Matt Yglesias

Whatever Happened to the Westminster Model

Food for thought: “For the first time in history, the Australian outcome means that every key ‘Westminster model’ country in the world now has a hung Parliament. These are the former British empire countries that according to decades of political science orthodoxy are supposed to produce strong, single party government. Following Duverger’s Law their allegedly ‘majoritarian’ electoral systems (first past the post and AV) will typically produce reinforced majorities for one of the top two parties.”

House Price Expectations

From the department of stuff people are wrong about:

In an annual survey conducted by the economists Robert J. Shiller and Karl E. Case, hundreds of new owners in four communities — Alameda County near San Francisco, Boston, Orange County south of Los Angeles, and Milwaukee — once again said they believed prices would rise about 10 percent a year for the next decade.

Do people understand what that would entail?

Of course housing in a particular location can become more desirable relative to housing elsewhere, but there’s no reason housing in general should increase in price much faster than the general cost of goods and services.

Maine Tea Party Travel Guide to DC

While I’m in Maine, Maine Tea Party leaders are sending the following advice to Tea Partiers headed to DC to fight tyranny:

Many parts of DC are safe beyond the areas I will list here, but why chance it if you don’t know where you are?

If you are on the subway stay on the Red line between Union Station and Shady Grove, Maryland. If you are on the Blue or Orange line do not go past Eastern Market (Capitol Hill) toward the Potomac Avenue stop and beyond; stay in NW DC and points in Virginia. Do not use the Green line or the Yellow line. These rules are even more important at night. There is of course nothing wrong with many other areas; but you don’t know where you are, so you should not explore them.

Five years ago I would have said definitively that the most terrifying thing about the Green/Yellow lines is the black people, but more recently this may be a caution against interacting with hipsters. But honestly this is bad advice. When visiting DC you might want to check out the baseball stadium, the many bars and clubs of U Street, the dining and shopping options of Columbia Heights, all of which are best-reached on the Green/Yellow lines. You can also take these lines to the vibrant Gallery Place / Chinatown station.

A Cato Purge

It seems that Brink Lindsey and Will Wilkinson are leaving the Cato Institute under circumstances that certainly make it seem that the higher-ups decided the Lindsey/Wilkinson critique of conservative/libertarian fusionism is unkosher. Wilkinson’s blogging for the Economist and Lindsey has a new gig at the Kaufmann Foundation. These sound like good jobs and good fits for those two, but as someone who’s interested in their ideological project, it’s too bad to see that it seems to be lacking the kind of intellectual support it would need to work.

Licensed to Blog

Philadelphia issuing fines for blogging without a license:

FFor the past three years, Marilyn Bess has operated MS Philly Organic, a small, low-traffic blog that features occasional posts about green living, out of her Manayunk home. Between her blog and infrequent contributions to ehow.com, over the last few years she says she’s made about $50. To Bess, her website is a hobby. To the city of Philadelphia, it’s a potential moneymaker, and the city wants its cut.

In May, the city sent Bess a letter demanding that she pay $300, the price of a business privilege license.

Bess should be made to report her income properly—including small amounts she may earn from sidelines like blogging—and to pay taxes on it. But it’s strongly contrary to the public interest to make it unduly difficult for people to engage in small-scale entrepreneurial activity.

Murder in Maine

Bangor Daily News on June 29:

Maine’s historic homicide average is 24 per year, he said Tuesday, with about half of those classified by police as acts of domestic violence. With the year nearly half over, the state’s homicide rate is not on track to break recent records, he said. Six of this year’s homicides have been classified as “domestics,” he said, including the death of Deborah Littlefield, allegedly at the hands of her husband, Michael Littlefield.

The homicide rate in Maine has had some fluctuations recently, according to information provided by the Maine Department of Public Safety’s Public Information Office. In 2008, when 31 people were killed, it marked a 32 percent increase from the 2007 rate. The 2008 murder rate was the highest since 1989, when 40 people were killed.

Maine has 1.3 million year-round residents (and of course many more people than that during the summer) making the overall murder rate very low. It’s a reminder that even after 15-20 years of generally falling crime, the United States of America as a whole remains a country with a very high level of violent crime. I think this is an underrated problem, with both the crime itself and the crime-evading behavior it engenders being quite costly.

Fed Split

Kill me now as the WSJ makes it clear that the FOMC is sharply divided over monetary policy: “At least seven of the 17 Fed officials gathered around the massive oval boardroom table, made of Honduran mahogany and granite, spoke against the proposal or expressed reservations. At the end of an extended debate, Mr. Bernanke settled the issue by pushing successfully to proceed with the move.”

Sure would’ve been nice for Barack Obama to have had some nominees confirmed.

