American politics

Democracy in America

  • Environmental regulation

    The irony of the tragedy of the commons

    Feb 24th 2011, 22:58 by M.S.

    THE American Economic Review just turned 100. It turns out that the original issue in 1911 featured an article by Professor Katharine Coman of Wellesley College entitled  “Some Unsettled Problems of Irrigation”, and in the anniversary issue, Robert Stavins (via Mark Thoma) cleverly decides to retrace what's happened since then with economic theory on "commons problems". Basically, he writes, Pigou and Coase and those who followed them have done yeoman work that's led to the institutionalisation of tools like cap-and-trade allowances for fishing permits and pollution permits, which are superior to command-and-control rules both from an environmental and economic perspective:

    First, economic theory—by focusing on market failures linked with incomplete systems of property rights—has made major contributions to our understanding of commons problems and the development of prudent public policies. Second, as our understanding of the commons has become more complex, the design of economic policy instruments has become more sophisticated, enabling policy makers to address problems that are characterized by uncertainty, spatial and temporal heterogeneity, and long duration. Third, government policies that have not accounted for economic responses have been excessively costly, often ineffective, and sometimes counterproductive.

    For example, he writes, the 1990 law establishing tradable permits to bring down sulfur dioxide emissions rather than using command-and-control regulations saves the economy $1 billion a year. And with what he calls the "ultimate problem of the commons", greenhouse gases, "there is widespread agreement among economists (and a diverse set of other policy analysts) that economy-wide carbon pricing will be an essential ingredient of any policy that can achieve meaningful reductions of CO2 emissions cost effectively, at least in the United States and other industrialized countries (Gilbert E. Metcalf 2009; Louis Kaplow 2010). The ubiquitous nature of energy generation and use and the diversity of CO2 sources in a modern economy mean that conventional technology and performance standards would be infeasible and—in any event—excessively costly (Newell and Stavins 2003)."

    The problem with this picture is passed along by Dave Roberts at Grist. The public, according to a new poll, does want to cut CO2—and smog, and mercury. But they want to do it through EPA regulation, ie command-and-control, not tradeable permits or Pigovian taxes.

    I've never seen a behavioural economics study on this, but I'm sure somebody's done it, because it seems pretty widespread: people generally prefer rules telling them something is not allowed, rather than charges making them pay for it, even if the latter are clearly more efficient at maximising social value. Mr Stavins does recognise this, observing that in terms of political appeal, aversion to the word "taxes" is probably one reason why cap-and-trade systems for carbon emission permits have already been instituted in Europe; but he also notes that "now that cap and trade has been demonized—in US politics, at least—as 'cap and tax,' this difference has surely diminished."

    The darkly ironic side of all this, of course, is that administrative command-and-control solutions like detailed EPA emissions rules are definitely more expensive than cap-and-trade or carbon taxes would be. If anything, when the public votes for EPA regulation rather than cap-and-trade, that's when it's imposing a tax on itself. Fifty years after Coase and 90 after Pigou, the economists are pretty sure they've finally got the solution for fixing commons problems without diminishing social value, only to have the public reject it because they think that's the tax. If the tragedy of the commons is "Romeo and Juliet", the rejection of Coasian cap-and-trade solutions to commons problems is "Blood Simple": a hilariously bitter demonstration of the human capacity for selfish stupidity that ends with the only guy who's figured it all out getting shot through a door by the wrong person for the wrong reasons.

  • The war in Afghanistan

    Going the Manchurian candidate one better

    Feb 24th 2011, 17:04 by M.S.

    JUST when I thought it had gone full circle, it went another full circle. It was crazy enough when, as Jane Mayer and others have documented, the CIA took the manuals developed by military trainers for hardening soldiers against the kinds of torture and psychological-manipulation techniques that had been used on Americans by North Korean and North Vietnamese interrogators, reverse-engineered those techniques, and started using them on captives at Bhagram, Abu Ghraib and Guantanamo. Then, when John McCain, who had himself been subjected to those torture and psychological-manipulation techniques in a Vietnamese prison camp, went ahead and endorsed their use by CIA interrogators, I thought the irony could go no deeper.

    Never underestimate the American military! Rolling Stone's Michael Hastings scores another coup:

    The U.S. Army illegally ordered a team of soldiers specializing in "psychological operations" to manipulate visiting American senators into providing more troops and funding for the war, Rolling Stone has learned – and when an officer tried to stop the operation, he was railroaded by military investigators.

    The orders came from the command of Lt. Gen. William Caldwell, a three-star general in charge of training Afghan troops – the linchpin of U.S. strategy in the war. Over a four-month period last year, a military cell devoted to what is known as "information operations" at Camp Eggers in Kabul was repeatedly pressured to target visiting senators and other VIPs who met with Caldwell. When the unit resisted the order, arguing that it violated U.S. laws prohibiting the use of propaganda against American citizens, it was subjected to a campaign of retaliation.

    Among the senators subjected to psy-ops manipulation by his own army: John McCain. I can't think of a funny closing line that could possibly top the straight-up Hollywood madness of this, so I'll just have to go with Mr Hastings's own serious observation, which is that the use of psy-ops techniques on American legislators shows the army is pretty desperate to convince people the war in Afghanistan is going swimmingly. Briefly, before the psy-ops guys get to my brain and zap my memory and logic cells, it isn't.

  • The power of free association

    Libertarian unionism

    Feb 23rd 2011, 22:34 by W.W. | IOWA CITY

    I'VE repeatedly argued that private- and public-sector unions operate in different institutional settings, raise fundamentally different moral and political questions, and that it is altogether reasonable to support private-sector unions while rejecting public-sector unions on account of the nature of their differences. A common response I've heard from the left is that I'm slyly seeking to sow discord by disingenuously arguing that the larger union movement is not in fact one, but is instead a coalition of fundamentally distinct organisations of unequal moral standing. A common response I've heard from the right is basically the same: "you don't really support private-sector unionism, do you"? 

    Well, I do. Sort of. It's complicated because American labour law is complicated. 

    The right of workers to band together to improve their bargaining position relative to employers is a straightforward implication of freedom of association, and the sort of voluntary association that results is the beating heart of the classical liberal vision of civil society. I unreservedly endorse what I'll call the "unionism of free association". My difficulty in coming out wholeheartedly for private-sector unions as they now exist is that they are, by and large, creatures of objectionable statutes which have badly warped the labour-capital power dynamic that would exist under the unionism of free association.

    Progressives and libertarians generally part ways on the justifiability of legislation that boosts the bargaining power of unions. Progressives generally think, not implausibly, that government has already put a thumb on the scale in favour of employers through the legal definition of the character and powers of the corporation, such that it is manifestly unjust for government to fail to put an equalising thumb on the scale in favour of unions. For now I only want to say that I think there is indeed a plausible case for government stepping in to help strengthen workers' bargaining power when inequalities in such power (often created by law and legislation) lead to a systemically unfair division of the gains from productive cooperation. I don't think the same plausible case applies to public-sector unions for reasons I've recited ad nauseam.  

    So, do circumstances merit a further statutory boost for private-sector unions? I don't know. Rather than become mired in largely intractable metaphysical disputes over fairness of the division of the cooperative surplus, which we would need to do in order to determine whether government should do more to augment union power, I believe it would be much more productive to focus on the ways in which the prevailing legal regime clearly handicaps labour relative to the power unions would have under conditions of free association. I heartily agree with Kevin Carson, a left-libertarian theorist and activist, when he argues that:

    [T]he room for change lies mainly, not with adding further economic intervention to aid labor at the expense of capital, but rather with eliminating those policies which currently benefit capital at the expense of labor. The question is not what new laws would strengthen the bargaining power of labor, but which existing ones weaken it. ...

    The most obvious forms of state intervention that hobble labor are legislation like:

    1) The provisions of Taft-Hartley which criminalize sympathy and boycott strikes;

    2) The Railway Labor Relations Act and the “cooling off” provisions of Taft-Hartley, which enable the government to prevent a strike from spreading to common carriers and thus becoming a general strike; and

    3) “Right-to-Work” (sic) laws, which restrict the freedom of contract by forbidding employers to enter into union shop contracts with a bargaining agent.

