Matt Yglesias

Endgame

Whitey’s gonna pay:

— Rush Limbaugh has some paranoid ideas about dieting.

— Seeking the best bus route in America.

— David Leonhardt catches inflation hawks forgeting to adjust for inflation when touting high price of gold.

— American taxpayers will be subsidizing Brazilian cotton growers.

— More on barbershop raids.

— “Why do you think there’s so much nostalgia for riot grrrl right now?”

I am feeling nostalgic for Bratmobile. “Polaroid Baby” is short and sweet.

Repeal Bush’s Alteration of Time

Barron YoungSmith reminds us that Daylight Savings Time was changed in 2005 as part of a silly political ploy and argues that we should change it back:

Let’s revisit why this act passed. In the summer of 2005, America was facing a full-blown energy crisis, but the Republican Congress was unwilling to do anything that would substantively improve the country’s energy efficiency. They wouldn’t mandate improved lightbulbs. They wouldn’t increase CAFE standards. But, alongside billions of dollars in handouts and tax breaks for dirty energy—and token money for boondoggles like clean coal and hydrogen fuel cells—the Frist-Hastert Congress was willing to “save energy” by shortening the portion of the year when Americans are allowed to sleep late. They did this by shifting the start and end dates for daylight saving time so that the portion of the year when it’s easier to wake up is a full month shorter, and the corresponding good-lord-this-is-painful period a month longer.

There was something unsettling and creepily disproportionate about the idea that Congress couldn’t muster the will to improve energy efficiency, so it voted to change time itself—but leave that aside. The rationale for the new daylight saving calendar was that it would reduce energy use by encouraging people to use less electric light, but that assumption hadn’t been well tested—and a new study by the National Bureau of Economic Research (NBER) reveals that the policy likely encouraged Americans to use more energy by running heaters and air conditioners more than enough to offset the decreased use of light, and to spend more money doing so. Indeed, the primary beneficiaries seem to have been the retail and sporting-goods lobbies, who pushed for the bill because it makes people want to stay out later and shop or hunt. (Lobbies who opposed the bill included the Conference of Catholic Bishops and the United Synagogue of Conservative Judaism, presumably because fewer people want to attend services before dawn, as well as the National Parent-Teacher Association.) In other words, like many other laws passed during the Bush administration, it was a sop to business that left ordinary folks holding the bag—in this case a bag lunch packed during pitch-dark late October mornings.

Strikingly enough, this wasn’t even the Bush administration’s only effort to change time, but their plan to eliminate leap seconds was defeated at the international level. Also note that the long-suffering people of Canada were ultimately forced to switch to the new Bush Savings Time in order to stay in sync with their hegemonic neighbor. My personal interest in this subject stems from the fact that the clock radio I purchased in 2003 automatically adjusts for DST but does so on the old schedule, which is very inconvenient for me. And, yes, I could solve this by buying a new clock.

Rick Perry’s Medicaid Fantasies

I sort of favor Texas secession from the United States of America, but nevertheless it bugged me to see Texas Governor Rick Perry randomly prattling over the weekend about his alleged desire to opt-out of Medicaid “rather than this one size fits all mentality that comes out of Washington, DC with string attached.”

You see, though there are a lot of problems with Medicaid’s hybrid state/federal nature, one virtue that structure has is that doesn’t have a one size fits all mentality. Any governor who thinks he has a more cost-effective way of meeting Medicaid’s coverage goals is free to apply for a waiver to restructure the program. Perry’s problem, as my colleague Igor Volsky explains, is that he doesn’t actually have a way to do this:

But of course, if Perry believes that Medicaid is such a bad deal, he can continue petitioning the government for a waiver that would allow the state to alter some of the rules of the program — so long as he can demonstrate that his ‘Texas solution’ is comparable to Medicaid’s coverage standards. Perry hasn’t proposed anything remotely plausible during his first term as governor and while he talked a lot about states acting as “laboratories of innovation” in the above CNN interview, but didn’t list a single “good idea” for how Texas would provide care more efficiently than Medicaid.

