Democracy in America

AS A follow-up to last week's post wondering why Americans don't care about global warming, I wanted to mention a few things drawn from the comments and elsewhere around the web.

One theme from commenters was that they're not concerned about climate change because they don't believe in climate change. This is exactly the view that infuriates some people who do believe in climate change. However, let's keep in mind that there's a lot of variation within the group of climate-change sceptics. Similarly, as Matt Ridley points out on his blog, to the extent that there's a consensus about climate change, it's a consensus that admits to differing views about the likely causes and consequences. As the Intergovernmental Panel for Climate Change put it, for example: "Most of the observed increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations." (Emphasis from Mr Ridley.)

A related concern was the politicisation of scientists. As commenter RestrainedRadical pointed out, most of the prominent climate hawks are Democrats. On its face, that looks awfully political, although there may be a causal confusion (if people who care about the environment become Democrats). The New York Times had an article last week about a conference for social psychologists in San Antonio, where Jonathan Haidt of the University of Virginia, based on a show of hands in a ballroom, estimated that 80% of the people in the room were liberals:

“This is a statistically impossible lack of diversity,” Dr. Haidt concluded, noting polls showing that 40 percent of Americans are conservative and 20 percent are liberal. In his speech and in an interview, Dr. Haidt argued that social psychologists are a “tribal-moral community” united by “sacred values” that hinder research and damage their credibility—and blind them to the hostile climate they’ve created for non-liberals.

He was talking about social psychologists in particular—a group that we would assume would be more interested in squishy issues than a random sample of Americans—but other academics have found that university professors are overwhelmingly Democratic. It's pretty interesting to think about the possible reasons for that—and maybe it's a discussion we can have in the future on this blog—but for the current context, let's just note that sceptics aren't being unreasonable to suspect some bias.

This doesn't mean that people should give up worrying about climate change, but it does suggest that the issue is overly polarised between the believers and the sceptics. Some commenters had the provocative thought that environmentalists should emphasise the effect (climate change) rather than the cause (anthropogenic). I was mulling this before the first post; in the Rasmussen poll linked there, there's a segment of people who believe in climate change but not that it's man-made. Presumably they would be particularly prone to dropping out of the debate if the emphasis on anthropogenic climate change discredits scientists in their eyes. However, if climate change is indeed caused by human behaviour, then it could be important to bring that forward, as slowing climate change would likely necessitate changing human behaviour. Any more thoughts on that?

Moving on, the World Bank has a cross-country poll of views on climate change. Their results for the United States roughly correspond to Rasmussen's, and do show Americans being less exercised about climate change than other countries. The poll also suggests a logical inverse relationship between levels of carbon emissions and levels of concern over the environment. On particularly American issues, Tzimisces was the first commenter to pull out an assumption implicit in the idea that America is more committed to heavy carbon use than most states—that America has a car culture most states do not. Tzi points out that cars are a symbol of freedom and autonomy, and that they're the only viable mode of transportation for a lot of working people. "Why don't Americans care about public transport?" is another question, one answer to which is that America's physical size and settlement patterns make public transportation an implausible way to commute in all but the densest metro areas. The United States also has a structural issue that affects its international participation, which is that the Senate has to approve international treaties by a two-thirds vote.

Following on from that, note that the original post, "Why don't Americans care about global warming?" is one of the most-discussed items on the entire website this week, a category typically filled with major news stories and caption contests. This suggests an additional question: "Why do people care so much about why Americans don't care about global warming?" A few possible answers suggest themselves—maybe people love a chance to pick on America—but the most plausible is that people care about America's views on the issue because, as I suggested in the earlier post, America is big enough that its involvement may be necessary for a global fight against climate change. This is a dynamic that persists in other issues and suggests a hypothesis: hegemonic states are prone to lag on collective-action problems, because other states value their activity more highly than they do. For a different take on global leadership, or the lack thereof, see Nouriel Roubini, writing today in Slate.

(Photo credit: AFP)

LAST month our Bagehot columnist flagged a new paper that the Nordic governments were set to present at Davos, on "The Nordic Way". Among the interesting arguments in the paper is an analysis of Nordic individualism:

While much has been written about the institutionalized aspects of the Nordic welfare state, few have paid much attention to the underlying moral logic. Though the path hasn't always been straight, one can discern over the course of the twentieth century an overarching ambition in the Nordic countries not to socialize the economy but to liberate the individual citizen from all forms of subordination and dependency within the family and in civil society: the poor from charity, the workers from their employers, wives from their husbands, children from their parents—and vice versa when the parents become elderly.

