on the criminal gangs, but without making much if any progress in reestablishing their rule. Mainly it is the warlords who are left, and who also run the country.

Various U.S. interventions, most notably under President Clinton in the 1990s, and UN-backed troop deployments have failed to prevent Haiti from falling to pieces. You can say the world has not tried hard enough, but you cannot say the world has not tried. There is still a Kenyan-led, UN-affiliated force in Haiti, but it does not appear to exert any significant influence.

One possibility is that a dominant gang emerges and becomes the new government, albeit a highly oppressive one. Yet it is far from obvious that consolidation is in the works, as in many situations we observe multiple, warring drug gangs as a persistent outcome. Most likely, Haiti will have ceased to be a sustainable nation-state with an identifiable government. It would better be described as a state of Hobbesian anarchy.

Worth a ponder.

Adam Tooze on European military spending

Now, you might think that the US figure is inflated by the notorious bloat within the American military-industrial complex. I would be the last person who would wish to minimize that. But the evidence suggests that the bias may be the other way around. American defense dollars likely go further than European euros.

Look for instance at the price of modern, third-generation battle tanks and the cost of self-propelled howitzers, which have been key to the fighting in Ukraine. German prices are far higher than their American counterparts.

And, as work by Juan Mejino-López and Guntram B. Wolff at the Bruegel policy think tank has shown, these higher costs have to do with smaller procurement runs and smaller procurement runs are, in turn, tied to the fragmentation of Europe’s militaries and their strong preference for national procurement.

Right-now there is often lamentation about the tendency of European militaries to import key weapons systems from the US. And there is, of course, plenty of geopolitical and political maneuvering involved, for instance, in Berlin’s initiative to build an air defense system heavily reliant American and Israeli missiles. As the data show, Germany does have a strong preference for imports from the US rather than its European neighbors.

But, on average, across the entire defense budget, the besetting sin of European militaries is not that they rely too heavily on foreign weapons, but that they import not enough. They are too self-sufficient. The problem is not that Germany buys too many weapons from the US, but that it buys too many in Germany.

National fragmentation creates the balkanized defense market, the inefficient proliferation of major weapons systems and in terms of global industrial competition, the small size of European defense contractors.

Here is the full Substack, very good throughout.  Via Felipe.

The wisdom of Ezra Klein

What both forms of populism share is a tendency to treat virtue as a fixed property of groups and policy as a way of redistributing power from the disfavored to the favored. When I said we needed “a liberalism that builds,” David Dayen, the editor of The American Prospect, responded that “we need a liberalism that builds power” and that the way to get it is for the government “actively supporting the very groups that have been left out of past economic transitions, building the necessary coalition for long-term transformation.”

Every policy, in this telling, has two goals. One is the goal of the policy or the project; perhaps you’re trying to decarbonize the economy or build affordable housing or increase competition in the market for hearing aids. But the other is the redistribution of power among groups: Does this policy leave unions stronger or weaker? Environmental justice groups? Corporations?

Under the populist theory of power, bad policy can be — and often is — justified as good politics. In California, the California Environmental Quality Act is defended by unions that use it to “greenmail” all manner of projects. CEQA is meant to protect the environment, but the threat of unending litigation can be used to win non-environmental concessions on virtually any building project in California.

Here is the full NYT  piece, interesting throughout, for instance:

My view of power is more classically liberal. In his book “Liberalism: The Life of an Idea,” Edmund Fawcett describes it neatly: “Human power was implacable. It could never be relied on to behave well. Whether political, economic or social, superior power of some people over others tended inevitably to arbitrariness and domination unless resisted and checked.”

Worth a ponder.

Mexico has been electing its federal judges

As a result, Mexicans face the paradox that giving more power to the public may undercut their democracy.

Predictions for Morena’s success on Sunday are driven by the unusual nature of the vote.

Just roughly 20 percent of voters are expected to cast ballots, the electoral authorities say, in part because voters hardly know the candidates. Polling shows Morena is overwhelmingly popular and the opposition is frail. The government controlled the selection process for federal candidates, who are elected by voters nationally, and 19 of 32 states will also elect local candidates.

Candidates are largely barred from traditional campaigning, a policy to try to level the playing field among candidates with different campaign funds. And political operatives have been accused of handing out cheat sheets, most of which recommend candidates with known ties to Morena.

Here is more from the NYT.  Garett Jones, telephone!