The fact of the matter is that governors generally don’t want flexibility over this sort of thing. What they want is the ability to do what Perry did—to go on television and tell people they have a double super secret way to accomplish the goals of federal programs more efficiently if only the jackbooted thugs in Washington would get out of the way. But nobody is standing in Perry’s way. He just doesn’t have a proposal that works.

Actually Existing Internet Communism

Henry Farrell finds Steven Johnson running away form the somewhat radical anti-capitalist implications of his work on innovation, something that I think is a fairly widespread problem.

The issue is that most people don’t have a great vocabulary for talking about valuable activity that’s neither organized by the government nor undertaken for commercial reasons. And yet there’s lots of activity along those lines in everyone’s life. Importantly, this has always been the case. People have always had hobbies. The number of people who play sports on an amateur basis has always exceeded the number of people who do it professionally. And most significantly, people—especially women—have always done intensely valuable work in the household sector and related to raising and educating children.

But rapid improvements in communications and information technology have drastically expanded the scope and importance of non-commercial activities. It’s also created a (virtual) space where commercial, hobbyist, non-profit, and government undertakings interact, compete, and collaborate in novel ways. This nexus of undertakings has created several billionaires and “hot” innovative businesses of the sort that those inclined to valorize the work of entrepreneurs can and do valorize. But it’s also created a much larger set of amateur or quasi-amateur producers who are impacting the lives of people all around the world. In its 1875 Gotha Program, the German Social Democratic Party “demand[ed] the establishment of socialistic productive associations with the support of the state and under the democratic control of the working people.”

It turns out that finding a feasible way to do that for industrial age enterprises was fairly problematic. And yet their arguments that such associations would be beneficial remain compelling. Meanwhile, the Internet makes it much easier for individuals to form socialistic productive associations without a ton of explicit support of the state. This means, however, that the extent to which the state is implicitly supporting or hindering the work of said associations deserves to be on the table politically. And that discussion needs to consider not just the GDP impacts of peer production (which are often quite small) but the giant quantities of consumer (and producer) surplus welfare that are involved.

Chris Christie Endorses Bloated Public Sector Benefits When He’s the Beneficiary

New Jersey Governor Chris Christie has become a darling of the political press with his scathing attacks on public sector workers. It turns out, however, that when Christie himself was a public sector worker he enjoyed gold-plated compensation in the form of illegally expensive hotel rooms:

According to the report’s review of reimbursements made between 2009 and 2009, “Attorney C” submitted 23 expense reports that included lodging costs. Of those, 15 exceeded the government lodging rate and 14 gave insufficient justifications, the report said. The 14 expense reports totaled $2,176, the report said.

“In terms of the percentage of travel, U.S. Attorney C[hris Christie] was the U.S. Attorney who most often exceeded the government rate without adequate justification,” the report concluded.

A stay at Boston’s boutique Nine Zero Hotel cost taxpayers $449 per night, more than double the government’s reimbursement rate for the city, the report said. Christie’s secretary told investigators it was a “coincidence” that he attended meetings in the same hotel. A stay at Washington, D.C.’s Four Seasons hotel cost $475 per night, more than double the $233 per night reimbursement rate. Christie stayed at the Georgetown hotel because he had to give an early morning speech there, according to the justification memo included with his expense report.

The point here isn’t that Christie’s defenses of living the high life on the government dime are absurd. On the contrary. The points he’s raising are perfectly reasonable. By overspending, Christie was able to make his life much more convenient for himself than it otherwise might be. Staying at a cheap hotel, waking up super-early, and taking a cab down to Georgetown would have been way less pleasant than spending the night at the Four Seasons. And the pleasantness of the job of US Attorney is relevant to the government’s ability to attract talent. And I take it that Christie thinks having talented people working as US Attorneys is important to public welfare.