The paper posits a triangle, with the family, the individual, and the state in the corners, and argues that the Nordic countries prioritise a different dynamic than Germany or the United States. As Bagehot summarises:

Americans favour a Family-Individual axis, this suggests, suspecting the state as a threat to liberty. Germans revere an axis connecting the family and the state, with a smaller role for individual autonomy. In the Nordic countries, they argue, the state and the individual form the dominant alliance. The paper cited, by the way, is entitled: "Pippi Longstocking: The Autonomous Child and the Moral Logic of the Swedish Welfare State". It hails Pippi (the strongest girl in the world and an anarchic individualist who lives without parents in her own house, with only a monkey, horse, a bag of gold and a strong moral compass for company) as a Nordic archetype.

This framework provides a way to think about how Americans think about the state. My colleague notes below that America has an exceptionally small government, and that the reasons may be historical, cultural, or institutional, or all of the above, and that the causal connections reinforcing the small-state approach would be difficult to untangle. Whatever the causes of America's underlying moral logic, though, it's interesting to think how this plays out today. It makes sense that if America posits a strong family-individual axis—as a hedge in the absence of state support, if not in opposition to it—that Americans would be more preoccupied with issues that pertain to individuals and the family, and would drag those issues into the political realm. (This new bill from South Dakota, however, which would make it a "justifiable homicide" if you kill someone to prevent them from killing a fetus, is taking it rather far.)

IN AN unjustly overlooked series of posts on the unjustly neglected Pileus blog, Jason Sorens, a professor of political science at the University at Buffalo, casts a sceptical eye on the common assumption that the United States is an unusual or "exceptional" country. According to Mr Sorens, America is not exceptionally free, American government is not exceptionally small, and that American inequality is not exceptionally high.  

Americans take pride in standing as the beacon of freedom unto the world. And America is pretty free. However, as Mr Sorens observes, it's beacon is not exceptionally bright. America comes in sixth in the Fraser Institute's 2010 "Economic Freedom of the World" rankings, between Chile and Canada. Mr Sorens doesn't mention it, but matters look worse if we look at the Heritage Foundation and Wall Street Journal's "2011 Index of Economic Freedom", which ranks America ninth, just behind Denmark and well behind our frostbitten northern neighbours. It's worse if we move on to non-economic liberties. Mr Sorens reports that America rates merely average on Amnesty International's government repression index in the period from 2004-2008. One might come to the defence of the city on the hill by noting that America gets top marks in political rights and civil liberties from Freedom House, but then so do scores of other countries. The Freedom House ratings aren't very fine-grained. If you think the extent of liberty is not unrelated to the rule of law, you may be interested in America's place in Transparency International's latest corruption perceptions index. It's 22nd, which isn't bad—better than France!—but not what you'd call exceptional.

In the second post of his series, Mr Sorens looks at the size of the American state, and finds a strong claim to exceptionalism. American government really is exceptionally small. But does America's relatively small government mean there is something in the American character and culture that especially prizes it? To answer this question, Mr Sorens examines a number of variables associated with government spending as a percentage of GDP. If it turns out that the size of America's government is smaller than would be predicted by the model, it is reasonable to conjecture that the "unexplained variance" is due to a cultural preference for smaller government. After running the numbers, Mr Sorens finds that

If anything, the U.S. has a slightly bigger government than average, once you control for its economic, religious, and institutional profile. The really parsimonious citizens (on government consumption) are apparently found in Hungary, Ireland, Switzerland, and Japan, while the least egalitarian peoples (on social spending) are Japanese, Slovaks, Icelanders, and Norwegians.

In summary, there is very little evidence that Americans favor smaller government than Europeans and that that is the reason the American state is small—or if there is some small-government tendency among Americans, it is captured fully by their religious diversity. (Not religiosity, mind. I tested that—no effect.) More religiously diverse countries typically accommodated religious minorities early on or even disestablished their state religions; thus, they have some history of liberalism in this sphere, and that history may account for some of the results found. If the U.S. had French institutions, we’d have something close to their government too.

This is a bit tricky. Mr Sorens is not saying that America does not have an exceptionally small government when compared to similar countries. It does. He's saying that American exceptionalism in this domain is accounted for not by distinctively American small-government norms, but instead by the long-term effect of a high level of religious diversity on America's institutions. If an evil demon pushed a button that instantly reorganised American institutions along French lines, there is nothing about Americans that would keep them from demanding French levels of government spending. I'm not sure this quite follows. Of course, if a country is exceptional in some respect, there's going to be a reason for it. Mr Sorens' argument seems to suggest that in accounting for our exceptionalism, we are likely to make a culture-wide version of the fundamental attribution error—to assume that our country's proud peculiarity flows from something special about us, as a people, as opposed to a unique external feature of our history that we had nothing to do with, and can't take credit for. But, as Mr Sorens acknowledges, the pathway from religious diversity to small government may be at least partly cultural. In that case, Americans, bearing the imprint of their unique history, might demand less than French levels of government spending even in an institutionally French counterfactual America. Still, Mr Sorens' finding takes some air out of puffed-up exceptionalism.