    Further, we should examine the extent to which even ostensibly pro-labor laws, like the Wagner Act, have served in practice to weaken the bargaining power of labor. Before Wagner, what is today regarded as the conventional strike—an announced walkout associated with a formal ultimatum—was only one tactic among many used by unions.

    Mr Carson then goes on to enumerate some of those now-rare tactics, which, taken together, add up to a compelling case that a return to the unionism of free association would improve the bargaining position of labour relative to the status quo.  

    It is in this light that I wish to join the Washington Examiner's Tim Carney in congratulating Mitch Daniels for his opposition to the "right-to-work" legislation proposed by Indiana Republicans. Presidential, indeed. 

  • Protectionism

    Barriers to trade back in the day

    Feb 23rd 2011, 21:31 by M.S.

    MATTHEW YGLESIAS cites Alan Taylor's "American Colonies: The Settling of North America" on how French-Iroquois warfare tacitly served both groups by erecting a protectionist barrier between northern Indians in Quebec and the Dutch colony at Fort Orange (now Albany)...

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

    From the NRC Handelsblad, "Ignoring History in the Westerschelde Debate":

    The fall of Antwerp in 1585 and the Dutch blockade of the Scheldt [pictured above] were a pivotal moment for the separation of North and South, of the Republic and the Spanish Netherlands. Antwerp was cut off from the sea; Amsterdam took over Antwerp's dominant position. After the 1648 Peace of Münster the Dutch Republic managed to perpetuate the Scheldt blockade. It wasn't until the Treaty of London of 1839, in which the great powers agreed to the independence of Belgium, that the reopening of the Scheldt river was finally guaranteed.

    Is Amsterdam a rich city today thanks to all the good middle-class jobs this Dutch protectionism helped save? In part, yeah, to the extent that any modern economic circumstances can be traced to things that happened centuries ago. The Dutch blockaded Antwerp for over 200 years, from 1585 until the Netherlands became the Napoleon-aligned Batavian Republic in 1795. That may not be the primary reason why the Dutch manufactures available at Fort Orange were so cheap, but it's not unrelated, and it's certainly a major reason why Amsterdam was a thriving world commercial centre in the mid-1600s while Antwerp became a declining provincial town. If the French had wanted to justify protectionist behaviour in North America by arguing that the Dutch did it too, they would have been right.

    This isn't to say that it's a good idea to ratchet up levels of protectionism when, as now, overall barriers to trade are low and declining. But when everyone's doing it, it's probably true that the people who do it more effectively are benefiting from it.

  • Mitch Daniels

    A quick thought on Mitch Daniels

    Feb 23rd 2011, 19:24 by C.H. | CHICAGO

    MITCH DANIELS seems to be doing everything he can to ensure that he loses a Republican presidential primary. Last year he called for a truce on social issues, so that leaders could focus on more pressing matters. Conservatives are still having conniptions about this. Now he is chiding Hoosier Republicans for pushing a right-to-work bill, saying that the fight may derail other, more urgent legislative priorities. Such efforts will be fodder for conservative opponents in a primary. They also suggest that Mr Daniels would be a rather good president.

    (Photo credit: AFP)

  • Unions

    Teaching quality and bargaining

    Feb 23rd 2011, 17:15 by M.S.

    SCOTT LEMIEUX passes along a pretty useful point to keep in mind, courtesy of his friend Ken Sherrill.

    Only 5 states do not have collective bargaining for educators and have deemed it illegal. Those states and their ranking on ACT/SAT scores are as follows:

    South Carolina – 50th
    North Carolina – 49th
    Georgia – 48th
    Texas – 47th
    Virginia – 44th

    If you are wondering, Wisconsin, with its collective bargaining for teachers, is ranked 2nd in the country.

    As Mr Lemieux says, this doesn't show that collective bargaining makes school systems better. But it makes it pretty hard to argue the converse.

    On a broader note, I think this is illustrative of the need for people who are interested in better outcomes for national social challenges to stop arguing that their opponents are illegitimate and should be annihilated. In the particular case of unions, it's pretty clear from all the research that the existence of unions in a workplace can either increase or decrease productivity, depending on how unions and management interact. Conservatives who want to argue that unions destroy productivity almost inevitably use the example of the American auto industry and the UAW, which is an interesting example because American car manufacturers were defeated on quality and price by car manufacturers from two countries with extremely high rates of unionisation, Germany and Japan. When GM staged a last-ditch effort in the 1980s to learn how to make cars the Japanese way, they sent management and union teams to work with Toyota to see how to arrange collaborative union-management relationships.

    There are clearly some serious problems facing American governance, and public-sector unions are going to have to make adjustments to solve those problems, whether it means pension restructuring or allowing the firing of incompetent teachers. But those kinds of reforms will be unachievable if unions correctly understand that their opponents, including Scott Walker and the modern Republican Party, are not in fact interested in collaborating with them on solutions, and are instead trying to destroy their existence as institutions.

  • Chicago Mayor Rahm Emanuel

    Rahm Emanuel wins

    Feb 23rd 2011, 14:45 by C.H. | CHICAGO

    NEW eras tend to be declared too easily. Chicago’s election of Rahm Emanuel on February 22nd, though, was a turning point. True, the mayoral race did have an air of familiarity, if only because it honoured the city’s penchant for the bizarre. Mr Emanuel was almost disqualified by a legal fight over the meaning of the word “reside”. Carol Moseley Braun, a black contender, called a lesser opponent a crack addict. A blizzard prompted candidates to battle over their shovelling skills. On Twitter, an impostor posing as Mr Emanuel won 36,000 followers with tweets composed almost entirely of expletives.

    Nevertheless, the election really did mark the end of an age. Richard Daley senior ruled Chicago from 1955 to 1976; his son has reigned over the city since 1989. Now a new powerbroker will take charge with no Daley in the offing. Mr Emanuel clobbered his opponents by winning 55% of the vote, well above the level needed to avoid a run-off. Mr Emanuel’s effect on the city, of course, has yet to be determined. But the election itself proved just how much Chicago has changed.

    The mayoral race was unlike any in recent memory, and not simply because Mr Daley was absent. Chicago’s rules of racial politics have become tangled. Mr Emanuel, a Jewish former congressman and aide to Barack Obama, was one of four main candidates. The Latino community, in a sign of growing prominence, produced not one but two credible contenders: Gery Chico, once Mr Daley’s chief of staff, and Miguel Del Valle, the city clerk. After much debate the black community rallied behind Ms Braun, a former senator. “The early assumption,” says Juan Rangel, a Latino leader and supporter of Mr Emanuel, “was that the election would be all about race.” But it wasn’t. Mr Chico’s most vocal backers were union members. Ms Braun tried and failed to incite class warfare. Mr Emanuel won in part because of his success in wards with high concentrations of black voters.

    Meanwhile the notorious Chicago machine is not what it was. Mr Daley’s machine was different than that of his father; his power base included Latinos and executives at global firms, for example. But in recent years the machine had grown rusty too. Federal investigations disrupted Chicago’s convenient system of rewarding political workers with city jobs and promotions. Mr Daley’s underlings were convicted in 2006 and 2009, but the boss himself was not implicated. The old patronage armies, says Dick Simpson of the University of Illinois at Chicago, have shrivelled.

    Mr Emanuel is hardly an outsider to Chicago’s political establishment—he courted community leaders such as Mr Rangel aggressively. But his tactics were less old Chicago than new Washington. He followed the requirements of any modern campaign: raise cash and deliver a clear message. By January Mr Emanuel had raised $11.8m, compared with $2.4m for Mr Chico. In the old days a patronage army might have fanned out across an important neighbourhood. Mr Emanuel’s money let him accost voters through their television sets. He also campaigned diligently, visiting more than 100 train stops to greet befuddled commuters. He stuck to his message (strong schools, safe streets, stable finances) and kept his famous temper in check.

    Winning the election, however, was the easy part. Mr Emanuel is more accustomed to being an aide than the chief. But on May 16th Mr Emanuel will become the executive of America’s third biggest city. A fiscal mess awaits him. Mr Daley closed recent budget gaps by using cash from asset sales; Mr Emanuel could not repeat this trick even if he wanted to. A brawl with local unions, who opposed him in the election, seems certain. He may also struggle with the city council. These challenges are formidable. Mr Emanuel’s temper, so controlled in the campaign, is sure to erupt. But if Mr Emanuel can survive the next few years, he may be the mayor for 20 more.