Of course this is all debatable. Maybe people take US Attorney gigs because it’s a good stepping-stone into higher political office. Maybe Christie-level talents would take the gig under any non-horrible compensation scheme since the real reward is the opportunity to run for Governor of New Jersey. So maybe the spending is genuinely wasteful. Or maybe the work of US Attorneys is actually totally unimportant and reducing the quality of people taking those jobs would be very low cost. Either way, there’s a debate to be had that requires some examination of the actual situation and not lazy lashing out at fat-cat bureaucrats staying at the Four Seasons at taxpayer expense.

Is Unlicensed Yacht Dealing a “Serious Threat” to the Welfare of the People of Florida

Needless to say I agree with Josh Barro about this specific case of raids on barbershops and the general issue of barbershop regulation. Following a link from him I got to the Florida Department of Business and Professional Regulation’s site on combatting unlicensed activity, thus allowing me to learn more about this vital issue:

Unlicensed activity is a serious threat to the health, safety, and welfare Florida residents and visitors. The department has made vigorous enforcement of licensure regulation one of its highest priorities.

Unlicensed activity occurs when a person performs or offers to perform a job or service that requires licensure in one of the professions regulated by the Division of Regulation, Division of Real Estate and Division of Certified Public Accounting. Unlicensed activity in these professions is a criminal offense and is referred to the local State Attorney.

If you need to file a complaint about licensed or unlicensed activity against another type of business, such as a food or lodging establishment; gaming facility; yacht and ship broker, timeshare business or a business that sells alcohol or tobacco, please CLICK HERE TO FILE YOUR COMPLAINT or call our Customer Contact Center at (850) 487-1395.

This naturally raises the question of whether unlicensed yacht brokering is actually a “serious threat” to the “health, safety, and welfare Florida residents and visitors”? My working hypothesis is that it is not. The fear that rich yacht-buyers are getting ripped off by scofflaw boat salesmen seems pretty implausible. Indeed, reading through the yacht licensing FAQ the main point of the yacht licensing system seems to be to protect Florida yacht brokers from competition from out-of-state boat salesmen. Apparently only California and Florida require licenses to sell yachts. Is there some evidence that other coastal states are suffering from unduly laissez faire policies in this regard? I’m most familiar with the seafaring scene in Maine where my family has vacationed for years and nobody seems to complain about a plague of unlicensed boat dealers.

From what I can tell on the Florida Yacht Brokers’ Association website what happened is that it used to be legal for anyone to sell boats in Florida. Then the FYBA was formed specifically in order to argue for cartelization in 1987, and succeeded within a year.

What Do People Think A Third Party President Would Do?

Ben McGrath’s discussion of the endless discussion of a Michael Bloomberg third party presidential bid is appropriately arch, but still doesn’t, I think, quite get at the core madness of this talk:

Speaking at Harvard, the day before the election, Bloomberg said, “I think, actually, a third-party candidate could run the government easier than a partisan political President,” and then he went on, as he always does, to deny that he intends to pursue the position. He is, as he is fond of saying, Jewish, unmarried, pro-choice, anti-gun, pro-immigrant, and pro-gay-marriage. Add to that a strong allegiance to Wall Street, a weekend house in Bermuda, and his vehemence, last summer, in defense of the mosque near Ground Zero, and it’s hard to see how he plays to the populist moment. A recent Marist poll indicates that only twenty-six per cent of New Yorkers favor the prospect of his running.

Yet the dream persists. “I think it’s a strong possibility,” Clay Mulford, the chief operating officer of the National Math and Science Initiative, and, as it happens, Perot’s son-in-law, said the other day. “The mood of the country is not ideological but more practical. The timing is unusually right.” Mulford mentioned that a Google search of his name and Bloomberg’s would reveal that the two of them met, a couple of years ago, to discuss ballot logistics. “His people put the story out,” Mulford said.

The question that needs to be asked about all these notions is what kind of legislative coalition is President Bloomberg supposed to be governing with? The version of ARRA that passed was the one Senators Collins, Snowe, and Specter were prepared to support. So what difference would it have made had Barack Obama been somewhat less liberal? I bet a third party president would initially impress people with his bold truth-telling and lack of need to cater to old bulls on the Hill. But it would swiftly become apparent that the constitution hasn’t been repealed, that the only bills that pass are the ones members of congress will vote for, and that members of congress all belong to parties. The only way you’d be able to get anything done would be to find a way to work within the party system somehow.

