Matt Yglesias

Future Shock

The Economist did an interesting 2010 in charts feature to close the year out. Combining their chart 2:

With their chart 3:

I think what we see is that for unclear reasons leaders in developed countries have basically given up on trying to have economic growth. The US, the Eurozone, and Japan are so terrified that real growth might lead to growth-imperiling inflation that we’ve just decided to live without the growth in the first place. To me this is also Tyler Cowen’s real message here.

But if the developed world has decided it’s not interested in growth anymore, I think we can look forward to many more stories like this:

With a market share of 31.5 percent, Nokia is still the largest vendor of handsets in the Indian market, followed by Chinese brand G’Five with about 10 percent share, IDC said on Wednesday.

That’s via full-time professional mobile device market analyst Horace Dedieu who remarks: “No, I haven’t heard of G’Five either.”

Welcome to the teens.

Provocation of the Day

There are sort of two different kinds of issues in K-12 education in America. One set of questions is about the structure of the system and what kinds of structural changes might drive better outcomes. Another set of questions is specifically about pedagogy and what kinds of classroom content would be valuable and effective. The former gets discussed a lot in the policy community and the latter much less so. This is, I think, mostly for good reason since someone like me would just be guessing randomly about pedagogical issues.

So I think each and every one of Michael O’Hare’s ideas on this subject should be taken with some grains of salt, but I found the whole post though-provoking and especially this: “let’s look hard at the differences between what we do to students in school and the environment they go into in a workplace, like the contrast between treating collaboration as cheating and as an essential for success.”

I will, however, stand up for a certain amount of instructional practices that O’Hare regards as obsolete. I think the evidence suggests that one of the most important skills people learn (or don’t) in school is self-discipline rather than specific knowledge. I don’t think learning the chronology of ancient near eastern empires (Sumeria then Assyria then Babylonia then Persia then Greece then Rome) in elementary school has ever been useful to me, or even that the chronology I learned is especially accurate, but a lot of life involves semi-arbitrary tasks and it’s worth one’s while to get used to performing them.

Request for Requests

As we head into the New Year, I’d like to revisit the idea of soliciting requests. What are people interested in? Are there questions you’d like to see my answer too? Issues that need more exploration?

The King’s Speech

See this film. It’s excellent. It’s about George VI’s struggles with stammering and his relationship with his speech therapist. But that sounds like a terrible idea for a movie, whereas in fact the film is excellent. I note that 2006′s The Queen was excellent as well, further bolstering the case for constitutional monarchy.

But should films really be limited to British monarchs? Of currently reigning sovereigns, Juan Carlos of Spain has had a much more interesting life than Queen Elizabeth, and of World War II-era monarchs, Wilhelmina of the Netherlands seems more noteworthy than George VI.

Constitutional Utopia

The field of constitutional law has always featured a great deal of what’s known as “motivated belief” where people look at the document and tend to see it as supporting their preexisting policy conclusions. Ezra Klein had a great post on this yesterday. Since the 111th Congress saw Democratic control of the House of Representatives, Democratic control of the Senate, and Democratic control of the White House paired with an overwhelming Republican preponderance in the federal judiciary we saw in particular a huge upsurge in conservative belief that the constitution prohibits Obama/Pelosi/Reid policies.

One thing worth saying about this, is that I think a lot of this kind of constitutional thinking constitutes a form of pernicious dreaming about the post-political utopia. Like what if the constitution really did entrench conservative policy preferences? What would happen then? We’re imagining that the structure of mass and public opinion are the same, and so is the structure of interest group politics. But suddenly most of the stuff progressives want to do is unconstitutional. What happens next? Do progressives all go home and just give up? That doesn’t seem realistic. Do progressives stage a violent revolution, arguing that it makes no sense to let the dead hand of the 18th century block social justice in the 21st? That doesn’t seem desirable.

The most likely outcome, and the most sensible one, is for progressives to just do what conservatives do—try to win elections and appoint judges who interpret the constitution in a way that’s friendly to progressive policy aims.

Guest Workers

I’m not a huge fan of the idea of “guest workers.” Given the public’s limited tolerance for immigration, I’d rather just push for as many full-fledged normal immigrants as possible. But different countries have different political cultures, and circumstances change, so it’s always worth thinking about. And I don’t think these arguments from David Frum are very persuasive.

He starts with a study showing that guest worker programs are a highly effective form of foreign aid:

He retorts:

1) The chart underscores the point, familiar from the economic literature, that the largest share of the economic gains from immigration accrue to the immigrants themselves. Which is nice for them, but raises again the question: What’s the benefit to the citizens of the host society?