  • Democracy diseased

    Public-sector unions and fiscal exploitation

    Feb 22nd 2011, 22:32 by W.W. | IOWA CITY

    EZRA KLEIN attempts to blur the distinction between public- and private-sector unions. Indeed, the title of his post, "You can't separate public and private unions", suggests that there is no distinction. But of course there is. The difference is profound, and goes to the very heart of liberal political theory.

    As Max Weber taught, the state is an institution distinguished by its claim to a "monopoly on the legitimate use of violence". The principal task of political philosophy is to give an account of the conditions under which it is morally legitimate or justified for an exclusive group of people to get things done by threatening and applying coercion to the rest of the inhabitants of a certain territory. On the dominant liberal account, several things need to be true before some small subset of a population can be justified in pushing the rest of us around. First, it needs to solve a problem to which there is no voluntary or non-coercive solution. According to the standard story, only the artful application of credible threats of violence can deliver certain "public goods" without which we would all be worse off. This is, by and large, what the state is for. Of course, any state powerful enough to deliver the public goods and protect our rights is powerful enough to violate them. We each have ample reason to reject the authority of any state that does not rely on the oversight and authorisation of those of us at the business end of police batons. The government of the state must take a form that minimises the chances of the abuse of state violence. According to both liberal theory and history, some form of representative democracy seems to be the ticket.

    While the liberal-democratic state has proven better than the known alternatives, it creates a number of serious problems on the way to solving others. Among the greatest of these problems is maintaining a system of public finance that does not stray outside the bounds of liberal legitimacy. The power to tax and spend is necessary for the performance of the democratic state's legitimate functions, but it is also a ready tool of exploitation and distributive injustice. An ideally legitimate state does nothing people can do better on voluntary terms, and it takes no more from people in taxes than is necessary to finance necessary public goods. But this is a moral target we never hit because the strategic logic of redistributive democracy reliably errs in the direction of expansion of services, deficit spending, and the abuse of taxpayers and other not-very-organised constituencies at the hands of highly-organised special interests. If we are concerned to minimise exploitation—if we care about the extent to which state violence is public-spirited and not merely criminal—we must go out of our way to acknowledge and guard against the abuses of fiscal democracy.

    It is in the context of these concerns that we must consider the function of public-sector unions. If they do anything at all, it is to protect their members' claims on future government revenue from democratic discretion—to limit the power of the elected representatives of the democratic public to set the terms on which union-members will receive transfers from taxpayers. That these transfers come to workers in the form of compensation for services rendered the government seems to confuse a lot people. This is, I think, why people on both sides of the debate are distracted by the question of whether government workers are or are not "overpaid". To my mind, the real question is whether government workers should be granted special legal powers that (a) are unavailable to other groups whose welfare also turns on transfers from the treasury, or on the size of compulsory transfers from their bank accounts to the treasury, and (b) limit democratic sovereignty over the distribution of the burdens and benefits of the system of public finance.

    I would argue on liberal grounds that justice demands limits on democratic sovereignty over budgetary matters precisely to avoid the exploitative redistribution that otherwise occurs. That's why I support constitutionalising nondiscrimination requirements on fiscal policy, among other reforms. My principled objection to public-sector unions is that their powers limit democratic sovereignty over taxation and public spending in a way that advantages some citizens at the expence of others—in a way that makes fiscal exploitation more, not less likely. Should they have grievances about their cut of the public budget, non-unionised government employees have recourse to the exact same democratic institutions as do other groups of citizens, which is as it should be. If we cannot trust democratic bodies to treat government workers fairly, then we cannot trust democratic bodies generally.

    Anyway, whether or not you agree with me, this particular set of political issues simply does not arise in discussions of private-sector unions. The problem of bargaining over shares of the surplus from voluntary exchange between workers, capitalists, and consumers is a different problem. It's easy to separate private- and public-sector unions once you know how! Indeed, it's not only possible but reasonable to support private-sector unions as a safeguard against economic exploitation and oppose public-sector unions as an instrument of political exploitation. That would not be the possible, much less reasonable, were Mr Klein correct about the inseparability of the two kinds of unions.

  • Unionism

    Now that's a really good question

    Feb 22nd 2011, 19:03 by M.S.

    MY COLLEAGUE asks an excellent question: if stronger private-sector unions aren't in the cards in America, then what? What other force do progressives think might play the role unions played in the postwar era, providing greater negotiating power for the working and middle class, so that they can try to claw back some of the 52% of all US GDP growth from 1993-2008 captured by the top 1% of the income scale and organise politically for concerns like universal health insurance? (Or, my pet beef, more vacation time. Why on Earth do Americans settle for two weeks' vacation time per year? Have we no unemployed people? Have we no robots? Isn't the whole point of advancement in technology and efficiency to give us more leisure time? Ever notice what words make up the phrase "labour-saving devices"? Okay, I'm done.)

    Kevin Drum poses precisely the same question in his new article in Mother Jones:

    Unions, for better or worse, are history. Even union leaders don't believe they'll ever regain the power of their glory days. If private-sector union density increased from 7 percent to 10 percent, that would be considered a huge victory. But it wouldn't be anywhere near enough to restore the power of the working and middle classes.

    And yet: The heart and soul of liberalism is economic egalitarianism. Without it, Wall Street will continue to extract ever vaster sums from the American economy, the middle class will continue to stagnate, and the left will continue to lack the powerful political and cultural energy necessary for a sustained period of liberal reform. For this to change, America needs a countervailing power as big, crude, and uncompromising as organized labor used to be.

    But what?

    Mr Drum doesn't have an answer, and at the moment, I'm pessimistic. I don't see a realistic alternative organisation that can enlist and mobilise manpower in the interest of middle-class and poor people's pocketbook concerns. A number of alternative models were created in the 1970s, including Ralph Nader's PIRGs and the poor people's participatory-democracy organisations that eventually became ACORN. They were never more than marginal players in power politics, and ACORN was ultimately destroyed essentially with a flick of the organised right's thumb. Organisations like the Campaign for Community Change sweat blood and tears to try to make poor people's voices heard in government, but the evidence is that government just doesn't listen to poor people. Progressive mass organisations formed along other identity-based or single-issue lines, such as the National Organisation for Women or the Sierra Club, are inevitably going to be dominated by well-off people with leisure time; even those folks are hampered by the fact that people in America have less and less leisure time (see above). Most important, there's really no way in the long term for organisations that depend on voluntary donations to take on organisations that have dedicated funding streams based on real profits. The Sierra Club will never be able to match the mission intensity or the funding consistency of the National Association of Manufacturers.

  • Oil royalties

    Giving away government money accidentally on purpose

    Feb 22nd 2011, 17:01 by M.S.

    IN THE first three quarters of 2010, Chevron earned $13.73 billion in profits. A substantial portion of those profits came from oil drilled in the Gulf of Mexico. Other profits came from oil drilled on private land. If Chevron drills oil on private land, it has to pay royalties to the owners of the land for the right to drill there. Normally, when Chevron drills oil on public land, it would pay royalties to the government, ie the taxpayer. But when Chevron drills oil on certain deepwater wells in the Gulf of Mexico, it doesn't have to pay royalties to anyone. That's because back in 1996, Congress decided it would be a good idea to encourage deepwater drilling by offering royalty-free leases in certain areas that wouldn't be otherwise commercially interesting.

    Which is fine, if you believe in prolonging our addiction to fossil fuels; but that's another discussion. The main problem is that Congress obviously doesn't want to be handing out royalty-free drilling leases on sites that would be commercially attractive even at the going rate. That's just handing out taxpayer money to a few corporations for no good reason; among other things, it's not fair to other drillers who have to pay for their leases. And when the price of crude goes above a certain level, those tough-to-develop deepwater wells become commercially attractive even without the free leases. So Congress sensibly instructed the Minerals Management Service (MMS) to award these free leases only when the price of oil was at a level low enough that they wouldn't otherwise be profitable to exploit.