The point is that most of the stuff people like to decry about American politics—the venality, the small-minded partisanship, the bickering, the corrupt deals—happens in Congress. Wishing for a different president doesn’t address any of it.

Trade and QE2

The cavalcade of international whinging about QE2—the Federal Reserve’s effort to lower medium-term interest rates—is really telling and important to understand. The first thing to understand it, I think, is that QE2 is not primarily about international trade. The key thing about the United States and international trade is that the US economy is enormous. If Vermont, which is small, were a country then “international trade” would be really important to Vermont and “trade with the United States” in particular would be hugely important. But Vermont’s not a country. And because the US economy is so giant the volume of our trade with foreigners is small compared to what you see in most countries.

QE2 is about raising aggregate demand in the United States of America.

Now it is of course true that QE2 will have impact on other countries, and foreign policymakers should feel free to whine if they feel that America’s policy choices are inconveniencing them. But that doesn’t mean we should listen to them. In this regard I think it’s worth doing more than Kevin Drum does to distinguish Germany and China. The Germans are merely being hypocritical about this (that’s politics) but the Chinese are being nonsensical. Their problem with QE2 is that they’ve decided to subsidize politically powerful Chinese exporters by yoking their currency to ours in a way that leads them to import our monetary policy. Since they did that, they now want us to run a monetary policy that would be appropriate for China rather than a monetary policy that would be appropriate for the United States of America. But since the United States of America and China are very different places, economically speaking, it would be nuts of us to do this. Fortunately, China can unyoke itself from us any time it wants by letting its currency float more. They’re acting like this currency tether is something we’ve been begging them to do when in fact it’s something we’ve been begging them to stop.

This, by the way, is what drove me nuts about the proposals to hit China with tariffs unless they changed course. We don’t need to coerce or cajole them into changing course, we just need to steer our own ship correctly and not pay attention when they whine about it. They know what they have to do in response and sooner or later they will.

My Application for Peter Thiel

Via Twitter, I see that one of the questions Peter Thiel asks applicants to his fellowship program (which unlike some of his philanthropic endeavors sounds to me like a totally good idea) is “Tell us one thing about the world that you strongly believe is true, but that most people think is not true.”

Since I’m not eligible for a fellowship for people under the age of twenty, I’ll offer my honest answer which is that guys like Peter Thiel are much more commonly reckless gamblers who got lucky making bad bets than they are brilliant visionaries who can peer into the future and see the best ideas.

In other words, if a thousand guys walk into a casino and all put $1 million down on different numbers on the roulette wheel, then the guys who win all make a second bet, someone will probably walk out of the casino with a billion dollars and an air of smug self-satisfaction. He’ll rapidly be surrounded by flatterers and possibly spend the rest of his life talking about how seasteading is humanity’s only hope to achieve real freedom.

Meanwhile, it seems to me that the recognition that successful capitalists mostly succeed thanks to good luck and willingness to run unwise risks is actually integral to the case for capitalism as an economic system. If it were otherwise, then we could just recruit Peter Thiel, Warren Buffett, Bill Gates, Pete Peterson, Charles & David Koch, and George Soros to run the Central Planning Committee. After all, those guys are smarter than the rest of us so it makes sense to put them in charge of allocating almost all the capital in the country and not just the puny share they’re able to obtain personally. In the real world, that’d be a disaster. There are a bunch of reasons for that, but that fact that a healthy fraction of the super-rich aren’t nearly as smart as their flatterers think they are is on the list.

Oldster-Fueled Backlash Against The ACA Unlikely to Reflect Support for Small Government

It’s been pretty widely remarked that the surge in Republican voting last week was driven largely by old people, but I’m really shocked by the extent to which the MSM has failed to derive the obvious conclusion from this. After all, criticism of Democrats had two main thrusts. On the one hand, incumbents were castigated for too much spending. On the other hand, incumbents were castigated for cutting Medicare. Surely both critiques were persuasive to some audience. But which critique do we think specifically found traction with senior citizens? Pretty clearly Medicare.

