The Onion, on Complexity

Apropos of my long essay below, as usual, the Onion got there first:

The Onion

Nation Finally Breaks Down And Begs Its Smart People To Just Fix Everything

WASHINGTON—Overwhelmed by the frustration of being utterly unable to solve any of the numerous difficult problems it faces, a worn-out nation finally broke down Thursday morning and begged its smart people to please just fix everything now.

Admitting they had "absolutely no idea what the fuck [they were] doing," millions of Americans immediately ceased trying to manage the country’s large-scale, ongoing disasters and pleaded with U.S. scientists, economists, educators, philosophers, and inventors to intervene and make things better again. […]

Acknowledging they lacked the know-how to put anything together without it all falling apart again in a matter of seconds, millions of ordinary Americans implored the nation’s skilled individuals to just use their knowledge to end the financial crisis, manage the health care industry, determine which human beings are actually fit to hold political office, teach the nation’s children, and enact overarching policy decisions that serve the greater good.

Citizens across the nation also promised to stay completely out of the way while those people who actually have some idea what they’re doing roll up their sleeves and get down to the bottom of all this. In addition, the competent have been issued assurances they will not be hindered by irrelevant, totally uninformed opinions while they are getting things done.

"You won’t hear a single word out of us, we swear," said Chicago real-estate broker Paul Linder, mentioning that smart people can have all the time and resources they need to make the necessary repairs to society.

Bookmark and Share

Complexity and Institutional Distrust, a Blogger’s Lament

After every post I write attempting to elucidate a small sliver of a difficult question, I’ll soon stumble upon a piece by some other writer which raises a different angle to the question that I did not consider. Sometimes it nicely supplements my own points, and sometimes it leaves my entire post in intellectual shatters. So it goes. This is a generalist blog which at its best aspires to synthesize widely disparate areas of human behavior and endeavor. It fails often; one can only synthesize so much, across so many domains. Only rare polymaths can weave together coherent narratives and analyses culled from the endless back catalogue of human history, politics, art, science, and economics. The rest of us operate within a narrow and attenuated amplitude, which is why it’s a nice idea to keep our conclusions modest and provisional.

This problem of information synthesis is why writers and policy analysts tend to specialize. Adam Smith explained the profound productivity benefits of labor division, but he also warned that such stark division might atrophy one’s interest in, and ability to understand, phenomena outside one’s particular domain. Specialization may in this way “corrupt the courage of the mind” and leave us ill-equipped to deal with multivariate issues of common concern.

As our modern systems and institutions become more complex, requiring more and more micro-specialization to understand each tiny constituent part, it becomes near impossible for anyone to step back and see how the systems relate to one another. As the complexity of modern political and economic life deepens, the systems become more globally integrated, and therefore more fragile. Just when the ability to synthesize and understand the totality is most urgent, hardly anyone among us is able to do so.

I think this unprecedented complexity and growing inability to synthesize information across domains has profound implications for our politics.

We are in the midst of a crisis of authority in this country in which the legitimacy of and trust in our traditional institutions has been undermined. The church, government, the Supreme Court, mass media, corporations, schools—are all experiencing near-historic lows in public confidence. Some of this is recession-related no doubt (bank hatred), but much of it is cumulative. Here is the basic state of things:

image

One reason for the growing public distrust in our elite institutions is the seeming failure of these institutions to foster shared prosperity and the inefficacy of our political class to resolve any of our most urgent problems.

But I think the basic inability of most people to understand what the hell is going on has some explanatory power as well. I think this lashing out at traditional institutions of authority is a reaction against the impotency in the face of the staggering complexity of our modern economic and political systems.

This dawning of complexity really began accelerating with the rise of globalization and the end of the Cold War, and culminated in two events: 9/11, and the financial crisis.

Prior to the end of the Cold War and the rise of true global integration, Americans to some degree had been insulated economically, culturally, and politically. Suddenly the shades were drawn up and we rubbed our collective eyes and we saw a whole interconnected world out our window. Unimaginably complicated financial interactions, political and religious ferment all around, previously dispossessed and impoverished societies demanding recognition and prosperity and security; beguiling technological breakthroughs. We rode a tech bubble through this vertiginous era, and easy credit and rising asset prices, along with unmatched military supremacy, helped provide the veneer of insularity to which we were so accustomed.