    Whoops! We all remember the MMS, right? So apparently, in 1998-99, the folks at the MMS were too busy flirting with each other, or accepting private-jet rides to college football games, or whatever, to notice that the price of oil had gotten pretty high and they shouldn't be handing out free leases anymore. As a result, 24 companies got free leases they shouldn't have gotten. And ever since, they've been making extra money that they really ought to be returning in the form of leases on public property to the American taxpayer. As of 2008, the bill came to $1.3 billion; this year, the losses will be $1.5 billion. Over the decades-long lifetime of the wells it'll add up to a lot more. According to the Government Accountability Office it'll come to $53 billion over the next 25 years. Last week, representative Ed Markey and a few other Democrats on the House Natural Resources Committee offered an amendment to the Republican budget bill to make those oil producers pay the standard amount in the future on the royalty-free leases they mistakenly received due to bureaucratic error. The amendment was voted down, 251-174.

    If the oil companies were required to pay the royalties going forward which they should have been paying in the first place, the enormous profits they're currently booking would be slightly smaller. Oil-company shareholders would be a tiny bit less wealthy. The federal deficit would be a bit smaller too. Average taxpayers would have to pay slightly less interest on the national debt, and more of their taxes would thus be devoted to productive uses like maintaining the roads on which to drive the cars that burn the oil that the oil companies produce. A pointless multibillion-dollar distortion caused by bureaucratic error would be removed from the economy, and taxpayers would be funding a little bit less corporate welfare. There is no rationale for continuing to oblige regular taxpayers to pick up the tab for these distortionary favours to major oil companies except that the oil companies want the money. For this Congress, that's plenty reason enough.

    Oh, one more thing. Some years back, Shell, BP, and two other oil companies that also mistakenly received royalty-free leases signed agreements with the federal government to voluntarily pay the normal lease on their wells from that date on. They probably did so less out of any concern for fairness to the American taxpayer than out of a desire to avoid the possibility that the government would try to retroactively recover leases for prior years. Nonetheless, voluntarily agreeing to pay the royalties going forward was the right thing to do. So, in the spirit of encouraging good behaviour: Shell and BP, good show. Chevron and the other guys, you need to go sit in the corner for a while and think about what behaviour this situation calls for.

    (Photo credit: AFP)

  • State budget problems

    The immediate crisis

    Feb 22nd 2011, 14:48 by C.H. | CHICAGO

    THE brouhaha around public workers in Wisconsin obscures a few things. First, states have big fiscal problems: pensions (in the long term) and structural deficits (oh, right about now). Health-care costs, not public workers, are the main driver of structural deficits. Second, most state pensions were faring reasonably well before the financial meltdown. As recently as 2008, pensions were 84% funded, according to the Centre for Retirement Research at Boston College. (Eighty percent is usually deemed an acceptable level.) Mismanagement has meant that some states, such as my adopted home of Illinois, are in dire trouble soon. Joshua Rauh of Northwestern expects the pension funds in Illinois will run out by 2018. However other states have more time to prepare for doom. Ohio’s pension funds are due to run dry in 2030, assuming an 8% annual return. Wisconsin’s won’t run out until 2038.

    Benefits for public workers are a problem, no doubt, but I wonder whether the fight over bargaining rules is eclipsing an immediate crisis. The deadlock in Wisconsin may be replicated elsewhere. A bill in Ohio, to abolish collective bargaining for state employees, is just as aggressive as that in Wisconsin. Protesters descended on Indianapolis yesterday to oppose a few anti-union bills, including one that limits collective bargaining for teachers. Perhaps the attention on bargaining rules is a negotiating tactic—"agree to make concessions or you won’t be able to bargain at all." But the fight may become a dangerous distraction.

  • Progressive pipe dreams

    If not unions, what?

    Feb 21st 2011, 20:38 by W.W. | IOWA CITY

    MATTHEW YGLESIAS draws some insightful general lessons about unionism in America from his father's experience as a member and officer of the Writer's Guild of America. He concludes:

    I think the classic postwar American dynamic of an economy with a large minority of the workforce unionized is fundamentally unstable. In the long-run the two equilibria are toward a non-union economy or else toward the Nordic model where virtually everyone is in a union. In the latter case, I think the unions become organizations of a more political character than anything else. In theory, Swedish labor unions could use their dominant labor market position to increase workers’ compensation by making Swedish firms less profitable than non-Swedish ones, but that would be bad for everyone. What you get instead is a kind of Mirror Universe version of the Chamber of Commerce, a politically powerful institution interested in maximizing the income growth of the median Swede rather than the median Swedish CEO.

    I think this is a plausible broad-strokes picture. But what are we to infer from it? Left-leaning commentators pine constantly for the all-but-universal unionisation equilibrium, yet this seems no more likely to come to pass than the libertarian night-watchman state. There is no path from here to there. Both are pipe dreams.

    Speaking of dreaming, one senses that progressive pulses have quickened lately due to the pro-union throng in Madison, as if success in persuading Wisconsin's duly elected democratic body to reverse course would somehow lead to some sort of cascade that ends in a revitalisation of unions as a political and economic force. But victory in salvaging for Wisconsin's state employees a package of legal-cum-political advantages over those with competing claims to state revenue seems to me to have approximately nothing to do with the prospects of private-sector unionism. And, of course, the sine qua non of the Wisconsin staredown is the unprecedented unpopularity of government-employee unions. Whatever the outcome in Madison, the fact that the whole thing is plausibly good politics for Governor Scott Walker bodes ill for those who dream of Sweden.

    Which brings me to my question for progressives. Supposing that Mr Walker and not the SEIU is the vanguard of history—supposing that America is headed toward the stable non-union equilibrium—what is the next-best scenario from a progressive perspective? What is the answer if resurgent unionism is not? Is there one? I hear plenty of progressive rhetoric to the effect that only a rehabilitated union movement can save America from plutocracy and middle-class stagnation, but my sense is that this is a lot like conservative rhetoric to the effect that only a return to constitutional principles will save America from sclerotic socialist decline. Do progressives, like their conservative counterparts, really believe their own hype?

    (Photo credit: AFP)

  • Wisconsin

    The value of bolting

    Feb 21st 2011, 18:48 by E.G.| AUSTIN

    THE stalemate in Wisconsin has persisted partly because a group of Democratic senators have left Madison for Rockford, Illinois, where they apparently remain, laying low. Political theatre? Gross obstructionism? Regardless of where you stand on the budget bill, there's something to admire in that the Democrats cared enough to bolt. Something similar happened in Texas in 2003, when Republicans in the state legislature were pushing a redistricting plan that would have heavily favoured Republicans:

    "In most cases, breaking a quorum has resulted in a temporary victory but a longer-term defeat," said Steve Bickerstaff, a University of Texas adjunct law professor and author of "Lines in the Sand," about an incident in which more than 50 Texas Democratic legislators fled temporarily to Oklahoma, New Mexico and even Mexico in 2003.

    As Mr Bickerstaff suggests, the Republicans eventually got their plan through. And on the one hand, bolting is clearly a stunt: if one party has a huge majority in the legislature, they didn't get it by magic, and the appropriate thing for the minority party to do is to try to win back seats in the next election. The long-term value of the bolting, however, was as a visible and credible form of protest. It commanded attention, and it involves some real risk and inconvenience to legislators—the risks of annoying their constituents and of bobbling their legislative agenda for the week, and the inconvenience of physically removing themselves from the state. While the effort failed, the drama of the moment persisted. Even now, years on, it's often cited as an example of Texas Democrats being overrun by the Republican hegemon. It may, in fact, have been the biggest stand Texas Democrats took on anything in that entire decade. As for Wisconsin, the impasse seems to have softened the Republicans a bit; Dale Schultz, a moderate Republican senator, has offered a compromise proposal. Will it work? Maybe, maybe not. But insofar as part of the reason we have legislatures is to give people a mediated space to air their grievances, the uproar in Wisconsin has had that benefit for the state.

  • Birthers

    They want a do over

    Feb 21st 2011, 17:07 by M.S.

    LAST week on Bill O'Reilly's show Karl Rove made a pseudo-laudable call for Republicans to distance themselves from birthers who believe, contrary to all evidence and the normal process of human day-to-day reasoning, that Barack Obama was born outside the United States. Of course Mr Rove didn't call for Republicans to do this because birtherism is wrong, paranoid, and tinged with nativist xenophobia and racial prejudice; he thinks they should do it in order to avoid Democratic "traps". Anyway, the subject of the discussion was the recent Public Policy Polling poll showing that 51% of likely Republican primary voters firmly believe that Mr Obama was born outside the United States. (Another 21% aren't sure.) That's up from 44% in August 2009. Here's the exchange:

    ROVE: Republicans had better be clear about this.We had a problem in the 1950s with the John Birch Society, and it took Bill Buckley standing up as a strong conservative and taking them on.

