Matt Yglesias

Partisan Balance

Any time you read something David Mayhew has written, you end up learning something. His latest book, Partisan Balance: Why Political Parties Don’t Kill the U.S. Constitutional System is no exception to that rule. Nevertheless, it’s still a bit of a strange book because it’s not entirely clear to me why he thinks his thesis is so reassuring.

The central claim of the book is that American political institutions aren’t systematically biased against one political party or the other. Examining the Truman to Bush era, he shows that thanks to the “packing” of liberals into super-partisan urban districts, the median House district is about one percentage point less Democratic than the country as a whole. The Senate is a bit more GOP leaning, but only slightly so. He shows that Democratic and Republican presidents have had equal (and large) amounts of trouble getting congress to go along with their ideas. He shows that both the House and the Senate have played obstructionist roles at different times and in roughly equal measure. He reminds us that there have been times when the Senate was more liberal than the House as well as vice versa.

This is all good to know, and I learned a lot of fascinating political history along the way. But the natural interpretation seems to me to be that America’s political parties are very good at adapting to institutional realities. That’s interesting, but it doesn’t carry much justificatory power. It seems to me that if we made it illegal for women to vote, the party system would adjust to the shock. But it would still be wrong, and would still have important consequences for people’s lives. Presidents try not to put obviously doomed items on the agenda, and good for them. But that leaves open the question that important topics are being kept off the agenda.

Bottom line: Good book, but I wouldn’t make this your first Mayhew if you haven’t read any of his other books.

Enlightened Despots

Chris Bertram proposes: “The Emir of Qatar may be a despot, but for Al Jazeera alone he could be winning a Frederick the Great prize as the most enlightened one of recent decades.”

An interesting idea. I’m heading to a meeting with the program director for Al Jazeera English a bit later this morning and it certainly seems to me that for all the Twitter/Facebook hype, the key information technology intervention here has been Al Jazeera and the rise of an Arab public sphere. Marc Lynch’s Voices of the New Arab Public: Iraq, al-Jazeera, and Middle East Politics Today was way ahead of the curve on this, but the publisher seems to be asking an extortionate price to read the book.

I think the idea of a Frederick The Great Prize has a lot of promise. Give it out maybe once a decade? Previous winners could include Lee Kwan Yew for his visionary implementation of congestion pricing and perhaps Mikhail Gorbachev.

Endgame

Fog rolling down behind the mountains:

— Politics is undermining the recovery.

— The Ryan McNeely Blog has launched.

— Where are all the good men?

— This is where the women writers are.

— 61 percent oppose limits on union bargaining.

PJ Harvey, “The Last Living Rose”

Trade Policy In 17th Century North America

From Alan Taylor’s American Colonies: The Settling of North America:

Ironically, the French also came to depend upon Iroquois hostility as a barrier that kept the northern Indians from traveling south to trade with the Dutch. The French recognized that they could not compete with the quality, quantity, or price of the Dutch trade goods. Therefore, a prolonged peace with the Iroquois would tempt northern Indians to carry their furs to Fort Orange for shipment to Amsterdam—to the detriment of Quebec and Paris. The French could ill afford friendship with the Iroquois, although they paid a heavy price in death and destruction for their enmity. The Five Nation Iroquois became equally ambivalent about peace with the French. The Iroquois usually preferred to steal furs from their northern enemies to take to Fort Orange, rather than permit them as friends a free passage to the Dutch traders. Because the northern Indians possessed better furs, they would, in the event of peace, become the preferred clients and customers of the Dutch, to the detriment of the Iroquois. As inferior suppliers of furs, the Iroquois had a perverse common interest with the French, an inferior source of manufactured goods. They both tacitly worked to keep apart the best suppliers of furs (the northern Indians) and of manufactures (the Dutch).

And today France is a rich country thanks to all the good middle class jobs this Iroquois protectionism helped save.