The dark side of American exceptionalism is America's allegedly exceptionally high levels of economic inequality. In the final post of his series, Mr Sorens' argues that America should not be compared to similarly wealthy European countries, but instead to countries with a similar history of slavery and the subjugation of natives.

The U.S. has the least inequality, by a fair margin, of these [formely slaveholding] countries. Of course, the U.S. also has a smaller combined percentage of blacks and Amerindians than all of these other countries except Costa Rica, Chile, Argentina, and Uruguay. But that’s precisely the point—the overriding factor determining inequality in New World countries is the white or mestizo percentage of the population. When you control for that, the U.S. actually has very low inequality.

If the U.S. is exceptional at all, it is exceptional for its high GDP per capita and low income inequality, relative to similarly situated countries.

Perhaps American pundits should devote more columns to explaining why it is that America, despite its baleful history of slavery, has managed to keep inequality so low. In addition to the purely demographic factors Mr Soren's points out, my first guess would be that the United States, unlike most other countries in the New World, made it over the hump of the Kuznets curve.

(Photo credit: Beverly & Pack via Flickr)

EGYPT is now ruled by a gaggle of generals, which may or may not be an improvement upon rule by Hosni Mubarrak. As Daniel Larison of The American Conservative notes:

It is a measure of how strange the situation has become that many Westerners seem to be celebrating what everyone would otherwise be calling a military coup (which is effectively what it is) as a moment of liberation.

My sense is that many Westerners were celebrating because masses of Egyptians were celebrating. Perhaps it is a measure of how strange the situation has become that Egyptians have responded with delirious rejoicing to what would otherwise be called a military coup.

All the same, there are some hopeful signs. The New York Times reports this morning that Egypt's Supreme Military Council has informed certain opposition leaders of their "plan to convene a panel of distinguished jurists to submit a package of constitutional amendments within 10 days for approval in a national referendum within two months, setting a breakneck schedule for the transition to civilian rule." Whether the generals really mean it remains to be seen. But, again, there are reasons for hope. Erik Voeten, a professor of government at Georgetown, points to new research by political scientists Hein Goemans and Nikolay Marinov indicating that post-coup military rulers have become increasingly likely to make the transition to democracy. Here's the abstract from their interesting working paper:

In this paper, we use new data on coup d'etats and elections to uncover a striking change in what happens after the coup. Whereas the vast majority of successful coups before 1990 installed their leaders durably in power, between 1991 and 2001 the picture reverses, with the majority of coups leading to competitive elections in 5 years or less. We argue that with the end of the Cold War, outside pressure has produced a development we characterize as the "electoral norm"—a requirement that binds successful coup-entrepreneurs to hold reasonably prompt and competitive elections upon gaining power. Consistent with our explanation, we find that post-Cold War those countries that are most dependent on Western aid have been the first the embrace competitive elections after the coup. Our theory is also able to account for the pronounced decline in the non-constitutional seizure of executive power since the early 1990s. While the coup d'etat has been and still is the single most important factor leading to the downfall of democratic government, our findings indicate that the new generation of coups have been considerably less nefarious for democracy than their historical predecessors. 

What is most captivating here is Messrs Goemans and Marinov's hypothesis that "outside pressure" has helped establish an "electoral norm" to which post-coup military regimes feel at least somewhat bound. Here's a bit more on what they have in mind in this regard: 

With the end of the Cold War, the West has begun to promote free elections in the rest of the world. While elections have not always been free and fair, nine of every ten countries in the world today hold regular elections that are significantly more competitive than the forms of political contestation most of these countries had before 1990. Furthermore, Western pressure to hold elections has been felt especially strongly by the set of countries most likely to undergo a coup: countries with weak, underdeveloped economies, and with poorly developed or unstable domestic authority structures.

The authors do not look past 2001, so this study says nothing about the effect of the "democracy promotion" efforts of the United States and its allies, whether truculent or diplomatic, on the development of this "electoral norm". However, the apparently salutary effect of earlier Western pressure to hold democratic elections certainly does suggest the question Lexington explored recently: "Was George Bush right?"