    Within our party, we've got to be very careful about allowing these people who are the birthers and the 9/11-deniers to get too high a profile and say too much without setting the record straight.

    O'REILLY: What percentage of Republican voters—5%, 10%?

    ROVE: I don't know, but whatever it is, it ought to be less, because we need the leaders of our party to say "Look, stop falling into the trap of the White House and focus on the real issues."

    To believe that only 5% or 10% of Republican voters are birthers, you have to believe that the PPP poll is wildly off-base. Put it this way: say only 30% of GOP primary voters were birthers. And say GOP primary voters are just 10% of the electorate, like they were in 2008 (even though they were depressed that year and will be fired up in 2012, which should mean they'll constitute more of the electorate). That's 3% of the electorate. Now, as of mid-2010, the percentage of the electorate that self-identifies as "Republican" or "lean Republican" was 40%. So you're already at 7.5% of Republican voters, and you're assuming no Republicans at all believe that Mr Obama was born outside the United States, except for the ones who vote in primaries. Basically, what you have to think, and what Messrs O'Reilly and Rove do in fact think, is that the PPP poll is just somehow off by a huge factor; Mr Rove offhandedly says "look, this is a terrible poll," as if that claim needs no substantiation.

    Predictably, Messrs O'Reilly and Rove's efforts to dismiss the results of the PPP poll were strongly denounced over the weekend, though not by angry political scientists defending the integrity of their profession.

    Whether you agree or not, the people who are pushing the eligibility issue are on our side.  It is certainly counter-productive to deride them like liberals do. Recently a whole stream of Republicans have come out, at the prompting of the drive by media, to reassure us that Obama is a citizen and oh, yes, he is a Christian too...

    The RINOs turn their noses up at the people who want the answers, which, incidentally is 60% of Republican voters. They turn their noses up at the Tea Party movement.  

    Thus the inimitable prose stylings of Tea Party Nation. And, because it's just too good not to pass it on:

    Yet, they do not take a moment to consider why this is important. If Barack Obama is proved to be ineligible to be President, everything he has done is wiped out.  Obamacare is gone.  The START treaty is gone.  The liberal lunatics Obama has appointed to the Federal Judiciary, including the two he has put on the Supreme Court are gone.

    ...What are the chances of success?  Who knows? Why do football teams run the flea flicker play?   It does not work all of the time, but when it does, the results are spectacular.  Why should conservatives all hope this works out?  Because this wipes out almost everything the Obama regime has done.  We get a do over.

    We get a do over. Ay yay yay. You know, when I refer to this stuff in blog posts, people reliably tell me I shouldn't be paying attention to this kind of junk; it's nut-picking. I wish I could agree. This stuff is what's driving the American political conversation. This stuff is why, more likely than not, that PPP poll is accurate.

  • Wisconsin public unions

    Don't join the government to get rich

    Feb 21st 2011, 14:55 by M.S.

    ONE of the memes being thrown around over the past few years by advocates of reducing the power of public-sector unions has been the claim that public-sector workers are overpaid in comparison to their private-sector counterparts. I've always considered this an odd claim to hear, as I've been in the labour market for quite a long time and can't recall ever hearing anyone say they were going to work for a government bureaucracy because they wanted to make a lot of money. At crucial career-making junctures in life, people who want to get rich tend to enter corporate law rather than join the District Attorney's office, to work for internet companies rather than teach math in public high schools, and so forth.

    All of this is coming up now because Wisconsin has become the showdown state for the public-sector union controversy, and Scott Walker, the governor, is claiming he needs to destroy the state's public-sector unions' ability to negotiate in order to deal with its budget shortfall. State workers, he says, are paid too much. But the Economic Policy Institute tells us that, in Wisconsin, public-sector workers are not in fact paid more than their private-sector counterparts. They're paid less. You can only make it appear that public-sector workers earn more by ignoring the fact that "both nationally and within Wisconsin, public sector workers are significantly more educated than their private sector counterparts."

    Nationally, 54% of full-time state and local public sector workers hold at least a four-year college degree, compared with 35% of full-time private sector workers. In Wisconsin, the difference is even greater: 59% of full-time Wisconsin public sector workers hold at least a four-year college degree, compared with 30% of full-time private sector workers.

    ...Public employees receive substantially lower wages, but much better benefits than their private sector counterparts. Wisconsin state and local governments pay public employees 14.2% lower annual wages than comparable private sector employees. On an hourly basis, they earn 10.7% less in wages. College-educated employees earn on average 28% less in wages and 25% less in total compensation in the public sector than in the private sector.

    The EPI study does find there's a class of public-sector workers who earn a bit more than their private-sector counterparts: those without high-school degrees. In other words, district attorneys earn less than corporate lawyers, but janitors at the district attorney's office may earn more than janitors at a corporate law office—provided the government hasn't outsourced its facilities staff to the same private company the law office uses, which it may have, since governments have been targeting low-skilled workers for outsourcing precisely because that's how they can save money.

    For most people who work for the government, however, the expectation is that your year-to-year salary will be lower, but your benefits will be better, in particular your pension. It turns out, however, that state governments won't have the money to pay a lot of those pensions. They're likely to renege on their promises, and Republicans in Congress want to allow them to declare bankruptcy in order to do so. (Funnily enough, this may be the one area in which labour unions and Wall Street are in alliance: neither one wants states to be allowed to declare bankruptcy.) In other words, as Ezra Klein points out, the public-sector employees got rooked: they accepted lower pay in exchange for retirement benefits, and now the retirement benefits look unlikely to come through.

    Now, how can we explain the fact that public-sector employees are paid less than private-sector employees? After all, public-sector employees are heavily unionised, while private-sector employees aren't. Shouldn't those unions be winning public-sector employees better wages? Well, I don't really know; perhaps the fact that the government is a monopoly employer with staggering market power has something to do with it. But try considering how employees' wage negotiations with the government might look if there were no public-sector unions. In most lines of work, individuals' power to negotiate higher wages with large organisations is very limited. In government employment, individuals' power to negotiate higher wages is utterly non-existent. An individual teacher who bargains with a private school for a higher wage than her peers is going to have a tough negotiation on her hands; an individual teacher who tries to bargain with the City of Milwaukee for a higher wage than her peers is going to be laughed out of the superintendent's office. In his initial post on this subject, my colleague ventured that civil servants would constitute a powerful bloc able to protect their wages even without unions. I'm not really sure what this means. Through what mechanism are civil servants supposed to bargain for wage increases if they don't have unions? Who's supposed to do the bargaining?

  • Crowd-sourcing recovery

    Detroit, you have suffered an emotional shock. I will notify Kickstarter

    Feb 20th 2011, 1:46 by W.W. | IOWA CITY

    RoboCopMAYBE social-networking sites can't topple dictators, but they can put up the money for a statue of RoboCop in downtrodden Detroit.

    A little over a week ago, some guy from Massachusetts suggested via Twitter to Detroit's mayor that the city raise a monument to RoboCop, "a GREAT ambassador for Detroit." The cult-classic 1987 Peter Weller vehicle, you will recall, was set in a militarised, corporatist hellhole Detroit of the future. Detroit's Mayor, Dave Bing, politely brushed off the idea in a tweeted reply: "There are not any plans to erect a statue to RoboCop. Thank you for your suggestion." But the idea didn't then disappear for eternity into the unattended abyss of the municipal suggestion box. Once unleashed upon Twitter, savvy use of social media swiftly transformed an amusing suggestion into a concrete plan to put a RoboCop statue in the Motor City. A "Build a Statue of RoboCop in Detroit" Facebook page popped up, with a campaign on Kickstarter to "crowd-source" the funds to create the statue quick on its heels. Within days, the Kickstarter campaign shattered its $50,000 goal, and plans are afoot to situate a metal replica of the iconic half-man, half-death-machine constable in Detroit's Roosevelt Park, across from the picturesque decay of Michigan Central Station.

