Category: Political Science
Solve for the equilibrium
The title of the paper is “Terrorism and Voting: The Rise of Right-Wing Populism in Germany.” Here is the abstract:
We document that right-wing terrorism leads to significant increases in vote share for the right-wing, populist AfD (Alternative fur Deutschland) party in Germany. To identify causal effects, we exploit quasi-random variation between successful and failed attacks across municipalities. Using the SOEP, a longitudinal panel of individuals, we find successful terror leads individuals to prefer the AfD and worry about migration. Political parties—the AfD in particular—adjust their messaging in election manifestos in response to terror. Overall, and in contrast to previous work, we find terrorism is consequential to the rise of right-wing populism in a Western, multiparty democratic system.
Note that is “right-wing terrorism,” not Islamic terrorism. The piece is by Navid Sabet, Marius Liebald, and Guido Friebel.
Why the tariffs are bad
I am delighted to see this excellent analysis in the NYT:
Mr. Tedeschi said that future leaders in Washington, whether Republican or Democrat, may be hesitant to roll back the tariffs if that would mean a further addition to the federal debt load, which is already raising alarms on Wall Street. And replacing the tariff revenue with another type of tax increase would require Congress to act, while the tariffs would be a legacy decision made by a previous president.
“Congress may not be excited about taking such a politically risky vote when they didn’t have to vote on tariffs in the first place,” Mr. Tedeschi said.
Some in Washington are already starting to think about how they could spend the tariff revenue. Mr. Trump recently floated the possibility of sending Americans a cash rebate for the tariffs, and Senator Josh Hawley, Republican of Missouri, recently introduced legislation to send $600 to many Americans. “We have so much money coming in, we’re thinking about a little rebate, but the big thing we want to do is pay down debt,” Mr. Trump said last month of the tariffs.
Democrats, once they return to power, may face a similar temptation to use the tariff revenue to fund a new social program, especially if raising taxes in Congress proves as challenging as it has in the past. As it is, Democrats have been divided over tariffs. Maintaining the status quo may be an easier political option than changing trade policy.
“That’s a hefty chunk of change,” Tyson Brody, a Democratic strategist, said of the tariffs. “The way that Democrats are starting to think about it is not that ‘these will be impossible to withdraw.’ It’s: ‘Oh look, there’s now going to be a large pot of money to use and reprogram.’”
That is from Andrew Duehren, bravo.
In which ways is the BLS biased?
No, they do not sit around changing the numbers to serve the interests of Democratic presidents, or to harm Republican ones. The system has too many different steps, too many checks and balances, and too many people who do not want to do the wrong thing. In a sense, you could say that the BLS is too bureaucratic to do that. They are better thought of as an agency which maximizes process, and the successful execution of process, success being defined in heavily process-intensive terms.
Their ideology, if that is even the right word, is to maximize adherence to the process. And “defensibility of the estimate” is important there.
You might argue they are not very good at seeing “the big picture,” but that same emphasis makes it difficult for them to deviate much from established procedures.
If there were important reasons why we should be creating new, useful, but highly speculative estimates (how about “the number of jobs that were not created because of AI”?), the BLS would not be good at doing that. They would not do it at all. Such estimates would open them up to too much criticism, and the speculative nature of the enterprise would clash with their desire to be managing controllable and defensible processes.
Over the last twenty years, a lot of their innovations have come in the form of disaggregated, sector-specific or region-specific data, which is fine. Or more emphasis on “work from home” issues. Which is fine.
So they estimate “that which they can,” rather than producing unreliable estimates that might be highly interesting.
That is the sense in which the BLS — and many other parts of the government in fact — is biased. It can matter, but it is a mistake to be looking for partisan bias that skews the numbers.
From the comments, on language preferences
Those wanting good, efficient government are not doing so well this century.
That is from Paco. The rest of the comment is a bit more specific:
In Spain, language politics are a key way to get your friends government jobs: When you manage to make regional language proficiency mandatory on any of said jobs, from schoolteacher up, and make the regional language the only language schools will teach on, you basically get a political cleansing of the institutions. Catalonia also pays those people quite a bit better than other regions: Not good for the budget (although now they get to hand the debt to Spain while they keep the taxes!), but it’s great for clientelism. Love your region, speak your regional language over all, get rewarded economically.
This is why you have similar schemes in every region that can get away with it: It’s just jobs for your friends. But that also translates to worse English for everyone, a language that might actually help do better in the long run. They call it maintaining the culture, I call it grift.
Then we’ll hear them all complain about Madrid’s corruption, when the 3% “friend tax” on basically any catalonian government contract, or anything large that needed a permit was documented for decades. It’s a key disease all across Spain. Blaiming Madrid made great sense circa 1920s or 30s, where it was just a bureaucratic capital with no industry of any sort. But now it’s the largest economic engine of the nation, largely because they are the closest to an economically liberal area.