(Photo credit: AFP)

LET'S start with some disclosure: I grew up in Washington, DC in the 1980s. DC has always been the strangest American city; in fact, it has never really been much of a city, more an inchoate layering of different cities—the transient political class (elected officials, their staffs) and the permanent political class (remoras attached to the former grouping: lobbyists, lawyers, thinktankers, etc), neither of which had much in the way of civic roots or involvement; the city's black elite and white elite, a multiethnic suburbia whose members came to work in the city but otherwise had nothing to do with it, and, of course, a vast black underclass. I realise that these same groupings exist in other places, but for a variety of reasons extraneous to this post they never really cohered together in DC.

The only thing that united the city was the Redskins. Rich white Washingtonians and poor black ones, Democrats and Republicans, people who voted for Marion Barry and people who couldn't stand him: we all sat in the same rickety stands at RFK to cheer the same team while the stadium swayed. If the 1980s were DC's lowpoint (and, man, were they ever), they were the Redskins' high point. The team not only won consistently, but they managed to be both classy (I'm thinking here of Art Monk, whose jersey I still sport most Sundays, George Starke and Russ Grimm—names that probably mean little or nothing to 98% of the people reading these sentences but to those of my age and background connote giants) and colourful (the mohawked Dexter Manley, the Hogs and of course John Riggins, a massive, lumbering running back who at a black-tie dinner told Justice O'Connor to "loosen up, Sandy baby. You're too tight," and then promptly fell asleep under the table during a speech from then Vice-President George H.W. Bush).

All of which is by way of saying that Daniel Snyder (pictured) does not just own a football team; he stewards what may be Washington, DC's only real civic institution. In both of those roles he has been a consistent failure, as Dave McKenna's article in the Washington City Paper last November detailed. Mr Snyder, unsurprisingly, disliked the article. Rather than shaking it off, or writing a response, however, he decided to sue the paper. He is suing for $2m in New York, not Washington; and he announced his suit not by contacting the paper's editor (another disclosure: Michael Schaffer, who edits the City Paper, is an old friend and someone I respect a great deal, but I would be writing this even if he weren't), but by threatening the investment company that controls the media company that owns the paper. "We presume that defending such litigation would not be a rational strategy for an investment fund such as yours," threatened a letter from David Donvan, the Redskins' general counsel. "Indeed, the cost of the litigation would presumably quickly outstrip the asset value of the Washington City Paper." The letter also claims a number of Mr McKenna's claims are false; the newspaper is standing by them. It also accuses the paper of "demeaning" his wife's role as a "national spokesperson on breast-cancer awareness". In fact, the article makes no mention of breast cancer and refers to his wife only twice, regarding her claim that her husband has "grown and evolved". Perhaps most egregiously, Mr Donovan's letter accuses the City Paper of trafficking in "anti-Semitic caricature" for the illustration accompanying the article, which was a picture of Mr Snyder with devil's horns and a beard scribbled on.

To be sure, the first amendment is no defence against making libellous statements. But it is, and should be, a defence against bullying, thuggish threats of litigation like this. To its credit, the paper is standing firm. It has established a legal-defence fund that raised $18,000 in five days, and its parent company has retained Floyd Abrams. It is a mystery what Mr Snyder thought he could get by filing such a suit. Judges tend to take a dim view of using lawsuits to intimidate, especially when doing so vitiates first amendment principles. And as Mr Schaffer writes, "Every journalist dreams of someday being in the middle of one of those epic, David-and-Goliath, right-versus-wrong First Amendment showdowns." But then, it's a mystery what Mr Snyder thought he'd get by signing 34-year-old Donovan McNabb to a five-year, $78m contract extension two weeks after they benched him.

(Photo credit: AFP)

AIN'T it always the way? The day I filed my piece on legal challenges to the Voting Rights Act (VRA), a federal district court in Washington, DC heard just such a challenge. It was brought by Shelby County, Alabama, which contends that the "preclearance" requirement of section five of the VRA—which requires covered jurisdictions to obtain approval from the Justice Department for any changes to their election procedures—is unconstitutional. The 15th amendment guarantees that "[t]he right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude", and it grants Congress the "power to enforce this article by appropriate legislation." Shelby County's suit contends that the VRA is no longer appropriate: when Congress reauthorised the act for 25 years in 2006, it failed to show the existence of "pervasive voting discrimination", "electoral gamesmanship" and "widespread intentional discrimination on the basis of race". 