Most People Don’t Graduate From College

A persistent problem with MSM coverage of young people is the fairly relentless focus on attendees and graduates of selective colleges. So I think Jamelle Bouie’s response to the latest NYT Magazine article on twentysomethings is spot on. There’s good in the piece, but:

That said, my main problem with the piece was simply the fact that there wasn’t much of an attempt at making class distinctions. It delves into the “extended adolescence” of relatively sheltered graduates from major universities, but what about the mass of 20-somethings who either didn’t go to college, or pursued degrees at community colleges and local universities? I graduated from a high school of roughly 2,400 people in 2005, and judging from the Facebook profiles of those I graduated with, many of my former classmates have built fairly adult lives for themselves. Most have jobs and live independently of their parents. Some have spouses or long-term partners, a few have children. For those who do live with their parents, it has less to do with maturity, and more to do with the terrible job market. Obviously, anecdotes can’t substitute for statistical data, but I’d wager that the above is true for many 20-somethings of modest means.

Most Americans don’t have bachelor’s degrees, and this is true at all age cohorts. What’s more, most Americans who do go to college don’t go to schools with selective admissions. Obviously, lots of people with BAs from selective schools have problems in life, and their problems (our problems, my problems) count in the moral scheme of things. But the less-privileged have more pressing problems and are also more numerous.

Socialism

Seen on the door at Blue Hill Books:

But of course Susan Collins and Olympia Snowe don’t see it that way. Also seen in Blue Hill: Lunch at the Fishnet.

Dropout Factories

My friend Ben Miller and Phuong Ly has a great piece in The Washington Monthly about college dropout factories, schools that earn nice money enrolling students but don’t seem to manage to graduate many or teach anyone useful skills.

The Partisan Fed?

It’s impolite to raise such concerns in polite circles, but it’s worth noting that there’s some evidence that the Federal Reserve’s monetary policy has historically been biased against Democratic elected officials. Is that going on today? We’ll never know for sure. We do know that presidents have some authority over the Fed. But when you use that authority to renominate the incumbent Republican GOP Fed Chair, and then don’t fill the other vacancies on the Fed board in a timely manner you’re virtually asking to be punished with policy biased against your political interests.

Where Have All the African Revolutionaries Gone?

Chris Blattman and William Reno (PDF) wonder why armed conflict in Africa has taken on a decreasingly ideological character in recent decades. You still have rebels, but you have fewer revolutionaries.

I’d say global politics has in general become less ideological in most places. US domestic politics is an exception to this overall trend, but you see it in a lot of other places, from the domestic politics of European countries to geopolitical rivalries to intrastate conflict in Africa. My impression is that politics wasn’t especially “ideologically” before the late 18-th century and perhaps post-1991 we’re just returning to the long-term norm.

Something to Read

Steve Randy Waldman’s writeup of economics bloggers’ meeting with Treasury officials makes for pretty interesting vacation reading.

Where’s the Brazilian Right

Latest polling of the Brazilian election:

Dilma Rousseff holds a significant advantage over fellow presidential candidate Jose Serra just months before an election takes place in Brazil, according to a poll by Ibope. 43 per cent of respondents would vote for Rousseff of the ruling Workers’ Party (PT) in the October ballot, up three points since June.

Jose Serra of the Brazilian Party of Social Democracy (PSDB) is second with 32 per cent, down three points. Marina Silva of the Green Party (PV) is third with seven per cent.

The funny thing here is that none of these seem to be the names of right-of-center parties. I know something similar happened in Portugal where the main center-right party is called the Partido Social Democrata (Social Democrats) and the center-left party is the Socialist Party. Is that’s what’s happening in Brazil with the PSDB being a de facto center-right party despite its left-sounding name?

What’s the Matter With Dolan?

Scroll all the way down to Bill Simmons’ last item for the best take I’ve read on the NY Knicks’ absurd owner.

Purchasing Power Parities

John Quiggin concludes a post with a “very wonkish note” on Purchasing Power Parities:

(Very wonkish note) Although PPP numbers are often treated as if they are are raw facts, they are index numbers which are fundamentally imprecise (even if the underlying data is perfectly accurate, which it isn’t). From work I did with Steve Dowrick in the 1990s, I estimate the difference between upper and lower bounds at around 10 per cent. It’s likely that any bias in PPP numbers favors the US. That’s because they are a generalized kind of Laspeyres index, and (as I understand it) the base data is derived largely from Europe.

I call for more wonky blog posts about PPP data. This kind of information is sort of the most dangerous kind—it’s easy to look up, it produces precise-looking ordinal lists, but few people (certainly not me) really understands how it works. Take a country like China, where the nominal GDP per capita is about $3,800 but the PPP GDP per capita is a much-higher $6,600. China is also a very large and diverse society with substantial class divisions. Presumably the typical “basket of goods” purchased by an urban professional is very different from the basket of goods of a peasant farmer. So whose purchasing power are we talking about here? I think relatively few of us who mention this data now and again really have a firm grasp on it.

