Matt Yglesias

Big Business and Small Government

My colleagues have put together a great feature on a big Koch-organized confab featuring Glenn Beck, the Chamber of Commerce, various billionaires, and rightwing political strategists all getting together to plot for the midterm elections. One particularly interesting name on the list is Tim Carney from the Washington Examiner.

Carney’s an interesting case because at a time when most have accused Barack Obama’s administration of being full of anti-business leftwing radicals, he’s invested his time in making the much more plausible critique that Obama’s agenda has been unduly favorable to the interests of big business. It’s a plausible critique because I think there’s a lot of truth to it. If you look at TARP or the health care bill or the failed cap and trade proposal, all of these were more “pro-business” than I would have deemed ideal. But even while ostensibly covering the intersection of big business and the political system, Carney’s done a remarkably good job of ignoring the big picture that America has one political party whose agenda is unduly influenced by big business and another party whose agenda is indistinguishable from big business.

You’d think that’s something he might have noticed at the Koch retreat…

Montgomery County Cracking Down on Scourge of Open Windows At Dining Establishments

Elahe Izadi reports that Montgomery County is planning on stepping up enforcement of an ordinance against open windows: “It seems the county’s restaurants and officials have only recently become aware of a regulation against open windows in restaurants, one that has long been a part of Maryland law.”

Granted that there’s something to be said for actually enforcing the laws that are on the books—even the ones people have forgotten about—was there actually some problem here? There’s a deli right on my block that just throws the windows open when the weather’s nice and I’ve never in my life heard anyone complain about it, much less suggest it should be illegal.

No More Large-Scale Long-Range Deployment For the New United Kingdom

Richard Norton-Taylor in the Guardian offers an excellent glimpse at the scope of the cuts David Cameron is sketching for the UK military:

Britain’s armed forces will no longer be able to mount the kind of operations conducted in Ira qand Afghanistan, the government’s strategic defence review made clear today. For at least a decade it will also be impossible to deploy the kind of carrier task force which liberated the Falklands 28 years ago.

Though defence chiefs said today that they will still have significant expeditionary forces, they will not be able to intervene on the scale or tempo of recent years. According to new defence planning assumptions, UK forces will be able to carry out one enduring brigade-level operation with up to 6,500 personnel, compared to the 10,000 now in Afghanistan, plus two smaller interventions, at any one time.

Reduced ability to participate in America’s misguided military adventures isn’t the worst thing in the world, but this certainly strikes me as an odd priority relative to phasing out second-strike nuclear capabilities. That said, it’s nice to see one country at least where politicians seem to grasp that excessive “defense” spending is some of the most wasteful spending you can imagine.

The Importance of Preference Intensity

Dave Roberts’ post about how intensity is a bigger problem than ignorance for people hoping to reduce greenhouse gas emissions is excellent.

I would also add that it’s pretty general. This is part of the reason 95% of discussion of public opinion about “the issues” is fairly misguided. Voters have a very restricted set of options at the voting booth, so fundamentally what someone thinks about most things is completely irrelevant. How many issues are there out there that could really swing your vote? Consequently, for most causes the most important question isn’t how do you persuade the median voter that you’re right; it’s how many resources can you mobilize (votes, volunteers, dollars, something) to your allies.

Endgame

The heat! The slime!

— As people write more and more of these stories about Ordos, China it sounds more like an urban planning failure than a “housing bubble” issue per se.

— Ugandan paper calls for mass hangings of gays.

— Will Palestine be the next Mideast security state?

— Casualties in the battle for gay rights.

— Univision backs away from plans to air ad aimed at persuading Latinos not to vote.

For Rabbi Yosef, it’s “Born to Do Dishes”.

Democrats Are Good At Getting Votes

Ezra Klein mentioned this yesterday and I want to echo his view that the liberal insistence that Republicans are somehow “better at politics” perhaps because of their greater willingness to engage in “hardball” strikes me as pretty dubious. Over the past twenty years, Democrats have won three out of five Presidential elections and carried the popular vote in one of the two elections they lost. Democrats controlled the Senate from 1991-94, from 2001-2002, and from 2007-2010—just about half the time, with the GOP margin coming from the few months before Jim Jeffords switched parties. Democrats have also generally won more votes in the House of Representatives:

So insofar as being “good at politics” means “persuading people to vote for your candidates,” the Democratic Party has a pretty impressive record over the past two decades. It’s true that a 50-50 split in the House vote leads to a Republican majority, which puts the DCCC at a perennial disadvantage. But that’s not a problem of tough campaign ads or aggressive messaging or what have you. Unfortunately, few people understand this quirk of the political system which derives from the fact that the most lopsided congressional districts are full of Democrats.