John Bates, who presided over the hearing, seemed to take a sceptical view of the VRA's extension. As its baseline, the act uses the 1964 election: any locality that used a test or device (such as a literacy test) and had voter turnout of less than 50% must "preclear" any changes to their electoral procedure. "We're now looking at a situation," said Mr Bates, "where that information is at least 45 years out of date, and by the time the 2006 extension of the Voting Rights Act runs its course, it will be 70 years. That wouldn't seem to be a current coverage formula, would it?" I am unmoved by this line of thinking, for two reasons. First, it is sophistry: of course the VRA, written in 1965, used the 1964 election as its baseline. But in 2006 Congress found enough evidence of continuing discrimination to warrant a 25-year renewal. Now, was there something wrong with that evidence? If so then make the argument. But age alone should not disqualify the act. Second, let's remember that slavery was in place for centuries. For another century, Southern whites did all they could to deny Southern blacks the rights guaranteed them by the 15th amendment. The VRA ended such practices. But in the broad sweep of history, 70 years really isn't all that much.

Having said that, the American South in 2011 is not the American South in 1964—as Justice Roberts wrote in 2009, "in part due to the success of [the VRA], we are now a very different Nation." There are no more literacy tests. Black officeholders and candidates abound. The registration gap between blacks and whites is minimal and sometimes non-existent in the covered states. The electoral votes of Virginia and North Carolina went to a black man in 2008. The crucial question today in much of the South—where black voters tend to be Democrats and white voters tend to be Republicans—is whether electoral changes such as redistricting are driven by racial bias or driven by politics. Challenging the VRA today seems less obviously petulant than doing so in 1965, as South Carolina did. One appellant I spoke to argued that the act has "great branding": say you want to challenge it and people think you're trying to keep black people from voting, which is not the case; challenging section five, which subjects some jurisdictions to an extra level of federal control, is not the same as challenging section two, which bars racial discrimination in voting.

That same appellant pointed out another less than salutary effect of the VRA: it keeps districts safe for incumbents. Conservative white Republicans and liberal black Democrats both benefit from districts drawn to ensure that the minority vote is neither packed, stacked nor cracked, as the saying goes (that is, neither too concentrated nor too diffuse). Consider my home state: the 4th, 5th and 13th districts, which comprise central Atlanta and its largely black southern suburbs, are represented by liberal black Democrats. The 6th, 7th, 11th and 3rd belong to conservative white Republicans. In those districts the competitive races are in the primaries, when candidates try to outflank each other to the right or the left. Would it not be better, the appellant wondered, if the districts were drawn to include more balanced numbers of Democrats and Republicans, so candidates in the general election have to appeal to the broad centre?

And where the Warren and Burger courts were inclined to grant the federal government broad leeway, the Roberts court has taken a narrower view of federal power and racial preferences. In a 2007 case that prohibited using race to determine school assignments (the district in this case was in Seattle, had no history of segregation, and was trying to achieve racially balanced schools), Justice Roberts wrote: "The way to stop discrimination on the basis of race is to stop discriminating on the basis of race." The VRA may not quite fit: it does not discriminate on the basis of race; it discriminates (if I can be permitted a little leeway in using that word in this clause) on the basis of history, of what actually happened, over and over again, in the areas it covers (and let's not forget it doesn't just cover the South; it protects Hispanic, Native American and Asian voters in numerous other localities scattered across seven states). The act was not simply willed into being; it, like other mid-century civil-rights legislation, came at great cost. It should not be lightly cast aside.

(Photo credit: AFP)

MY COLLEAGUES have been discussing climate change, and it's worth noting that global warming used to be the subject of genuine political debate in Washington as well. Al Gore made a movie about it. Barack Obama vowed to put a stop to it (indeed, he claimed that he had begun to lower sea levels simply by being nominated for the presidency). Congress pored over a series of detailed laws designed to tackle it. The House of Representatives even passed one.

No longer. The bill the House passed made no headway in the Senate, even with a filibuster-proof Democratic majority. Now that the Democrats have lost the House and seen their majority shrink in the Senate, the chances of an emissions-cutting measure getting through Congress are nil. Indeed, Republicans want to move in the opposite direction, and strip the EPA of its authority to regulate greenhouse gases under the Clean Air Act. But the chances of that succeeding are also close to zero, since the president has promised to veto any such move.

It should be of little surprise, then, that the hearing held today by the House’s Energy and Commerce Committee on reining in the EPA was more about grandstanding than about legislating. A series of Republicans asked Lisa Jackson (pictured), the head of the EPA, whether she was aware of how many jobs she was killing by raising energy prices and whether she was happy about it. A series of Democrats asked Mrs Jackson whether she was aware of how many lives she was saving by fighting pollution, and whether it would be a good idea to let those people die. Mrs Jackson, the supposed star witness, had only a minor role in it all.