2) In the U.S. context, guestworker programs bump up against a legal constraint: The 14th amendment, which confers citizenship on children born on national territory. Once that happens, they are not guests any more.

3) Theoretically, the US could repeal birthright citizenship. But that would be to invite the growth of a permanent subordinated caste of non-citizen visitors, like the Athenian metics – not exactly a source of social stability.

Taking this backwards, I agree that repealing birthright citizenship would be a mistake for the United States. But of course many developed countries have different traditions and different rules in this regard, so the finding that guest worker programs are highly effective foreign aid is extremely relevant to those places.

On two, birthright citizenship is hardly an insurmountable objection to a seasonal migrant labor program. Humans have a nine month gestation time, so you could simply ban pregnant women from programs oriented to genuinely seasonal work. You also need to have some kind of baseline in mind. How effective has declining to implement a guest worker program been? For most of America’s history, there were no formal controls on the southern border so this wasn’t an issue. But starting in the mid-sixties, it became difficult to cross the border legally. That didn’t eliminate the demand for seasonal labor, instead it meant we had a large quantity of unauthorized seasonal migration. People didn’t like that, and we began investing in enhanced border security. That, in turn, has tended to replace unauthorized seasonal migration with longer term unauthorized migration. You can’t compare the complications of a real world guest worker program to a magical world of perfect, costless border control. You have to compare it to a real world scenario.

On (1) of course the majority of the financial gains of a program to allow people to temporarily migrate in order to do work will alight to the person actually doing the work. He’s also bearing almost all the gross costs! Host citizens get some benefit at low cost, that’s the case. It’s also possible to adjust this at the margin through the tax code. You, for example, could charge payroll tax on guest worker salaries and not give them Social Security benefits.

Endgame

Could you plan an escape?

— House GOP rules changes will give Paul Ryan an unprecedented amount of power for a Budget Committee Chairman.

— North Dakota going after teacher pensions.

— Barack Obama’s bad losses.

— Ezra Klein sketches the argument in defense of Obama’s approach.

— Ten percent of the way through Quicksilver I see Neal Stephenson’s deeper into monetary issues than ever before!

— My photos from Mexico.

The Pains of Being Pure at Heart, “Say No to Love”.

Bringing Back Real Filibusters

One of the most popular ideas for Senate reform is to make would-be filibusterers do a “real filibuster” where you talk and need to hold the floor. But how do you do that in practice? Tom Udall explains his idea to Brian Beutler:

As things currently stand, the onus is on the majority to put together 60 votes to break a filibuster. Until that happens, it’s a “filibuster,” but it’s little more than a series of quorum calls, votes on procedural motions, and floor speeches. The people who oppose the underlying issue don’t have to do much of anything if they don’t want to.

Here’s how they propose to change that. Under this plan, if 41 or more senators voted against the cloture motion to end debate, “then you would go into a period of extended debate, and dilatory motions would not be allowed,” Udall explained.

As long as a member is on hand to keep talking, that period of debate continues. But if they lapse, it’s over — cloture is invoked and, eventually, the issue gets an up-or-down majority vote.

That doesn’t do away with the principle of unlimited debate. If the minority is determined — and what senator doesn’t like to talk — it can wait out the majority and force them to pull the legislation.

This seems like a pretty modest change, but I imagine it would have a real impact on things like nominations.

Against Utopia

Earlier this week, Dave Weigel wrote “Do libertarians promise utopia? Sure. So do the socialists who came up with the ideas that motivate Democratic politicians.” Today he followed up on his meaning, arguing “it’s a dead end to accuse ideologues of promising rainbows if their ideas are adopted.”

It is and it isn’t. I have a utopian bent, personally, and have been known to muse to my girlfriend about how at Taiwan’s level of population density we could fit 500 million people into 10 percent of the land area of the United States and turn the rest into yawning wilderness. But I think it’s really a pretty serious mistake to think about politics in these terms. It’s not that people should be “politically realistic” in their aspirations, it’s that it’s really important to think about concrete, specific policy changes and the specific consequences likely to in fact flow from them. Absent that kind of practicality you get things like loosening regulations on the banking sector followed by a financial crisis followed by complaints that “the real problem is Fannie and Freddie and bailouts,” followed by deciding it’s actually best to leave Fannie and Freddie in place after all then when someone does propose reforming Fannie and Freddie someone else shouts back that the real problem is deregulation.