The veneer was stripped away on 9/11, and the modern world—by way of the 7th century—flooded in for good. We were offered innumerable explanations for what had happened. It was our freedom; it was foreign policy blowback, it was poverty, religion, the consequence of dictatorship and political repression. Americans had no historical context with which to make sense of it, and no ability to synthesize these complex and interconnected social disciplines. How to understand the lineage of Islamic thought and the wellsprings of accumulated grievance and pathology running through the Arab and Muslim world? I never learned about that in school. What of the sectarian and ethnic divisions that had convulsed a quarter of the world for a millennium? Nope.

As benumbed Americans fell back on the ready-made tropes of demonization and jingoism and nationalism, our elites were equally clueless. They gave us TSA, torture, warrantless surveillance, CIA kill lists. The president said Iraq and we said sounds good. We spent the next several years fumbling through ill-conceived and ill-executed wars in deeply hostile places, and at home we were changing the relationship between state and citizen, likely forever.

Then the financial crisis hit. While were were still flailing about through our newly-discovered political vulnerability, our crippling economic vulnerability revealed itself. We discovered our collective economic fate was controlled by unscrupulous bravados who conjured up exotic financial instruments that none of them understood, based on bunk risk models, in order to realize short term profits and bonuses. There was a whole new set of explanations and buzzwords: tranches, CDOs, Glass-Steagall, Dodd-Frank, Basel III, TARP, flash crashes, Fannie Freddie. There was a whole new cast of villians. Banks, yes, but also federal debt, public unions, Wall Street, the federal reserve system, China, illegal immigrants.

We are all now faced with the same problem of synthesis that I struggle with in miniature on the blog. How to understand and explain why the fate of our financial well-being depends on whether the Eurozone monetary union is fortified? On arcane votes by the Slovakian Parliament or popular referenda in Greece. Why American job growth depends on raising nominal GDP targets. Why income stagnation, rising inequality, why the Tea Party, Occupy Wall Street, the Arab Spring, the rise of China and India. Where does education fit in? Health care? Immigration? And I hear those climate problems are still with us.

What of the hardening class lines and lack of income mobility in this country that entrap people by accident of birth? Is it regulations and marginal tax rates? Is it monetary policy? Is it our weak redistributive welfare state? Technological displacement? Unskilled immigration? Declining marriage rates? I have impressions but I don’t know! Who does?

So how have we reacted to this impenetrable thicket of complexity? Look back at the graph above. We lash out and rather indiscriminately blame all of our elite institutions of traditional authority. Faced with our own inability (with good reason!) to articulate substantive critiques and marshall sound arguments in support of our reflexive policy preferences, voters and politicians alike settle on simplistic platitudes, emotional appeals, identity- and heritage-mongering, slogans from perceived golden ages.

None of these phenomena are new, and of course it’s not the first time that bedeviling events have evolved beyond our capacity to understand them. But I believe this new brand of complexity we face, revealed emphatically by 9/11, globalization, and the financial crisis, has given us a slate of unprecedented policy challenges that admit of no apparent solution.

Attempting to synthesize these infinite data points across myriad academic sub-specialties may be futile for all but the freak geniuses among us; but alas, we are incorrigible pattern-seeking creatures and we’d rather settle on an impoverished narrative than no narrative at all (which likely describes this whole post). Politicians are as stymied and impotent as the rest of us. So they glom on to ready-made sophistry churned out by partisan think tanks, telling us it’s simple, we just do what we did before, we do what Reagan did thirty years ago, we regain our surety and our sense of agency by means of a mysterious alchemy involving American ingenuity and the rolling up of sleeves and squinting anew at the words of the founding fathers in search of hidden signposts.

I don’t mean to make this a partisan argument because I don’t think anyone is immune. But clearly a right-wing militarist political party with reactionary social instincts is especially vulnerable to all this. When you graft the profound changes in our culture on top of the political and economic morass, you have the recipe for a rather difficult Republican moment, which we are in the midst of now. What sort of basic ideological and cultural biases must one revisit and overturn in order to actually grapple with and assimilate these changes? Very few people are interested in that sort of skin-shedding. It will take a long time.

We have had amorphous protest movements on the right (Tea Party) and the left (Occupy Wall Street). Both have as their targets one or more institutions of traditional authority. In one way, the fall from grace of these instutitions is welcome, as they have proven themselves inept in dealing with the problems of compounding complexity.