    It's easy to imagine why Detroit's powers-that-be might wish to distance themselves from a famous cinematic symbol of Detroit as a violent, crumbling dystopia. Indeed, a "crowd-sourced" $50,000 RoboCop statue may seem like a cruel practical joke played on the struggling city by heartless nerds. However, it's possible to imagine how the project may seem to some as a glimmer of hope. If Detroit's going to make a comeback, it will need a lot of this sort of bottom-up initiative and energy. If a cast-iron monument to RoboCop suggests resignation to Detroit's decline, it also suggests the playful will to keep Detroit alive as an object of imagination, and in imagination there is hope. Plus, tourists! That's all nice. But for now I suspect that here in the USA the coordinating functions of social sites such as Twitter, Facebook, and Kickstarter will be deployed more for the amusement of well-wired geeks than for initiatives that will actually help those suffering in hard-knock cities like Detroit.

  • Jeopardy and IBM

    Watson and our superiority complex

    Feb 18th 2011, 22:19 by R.M. | WASHINGTON, DC

    watsonI HAVE fond childhood memories of sitting on the floor of my grandmother's house and watching "Jeopardy" with her and her sister-in-law, who remained the undisputed in-house champion of the game into her 90s. Those were good times, filled with the hope of some day matching the intellect of that hirsute genius Alex Trebek. Since then I've probably only watched a handful of episodes, but on Wednesday I found myself rushing home to see the outcome of "The IBM Challenge", which pitted an IBM computer against two past "Jeopardy" champions. In the end, the machine won, willfuly ignoring the first law and injuring the humans' pride.

    It would be easy to overstate IBM's achievement, but I've so far seen many more observers moving in the opposite direction, downplaying the win. Watson, as the computer is called, is just a powerful machine with a vast store of data, they say, it still can't fully understand language, recognise objects, or appreciate human subtleties. This is true, of course, and the computer suffered a stinging embarrassment at the end of the first day of the competition when it settled on Toronto as the US city whose largest airport is named for a WWII hero and second largest for a WWII battle. But Watson dominated the competition in every other round, understanding often indirect and elusive clues. It more than tripled the earnings of the second-place finisher, Ken Jennings.

    Perhaps we can blame Hollywood for creating unrealistic expectations about computers. Watson is not about to become sentient and self-aware and send the ex-governor of California back through time. Nor is it likely to rename itself HAL and shut the pod bay door on us. (By the way, that urban legend about HAL and IBM isn't true.) But read some of the commenters here and you get a sense of the disappointment. For example:

    Watson is merely a powerful computer interpreting massive amounts of data, thanks to some sophisticated programming. By humans.

    It's fun to watch, but a breakthrough in machine intelligence? Hardly.

    That seems like an odd criticism. If we strip out emotion, one could say the main role of the human brain is to interpret massive amounts of data using sophisticated programming. And with projects like Watson, the goal is to mimic the brain. Sure, we're still some way off from strong AI, but Watson's ability to interpret complex human communications is a step forward. And the fact that the computer is still dependent on human wiring seems more reassuring then disappointing.

    When I started reading the criticism of Watson, it actually got me thinking about American society and how we seem to have developed a national superiority complex. I found it striking that the simple observation that a computer is smarter than us was met with knee-jerk cries of "No it's not!", as if the man-made machine was a threat to our own self-worth. Similarly, I've been surprised by the recent antipathy directed at scientists, academics, and experts in any given field—in other words, people who are generally considered rather intelligent. We see them derided as "the elite" at political rallies and on certain news channels. Some (perhaps much) of this phenomenon can be attributed to fears of government intrusion—"you may be smart, but you don't know what's best for me!" But I also think there is something else motivating people like Sarah Palin, who's not an expert in anything except knowing that experts are wrong about everything. I think part of this modern anti-intellectualism stems from an unwillingness to accept our own inferiority. On a small scale, this is manifested in our unwillingness to assign authority to figures that are obviously much more studied and experienced in certain matters. On a national scale, it shows in our refusal to admit that America may not be uniquely great.

    Perhaps the criticism of Watson is a poor corollary, but there has been an odd amount of defensiveness in the reaction to the machine's victory over us humans. Mr Jennings went the other way, adding this humble and humorous note to his final answer: "I, for one, welcome our new computer overlords." That's a bit much. I'm not saying we need to welcome our new Chinese overlords, or bow down to scientists, but it's difficult to deal with our inferiorities if we refuse to acknowledge them. And it will be difficult to solve society's complex problems if we stubbornly refuse to utilise those who have made studying those problems their life's work.

    In the unique case of Watson, the correct response to its win should come quite easily to us, because it's less a matter of admitting that we were bested by a computer, than of celebrating an advance in human programming. Of course, those human programmers could probably be considered members of the elite, but let's not hold that against them.

    (Photo credit: Bloomberg News)

  • The bureaucrat and the human condition

    Bureaucracy in America

    Feb 18th 2011, 18:16 by G.L. | NEW YORK

    I HAVE spent large parts of today and yesterday sorting out visa issues at the giant federal monolith in downtown Manhattan. As government buildings go, it is not so bad. The waiting room of the United States Citizenship and Immigration Services (USCIS) is large, new and well-lit; big flat screens everywhere display the state of the queue, and as tickets come up, automated voices announce them over good loudspeakers in a pleasing timbre. Which is just as well, because there is a lot of waiting.

    My reservation letter warns that I will be turned away if I am late for the appointment I made over the USCIS website, which offers you only one day to choose from in the coming month, a day seemingly picked at random each time. Once I am in the building, however, the appointments turn out to be a fiction. There is only the implacable queue of tickets, coded with a variety of letters. Yesterday I had a B. Today I have a U, which makes me feel special; there are not many Us. Even rarer are Xs. I wonder what fortunate, or unfortunate, souls deserve an X. Yet the letters’ true import is unknowable. An hour, two, three; all of us move towards our fates at the same stately pace.

    This negation of its supplicants’ time, the sublimation of their schedules to its own, is just one of the many small ways in which the bureaucracy chips away at their autonomy. You may not bring food into the waiting room; water is allowed, but not any other drink, as if we were four-year-olds, liable to spill our iced tea or Coca-Cola on the seats and make them sticky. One woman surreptitiously gave potato crisps to her toddler, who scattered some on the floor; the guard came and reprimanded her, and then made everyone in the neighbouring seats move to another row until the cleaners came, as if the tuberous shards were toxic waste.

    On entering the waiting room you must turn your mobile phone not to flight mode or vibrate mode or any other form of inoffensiveness, but fully off, as though entering a nuclear facility or the CIA, and the guards will watch while you do it. Thereafter, if they even see you holding it in your hand, they will order you to put it away. “In case someone else sees you and thinks you’re using it,” one of them explained to me. It made me think of the rules pertaining to very orthodox Jews, who must refrain not only from violating the Sabbath or the kosher laws, but from anything that might look like a violation, even when it isn’t one, for fear of provoking another Jew to transgression.

    As in all government offices, there are signs everywhere. One says you must “cover your cough”. Others announce that the cashier does not accept cash, and more emphatically, “DOES NOT FURNISH IMMIGRATION INFORMATION”. They will take cheques, but another notice informs you that if you pay by cheque the government may use the information on it to request an electronic transfer and if so the funds may leave your account immediately; this is accompanied by a further notice explaining why, under the Privacy Act, they are obliged to post the first notice, and giving a website where you can find the text of the act and a toll-free number to call to ask for a copy in the post. (I note in passing that the reason for this legal sleight-of-hand is the need to justify not the peremptory transformation of a cheque into an electronic transfer, but the collection of the data that make it possible.)

    When, yesterday, my turn finally came to present my plea, which was that my application had been pending for more than 90 days, the official first told me that the USCIS had given no undertaking to reply within 90 days, and then, that any complaints about delays were in the purview of a different office anyway. Only when I told her that I had booked my appointment (so-called) via a page on the USCIS website that specifically enjoined me to do so if more than 90 days had passed did she agree even to look into it.