Contractortopia

I understand and, indeed, agree with the argument that public sector labor unions often use their political clout to advance the interests of service providers relative to the interests of service beneficiaries. This is often a source of bad public policy. What I don’t understand at all is the view that if we eliminated the unions the problem would go away. Consider, for example, the fact that alongside anti-union proposals Scott Walker’s budget would allow him to sell off state assets via no-bid contracts.

Of course people will still bid it’s just that they’ll be bidding to bribe Walker and his political allies rather than bidding to give money to the taxpayers.

And this is the general shape of the river. People claiming to be shocked to discover special interest politicking in the administration of the public school system might be interested to learn that military procurement decisions aren’t immune to political influence. Or that the orthodox conservative opinion has become that for-profit colleges are entitled to federal subsidies irrespective of the quality of services provided. Similarly, the orthodox conservative opinion was that federally subsidized student loans should be required to pass through the hands of bankers who take a cut along the way. Whatever cynical and pernicious things teachers’ union leaders can do can also be done by charter school leaders, and for the exact same reasons. Indeed, thanks to Citizens’ United, government contractors will be able to engage in unlimited anonymous campaign spending.

Any government empowered to collect taxes and spend money will be subject to possible interest group capture. Capture by the workforce of a public agency is no better or worse than capture by a private firm. If you look around the world at the best examples of efficient provision of public services (oftentimes through privatization) what you find is a list dominated by Nordic countries with extremely high levels of unionization.

The Pyramid Scheme Myth

To continue with the theme of Social Security’s admirable structure as an approach to funding middle class retirements, it’s important to tie this in with the pyramid scheme allegation.

Imagine a society with no Social Security, and also no imprudent or short-sighted people. Everyone puts a healthy share of their annual income away in a savings vehicle, and everyone manages to retire on a decent income. Thanks to the ups and downs of the financial markets, there’s a certain inefficiently noisy quality to the income of retired people, but due to the magic of infinite prudence the problem is very manageable. Now imagine that demographers are predicting a one-time demographic adjustment in the ratio of old people to non-old people in the population. This will lead to a decline in the rate of economic growth, and therefore to the expected return on investment. Either workers will need to start increasing their savings rate, or else they’ll need to accept lower living standards when retired. In other words, they’ll face the exact same choice we currently face in the form of higher taxes or lower benefits. Of course people could try to compensate for lower expected returns by engaging in riskier investment strategies, but we’re talking about a perfectly prudent population.

Under the circumstances, I don’t think anyone would be saying “saving for your retirement is a pyramid scheme—it depends on the assumption of future economic growth!” Future growth is a prudent assumption. But I also don’t think people would just be saying “well, we need to make some tough choices.” I think they’d be saying that we shouldn’t meekly accept the premise of slower economic growth. They’d be calling for more immigration, especially of high-skill people.

Donald Rumsfeld Presents The Greatest Memo Of All Time

Not a parody:

This seems to have been posted on Rumsfeld’s website (PDF) in order to help Barack Obama re-connect with disgruntled liberals.

The Chapter Ten Problem

Kevin Drum’s opus on the decline of labor and the collapse of economic egalitarianism in American politics isn’t something I agree with in every detail, but it’s good. But it suffers from an acute case of the so-called “chapter ten problem” where you can’t produce a positive vision for the future. Here’s the end:

Over the past 40 years, the American left has built an enormous institutional infrastructure dedicated to mobilizing money, votes, and public opinion on social issues, and this has paid off with huge strides in civil rights, feminism, gay rights, environmental policy, and more. But the past two years have demonstrated that that isn’t enough. If the left ever wants to regain the vigor that powered earlier eras of liberal reform, it needs to rebuild the infrastructure of economic populism that we’ve ignored for too long. Figuring out how to do that is the central task of the new decade.