Committee hearings are always like this. After smarmy exchanges about how delighted they are to be speaking to one another, congressmen ask grotesquely biased “Gotcha!” questions that the witnesses, usually harried officials, do their best not to respond to in a meaningful fashion. There are a lot of requests, almost always ignored, for yes or no answers. Mrs Jackson, for example, expended considerable time and effort not saying that greenhouse-gas regulation would raise energy prices and thus harm the economy.

Sometimes, the pretence of give-and-take is abandoned altogether. This morning, Joe “Sorry BP” Barton, a Republican from Texas, asked a laughably leading question, requested a yes or no answer, and then—before receiving one—told Mrs Jackson, “The answer is no.” When she asked, with faux naivety, whether Mr Barton wanted her to answer the question herself or comment on his remarks, he replied with admirable honesty that he didn’t.

Continue reading "Congress, climate change and incompetent grandstanding" >>

SOMETHING about public employees' unions certainly feels different from private-industry unions, as my colleague points out. But I'm not sure I follow the way he draws the distinction. In private industry, my colleague thinks, unions make sense because they compensate for uneven bargaining power between owners and workers in the struggle over how to split up profits. Public-sector unions, he thinks,

...don't work like this. They aren't bargaining against capitalists for a fair cut of the cooperative surplus. They're bargaining against everybody who pays taxes and/or benefits from government spending. The question of distribution in democratic politics isn't about splitting up jointly-produced profits. It's about interest groups fighting to grab a bigger share of government revenue while sticking competing groups with the tax bill.

The thing is, if one were a hardcore neo-classical type, one might argue that private-sector unions are merely bargaining against everyone who buys the products they produce, in an effort to drive up prices. Unions are trying to set industry-wide uniform wages, not argue with the owners of a particular firm about how to divide that firm's profits based on this year's results. That would result in different wages for workers at different firms, which is one thing unions generally don't want. In a platonic-idealist capitalist world where competition is always driving down prices and profits, and where firms have to compete on efficiency, you'd think the only way unions could make more money for workers is by raising prices for everyone.

In fact, the world isn't ideal, there's a whole lot of wiggle room for firms to increase profits by driving down wages, and, as my colleague writes, private-sector unions provide workers with a counterweight to management power in bargaining over compensation. And the evidence is very clear that, while they may also lead to reduced investment, unions provide a wage premium for their workers in the firms and industries where they operate. If you had a situation in which the private sector was largely unionised and the public sector wasn't, you'd expect to see private-sector workers making more than public-sector ones for similar jobs.

In fact, however, we don't have such a world. We have a world in which private-sector unions have shriveled while public-sector ones have grown. And I think it's pretty clear how this came about. Back in the 1940s and 1950s, the standard jobs that provided decent salaries and job security for the working and middle class were all pretty heavily unionised, whether private- or public-sector. Auto workers were unionised, police officers were unionised, newspaper reporters were unionised, postal workers were unionised. In my family, one branch was in the (private) ladies' garment workers' union, the other branch was in the (public) teachers' union. (Then there was my Great-aunt Marcia, who was in the Screen Cartoonists' Guild, which Walt Disney claimed was a Stalinist front group taking orders directly from Moscow. She used to draw a mean Popeye.) In that generation, people who worked in government jobs would have reacted angrily to the idea that they didn't have the right to organise and demand better wages the same way their private counterparts did.

Private-sector unionisation began to decline in the 1970s for a reason: private industry had an incentive to seek a non-unionised labour force and to break union control wherever possible, in order to increase profitability. So the auto and steel industries shifted factories to right-to-work states, leading to the tautological result trumpeted in papers like this one that unionised areas have lower rates of investment than non-unionised ones. The government doesn't have such a clear incentive to seek low-cost non-unionised labour. Moreover, a lot of governing tasks can't be outsourced to cheap non-union locales; you can't move an elementary school to Arkansas because the unionised teachers in New Jersey are too expensive. So government unionisation has risen from 23% in 1973 to 36% today, while private-sector unionisation has declined from 24% in 1973 to 7% today. In this environment, it's quixotic to argue that private-sector unions (which are withering) are legitimate, while public-sector ones aren't. It might be interesting to consider the merits of an economy with 50% private-sector unionisation and no public-sector unionisation at all, but that's not an economy we could conceivably get at this point.