As for the economists, it’s easy: They are inclined to any pro-independent movement that claims oppression, for any reason. At that point that cause is on their team, and careful analysis disappears. I bet you can all find an example or two of people justifying the waste and corruption elsewhere, just due to association.
Should Catalonia receive more financial independence?
Jesús details how Spain already operates one of the most decentralized fiscal systems in the world, “more latitude than most U.S. states,” he notes, yet Catalonia now seeks the bespoke privileges long enjoyed by the Basque Country and Navarra. The Regional Authority Index rates how much self‑rule and shared rule each country’s sub‑national governments actually wield. In its last update the index places Spain as the most decentralized unitary state in the sample and fourth overall among 96 countries.
Those northern provinces collect every euro on their own soil and forward a modest remittance to the central treasury, a setup that Fernández‑Villaverde brands “a Confederate relic.” Extending it to Catalonia, he argues, would hollow out Spain’s common‑pool finances, deepen inter‑regional resentment and erode the principle of equal citizenship, while turning the national revenue service into little more than a mailbox for provincial checks.
That is from the episode summary of a podcast of Rasheed Griffith with Jesús Fernandez-Villaverde. On the Catalan language, matters look grim in any case:
Right now around only 55% of births in Catalonia are born from a mother that was born, actually not even Catalan, that was born in Spain. That basically tells you that only 40, 45%, perhaps even a little bit less of mothers that were born in Spain speak Catalan at home. At this moment, I will say that less than 30, 28% of kids born in Cataluña, perhaps even less, will speak Catalan at home.
It amazes me how many people ignore the reality that a host of leading economists led or endorsed a constitution-violating movement to separate Catalonia from the rest of Spain and not long ago. The podcast will tell you more. It is also interesting throughout, including on Spanish history since the 19th century.
Why does renovating the Fed cost so much?
Here is a good WSJ piece on that question. Excerpt:
For example, members of the fine arts commission in 2020 recommended that the Fed use more marble to better match the original buildings. The Fed had initially proposed using more glass in an effort to represent the Fed’s transparency, according to the commission’s meeting minutes. The Fed amended the design to incorporate more marble.
To be clear, I am fine with an unabashedly elitist approach to designing or redesigning a central bank building, at least provided one’s domestic politics is able to sustain such a thing. I am glad for instance that the Cleveland Fed is quite a nice building, and I wish more DC architecture were of comparable quality, noting that these days we are not very good at constructing Beaux Arts buildings, and for DC modernist styles do not always fit the surroundings very well, thus creating a broader dilemma.
Partisan Bias in Professional Macroeconomic Forecasts
Here is a recent paper by Benjamin S. Kay, Aeimit Lakdawala, and Jane Ryngaert:
Using a novel dataset linking professional forecasters in the Wall Street Journal Economic Forecasting Survey to their political affiliations, we document a partisan bias in GDP growth forecasts. Republican-affiliated forecasters project 0.3-0.4 percentage points higher growth when Republicans hold the presidency, relative to Democratic-affiliated forecasters. Forecast accuracy shows a similar partisan pattern: Republican-affiliated forecasters are less accurate under Republican presidents, indicating that partisan optimism impairs predictive performance. This bias appears uniquely in GDP forecasts and does not extend to inflation, unemployment, or interest rates. We explain these findings with a model where forecasters combine noisy signals with politically-influenced priors: because GDP data are relatively more uncertain, priors carry more weight, letting ideology shape growth projections while leaving easier-to-forecast variables unaffected. Noisy information therefore amplifies, rather than substitutes for, heterogeneous political priors, implying that expectation models should account for both information rigidities and belief heterogeneity. Finally, we show that Republican forecasters become more optimistic when tax cuts are salient in public discourse, suggesting that partisan differences reflect divergent beliefs about the economic effects of fiscal policy.
Here is the SSRN link.
My excellent Conversation with Helen Castor
Here is the audio, video, and transcript. Here is part of the episode summary:
Tyler and Helen explore what English government could and couldn’t do in the 14th century, why landed nobles obeyed the king, why parliament chose to fund wars with France, whether England could have won the Hundred Years’ War, the constitutional precedents set by Henry IV’s deposition of Richard II, how Shakespeare’s Richard II scandalized Elizabethan audiences, Richard’s superb artistic taste versus Henry’s lack, why Chaucer suddenly becomes possible in this period, whether Richard II’s fatal trip to Ireland was like Captain Kirk beaming down to a hostile planet, how historians continue to discover new evidence about the period, how Shakespeare’s Henriad influences our historical understanding, Castor’s most successful work habits, what she finds fascinating about Asimov’s I, Robot, the subject of her next book, and more.