Of course I don’t have the answer either. But to begin to sketch an idea, I think that in abstract terms “infrastructure of economic populism” isn’t the right description of what a labor union contributes politically. What you have with a union is a mechanism for collecting modest sums of money from a large group of people, such that some of the money is spent on hiring professionals to do the following things:

— Monitor legislative activity and political campaigns.
— Analyze the implications of policy proposals.
— Convey the upshot of the analysis both down to members and up to legislators.
— Produce bodies to show up at stuff.

The essential issue here is a basic collective action problem. If had the option of teaming up with 30 million like minded people to spend $100 a year in dues in order to maintain a political institution with an annual budget of $3 billion dedicated to my priorities, I’d be in good shape. Indeed, an institution specifically dedicated to political advocacy on behalf of like-minded people would be a much more optimal solution to the “countervailing forces” problem posed by the decline of organized labor. And I think a lot of people might find that kind of arrangement appealing. But of course once such an organization existed, $100 more or less wouldn’t make or break it so donors would tend to defect. And in the absence of the organization existing, it’s hard to persuade anyone to give the $100. No new conceptual ground there except to observe that these collective action problems pop up all over the place in the political domain, and if was truly impossible to overcome them you’d never see change for the better.

Mark Schmitt on “Dean’s Penguin” is still the closest thing to a workable vision on this score that I’ve seen.

Overpaid Newspaper Columnists

Richard Cohen is very upset about generous compensation of public sector employees, but what about the generous compensation of newspaper columnists? Suppose the Washington Post had just sent out a tweet on Friday morning saying “we want 750 words by 5PM Saturday on why Scott Walker is right—the three best will be published on Monday.”

Do you think nobody would submit an offering? That the offerings would be of massively lower quality than Cohen’s op-ed? If anything, I think quality would go up since the submissions would tend to come from the best writers the conservative movement can muster on this subject rather than as a generalist doing a “this is the hot issue of the week” snoozer.

States and Fiscal Crisis

David Brooks notes, accurately, that “States with public sector unions tend to run into fiscal crises”. This is true because “states with public sector unions” are a sub-set of “states” and in the United States of America “states tend to run into fiscal crises.”

This is a problem that would be well-worth addressing. The biggest area of problematic federal policy in this regard concerns Medicaid which creates large financial incentives for states to undertake commitments that won’t be sustainable in recessions. A big think new idea that could help in this regard would be for the federal government to “tax” state government spending, creating a bailout fund that could be released during recessions with disbursements strictly proportional to payments rendered. A structural issue voters ought to think about is that term limits for governors and state legislators exacerbate the bad incentives behind boom/bust budgeting.

Men These Days

Kay Hymowitz in the Wall Street Journal:

Not so long ago, the average American man in his 20s had achieved most of the milestones of adulthood: a high-school diploma, financial independence, marriage and children. Today, most men in their 20s hang out in a novel sort of limbo, a hybrid state of semi-hormonal adolescence and responsible self-reliance. This “pre-adulthood” has much to recommend it, especially for the college-educated. But it’s time to state what has become obvious to legions of frustrated young women: It doesn’t bring out the best in men.

Since I’m still in my twenties for a few more months, I thought I’d actually look up the median age at first marriage for American males. The most recent year the data is reported for is 2007, when it was 27.7 which is indeed a few years older than it was “not so long ago” in 1960 when it was 22.8 years. But in 1920, it was 24.6 years. In 1890, it was 26.1, presumably because everyone was too busy watching Judd Apatow movies. Or maybe this number just bounces around over time and it’s always been the case that some people are sometimes frustrated with some members of the opposite sex.

The “Carmelo” Deal

I think Carmelo Anthony is a widely overrated player, but the deal announced today for the New York Knicks to acquire him seems like a good trade anyway. That’s because they managed to give up assets—Danillo Galinari, Wilson Chandler, and Timofey Mozgov—that aren’t worth a huge amount either. Swapping Raymond Felton for Chauncey Billups at point guard obviously makes you older and darkens the outlook over the long term, but Billups is still the better player today.