The underlying issue is that if you’re committed to any form of reasonably liberal politics, which almost everyone in America is, then you’re committed to a world of endless ideological disagreement and interest-group pluralism. Too often, people think about politics by starting from the assumption that there will be post-political utopia in which everything is frozen into place, then reasoning backwards from how that utopia looks.

CBPP On Film Subsidies

I wrote about the bad idea of targeted tax subsidies for movie production, and it turns out that the Center on Budget and Policy Priorities did an informative overview of the situation recently:

Today, 43 states offer them, compared to only a handful in 2002. Over the course of state fiscal year 2010 (FY2010), states committed about $1.5 billion to subsidizing film and TV production (see Appendix Table 1) — money that they otherwise could have spent on public services like education, health care, public safety, and infrastructure.

The median state gives producers a subsidy worth 25 cents for every dollar of subsidized production expense. The most lucrative tax subsidies are Alaska’s and Michigan’s, 44 cents and 42 cents on the dollar, respectively. Moreover, special rules allow film companies to claim a very large credit even if they lose money— as many do.

This is terrible economics and certainly not “free market” economics of any kind. But I’d bet you dollars to doughnuts that a great many of the legislators and governors who backed these subsidies think of themselves as small government conservatives, since they’ve got it into their heads that taxes are bad and thus anything that reduces tax revenues must be good.

Models for Congressional Reform

Tyler Cowen complains that it’s hard to assess proposals for congressional reform since “There is no simple model at hand.”

I think there’s a tragic neglect of comparative politics in the United States, and my favorite relevant model is the one presented in George Tsebelis’ Veto Players: How Political Institutions Work. The key issues here are trying to understand who has agenda-setting powers, how many veto players are there, and who the veto players are. And the distressing development in American politics over the past 20 years has been the tendency of routinized filibustering plus growing party discipline to make the Senate Minority Leader into a veto player, especially on things that aren’t top-tier issues that dominate the public discussion.

That’s not really a workable system, though I note that there’s some reason to believe that presidential democracy is unworkable in general if you have ideologically coherent political parties. At a minimum, when the US conquers a country (Italy, Germany, Japan, Iraq) and sets up a new government, we almost never opt to replicate our own system. The exception is Afghanistan where Presidentialism was done at the behest of Hamid Karzai’s Pashtun allies who thought this would help him monopolize power. I think time has proven that insightful, but mostly in a bad way.

The Tel Aviv Bubble

Kevin Drum deems it “telling that a full-blown Israeli zealot like Marty Peretz now apparently finds only a tiny part of the country truly agreeable”:

The part of Israel that remains perfect to Martin Peretz is vanishingly small. But it does still exist, tangibly enough that you could trace its perimeter on a map of Tel Aviv: the ethnically mixed neighborhoods of Jaffa, the impeccably preserved Bauhaus downtown, the symphony halls and dance theaters, the intersections that still hold traffic, tense and honking, at 2:30 in the morning, the cosmopolitan sidewalk cafés that make real the old liberal dream. Peretz, the longtime owner and editor-in-chief of The New Republic, has been living here since October, and he reported recently that he has seen performances by the progressive dance company Pilobolus, the Cape Town Opera, and a Malian jazz group, which drew “a very hip crowd.” The sections of Tel Aviv he inhabits are so secular, Peretz says with relish, that in his first six weeks he saw exactly “eleven guys with Orthodox clothes. That’s it.”

By contrast, “When he visits Jerusalem—’a very poor city’—he notices ultra-Orthodox boys running everywhere, and he disdains the sanctimony of the very religious and the ‘superpatriotism’ of the Russian immigrants.”

I don’t want to totally discount the Peretz/Goldberg/Drum thesis that the haredi and the Russians are changing the face of Israel in somewhat distressing ways. But I do think it’s often useful to check these aperçus about Israeli society against other more banal countries. How much does my dad get around in the United States of America? Well, you could chart its perimeter on a map of New York City. It doesn’t include Staten Island. It doesn’t include the Bronx. It doesn’t include Queens. It doesn’t include Brooklyn. It really doesn’t include the Upper West Side, either. There’s a swathe of the city ranging from his apartment on East 79th Street down to the Village where we used to live and where his office is, and that includes the theaters and Madison Square Garden in between. I guess he also goes to Mets games.

There’s a certain parochialism that’s common to cosmopolitan intellectual types in all the major cosmopolitan cities of the world. I’m not sure there’s really anything unusual about Tel Aviv in this regard.