Socialist Cities

Urban real estate isn’t a “free market” anyplace that I’m familiar with, but market forces are an important factor in most urban real estate markets. Consequently, you tend to get taller buildings near the center where land is most expensive, and lower-density construction on less-valuable land that’s further away. For much of the twentieth century, however, many countries engaged in a big-time experiment in doing construction in a totally non-market way which apparently lead to a distinctive pattern of urban growth, as explained by Alain Bertaud and Bertrand Renaud in “Socialist Cities without Land Markets” (that’s via Stephen Smith):

How does the spatial dynamics of the socialist city compare with that of the market city? What happens when all investment decisions are made administratively in the absence of land markets? Russian development is the longest socialist experiment on record. Its outcome is of paramount interest to urban economists. This paper reports the first analysis of the structure of Russian cities after 70 years of Soviet development. The main finding is a perversely positive population density gradient. The Soviet city also has a disproportionate share of industrial land, often in prime locations. Free property trading started in Russia in 1992. The emerging negative price gradient contrasts totally with the positive population gradient that is the legacy of administrative land allocation. These two conflicting gradients highlight the land misallocation and inefficiency of the socialist city.

Here’s a chart illustrating the contrast between Paris and Moscow:

Given the way tea partiers are throwing the term “socialism” around to mean any kind of provision of social welfare it’s worth being clear here that the issue isn’t high taxes on the rich to finance to finance rent subsidies. The issue is that instead of land being allocated according to who had the means and inclination to pay for it, it was allocated by political insiders to whatever they preferred.

Trident Replacement is Bad News for the USA

British defense spending should be every American’s favorite kind of defense spending. UK military assets are essentially at the disposal of US foreign policy, but American taxpayers don’t need to foot the bill. So we should all pay attention to the defense cuts coming as part of David Cameron’s austerity drive:

David Cameron has confirmed defence spending is to be cut by 8% in real terms over four years, as he unveils the strategic defence review. He said RAF and Navy numbers would be reduced by 5,000 each, Army numbers by 7,000 and the Ministry of Defence would lose 25,000 civilian staff by 2015. [...]

Mr Cameron vowed to push ahead with replacing Britain’s Trident nuclear missile system but said their replacement would be scaled back, with the number of warheads per boat cut from 58 to 40, as part of a £750m package of savings.

Cutting conventional military personnel while spending money on renewing Britain’s nuclear arsenal is more-or-less the worst case scenario from an American perspective. The UK’s ability to contribute to the “global public goods” functions of the Pentagon will be diminished more than is necessary to meet the monetary targets, and British possession of a nuclear second-strike capability accomplishes nothing whatsoever for America. What’s more, it doesn’t really accomplish anything for the United Kingdom either—it’s just a way of hanging on to a bit of faded imperial glory.

What’s more, I think it’s worth paying some attention to the role the small British and French nuclear arsenals play in the larger global proliferation question. What message does it send to Brazil, Taiwan, South Africa, Indonesia, and other regional powers when medium-sized countries facing no conventional security threat and benefitting from explicit American security guarantees insist that they need nuclear arsenals? And how much does desire to keep the door to nuclearization open play into their stances on questions relating to “bad guy” proliferators like Iran and North Korea? The obligation of existing weapons states to take meaningful steps toward nuclear disarmament falls primarily on the US and Russia, which have the bulk of the weapons, but the smaller arsenals play a role in this as well.

Cuba Embargo Turns 50

Ian Vasquez observes that this is the fiftieth anniversary of America’s ridiculous embargo of Cuba:

It is time to lift the embargo. Doing so will not save communism from its inherent flaws; that system collapsed spectacularly elsewhere around the world in places where the West maintained or established trade. Keeping the sanctions will only further allow the dictatorship and its sympathizers to explain away the regime’s own failings. It would be better for Cubans and the world to see the unraveling of Cuban communism without U.S. intervention. When a free Cuba is eventually born, it will more easily flourish if enemies of the open society cannot rely on a false narrative about how the colossus of the North finally killed off the island’s socialist experiment.

A good way to start would be by lifting the travel portion of the embargo. That measure would expose ordinary Cubans to hundreds of thousands of American citizens, thus inevitably expanding Cuba’s informal economy and establishing innumerable relationships that would make Cuban citizens more independent of the state. The regime may try to reap the benefits of increased revenues, but it will have unleashed a social dynamic that will be difficult to control.

To add a few other points, Cuba aside it’s simply preposterous for the government of a democracy to be restricting which countries its own citizens are allowed to visit. What’s more, it’s worth emphasizing that insofar as a relaxed embargo would present new economic opportunities to the Cuban regime the way for them to maximize those opportunities is to walk further down the China/Vietnam path and relax their grip on the economy. Consequently, the impact of relaxing the embargo on Cuban freedom is necessarily going to lie somewhere in the positive range.

Real Interest Rates

Mark Thoma posts a detailed presentation from Mary Daly of the San Francisco Fed about the bleak economic outlook. I’d like to just pull a couple of charts out.

First this one:

Second, this one:

If you look at just the first chart, it looks like rates on things like Baa corporate debt and jumbo mortgages have returned to pre-crisis levels. But when you put the first chart in the context of the second chart, you’ll see that falling inflation and inflation expectations mean that real rates are higher than they might initially appear. Take that as a token example of how room remains for Fed actions to help restore the economic equilibrium.