    As it happens, my reading matter during the hours of waiting has been Gabriel García Márquez’s “Voyage Through the Socialist Countries”. Its descriptions of the mind-numbing bureaucracy he encountered behind the Iron Curtain feel oddly familiar. It makes me reflect that, as utterly different as the Eastern bloc of 1957 and America of 2011 are, bureaucracy is not a system special to any form of government, but rather a trait of human behaviour that no amount of democracy and accountability can bring to heel. You can, in a democracy, force the government to put its rules up on a wall, send you a copy of them in the post, or even change them from time to time, but you can do nothing against the unremitting tendency of human beings, given any small domain over other human beings, to find the space within those rules to use their power to its fullest. The common description of bureaucrats as “little Hitlers” (does anyone know who first used this phrase?) fails, or wilfully refuses, to recognise that we all have a little Hitler in us, or more to the point, that Hitler had a little human in him too, and that a human given power will exercise it, no matter how measly it may be.

    Especially, in fact, if it is measly. If you want to eat, use the toilet or make a phone call, you can leave the waiting room, but you must show your ticket number again each time you come back, “because,” the guard argues, “what if you’d lost it?” You may not use any device with a wi-fi signal, which seems a reasonable precaution against hackers until you consider that there is no prohibition on doing it just outside the waiting room, in the very heart of the federal building. You must not plug any device into a power socket, which is inexplicable, unless perhaps they are worried that someone will trip over your power cord and sue the United States government. You may use a laptop while seated in the waiting area (though not at the service counters), as long it violates neither of these conditions. There is nothing saying what you may write on the laptop, but I am keeping the text on my screen as small as I can, just in case.

  • Public-sector unions

    Partisan conflict and fiscal prudence

    Feb 18th 2011, 16:00 by W.W. | IOWA CITY

    THE Republican-sponsored Wisconsin bill that would reduce the legal powers of the state's government-employee unions has aroused mass demonstrations in Madison (see photo) and instigated a comic diaspora of Democratic state senators to the glamourous Best Western Clocktower Resort in Rockford, Illinois (it has a waterslide!). Meanshile, Kevin Drum of Mother Jones finds upon close examination that the legislation contains within it a dash of cynical partisan politics! The bill would, among other things, require government workers to make contributions to their pension and health plans, except for cops and firefighters. Mr Drum inquires:  

    Now why would this be? Is it because collective bargaining is somehow less of a problem for public safety employees than for teachers? Because strikes by cops are less hazardous than strikes by teachers? Because public safety employees tend not to be hard bargainers anyway? Because public safety employees are poorly paid? 

    Or is it because teachers tend to vote pretty reliably for Democrats and public safety employees don't? Bingo.

    Gasp!

    The converse of this observation is that Democratic politicians, increasingly dependent on money and votes from SEIU, AFSCME, NEA, and so forth, fear they will reap the electoral whirlwind if they stand up to the unions—even when union-negotiated benefits packages threaten to wreak fiscal devastation upon state and municipal budgets. The partial transformation of the Democratic Party into the political arm of the public-sector unions threatens to remake the party into something like the organised antagonist of all those who pay taxes or benefit from taxpayer-financed government programmes, but who do not themselves work for the government—an anti-everyone-but-public-employees union. That it is to the GOP's undeniable electoral advantage to weaken the Democrats' main source of money and voter mobilisation turns the Republican Party into something like the everyone-but-public-employees union, whether they care about everyone but public employees or not. It doesn't matter if Republicans give a damn about subsidised school lunches for poor kids. When it comes down to zero-sum distributive conflict over a shrinking pool of money, the enemy of your enemy is your friend.

    Anyway, the fact that Wisconsin Republicans have carved out a loophole for right-leaning heroes in uniform simply illustrates the mechanism. Partisan advantage has motivated GOP lawmakers to enlarge the set of fiscal options for states and municipalities—to clear some badly-needed room to manoeuvre—by undoing the attempts of public-sector unions to lock down claims on large and often unsustainably increasing shares of future budgets.

    Of course, Democrat-controlled cities and states also need this sort of room to move if they are to effectively look after their party's less powerful constituencies, or to govern in the common interest. The problem is that, for many Democrats, it's just too politically risky to fight for it. Nevertheless, some bravely public-spirited Democrats are throwing down. In New York, Andrew Cuomo has locked horns with the state's public-sector unions. Yesterday, Schumpeter pointed us to a fascinating Josh Barro piece on Rahm Emmanuel's battle with Chicago's public-sector unions in his campaign for the mayor's office. I found this bit especially illuminating: 

    Emanuel [who has no public-sector union support] does have support from some private-sector unions, including the Teamsters and the Plumbers', Bricklayers', and Ironworkers' locals. This alignment is similar to that in New York State, where Governor Andrew Cuomo has clashed with public worker unions as he seeks to close a large budget gap without raising taxes. The Committee to Save New York, a coalition organized to defend the governor's budget agenda from union criticism, counts among its members various figures from New York's banking and real estate industries—and the president of New York City's Building Trades' Council. As in New York, private sector unions in Chicago understand that a sustainable city budget helps to create jobs in construction and other private industries.

    Lots of folks on the left are trying to characterise the showdown in Madison as a referendum on the future of unions generally. But private- and public-sector unions really are different creatures. And it is becoming increasingly clear that their interests aren't necessarily aligned. A cash-strapped state that can't afford to, say, maintain or improve its physical infrastructure obviously can't afford to contract with private-sector union crews to do the work.

  • Israeli settlements

    Some kind of perfidy

    Feb 18th 2011, 13:36 by M.S.

    THIS week the Obama administration apparently tried, unsuccessfully, to broker a deal in which the Palestinian Authority and other Arab governments would downgrade a proposed Security Council condemnation of the illegality of Israeli settlements on the occupied West Bank from a "resolution" to a "statement", in exchange for American acquiescence. In response, writes Politico's Ben Smith, knee-jerk pro-settlement Republicans and knee-jerk pro-settlement Democrats in Congress went bananas. (I'm not sure "went" is the appropriate verb here. "Remained" might be more accurate.) Steve Rothman, a Democratic representative from New Jersey, said that "any failure to stand with Israel during these difficult times in the Middle East will only encourage the enemies of America and Israel." The emptiness of the logic in Mr Rothman's statement beggars description. Meanwhile, Democrat Joe Crowley and Republican Joe Walsh are circulating a letter that says, inter alia:

    Reports have surfaced that the United States is negotiating with a group of Arab nations about supporting a possible United Nations Security Council presidential statement critical of Israel and possibly taking other similar steps in exchange for Arab agreement to withdraw a UNSC resolution and deeming Israeli construction in the West Bank and East Jerusalem illegal. It is also not clear whether the U.S. would veto a resolution on settlements should it be brought to the UN Security Council. It should not be the practice of the U.S. to be conducting back door deals, of any sort, that weaken the strategic interests of any ally—let alone one of of our closest allies. We strongly urge you to make it clear that the U.S. will oppose any U.N efforts to pressure Israel on the "settlement" issue.

    On this one, I have to confess, I'm of two minds. My first instinct is that one good reason why America should support a statement deeming Israeli construction on the West Bank and in East Jerusalem illegal is that Israeli construction on the West Bank and in East Jerusalem is illegal. It's rather pathetic to watch the way each of the statements issued in criticism of the Obama administration's stance dances frantically around the question of whether it's a good idea for Israel to be building more and more government-subsidised housing settlements exclusively reserved for Jews on land that does not belong to Israel, unless you subscribe to the idea that seizure by force legitimises ownership, or to the equally alarming idea that the government of Binyamin Netanyahu was ordered to expand the condo units at Maale Adumim 3,000 years ago by God.

    However, I hesitate to really embrace the point that America should call the settlements illegal because they are, as it's based on the idea that governments ought to say things because they are true. I don't actually think that's a very compelling principle in diplomacy, and in any case it's so rarely observed in practice that I'm not sure what the point of advocating it would be.

  • Defence spending

    Sole-sourcing the Pentagon

    Feb 17th 2011, 15:43 by J.D. | WASHINGTON, DC

    IN LAST week's paper we reported that America's fiscal crisis seemed to have put even the once-sacrosanct defence budget on the chopping block. But one of the surprising features of Barack Obama's proposed budget is how little it reduces military spending (and Republicans seem just as reluctant to cut the Pentagon's allowance). Instead, what Mr Obama has urged is greater efficiency in defence spending, including more competition for contracts. In the last fiscal year the Pentagon spent over half of its $366 billion contracting budget on projects that were awarded in an uncompetitive manner.