What’s unusual, of course, is that there are several millions Palestinian Arabs subject to the jurisdiction of the State of Israel who are nonetheless not citizens of the State of Israel or even legal residents with some kind of regularized immigration status. That’s very unusual and it’s both a huge injustice and a giant practical problem. But that aside (“how did you like the play, Mrs Lincoln”) a lot of this other stuff strikes me as pretty ordinary.

Cracking Down on Drug Tourism

Relatively few Americans are aware that recent years have seen a large backlash in the Netherlands against the quasi-legalization of marijuana that their country is famous for. In particular, the “legalization in one country” paradigm has helped generate a lot of drug tourism that Dutch people don’t seem to like very much. But Keith Humphreys reports that the drug tourism issue may not doom the coffee shops after all:

An EU judge has upheld the legality of Maastricht’s proposal to restrict “coffee shop” sales to Dutch citizens. This decision probably saves the coffee shops as a social experiment in the long term despite the fact that the loss of tourist business will make some of them fold. Maastricht and a number of other cities were planning to close their shops rather than continue to experience the problems that come with drug tourism.

Good news for Dutch people. Of course this won’t fly in the USA. If Michigan wants to create legal smoke shops, they’d need to put up with a stream of people from other states coming in to get high. Of course you might see that as a feature—something to draw business in from out-of-town the way Vegas did with gambling back in the day.

Ebooks and Page Numbers

I love ebooks. I loved my kindle when I first got it, and now I love my kindle ap for ipad. But I share John Holbo’s grievance:

But I’m thinking about quoting our John in something I’m writing (yes, on Zizek). But I can’t footnote a Kindle edition. No pages. What will the world come to? Bibliography has gotten a bit old and odd in the head in the age of the internet, but the existence of pages themselves is kind of a watershed. On the one hand, there’s really no reason why a text that can be poured into a virtual vessel as easily as it can be inspirited into the corpse of a tree should have to have ‘pages’. Still, it’s traditional. Harumph. I suppose I’m going to have to use Amazon’s ‘search inside’ or Google Books and pretend I read the paper version, as a proper scholar would. Or just email John Q. and ask.

What’s particularly aggravating about this is that it seems so unnecessary. The technical challenge here would be trivial, and the gains in terms of getting a bigger purchase on the educational market would be large.

Labor Markets, Immigration, and Inequality

Here’s Mickey Kaus’ proposed solution to inequality:

If you’re worried about incomes at the bottom, though, one solution leaps out at you. It’s a solution that worked, at least in the late 1990s under Bill Clinton, when wages at the low end of the income ladder rose fairly dramatically. The solution is tight labor markets. Get employers bidding for scarce workers and you’ll see incomes rise across the board without the need for government aid programs or tax redistribution. A major enemy of tight labor markets at the bottom is also fairly clear: unchecked immigration by undocumented low-skilled workers. It’s hard for a day laborer to command $18 an hour in the market if there are illegals hanging out on the corner willing to work for $7. Even experts who claim illlegal immigration is good for Americans overall admit that it’s not good for Americans at the bottom. In other words, it’s not good for income equality.

I agree with Will Wilkinson that the moral math here is suspicious. If we banned all health and nutrition assistance to the poor, this would cause poor people to start dying off and the gini coefficient would show a reduction in inequality. Or as Wilkinson says, “nation-level income inequality would drop if the government herded all the poor people onto boats and dropped them off on a distant island.”

But what about Kaus’ example here of the great late-nineties immigration crackdown pioneered by Bill Clinton. Do you remember that? I don’t remember that. I don’t remember it because it didn’t happen. Deportations reached a record high just this year, not in the late nineties. What happened in the nineties was that a tight labor market led to a spike in immigration.

Curtailing population growth might lead to rising real wages in an agricultural society or a small country with an economy based on fossil fuel exports, but that’s not how the American economy works. If you want to tweak the distributive implications of US immigration policy the economically and ethically sensible thing to do is to increase legal immigration of high-skill people. The tightness or lack thereof of the labor market is mostly a consequence of monetary and fiscal policy, with more rapid growth of the labor force making it feasible to have more growth without risking inflation.

The DeJuan Blair Factor

I’m continually blown away by the fact that DeJuan Blair slipped into the second round of the NBA draft. This particularly egregious because it’s not like he was a seventeen year-old playing in an obscure foreign league. He had two college seasons under his belt, and based on his play there his success in the NBA was very predictable. But he slipped because he stands at the intersection of two frequent errors in NBA drafting.