But this loss of trust is also troubling. While these institutions are insufficient, they are also necessary. There is a worrying strain of nihilism running through this elite backlash. With the terminal undermining of trust in our institutions, the very idea of collective action in response to national problems takes a hit as well.

Politically and electorally, this will lead to a tumultous time. If our elite institutions are seen as suspect and effete, the politicians empowered to run and regulate them will be seen that way as well. This will induce a period of rapid electoral see-sawing as we flit from one partisan savior to another. This constant instability might make our institutions even less effective and further undermine public trust, leading to ever-more violent electoral swings and partisan rancor.

That’s a rather dystopian vision and I hope I’m wrong. But I do not see our reaction to the problems of network complexity and multivariate synthesis growing more sophisticated any time soon. In the meantime you can continue watching me lurch about for answers.

Bookmark and Share

The Fitful American Dream

Here is the chart that may sink President Obama’s reelection prospects:

The median American salary fell to $26,364 in 2010, the lowest real level since 1999. (The wage data includes part-time workers which is why it’s so low.) And there are 5.2 million people who had a job in 2007 but who didn’t earn a penny in 2010. 

Less employment and lower pay is decidedly not the way to win the future. Add in the sharp decade-long decline in total household wealth, and it’s extremely difficult to map out what "recovery" is supposed to look like. The prospect of what I believe is the first generational decline in the standard of living for average Americans is by far the most pressing political issue of the day, or it ought to be.

At the Republican debate the other night, Rick Santorum, of all people, had a very interesting comment which addressed a major underlying symptom of the crisis: 

Believe it or not, studies have been done that show that in Western Europe, people at the lower parts of the income scale actually have a better mobility going up the ladder now than in America.

He’s right. I’ve touched on this before, but here is a chart of relative income mobility among Western  nations:

image

This means that an American child born into the bottom fifth of the income distribution is more likely to remain there throughout his life than is his counterpart in every advanced European country except the UK. This is not a symptom of the global economic downturn, it’s an American (and British)malady. It’s often said that our system is designed to promote equality of opportunity, not equality of outcomes. But we do neither well.

So, just after citing this important data, in a surprise move, Santorum said that this clearly shows that the U.S. needs to undergo a major expansion of the social welfare state so we can reach Scandinavian-like levels of class mobility and economic dynamism. He then made an impassioned argument in favor of universal health care, free education from birth through university, and generous federal maternity and paternity leave, all paid for through a steeper progressive tax structure and higher rates.

Well, no, not exactly. In fact, in a remarkable real-time display of cognitive dissonance, he sort of came to the opposite conclusion, and started talking about all sorts of supply-side tax cuts for manufacturers:

I believe [the lack of income mobility in America] is because we’ve lost our manufacturing base. No more stamp "Made in America" is really hurting people in the middle.

And that’s why I focus all of the real big changes in the tax code at manufacturing. I cut the corporate rate for manufacturing to zero, repeal all regulations affecting manufacturers that cost over $100 million and replace them with something that’s friendlier, they can work with. We repatriate $1.2 trillion that manufacturers made overseas and allow them to bring it back here, if they invest in plants and equipment. They can do it without having to pay any — any excise tax.

Is this really true? That the collapse of American manufacturing has lead to a decline in income and class mobility?

Manufacturing employment certainly has fallen in this country; however, our total manufacturing output has continued to increase dramatically. This is due to productivity gains and to the fact that Americans work ever-longer hours.

image

For Santorum’s thesis to be right, European countries with better socioeconomic mobility must have even more robust manufacturing sectors than the U.S. This isn’t true at all, however.

image

The same forces that have eroded our manufacturing employment base—lower labor costs in Asia chief among them—have done the same for every advanced economy. It’s not like big manufacturers in the U.S. are packing up the plant and relocating to Denmark. Santorum’s prescriptions are incoherent. 

I really don’t mean to pick on Rick Santorum, who has plenty of Google-related problems of his own, and whose election prospects are such that the nation will never be turning its lonely eyes to him. He actually deserves credit for trying to bring attention to the hardening class structure in this country, which really undercuts the Republican mythos of America as a place where people can transcend the unlucky circumstances of their birth merely through various bootstrap manipulations.