Here is an excerpt from the opening sequence:
COWEN: Richard II and Henry IV — they’re born in the same year, namely 1367. Just to frame it for our listeners, could you give us a sense — back then, what was it that the English government could do and what could it not do? What is the government like then?
CASTOR: I think people might be surprised at quite how much government could do in England at this point in history because England, at this point, was the most centralized state in Europe, and that has two reasons. One is the Conquest of 1066 where the Normans have come in and taken the whole place over. Then, the other key formative period is the late 12th century when Henry II is ruling an empire that stretches from the Scottish border all the way down to southwestern France.
He has to have a system of government and of law that can function when he’s not there. By the late 14th century, when Richard and Henry — my two kings in this book — appear on the scene, the king has two key functions which appear on the two sides of his seal. On one side, he sits in state wearing a crown, carrying an orb and scepter as a lawgiver and a judge. That is a key function of what he does for his people. He imposes law. He gives justice. He maintains order.
On the other side of the seal, he’s wearing armor on a warhorse with a sword unsheathed in his hand. That’s his function as a defender of the realm in an intensely practical way. He has to be a soldier, a warrior to repel attacks or, indeed, to launch attacks if that’s the best form of defense. To do that, he needs money.
For that, the institution of parliament has developed, which offers consent to taxation that he can demonstrate is in the national interest. It has also come to be a law-making forum. Wherever he needs to make new laws, he can make statute law in Parliament that therefore, in its very nature, has the consent of the representatives of the realm.
COWEN: What is it, back then, that government cannot do?
CASTOR: What a government doesn’t have in the medieval period is, it doesn’t have a monopoly of force. In other words, it doesn’t have a police force. It doesn’t have a professional police force, and it doesn’t have a standing army, or at least by the late Middle Ages, England does have a permanent garrison in Calais, which is its outpost on the northern coast of France, but that’s not a garrison that can be recalled to England with any ease.
So, enforcement is the government’s key problem. To enforce the king’s edicts, it therefore relies on a hierarchy of private power on the landed, the great landowners of the kingdom, who are wealthy because of their possession of land, but crucially, also have control over people, the men who live and work on their land. If you need to get an enforcement posse — this is medieval English language that we use when we talk of sheriffs and posses — the county posse, the power of the county.
If you need to get men out quickly, you need to tap into those local power structures. You don’t have modern communications. You don’t have modern transport. The whole hierarchy of the king’s theoretical authority has to tap into and work through the private hierarchy of landed power.
COWEN: Why do those landed nobles obey the king? They’re afraid of the future raising of an army? Or they’re handed out some other benefit? What keeps the incentives all working together to the extent they stay working together?
CASTOR: They have a very important pragmatic interest in obeying the king because the king is the keystone of the hierarchy within which they are powerful and wealthy. Of course, they want more power and more wealth for themselves and for their dynasty, but importantly, they don’t want to risk everything to acquire more if it means serious danger that they might lose what they already have.
They have every interest in maintaining the hierarchy as it already is, within which they can then . . . It’s like having a referee…
A very good episode, definitely recommended. I enjoyed all of Helen’s books, most notably the recent
Sentences to ponder
In a much more narrow case, a big study of the views of AI and machine learning researchers revealed high levels of trust in international organizations and low levels of trust in national militaries.
That is from Matt Yglesias.
Naveen Nvn’s ideological migration (from my email)
I started following American politics only in 2010/2011, which is two years after his [Buckley’s] death, and I was in India at that time.
Plus, I was very liberal at that time.
Around 2018-19ish, I was pushed into a centrist stance because I was appalled by wokeness, especially on campuses. I was in graduate school in the US at that time. Although I didn’t experience wokeness advocacy in the classroom except two or three incidents, I saw signs of wokeness on campus a lot. But even then, I was quite libertarian on how universities ought to handle campus politics.
I picked up God and Man at Yale around this time because wokeness was my primary concern.
I’ve always known that conservatives love that book. I assumed it would be a defense of free inquiry and against universities having a preferred ideology.
However, to my surprise, in the book, he argued explicitly that Yale was neglecting its true mission and it should uphold its “foundational values,” as he put it. I assumed he would be promoting a libertarian outlook on campus politics, but he was arguing the opposite.
He said Yale and other elite universities should incorporate free markets and traditional perspectives directly into the curriculum because they are betraying a contract that the current alumni and the administration have with the founders of the universities. It was a pretty shocking advocacy of conservatism being imposed on the students, and I didn’t like that at all.
But later on, around 2020-ish, I became a conservative (thanks to you; more on that in the link below). But even as late as early 2023, I still held a libertarian view on academic freedom and campus politics.
(You may be interested in a comment I left on your ‘Why Young People Are Socialist’ post yesterday, in which I shared how I was once a liberal, then turned centrist, and how I finally turned conservative. You are a major influence.)