One is an irrational aversion to “undersized” big men. NBA teams correctly note that college success does not directly correlate with NBA success, so beyond raw numbers they look for physical tools that are likely to lead to success. This is reasonable as far as it goes, but different things project better or worse and rebounding in the NBA actually correlates pretty highly with rebounding in college. It’s also true that size helps with rebounding, but the point is that if an undersized player has success at rebounding in college, he’s likely to continue doing so in the pros.

The other issue is injury aversion. Kevin Pelton covered this issue in an article I linked to yesterday, but the problem here is that GMs seem to vastly overrate the value of your average draft pick. There are 30 players picked in the first round of the NBA draft and 30 more picked in the second round. There’s only 30 teams, and in practice most teams play an 8 or 9 man rotation even though rosters are bigger than that. That means that even in the first round there’s a very high ratio of draft picks to rotation spots. And of course some rotation players are actually pretty bad. On top of that, lots of times you draft a good player (LeBron James, Shaquille O’Neal, etc.) and then they leave in free agency. The upshot is that if you get a good year or two or three out of someone before their career is ruined by injury then you’re coming out ahead.

Now of course it matters if you’re talking about the number one overall pick or something. But teams drafting in the second half of the first round have absolutely no business worrying about injuries. What you should be worried about is whether or not the guy you get will be any good at all.

Endgame

Just like before:

— The Founders were no libertarians.

— Teams should worry less about injuries in the NBA draft.

— Immigration reform would bolster the housing market.

— Paul Krugman, neoliberal.

— Do incoming House Republicans understand that even if they ban lame duck sessions, future congresses can un-ban them?

Amerie’s “1 Thing” didn’t really succeed in launching Go-Go into the mainstream but I like it anyway.

Top Five Neglected Features of the Affordable Care Act

Underrated law signed earlier this year contains a number of provisions that are only tangentially related to the core health insurance market reforms, each of which would have been considered important achievements had they passed as standalone measures:

— Reform of student loan process to eliminate rip-off by for-profit lenders.

— Community transformation grants to help make the built environment more conducive to public health.

— $12.5 billion in grants for community health centers.

— Nationwide calorie menu labeling regulations.

— Comparative effectiveness research.

Incidentally, I’m glad to see that the “Affordable Care Act” lingo that I started trying to popularize months ago as an alternative to “ObamaCare” has been taken up by the administration.

The Conservative Recovery

The state of the labor market is not good, which has understandably taken a toll on the popularity of Barack Obama. But what’s underappreciated is the extent to which the bad labor market reflects what conservatives say they want to see. As David Leonhardt points out, we’re basically seeing a structural decline in public sector employment:

Now I’m not saying people should be happy with the state of the economy. I’m saying, instead, that conservatives should wake up to the fact that their economy theory is nonsense. On their telling, the state of the economy is bleak due to Obama’s socialistic policies and if we just trimmed back government the private sector would come roaring back. The truth is that under Obama the private sector has been growing and the public sector’s been shrinking. But public sector shrinkage hasn’t spurred private job growth, it’s been a drag on it. Which is exactly how it should be. Your town’s firefighters are also customers for your town’s stores and plumbers. Cutbacks in bus service make it more difficult for people to get to work and participate in the economy. If we’d had more stimulus—specifically more fiscal aid to state and local government—then those public jobs wouldn’t have gone away (lowering unemployment) and the income streams attached to them wouldn’t have gone away either, spurring private employment and further improving the labor market.

Real Talk From Muriel Bowser on WalMart

With DC’s mayor Adrian Fenty on the way out, I’ve been wondering if Muriel Bowser who took over his old City Council seat and has been a key ally of his on the council is someone I should be looking to for good ideas in the future. These remarks on WalMart reported by Lydia DePillis seem very sensible to me:

“I don’t mean to offend anybody,” she said, “but we already have enough beer and wine licenses. Where can somebody go buy clothes, right now?” The room was silent. “Where? Nowhere?”

“I get your concern,” she continued, holding out her hands in an appeal. “But I need you to get my concern. I can’t go to my community and say, this is all you deserve. I can’t do that.”

Bowser also pointed out that the community had brought Walmart upon itself by refusing densification at key spots along Georgia Avenue, ignoring recommendations from the Great Streets program.

That all seems about right to me. If you allow for dense development, the tendency is to make suburban-style big box stores a not-so-optimal use of space. If you insist on low-density, then you get big box stores. If you insist on neither high density nor big box stores, you get . . . noplace to buy clothing.