Now politics ain’t beanbag, so if Republicans want to slam Democrats for reducing Medicare’s projected future outlays they’re free to do so. But you can’t ride to victory on a backlash against Medicare cuts and then claim to be riding a backlash against big government. Medicare is big government. Really big!

Pat Garofalo pointed out yesterday that Jim DeMint (R-SC) is trying to square this circle by somehow pretending that Paul Ryan’s “budget roadmap” doesn’t cut retirement programs:

GREGORY: But then, but where, but where do you make the cuts? I mean, if you’re protecting everything for those, the most potent political groups like seniors who go out and vote, where are you really going to balance the budget?

DEMINT: Well, look at Paul Ryan’s Roadmap to the future. We see a clear path to moving back to a balanced budget over time. Again, the plans are on the table. We don’t have to cut benefits for seniors, and we don’t need to cut Medicare.

The reality is that Ryan’s plan involves completely eliminating Medicare and replacing it with a less-generous system of vouchers that will let you buy private insurance. At root, the agenda here is totally incoherent.

DADT Repeal and the McConnell Way

Looks like Republicans aren’t going to back down on their threat to filibuster a defense appropriations bill unless it’s stripped of Don’t Ask Don’t Tell repeal legislation, and it looks like Democrats are going to cave.

Just as a pure political spectacle here, this is a thing to behold. Filibustering defense appropriations bills is politically risky. And to do it in order to support a hugely unpopular position on a related issue is a giant risk. It’d be one thing if 60% of the public was on the Republicans’ side about DADT. But it’s not. Instead this is a 70-30 issue that cuts against them.

But not only are they getting away with the filibuster, they’re turning their obstruction into a political winner by forcing the progressive community into circular firing squad mode. I try really hard to think of politics in terms of the substance of things rather than the quality of the performances, but from a sports fan type perspective you really have to admit that Mitch McConnell has delivered a gutsy virtuoso performance as a legislative leader. It takes a real kind of vision to recognize that relentless obstruction even of overwhelmingly popular progressive ideas can be turned into a political winner by creating fractures in the other side’s coalition. Meanwhile though the political reporter set admires nothing so much as a winner, I feel like they still haven’t really grasped how the McConnell Way works. But once you “get it” your understanding of the legislative landscape really starts to look different. And unfortunately for the country, I’m not sure they get it in the White House either.

DC Cabbies Don’t Like Competition

During his primary campaign against Adrian Fenty, DC mayor-elect Vince Gray was able to attract the support of a very wide array of interest groups without making any formal promises. Now, though, the people in whose debt he is feel that it’s time to pay the piper. Cab drivers, for example, were solid Gray backers because they (accurately) blamed Fenty for imposing a rational meter system on the city rather than an insane zone system. Even the cabbies aren’t crazy enough to actually suggest going back to the old system, but they do have a different bad idea:

Derje Mamo, a taxi driver who helped run transportation for the mayor-elect’s campaign, said cabdrivers already are pushing Gray to reshape the Taxicab Commission and allow for the creation of a medallion system. A medallion or certification system would limit the number of cabs operating in the city. Proponents of such a system argue that too many taxis are flooding D.C. streets. ‘He’s got one year, that’s it,’ Mamo said.”

Too many taxis? Systems of this sort are widespread in other cities, but they’re not a good idea. Basically if you think it’s too easy and convenient to hail a cab in Washington, you’ll love an artificial regulatory restriction on the supply of taxis. In particular, if you think the city’s peripheral neighborhoods are too well-served by cab drivers and that we need to shift to a dynamic where you can only hail a cab in the downtown core, you’ll love this plan. You also might like it if you’re an incumbent cab driver who wants to restrict new entrants’ ability to compete with your business.

If Gray is smart, he’ll recognize that this is change we don’t need. But I worry that Gray will think the lesson of his victory is that city government should always bow to interest-group pressure.