FIRST of all, I apologise for the slightly inflammatory headline of this post. The fact is that a majority of Americans (58%) do think climate change is a serious problem, according to the January 2011 Rasmussen Energy Update, and fully one-third, 33%, "see it as a Very Serious problem." Still, the United States is less exercised about climate change than a lot of countries, and it's one of the few places where you can turn on the television and catch a debate between mainstream figures about whether climate change is even real. Over the weekend, for example, Charles Krauthammer suggested that a belief in global warming has the same epistemological status as a religious belief.

I've been wanting to take a step back and think about why America is a laggard in the fight against climate change. I would posit a handful of explanations:

Psychological: The consequences of climate change are too awful to contemplate. Therefore, we're denying the issue, as we used to deny monsters in the room by hiding under the blanket. If you don't look at it, it can't look at you.

Economic: The costs of a large-scale effort to fight global warming are too steep to bear. Therefore, we're trying to ignore the issue, or pretending it doesn't exist, or we believe that the economy (including development) is more important.

Political: The fact that Democrats are always hammering on about climate change and Republicans aren't suggests that this is a political issue, not a scientific one. This creates a feedback loop: if climate change were real, why is it so polarising? Because it's so polarising, it must be slightly suspicious.

Epistemological: Why should we believe in climate change? Where's the evidence? All we know is what scientists say, and scientists are sometimes wrong. And don't even get me started on Al Gore.

Metaphysical: God isn't going to let millions of people die in an epic drought.

I suspect the metaphysical denial is quite rare—but given the comparative religiosity of American culture and the stereotypes thereof, it gets a lot of air time. It is also the least valid of the reasons for denial (partly because in the given system, God obviously does let people die). The other explanations are more common. In the Rasmussen poll, for example, a plurality of respondents said that "there is a conflict between environmental protection and economic growth."

Continue reading "Why don't Americans believe in global warming?" >>

PAUL KRUGMAN rounded out his praise for "simple models" last week with a video treatment of the "Simple Gifts" theme from Aaron Copland's "Appalachian Spring". As Mr Krugman notes, the melody is derived from an old Shaker hymn whose lyrics start:

'Tis the gift to be simple, 'tis the gift to be free
'Tis the gift to come down where we ought to be

When Mr Krugman called the lyrics appropriate, I took him to be alluding to the Federal Reserve's great mission of getting interest rates to sit just where they ought to be. Of course, what we're all worried about is that central bankers may have more of the attitude expressed in the cheeseball 90s-kitsch Celtic-dance adaptation of the "Simple Gifts" melody, "Lord of the Dance":

Dance, dance, wherever you may be
I am the lord of the dance, said he
And I lead you all, wherever you may be
And I lead you all in the dance, said he

Mostly, though, central bankers seem to have a pretty impressive respect for the tremendous responsibilities they carry. It's more the heads of private too-big-to-fail banks who seem to feel they "came down from heaven and danced on the earth," and owe no explanations to anyone.

GLENN BECK types who warn of a coming bout of inflation typically blame it on the policies (or, often, the very existence) of the Fed, which has dramatically expanded the money supply over the past two years to counteract the fall in commercial activity due to deleveraging from the financial crisis, thereby probably preventing a second Great Depression. Fortunately, Ben Bernanke apparently pays no attention to such people. But in a post on Friday, Gavyn Davies explained where the real inflationary threat lies: the possibility that the current rise in commodity prices isn't your typical short-term fluctuation, but part of a long-term trend. As emerging markets grow richer and drive up demand for raw materials, those materials may be rising in value relative to the industrial and service products of the developed economies.

There is a very big difference between a self-reversing up-and-down cycle in the commodity markets, and a longer term upward trend in commodity prices relative to the prices of goods and services produced in the developed economies. Because commodity prices are determined in competitive markets which need to clear at any point in time, they tend to fluctuate much more over short periods than the “sticky” prices and wages which exist in developed economies. If they are simply fluctuating around a constant or slowly rising trend, then they will quickly self-correct and the central bank should stay focused on the core inflation rate which is set in the rest of the economy.

But what if commodity prices are instead embarked on a long term uptrend against the prices of goods and services in the developed economies, driven by the rapid growth in the emerging economies? In that case, the commodity price shock would have a permanent effect on input prices in the developed economies, and it would not be appropriate for the central banks to ignore this shock. In fact, if they ignored it, they would simply be accommodating a permanent inflation shock to the system, which is what they did in the inflationary 1970s.

So it is a very difficult judgment. My own view, based on the arguments above,  is that the central banks are justified in waiting for more data before concluding that the rise in commodity prices is permanent.

Paul Krugman likes Mr Davies's column but thinks the main problem is still overreaction to commodity-price fluctuations rather than the reverse. He recalls the point in mid-2008 when the European Central Bank, looking at rising headline inflation that was driven by the commodity bump, made the mistake of raising rates at the onset of a huge recession.