Best of all, the Knicks hang on to underrated low volume / high efficiency guy Landry Fields and also acquire underrated low volume / high efficiency guy Renaldo Balkman from Denver. He’s gotten very few minutes from the Nuggets, but he’s been good, and he played more in his earlier stint with the Knicks. A lineup of Billups, Fields, Anthony, Balkman, and Stoudemire as coached by Mike D’Antoni ought to be quite potent mix of complementary skills.

Unions and Budget Deficits

Do high unionization levels lead to state budget deficits, as some claim? John Sides shows that the answer is no:

Looking at this chart, what I think you would see is that unionization levels have a strong relationship to progressive taxation. New York, Hawaii, and Washington are all high-tax states, especially on rich people, while the non-union south has generally low levels of taxation and regressive tax structures. The conservative movement is financed by rich people whose primary interest in life is lower taxes. And on an intellectual level, the main wellspring of conservative economic policy ideas comes from people who believe that progressive income taxes are very economically damaging. A secondary intellectual inspiration is people like Greg Mankiw who believe that such taxes are an immoral imposition on a genetic elite. A key problem with this agenda is that higher taxes on rich people are a politically popular way to solve budget deficits. The solution is to create a dynamic in which political parties are entirely reliant on rich businessmen for their financing. Reducing labor unions to a state of political impotence will get the job done.

Oil and Instability

The surging price of oil driven by turmoil in Libya and other Arab countries is a reminder that America’s national security posture in the Middle East is what it is for a reason. And I wish we could have more above-board discussion of that fact, because I think subjecting it to scrutiny would swiftly reveal that it’s not a very good reason.

Oil price shocks are very costly to the American economy, so it makes sense for us to expend a lot of resources on trying to prevent oil-related problems. But when we do so by trying to directly prevent the shocks, the benefits of our success are spread around to everyone while the costs are concentrated. What’s more, the costs not only include a heavy fiscal burden but also soldiers killed and substantial anti-American sentiment in the area. An alternative strategy would be to expend resources trying to make the country more resilient in the face of oil price shocks via a more diversified physical infrastructure. If we had congestion pricing and abundant bus lanes in our major metropolitan areas, the vast majority of people would still drive to work in the morning. But a system would be in place such that when price conditions changed people could switch at the margin. A subway line, more generally, is cheap compared to a war.

They Could Call It “Social Security”

Felix Salmon, inspired by a new Wade Pfau paper (PDF) talks about optimal retirement strategies:

Pfau makes a very basic calculation that for someone on a constant real wage, saving for 30 years and then living for another 30 years on 50% of their final salary, saving about 16% of your salary each year into a portfolio of 60% stocks and 40% bonds will put you into safe territory.

Of course, real wages aren’t constant over time, and all the other figures are highly variable too. But the bigger message certainly resonates with me: spend less effort on trying to boost your annual returns, when you have very little reason to believe in your alpha-generation abilities, and spend more effort on maximizing your savings every year.

This seems to me like an area where public policy could play a useful role. Say that instead of “saving about 15 percent of your salary” each year, there was a payroll tax of about 16 percent. And then people who’d paid the tax would receive from the government a defined benefit pension, whose generosity would be proportional to the extent of your earlier tax payments and therefore your salary. Since the goal here is essentially to guarantee middle class retirement security, you could put a cap on the quantity of wages subject to the payroll tax and assume that high-income people who want to keep up with the high life in retirement will take some of that untaxed income and invest it in stock or bond markets.

Then you’d have a public program that helps ameliorate people’s short-sighted and weak-willed qualities, thus ensuring a decent retirement for middle class people. And since those who pay higher taxes will receive greater benefits, it has no net impact on incentives. Great idea, right? We could call it “Social Security” since by socializing and spreading the risks, it ensures a decent, secure return for all participants rather than sending everyone to the casino.