But after Oct 7, all of that changed quite fast. Watching the pro-Hamas protests on campuses that started the very next day after October 7, before even one IDF soldier set foot on Gaza, I immediately thought about God and Man at Yale. I wanted to go back and re-read God and Man at Yale.
Everything I’ve witnessed after Oct 7 — Harvard defending Claudine Gay, Harvard explicitly stating they’re an “international institution” and not an American institution, DEI, anti-White, anti-Asian discrimination, etc. has convinced me that WFB Jr. was right.
Elite universities ought to be promoting free markets and pro-American, pro-Western views. I don’t believe we should have a completely libertarian approach to academic freedom. That’s untenable in this day and age. (Again, demographics is destiny, even within organizations.)
I’ve become significantly less libertarian on a wide range of issues compared to where I was just two years ago, and not just on academic freedom/university direction.
So yes, WFB Jr. has influenced me on this idea.
Asymmetric economic power?
America’s trading partners have largely failed to retaliate against Donald Trump’s sweeping tariffs, allowing a president taunted for “always chickening out” to raise nearly $50bn in extra customs revenues at little cost.
Four months since Trump fired the opening salvo of his trade war, only China and Canada have dared to hit back at Washington imposing a minimum 10 per cent global tariff, 50 per cent levies on steel and aluminium, and 25 per cent on autos.
At the same time US revenues from customs duties hit a record high of $64bn in the second quarter — $47bn more than over the same period last year, according to data published by the US Treasury on Friday.
China’s retaliatory tariffs on American imports, the most sustained and significant of any country, have not had the same effect, with overall income from custom duties only 1.9 per cent higher in May 2025 than the year before.
Here is more from the FT. To be clear, I do not think this is good. Nonetheless it amazes me how many economists a) reject the “Leviathan” approach to analyzing public choice and U.S. government, b) think “normative nationalism” is fine, c) have expressed partial “trade skepticism” for some while, and d) think our government should raise a lot more revenue, including through consumption taxes…and yet they find this to be about the worst policy they ever have seen.
Some also will tell you that higher inflation is not such a terrible thing, though whether they extend this view to inflation from real shocks is disputable.
With some debatable number of national security exceptions, zero tariffs is the way to go. But you can only get there through broadly libertarian frameworks, not through conventional “mid-establishment” policy analyses.
Finland fact of the day
Nearly half of Finns now identify with the political right, according to a new survey by the Finnish Business and Policy Forum (EVA), marking a record high in the organisation’s annual values and attitudes research.
The 2025 survey found that 49 percent of respondents place themselves on the right of the political spectrum. The proportion identifying with the left stands at 31 percent, while only 19 percent consider themselves centrist. The centre has declined steadily with each round of the survey.
Here is the full story, via Rasheed.
Bari Weiss, Kyla Scanlon, and I on why young people love socialism
Here is the podcast.
Greater Bias Toward Transgender People Compared to Gay Men and Lesbian Women Is WEIRD
The greater acceptance of gay, compared with transgender, people in Western countries may be a result of a specific trajectory—where queer rights was centered by and around White, middle class, gender-conforming gay men—and may not generalize to other places. Two surveys of respondents in 23 countries (Ns∼ = 500 or 1,000 per country) showed that bias toward gay and transgender people is lower in Western (vs. non-Western) countries, but that the relative bias changes as a function of region: there is greater acceptance of gay (vs. transgender) people in most Western countries, whereas the reverse is true in most non-Western countries. Analyses of legal frameworks (N = 193) show that recognition of same-gender unions is prevalent in Western countries but virtually nonexistent elsewhere, whereas recognition of gender marker changes is prevalent throughout the world. Overall, in the most intolerant places, transgender people are relatively more accepted than gay people.
Here is the recent article by Jaimi L. Napier. Via a loyal MR reader.
The revival of socialism is an example of negative emotional contagion
That is the theme of my latest Free Press column. Rather than present the argument again, let me move directly to the trolling part of the piece:
Even the Soviet Union had some positive and forward-looking elements to its socialist doctrine. The stated goal was to overtake the United States, not “degrowth.” You were supposed to have kids to support the glory of communism, not give up on the idea because the world was too dreadful. Socialist labor was supposed to be fun and rewarding, not something to whine about. Furthermore, there were top performers in every category, including in the schools. Moscow State University was a self-consciously elite institution that intended to remain as such. However skewed the standards may have been, there was an intense desire to measure the best and (sometimes) reward them with foreign travel, as in chess and pianism. In an often distorted and unfair way, some parts of the Soviet system respected the notion of progress. For all the horrors of Soviet communism, at least along a few dimensions it had better ideals than some of those from today, including the undesirability of having children, and a dislike of economic growth.
There is much more at the link.