To me, the main point here is just how crucial it is for Western economies, and particularly the United States, to reduce their use of commodities, and particularly oil. The capacities of human ingenuity are limitless; the amount of crude oil on planet Earth is not. If you build an economy that's entirely dependent on a non-renewable resource, you are guaranteeing yourself a nasty encounter with stagflation sooner or later when the stuff starts to run out. The idea that sustainable-resource use and renewable energy is some kind of socialist hippy hobby is incredibly naive and frivolous, and extremely damaging to the American economy.

MIKE Konczal writes:

One of the more curious behavioral responses is that people hate unemployment. They hate not being part of their productive community, they hate not contributing, they hate the loss of identity that one gets as someone who works. To an economist that’s b-a-n-a-n-a-s. Unemployment should be a pleasant vacation! But, last time I checked, it wasn’t (is that consistent with the latest frontiers in happiness research?).

Mr Konczal is contributing to a discussion that's kicked up recently over a paper written by libertarian economists Bryan Caplan and Scott Beaulier, arguing that behavioural economics provides a basis for critiquing government welfare policies. Karl Smith highlighted Mr Caplan's paper as a serious challenge to his neo-classical economic belief structure; other commentors replied that the paper had no data and no mathematical models; Mr Smith responded that often simple, data-free models can be extremely helpful in posing problems and presenting complex ideas intuitively, and cited the example of Paul Krugman's famous essay on the babysitting co-op with its crystal-clear workaday picture of how a Keynesian liquidity trap works; Mr Krugman jumped in with his favourite simple, low-on-data papers, including David Hume's thought experiment "Of the Balance of Trade" and Evsey Domar's paper grounding slavery and serfdom in land surpluses and labour shortages. (I love this stuff. Blogs are the greatest thing to happen to intellectual life in the early 21st century; one day we'll look back on them as a latter-day Bloomsbury.)

Mr Caplan is taking up a problem for conservative critics of the welfare state who take a neo-classical economic perspective. From a neo-classical perspective, he says, giving people more choices (by giving them money, preference in university admissions, health care and so on) always makes them better off. So how can welfare hurt the poor? He thinks behavioural economics, which shows us how people often (usually, even) make decisions that are irrational from a classical economic perspective, can provide the answer:

A simple numerical example can illustrate the link between helping the poor and harming them. Suppose that in the absence of government assistance, the true net benefit of having a child out-of-wedlock is -$25,000, but a teenage girl with self-serving bias [unrealistically optimistic and overconfident] believes it is only -$5000. Since she still sees the net benefits as negative she chooses to wait. But suppose the government offers $10,000 in assistance to unwed mothers. Then the perceived benefits rise to $5000, the teenage girl opts to have the baby, and ex post experiences a net benefit of -$25,000 + $10,000 = -$15,000.

Mr Konczal responds that the fact that people are economically irrational shows us precisely why government safety-net programmes are necessary.

[S]houldn’t loss aversion, overconfidence, time-inconsistent discounting and difficulty following statistical probabilities lead a behavioral person to be made better off by universal health care and old age pensions? The probability of managing an individual investment portfolio as well as estimating the chances and subjective experience of being destitute in old age is difficult to estimate individually and the tail risk of the loss that occurs in poverty would be particularly painful. The same statement should be true for health care. Same for unemployment insurance... That people are bad risk judges and hate losses should redouble our faith in social democratic insurance, not detract.

I basically agree with what Mr Konczal is saying here, but I also agree with what Mr Caplan is saying. It's pretty obvious that systems that disburse money in ways that aren't compatible with producing social utility can create pathological cultures of dependency. To take the obverse of what Mr Caplan says: it may be difficult from a neo-classical perspective to explain why a football coach is helping his players by subjecting them to extremely painful drills, against their wishes. He's doing it because he has a better ability than they do to judge what's necessary for them to achieve their long-term goal of winning football games. What I would point out, though, is that what Mr Caplan is saying here implies a certain degree of paternalism. Mr Caplan's example posits a difference between a "true" net benefit of having a child out-of-wedlock, and the merely apparent net benefit perceived by an immature teenage girl. But who is it that judges the "true" net benefit? A teenage girl is quite likely to herself decide, at some point down the road, that having a baby was the wrong decision. But a lot of social welfare policies are directed at mature adults. Mr Caplan is implying that third parties can be better judges of what's good for people than those people are themselves. I don't disagree with that perspective, but like Mr Konczal, I'm sceptical that it generally mitigates against government social-welfare policies, as opposed to for them.