Though Santorum acknowledges the problem, the fact that he is wholly incapable of drawing any useful conclusions is indicative of the Republican party’s larger failure when it comes to addressing the concerns and anxieties of the working and middle class. David Frum—almost alone on the right—has been lamenting this failure of his party for a long time. As the steady stream of rotten statistics pile up, Frum reminds us that economic mobility is not our only problem:

Conceptually, you could imagine a highly unequal society with rapid income mobility. You could imagine a society with little mobility, but in which all classes were getting richer at approximately the same pace. America, however, is a society of widening inequality, hardening class lines, and stagnating living standards for most people.

Eventually, sometime, I have to believe that ignoring or obscuring these problems will become politically untenable. We desperately need a two-party consensus in this country that at least recognizes the fissures and deficiencies in our social contract; then we can quibble about the remedies. But we’ll remain in big trouble so long as the spectrum of Republican solutions runs from covering the ears and shouting "American exceptionalism!" to the better-but-awful Santorum line that says if only we cut taxes and slash regulations we’ll be more like Denmark. Actual conservatives in this country really deserve better, and I hope they demand it soon.

Bookmark and Share

Immigrants Do Jobs Americans Can’t Do

In the manifestations of anti-Semitism throughout history, there’s always been an unresolvable tension in the purported nature of the Jewish threat: Either the Jews are said to be a weak, racially inferior, unwashed infestation who deserve to be marginalized and ghettoized; or else it’s that the Jews secretly control the world through various high-level conspiracies which allow them to pull all the levers of power of global finance, business, entertainment, and government. They’re all-powerful or sub-human; the fevered mind of bigotry can never seem to decide. 

I think there’s a similar theme at work when people try to explain the nature of the threat posed by illegal immigration. Either the invading hispanic immigrants are said to want nothing more than to sneak into this country so they can be lazy and not pay taxes and mooch off the American social welfare system; or else the same group is so industrious and self-sacrificing that they will steal all the jobs and put lower-skill Americans out of work. They’re not good enough to be here, and too good.

I for one am still eagerly awaiting a check in the mail representing my share of the spoils of global Jewish hegemony, but the reality of course is that in both instances, ethnocentric prejudices say far more about the expounders than the supposed objects.

The hard economic times have led, as they often do, to a coarsening nativist attitude in this country, and a renewed virulence directed at undocumented immigrants. We see this in Arizona’s recent anti-immigrant legislation, as well as Alabama’s win-the-future policy of terrifying its hispanic schoolchildren and making them cry. We saw it in last night’s GOP debate with the candidates duelling over who can come up with the most elaborate evil-genius design of a border fence, and a vision of border security that involves electrified barbed-wire, military troops, Predator drones—basically the Waziristanification of the southern United States. Can’t wait.

Predictably, there is growing evidence that the abstract instinct to marginalize hispanic immigrants is banging up against the very concrete labor needs of the harvest:

Jerry Spencer had an idea after Alabama’s tough new law against illegal immigration scared Hispanic workers out of the tomato fields northeast of Birmingham: Recruit unemployed U.S. citizens to do the work, give them free transportation and pay them to pick the fruit and clean the fields.

After two weeks, Spencer said Monday, the experiment is a failure. Jobless resident Americans lack the physical stamina and the mental toughness to see the job through, he said, and there’s not much of a chance a new state program to fill the jobs will fare better. […]

Spencer said that of more than 50 people he recruited for the work, only a few worked more than two or three days, and just one stuck with the job for the last two weeks….

Spencer said the people weren’t in good enough physical condition to work harder or longer hours and typically gave up when faced with acre after acre of tomato plants ready to be picked.

Farmers in Colorado are finding the same thing:

[Colorado farmer John Harold] has participated for about a decade in a federal program called H-2A that allows seasonal foreign workers into the country to make up the gap where willing and able American workers are few in number. He typically has brought in about 90 people from Mexico each year from July through October.

This year, though, with tough times lingering and a big jump in the minimum wage under the program, to nearly $10.50 an  hour, Mr. Harold brought in only two-thirds of his usual contingent. The other positions, he figured, would be snapped up by jobless local residents wanting some extra summer cash.

“It didn’t take me six hours to realize I’d made a heck of a mistake,” Mr. Harold said….

Six hours was enough, between the 6 a.m. start time and noon lunch break, for the first wave of local workers to quit. Some simply never came back and gave no reason. Twenty-five of them said specifically, according to farm records, that the work was too hard.