Endgame

I swear I’ll do my best to comply:

— Deregulation and suburban lawn care.

— Activist judges impose sharia on Oklahoma just as the voters feared.

— Barbershop crackdown because Florida needs more unemployed people.

— Call it the WTF Were You Thinking Project.

— Karl Smith has made charts and graphs that should finally make it clear: the problem is a lack of aggregate demand.

— PBS on Senate dysfunction.

The Postal Service, “Nothing Better”.

The Number That Matters

The labor market indicator I see discussed most often is the unemployment rate. Sometimes people push into the “broad” unemployment measures. But in political terms, I doubt this is the most important indicator. After all, even at the depth of the Great Depression the unemployed were only a minority of the population. And there’s little sign that high-unemployment demographic sub-groups (African-Americans, young people, high-school dropouts) experienced some kind of particularly sharp turn against Barack Obama.

Something better to think about may be the change in real personal disposable income:

Another point where this is relevant is the continued mumblings that there’s nothing policymakers can do about unemployment since all this joblessness is “structural.” The labor market has been delivering bad outcomes across the board, not just a targeted blow to a handful of suddenly unemployably inept individuals.

The Vision Thing

Ross Douthat explains why he won’t be missing Charlie Crist, Evan Bayh, or Arlen Specter and has wide comments on the general situation facing centrist legislators:

We hear a lot about the perils of political polarization, and for understandable reasons: America faces structural challenges that probably can’t be addressed by one party alone, and the waning of bipartisanship is one of the many forces that make a Greece or California-like endgame seem depressingly plausible. But if a polarized political system produces fewer centrists overall, it also increases the power and potential leverage of the centrists who remain. For a time, the most important figures in the debate over health care reform were Chuck Grassley and Max Baucus; later on, that role passed to Ben Nelson, Susan Collins and Olympia Snowe, among others. (The same was true in the stimulus debate, the financial reform debate, etc.) A swing vote in the U.S. Senate should be able to wield disproportionate influence over the design of legislation; a swing bloc, if one existed, would essentially have veto power over whatever the majority wanted to do. And so the legislator who wastes this power — by engaging in horse-trading without any larger vision, by griping constantly about their own party’s mistakes while voting the party line on every major piece of legislation, or by simply being a self-interested, unprincipled cynic — is as much to blame for the dysfunctions of the American political system as any uncompromising partisan of the left and right.

I think this was an underrated sub-plot of the 111th Congress. The people who occupied the legislative pivot points showed us basically nothing in the way of vision. When Scott Brown held all the leverage on financial regulation legislation, he used it to get a special carve-out aimed to benefit the bottom line of Massachusetts-based banks. Blue Dogs exempted car dealers from otherwise applicable consumer protection rules. Ben Nelson asked for the “cornhusker kickback.”

This kind of thing is one reason I’m hoping that instead of obsessing over finding compromises with Republicans the President will refocus his attention away from the legislative arena. Left to their own devices, maybe some of the pivoteers will realize that they have an obligation to actually frame some kind of proposal for coping with the country’s problems.

The Unrepresented

There’s a 25 acre chunk of land in DC located just south of a major hospital complex and otherwise surrounded by residential neighborhoods called the McMillan Sand Filtration Site. It’s no longer needed for water-filtration purposes, so the idea is to redevelop it as someplace where people can live and work and shop. That requires a regulatory plan in which the interests of people who live in the McMillan-adjacent neighborhoods is being given heavy weight.

Lydia DePillis reports that one thing they want is low-density development, especially on the most promising retail corridor:

Based on the surrounding geography, master planner Matt Bell of EEK and landscape architect Warren Byrd of Nelson Byrd Woltz outlined a rough sketch of how the site’s 25 acres might be apportioned: Office buildings would go on the north end, across Michigan Avenue from the medical center; townhouses would go on the south end, along Channing Street; with multifamily residential buildings and park space somewhere in between. They also proposed building higher towards the west side of the site, so as not to crowd the short townhouses on North Capitol Street, though that corridor was identified as the most viable location for retail (a representative from Councilmember Harry Thomas‘ office relayed North Capitol residents’ strong desire not to have tall buildings across the street).