    But while nearly all politicians would like to see more competition, and lower costs, the Pentagon's complex contracting system has so far proven resistant to change. In some cases, this is because a lack of competition makes sense—for example, when it’s more costly to have competitive bidding than to not have it; or when the time it would take to hold a competition would result in soldiers dying; or when it is clear that only one firm can do the work. But most experts, including those in charge of Pentagon procurement, think it is unacceptable that so much of the military’s business is insulated from market forces.

    Until a couple of years ago, Defence officials didn’t even know how bad the problem was. In 2008, they began tracking the number of times a competition was held but only one company bid. In the last fiscal year, for example, at least $48 billion (or 13% of the department’s contracting dollars) went to one-bid contracts. In many of these "competitions" the description of the work is tailored for a favoured contractor who, perhaps, is perceived to be doing a good job on an existing contract. The obvious flaw in this approach is that without competitive bidding, the Pentagon will never know if someone else could do it better. And because everyone knows who is going to win, there is no pressure on the incumbent contractor to improve its performance.

    In addition to those one-bid contests, there are the more common cases where the Pentagon deliberately awards a contract without taking offers from competing bidders—a "sole-source" deal. Those accounted for $140 billion, or 38% of the total contracting budget. Although the law governing Pentagon contracts requires competition on large projects, it is filled with exemptions. And on numerous occasions Pentagon auditors have caught officials writing bogus justifications for avoiding competition—claiming, for instance, that only one firm can do the work when clearly others can; or saying the need is too urgent to wait for a competition, when it is demonstrably not. In one $22m wartime contract in Iraq, the Army only sent the document soliciting bids to the incumbent company—and mailed it just a few days before the "competition" was to end.

    One of the biggest reasons for sole-sourcing has to do with corporate-data rights. When the government is looking for a Company B to help boost production of a weapon made by Company A, it cannot hire Company B to do the job unless it has obtained from Company A the rights to its technical data. When it has not secured that data, the military is stuck with Company A. That not only gives company A a lot of leverage over the government, it can also jeopardise the lives of troops in the field. In the first years of the Iraq war, the production of heavily armoured Humvees lagged behind the need for years because the army did not secure the data rights from the manufacturer and could not bring on a second source. Now, in Afghanistan, the same problem is recurring. The Army is short on a specialised piece of equipment meant to protect vehicles from roadside bombs. But because contracting officials did not secure the manufacturer’s data rights, they have nowhere else to turn to meet soldiers’ needs.

    The Pentagon and Congress have paid lip service to fixing the problem, encouraging procurement officials to buy data rights more often and to minimise one-bid contracts. But since the second world war, nearly every administration has advocated "acquisition reform" in the military, with little success to date. This year got off to an inauspicious start when the Defence Department reversed a plan to take bids on a new contract for feeding troops in Afghanistan. As a result, the lone contractor that has been feeding American forces since 2005 for $4 billion will continue doing so for up to two more years for as much as $4 billion more. The Pentagon agency that oversees the contract offered various reasons why, more than nine years into the war, it was caught unprepared to hold a competition—none of them particularly convincing. The decision was just the latest reminder that change will come slowly to the Pentagon’s procurement system, if it comes at all.

    (Photo credit: AFP)

  • Phoning it in

    The magic of Bob Herbert

    Feb 16th 2011, 20:20 by W.W. | IOWA CITY

    I READ this Bob Herbert column first with incredulity. "As the throngs celebrated in Cairo," Mr Herbert begins, "I couldn’t help wondering about what is happening to democracy here in the United States." Because, really, nothing on Earth is so important that it should keep our minds turning immediately to the only subject that really matters: us. Thus, when we encounter the first exhilarating steps of an oppressed people struggling toward popular self-rule, we simply can't help wondering about democracy here in the US of A.

    Then I read it again, with annoyance. Mr Herbert wanted to say that American democracy is broken because it's been hijacked by the rich. This is one of approximately five columns liberal pundits phone in when they are uninspired or feeling lazy. Not that you can sleepwalk through a phone-in! Oh, there's work to do. First, you've got to find a piping hot news hook. This can be accomplished by staring at the headlines until you run across a word that also appears in one of your ready-made gotta-get-to-brunch op-ed templates. So, let's see... Egyptians have cast out a dictator in hopes of one day establishing a democracy. Democracy! Rich people have hijacked our democracy! Then it's just a matter of peppering the thing with au courant Pavlovian keywords: "corporate stranglehold", "Citizens United decision", "Koch brothers". Finally, one must summon the energy to loop back to the hook. "The Egyptians want to establish a viable democracy, and that’s a long, hard road. Americans are in the mind-bogglingly self-destructive process of letting a real democracy slip away." Boom! This is is how they do it in the bigs, folks. 

    None of this is to say that worries similar to Mr Herbert's about the undue influence of money in politics are unworthy of a careful substantive response. I started this post intending to offer such a response. It just turns out that this particular column's paint-by-numbers roteness slaps you in the face so hard that I couldn't help concluding it doesn't merit one. 

  • Climate change

    Americans and global warming, continued

    Feb 16th 2011, 17:59 by E.G. | AUSTIN

    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)

  • Picturing politics

    Sumner's wheel of ideology

    Feb 16th 2011, 14:13 by W.W. | IOWA CITY

    SCOTT SUMNER isn't just one of the internet's finest economic commentators. He's also a crack gentleman amateur political theorist. In a recent post, Mr Sumner offers a fresh and intriguing political typology. Behold:

    Scott Sumner's political typology

    And here's how Mr Sumner describes his classificatory scheme:

    My goal here is to set things up in such a way that each group has a values affinity to those on one side, and an ideological affinity to those on the other side. So you could circle any two adjoining groups, and describe a common feature:

    1.  Progressives/Pragmatic libertarians:  Both tend to be secular utilitarians, or at least consequentialists

    2.  Pragmatic and dogmatic libertarians:  Both favor very small government

    3.  Dogmatic libertarians and idealistic conservatives:  Both are nostalgic for the past, and revere the (original intent of) the Constitution.

    4.  Idealistic conservatives and corrupt Republicans:  Both are Republicans.

    5.  Corrupt Republicans and corrupt Dems:  Both believe in realpolitik, are disdainful of fuzzy-headed, idealistic intellectuals.

    6.  Corrupt Democrats and idealistic progressives:  Both are Democrats

    Thus on values there are three pairings:  utilitarian, natural rights, and selfish.  On ideology there are three different pairings:  Democrat, Republican and libertarian.

    By "corrupt", Mr Sumner means politicians and pundits who prioritise the interests of the pressure groups within their party's politcal coalition over their publicly-espoused ideals. (How can you implement your ideals if you don't win elections!) I would suggest Mr Sumner include among the corrupt those who, through flights of wishful thinking, are able to convince themselves that their conservative or progressive principles conveniently align almost perfectly with the clientele of the Republican or Democratic Party.

    I find Mr Sumner's typology quite congenial probably because I have Mr Sumner's politics, more or less, and his way of carving up the ideological space places us where we see ourselves: as "pragmatic libertarians" leaning a bit more toward "progressive idealism" than "dogmatic libertarianism". That said, there is something troubling about the lack of parallelism in Mr Sumner's scheme. While conservatism and progressivism both have "idealistic" and "corrupt" variants, libertarianism is only "dogmatic" and "pragmatic". I think the ideological influence but electoral insignificance of libertarianism goes some way toward justifying its different treatment. But I wouldn't want to leave out the possibility of conservatism and progressivism that is pragmatic in the sense of pursuing conservative and progressive values through practical, empirically-tested means, and not in the "corrupt" sense of catering to the electoral interests of a partisan faction.

    Indeed, Mr Sumner argues that policy-minded intellectuals of all ideological stripes have arrived at rough consensus on a number of issues ranging from occupational licensing to urban policy, but I don't think we'd want to say that this makes the conservatives and progressives among them honorary pragmatic libertarians. Mr Sumner's illuminating diagram would make more sense to me if it made room for pragmatic but non-corrupt, non-idealistic conservatives and progressives. Maybe somebody can figure out how to draw that.

  • Family and the state

    The underlying moral logic

    Feb 15th 2011, 21:52 by E.G. | AUSTIN

    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.)

About Democracy in America

In this blog, our correspondents share their thoughts and opinions on America's kinetic brand of politics and the policy it produces.

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