Maine Fact of the Day

Maine is the whitest state in the union, edging out long-time rival Vermont. In fact, the state is so white that white people even cook the Mexican food.

Ideological Positioning

A colleague mentioned to me the other day that I’m “pretty conservative” on some state and local government issues, with reference to some recent posts on occupational licensing. Someone on twitter asked if I’m trying to score a date with a Cato staffer. I’m not. And I’m not. And I think that whole framing represents a bad way of understanding the whole situation.

I think it’s pretty clear that, as a historical matter of fact, the main thing “the state” has been used to do is to help the wealthy and powerful further enrich and entrench themselves. Think Pharaoh and his pyramids. Or more generally the fancy houses of European nobility, the plantations of Old South slaveowners, or Imelda Marcos’ shoes. The “left-wing” position is to be against this stuff—to be on the side of the people and against the forces of privilege. It’s true that some useful egalitarian activism over the past 150 years has consisted of trying to get the state to take affirmative steps to help people—social insurance, the welfare state, infrastructure, schools—but dismantling efforts to use the state to help the privileged has always been on the agenda. Don’t think to yourself “we need to regulate carbon emissions therefore regulation is good therefore regulation of barbers is good.” Think to yourself “we can’t let the privileged trample all over everyone, therefore we need to regulate carbon emissions and we need to break the dentists’ cartel.”

Traffic Jams

I feel certain that if Financial Times did an article about how some country’s determination to provide free bags of rice to all its citizens was leading people to spend a huge amount of time standing on line waiting for rice, that they would highlight the fact that this is what happens when you don’t price things correctly. There’s only so much rice. There are only so many hander-outers of rice. If you try to make the rice free to everyone, you’re going to get lines and shortages.

At any rate, as Clive Cookson points out in the FT a comparable problem exists on most countries’ roadways:

Access to these roadways is generally either free, or else set a price determined by something other than the scarcity of space on the roadway. And yet any given street or highway can only fit so many cars at a time. So when the price is unrelated to the scarcity, you get shortages and queuing—traffic jams. But weirdly a whole long article on improved traffic management just leaves this as a throwaway line “In the long term, variable road pricing or tolls on main roads may provide a partial answer but these are not yet technically or politically feasible in most countries.”

That’s fair enough, but none of the other stuff in the article is yet technically or politically feasible in most countries either. And the question of what is and isn’t “politically feasible” is itself amenable to influence by media coverage.

The Truth About Japan

I would highly recommend that you take a look at Adam Pozen’s talk “The Realities and Relevance of Japan’s Great Recession – Neither Ran nor Rashomon“. His point is that poor Japanese economic performance, though of course not unrelated to the bursting of asset bubbles, was fundamentally caused by policy errors and that when better policies were implemented growth became strong:

What was necessary was the clean-up and recapitalization of the banking system, the further loosening of monetary policy (to the extent possible given that interest rates were at zero), and the avoidance of any further premature fiscal tightening, as I set out in Posen (1998, 1999a, and 2001b). This was obviously not a simple list, economically or politically. Yet, it was also not a list of the impossible, it emphasized demand side factors, and was a list that seemed all the more plausible when Japanese policymakers recognized that Japan was not doomed to a permanently low trend growth rate – a belief that had bedevilled both fiscal and monetary policy decisions in Japan for much of the 1990s.

Japan’s new economic leadership in the early 2000s, Prime Minister Junichiro Koizumi, Cabinet Office and later Financial Services Minister Heizo Takenaka, and Bank of Japan Governor Toshihiko Fukui, turned matters around. They reversed monetary policies that contributed to deflation, turned the fiscal impulse to average net zero (see figure 5), and forced bad loan write- offs and recapitalization by the Japanese banks (figure 6).10 What few seem to appreciate, either inside or outside of Japan, is just how strong the resulting Japanese recovery from 2002-2008 was. It was the longest unbroken recovery of Japan’s postwar history, and, while not as strong as pre-bubble Japanese performance, was in fact stronger than the growth in comparable economies even when fuelled by their own bubbles.

People can get confused about Koizumi-era Japan’s economic performance because demographics were driving a pretty rapid reduction in the number of workers. That drags down overall output. But even though China’s GDP is much larger than Switzerland, Switzerland is still much richer and its workers are much more productive.