My very strong suspicion is that the North Capitol Street residents have a subjective understanding of their actions as jeopardizing the interests of rich developers. Harry Thomas, likewise, presumably sees himself as standing up for regular people against the rich developers. But what about the future residents of the McMillan site? Who’s asking those people whether they’d prefer taller buildings and a richer retail environment? And who’s asking the people who won’t be able to move to the McMillan site in the future but who would have been able to move had higher-density construction been permitted?

Similarly, how about the ecological impact? It’s not as if the people who don’t move to McMillan will just vanish. Instead, they’ll live someplace else—someplace with longer commutes—and the emissions from their automobiles will in a small way contribute to environmental problems around the world.

Of course this is just one largish patch of land in one American city. But just about every single infill planning process in America suffers from the exact same bias. The views and interests of people who currently live nearby are represented, but the views and interests of the future-people impacted by the process aren’t. Consequently, each planning process is systematically biased toward permitting too-little development.

The Dialectic is Interested in Climate Scientists

I’m very much in agreement with Dave Roberts about the ultimate futility of any effort to “keep the politics out” of climate science:

Curry may be able to remain scrupulously apolitical, if that’s her inclination. But climate science in general cannot escape politics. Not because scientists — or the advocates and politicians who take it seriously — did anything to bring it on themselves. It’s just that an alliance of energy incumbents and far-right ideologues has chosen to lie relentlessly about it. In the milieu of current climate and energy politics, speaking the truth is a political act. The only way to escape politics is to lapse into silence.

That’s moralized language. A different way of putting it would be à la Trotsky’s quip that you may not be interested in the dialectic, but the dialectic is interested in you. It’s possible to have meaningful dialogue about an issue on a technical “non-political” level if and only if the political system isn’t interested in the question. In the early part of the decade, monetary policy was a “non-political” issue and Ben Bernanke could float quantitative easing at conferences and a bunch of guys with PhDs would discuss it calmly. Today it’s different. Monetary policy makes headlines, Mike Pence issues press releases denouncing QE, Sarah Palin offers her take on Twitter, etc.

That’s life. I understand that people don’t like it. Personally I prefer talking about issues that aren’t at the forefront of national politics. I’ve had great conversations over the past year about postal banking with people who are considerably more leftwing than I am and with people who are considerably more rightwing than I am. That’s because obviously America isn’t going to institute a postal banking system in the short-term, so it’s a pleasant non-partisan conversation. So I definitely sympathize with the desire of scientists working in the climate space to stay “out of politics.” But politics is interested in climate science! A lot of policymakers have looked at the science and drawn the conclusion that a dramatic policy response is warranted. A dramatic policy response, however, upsets many stakeholders who have a vested interest in attacking both the policy inference and the underlying science.

The Secret War on Poverty

Annie Lowrey did an excellent piece last week about the weird way in which poverty has vanished from the American policy agenda even as the 111th Congress in practice passed tons of legislation favorable to poor people:

In the just-finished campaign, as usual, every candidate claimed to be standing up for the middle class. Democrats argued that they delivered what the middle class needed: tax breaks, health care reform, and federal aid to states to help ease the recession. Republicans argued that Democrats failed to deliver the only thing the middle class wanted and needed: jobs. Neither party talked much about “low-income families,” to use the preferred euphemism—or, more bluntly, poor folks.

In truth, the Congress of the last two years passed more legislation benefiting the poor than any other in memory. That the Democrats didn’t campaign on their achievements may indicate one of two things. One, poor folks—unlike, say, politically generous Wall Street bankers or socially conservative Rust Belt Catholics—are generally not viewed as a constituency worth courting. Two, as with the stimulus bill’s effect on unemployment, what the Democrats did mainly consisted of preventing a bad situation from getting worse.