Today as 1848

Back on Sunday I toyed around with the idea of trying to produce an analogy between the anti-regime movements active in the Arab world in 2011 to the European revolutions of 1848. But I couldn’t actually come up with an actual point to make. Anne Applebaum pulls it off:

Television creates the illusion of a linear narrative and gives events the semblance of a beginning, a middle, and an end. Real life is never like that; 1848 wasn’t like that. It’s useful to ponder the messiness of history from time to time, because it reminds us that the present is really no different.

She’s referring to the fact that most of the 1848 revolutions “failed.” But many of the things failed revolutionaries wanted in Germany wound up happening. By contrast, the 1848 uprisings in France “succeeded,” the July Monarchy was toppled and a Second Republic was established. But the Second Republic actually turned out to be a failure pretty quickly and ended up as a dictatorship/”empire” and a very witty Karl Marx essay.

Murder in Libya

Just a placeholder to note that I, along with the rest of the world, am aware of the massacres being perpetrated against protestors in Libya today and to express my hope that justice will be done.

Building DC Out

There’s a giant surface parking lot amidst downtown Washington, where the convention center used to be but construction on the replacement will begin within months and then there’s little space left for downtown development:

Gerry Widdicombe, Director of Economic Development for the Downtown Business Improvement District (BID) notes the difference 185,000 s.f. of retail will make for downtown. “This is really the capstone for downtown DC. We have about 5 million square feet [of buildable space] left on vacant lots or dilapidated office buildings…the old convention center site is about 2.5 million [s.f.] of that, 1.8 million is the air rights building, then we’re almost built out.” Widdicombe credits former city leaders with setting parameters of a strong residential presence rather than solely office space – despite the commercial’s greater tax base value, and for fostering a vision of a retail center. “Everything’s working pretty well. The thing we’re lacking is retail, hopefully we’ll have an Apple store, maybe a Bloomingdales, to get us over 500,000 s.f. of destination retail.” He notes that when the BID formed downtown had 95 surface paking lots and 30 dilapidated buildings. “Now we’ve got 5.”

What we need are some taller buildings. With taller buildings we wouldn’t face this sharp tradeoff between “parameters of a strong residential presence . . . despite the commercial’s greater tax base.” Instead, we’d get a ton more office space up to the point where commercial rents decline enough to make the market indifferent between housing and offices. The denser volume of people and jobs would make downtown DC a more attractive place to locate destination retail.” And the stronger tax base would allow us to have better public services and lower tax rates.

I know that many people like the look and feel of a city with no skyscrapers. But DC has both a lot of problems and a fair amount of extremely valuable land. Failing to use the land efficiently is extremely costly and makes it much harder for us to solve our problems.

Happy President’s Day!

I thought this might be a fun occasion for a trip to the Confederate White House down in Richmond. After all, Jefferson Davis was a kind of President. We’ll see….

The Value of Diversity

Debating Mike Pence’s amendment to defund Planned Parenthood, Rep Jackie Speier talked about her abortion (“For you to stand on this floor and suggest that somehow this is a procedure that is either welcomed or done cavalierly or done without any thought, is preposterous”) and Rep Gwen Moore discussed her experience as a teen mother.

Dana Goldstein makes a smart point about this:

These two women serve as reminders of why we need many more women and people of color serving in public office. To suggest so much is often derided as playing “identity politics,” but really, it’s just an acknowledgement that people with identities that differ from the status quo of political life–old, white, affluent, and male–have experiences that add something to the public debate and decision-making process. They’ve been single mothers. They’ve endured the tragedy of losing a wanted pregnancy. They’ve been poor.

I think people would appreciate this point better if they understood the fact that public opinion and interest group politics only constrain politicians very loosely. Both of those factors matter, of course, but politicians actually have a fair amount of autonomy. What they think in their heart—and especially which priorities are dear to them—actually makes quite a bit of difference. People with different backgrounds and life experiences are likely to have different ideas about what matters, and that can really change political outcomes.