Posen’s piece is important, because I fear that historical evidence of poor economic performance in the wake of asset price bubbles bursting is creating a mood of dangerous complacency. You can read that as evidence that we’re destined to experience an extended period of poor growth, but you can also read it as evidence that what normally happens after a bust is that policymakers implement an ineffective response. And as Posen argues, accepting the view that slow growth is inevitable is a major cause of ineffective policy and becomes self-fulfilling. Japan started growing once it got some policymakers who believed it was possible for Japan to grow, and thus that they would try pro-growth things and try them on a large scale.

The Route North

For the long drive, I’ve tried to assemble a playlist of state-appropriate songs that take us from DC to Maine as follows:

1. For Washington, DC it’s the Postal Service “The District Sleeps Alone Tonight.”
2. For Maryland, it’s REM “(Don’t Go Back to) Rockville.”
3. Then Delaware, Promise Ring “Is This Thing On?”
4. New Jersey is Less Than Jake “Never Going Back to New Jersey.”
5. I know a million New York songs, but since the route just involves a quick jaunt across the Cross Bronx Expressway I’m going with Boogie Down Productions, “South Bronx.”
6. I think from the title that Rainer Maria’s “CT Catholic” is Connecticut, though the only specific place referenced is the BQE in New York. But I guess that’s how you’d get from Williamsburg to Connecticut.
7. Next up, The Get-Up Kids “Mass Pike.”
8. There don’t seem to be any real songs about New Hampshire, but the “Granite State of Mind” parody is hilarious.
9. John Linnel’s “Maine” is pretty great.

This ended up being a more emo list than I’d intended. Peppy bands should write more songs about locations in the Northeast.

The Message

Voting is mostly about the objective situation, not about what people say about the election. But insofar as talking is inevitable, you may as well do it well. Looking at the Democrats message heading into the midterms it all seems mighty backward looking: “we accomplished a bunch of stuff / the economy’s not really our fault / etc.” Missing here is what you’d call the narrative about what Democrats envision the 112th Congress as doing.

Suppose you voted for Democrats in 2006 and 2008 because you wanted to see action on health reform, energy reform, and immigration reform. Now you’re happy that health reform happened, but sad that energy reform and immigration reform didn’t happen. If Democrats come back this fall with a surprisingly good result—diminished but still robust majorities—are those things going to happen? Or are the remaining pieces of that agenda dead either way?

Let’s Go Away for a While

I’m off this morning to a strange and distant land for a bit of vacation. Specifically, my girlfriend and I will be driving up to sunny Cambridge, MA today and then pushing forward Sunday morning to my dad’s summer place in Brooklin, ME recently profiled by the Internet’s own Emily Gould. My hope is to enjoy some breeze, nice views, lobster rolls, peekytoe crab, and perhaps some sea kayaking.

Anyways, I like blogging so I’ll put some posts up while I’m gone, but obviously at a much-reduced pace and possibly focused on photos of quaint stuff.

Endgame

Ton visage sur mon magazine:

— Important new developments in sports bra science.

— “The Boom Not the Slump — The Right Time for Austerity”.

— Good advice.

— Bimodal distribution of lawyers’ compensation.

— Nenad Krstic arrested on charges of too-few vowels.

Malajube, “Montréal -40º C”

It Takes a Congress

Something to add to the growing “what’s Obama done wrong” literature and the “what’s wrong with the ‘what’s Obama don’t wrong’ literature” literature is that too often these discussions seem to me to forget that the United States Congress is composed of free and equal human beings who are responsible for their own actions. For example, it may or may not be the case that a different approach on the part of Barack Obama or his staff would have caused Ben Nelson to do different things low these past several months, but it’s absolutely certain that had Nelson wanted to do different things that different things would have happened.

Given that to err is human, I think we can take it for granted that some errors existed in the White House’s approach to legislative negotiations. But it’s also clear that members have their own volition. A skeptical Blanche Lincoln could have responded to the $800 billion stimulus request by asking Barack Obama “what does Christina Romer think? will this really fill the output gap?” Vulnerable House members could have challenged Rahm Emannuel “if things turn out to be worse than you guys expect, we’re all going to lose in the midterms—wouldn’t it be more prudent to build in provisions for additional stimulus if necessary?” The members who insisted on exempting auto dealerships from the jurisdiction of the Consumer Financial Protection Bureau could have said “you know what, Michael Barr is right, this doesn’t make any sense; we should do the right thing and tell the dealers to stop whining.”

Which is just to say that in a lot of respects members of congress seem to me to benefit from the soft bigotry of low expectations. Nobody really expects them to do the right thing or to ask smart questions or to listen to experts rather than engage in random acts of political posturing. So when they do bad stuff, we blame the White House for not doing a better job of preventing them from doing bad stuff. And fair enough—dealing with congress is an important part of the job. But you also do need to blame the people who are doing the bad deeds.