The total inattention to the issue of poverty during the current recession by the “sensible center” is, meanwhile, quite damning. During the 1980s the notion that work, rather than relief programs, was the only road out of poverty gained a lot of steam. And in 1995 that principle was enacted into law as part of the Clinton-Gingrich welfare reform. And as long as the economy stayed near full employment the new policy paradigm worked. The whole thing was proclaimed a success and the left (as always) was proclaimed to have been discredited.

But anyone who cared about this agenda at all as a matter of substance would be lighting their hair on fire over the prospect of a years-long period of 7+ percent unemployment. After all, if you replace income-supporting programs with work-supporting programs you’re implicitly undertaking an obligation to provide the demand for labor that would ensure the availability of jobs. And yet somehow I don’t see “centrists” out there slamming Ben Bernanke for sabotaging welfare reform to reassure inflation-panickers or calling for congress to enact massive public works programs.

But which is it? Are people supposed to work or aren’t there? If it’s the former, you need to provide jobs for low-skilled people to do.

The Luck of the Irish

Here’s Chris Edwards, director of tax policy at the Cato Institute and author of Downsizing Government writing at National Review online in March 2007 about how everyone would be more like Ireland if only they listened to rightwing economic policy:

Ireland has boomed in recent years, and it now boasts the fourth highest gross domestic product per capita in the world. In the mid-1980s, Ireland was a backwater with an average income level 30 percent below that of the European Union. Today, Irish incomes are 40 percent above the EU average.

Was this dramatic change the luck of the Irish? Not at all. It resulted from a series of hard-headed decisions that shifted Ireland from big government stagnation to free market growth. After years of high inflation, double-digit unemployment rates, and soaring government debt that topped 100 percent of GDP, Irish policymakers began to cut spending in the late 1980s in a desperate bid to recover financial stability.

Irish government spending fell from more than 50 percent of GDP in the 1980s to 34 percent by 2005. For Europe that is a triumph of restraint, given that the average size of government across 25 EU countries today is 47 percent of GDP. And Ireland has steadily reduced its tax rates. The top individual income tax rate was cut from 65 percent in 1985 to 42 percent today. The capital gains tax rate was cut from 40 to 20 percent in 1999.

However, the key to Ireland’s success has been its excellent tax climate for business. In 1980, Ireland established a corporate tax rate for manufacturing of just 10 percent. That low rate was subsequently extended to high-technology, financial services, and other industries. More recently, Ireland established a flat 12.5 percent tax rate on all corporations — one of the lowest rates in the world, and just one-third of the U.S. rate.

James D. Gwartney and Robert Lawson writing for Cato back in 2005 said that Ireland should be seen along with Iceland as an important case study in the success of free market economics.

Today of course Ireland is a total disaster. I wouldn’t try to blame their property crash on low tax rates. But by the same token a frightening number of pundits went “all-in” on the idea that Ireland’s conserva-friendly tax policies were behind a boom that was in fact driven by a real estate bubble. There needs to be some accountability for this, because it appears to quite genuinely be the case that relaxed financial regulation is a can’t-lose strategy for (temporarily) attracting financial inflows, sparking an asset price bubble, and boosting growth. But that doesn’t mean countries should do it. And we need a system of international praise and esteem that’s not so blind to these issues.

Obama Backs Security Council Seat for India

I’m glad to see Barack Obama announce support for giving India a Security Council seat. Reform of the UN Security Council is something of a doomed endeavor, but in my view that’s all the more reason for the United States to play the role of good guy rather than protector of the status quo. India and Japan should have permanent Security Council seats. Brazil too. We should work something out with Africa. The EU should have some kind of consolidate seat instead of separate ones for France and the UK. There shouldn’t be unilateral vetos of UNSC resolutions. The “Forging a World of Liberty Under Law” report from John Ikenberry and Anne-Marie Slaughter (currently at the State Department) had a lot of good ideas along these lines.

Will it happen? Not in the short-term, that’s for sure. But let China and France be the spoilers here.

Over the long run, either these structures will shift or else they’ll become decreasingly relevant. The former would be clearly preferable to the latter, but in either case it makes sense for the United States to try to get ahead of the curve.