The story notes that most of the local residents Harold hired were actually Hispanic themselves, who perhaps at one time immigrated for agricultural work but have since gone on to better jobs in construction or landscaping. Here is the big upshot:

The broader story of labor in agriculture, economists and historians said, is that through good times and bad and across socioeconomic lines, people who find better lives off the farm rarely return.

Manual farm work sucks, and nobody who has had a taste of it ever wants to go back. Instead of promoting reverence and respect for those who do it, we elevate people in the public square who find more use out of demonizing a vulnerable outgroup.

To those, including several Republican candidates, who believe themselves to be against illegal immigration only because they are SO SUPPORTIVE of legal immigration, it must always be noted that for Mexicans who have no advanced skills nor any family connections in the U.S., there is no path to permanent legal residence whatsoever. No "line to wait in," no "doing it the right way," no opportunity to "respect the process." If people are so offended by the law-breaking which attends the process by which certain people contract out their labor in exchange for money—a scandalous concept, I know—they should stop fellow-travelling with the genuine bigots and demagogues, and instead advocate for aligning what is legal with what is right, and necessary. 

Bookmark and Share

The Limits of Presidential Boldness, Toughness, or Seriousness

JibJab

The biggest distortion you get from watching presidential primary debates is the idea that the president of the United States is totally unconstrained by countervailing political forces, and that there is no veto point within the system that can possibly stand up to the hurricane force of a tough president who is really serious about getting stuff done.

So you have the GOP candidates at the debate the other night promising all sorts of big crazy unilateral moves, wiping out the whole tax code, getting rid of financial regulation and health care reform, passing constitutional amendments, building giant border fences; and of course they alone will create millions of jobs, achieve national energy independence, produce a compliant Iran, etc. This is all presumably achieved through nothing more than sheer force of personality, or through applying sufficient boldness or toughness or seriousness to the problem, or through the candidate’s professed supernatural ability to build consensus “across party lines” as evidenced by that one time he got someone somewhere to agree to do something. It’s all a very bizarre view of modern presidential power and the legislative process, but I think it’s one that is pretty widely held among both media elites and average voters.

The GOP candidates’ omnipotent view of the presidency is particularly ironic given that since 2009 Republicans in Congress have adopted a (successful!) legislative strategy of using procedural tactics and institutional veto points to stymie the president’s agenda. You’d think the ongoing stellar success of this strategy would give presidential hopefuls a degree of humility before proposing sweeping changes. But it doesn’t.

Sometimes candidates deny that Congress has any ability to influence policy whatsoever. At the debate, Rick Perry told us of his “pretty bold plan” (boldness alert!):

…to put 1.2 million Americans working in the energy industry. And you don’t need Congress to do that. You need a president with a plan, which I’m laying out over the next three days, and, clearly, the intent to open up this treasure trove that America’s sitting on and getting America independent on the domestic energy side.

Basically boldness and plan-creation will be the hallmarks of President Perry’s legislative strategy. Good luck.

When not ignoring Congress altogether, candidates will sometimes appeal to the power of public opinion to get their crazy initiative through. For instance, when challenged on the ability of his goofy and discredited 9-9-9 plan to pass Congress, Herman Cain assured us, “It will pass because the American people want it to pass.” This may be termed the Tinkerbell Theory of Governance, where if only enough people believe something and clap their hands in unison, the belief will manifest itself. It’s a happy thought, but it’s not how the legislative process works.

A fresh example: the president’s Jobs bill. At first glance, there’s a lot to recommend it. The measure contains many proposals that Republicans have supported previously. The president “took it to the people,” hitting the road to sell it retail. The PR campaign worked: Americans now favor almost every single proposal in the Jobs bill; many of the components get 70% or 80% approval, even from Republicans. Should pass easily, right Herman Cain? It didn’t. It was blocked by a Republican filibuster yesterday. How can this be?

Notwithstanding the superstitous notions of the former pizza executive, there’s actually a growing body of research on the link between public preferences and policy outcomes. How much does public opinion affect government behavior? According to a large survey study (pdf) by political scientist Martin Gilens, the answer is: depends on what you mean by “the public”:

I find a moderately strong relationship between what the public wants and what the government does, albeit with a strong bias toward the status quo. But I also find that when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear virtually no relationship to the preferences of poor or middle-income Americans.

Though of course, being rich and powerful is no guarantee you can effect your preferred policy outcome. There’s a remarkably candid interview in the Washington Post with former Google CEO Eric Schmidt, on the subject of tech regulation and the growing sophistication of Silicon Valley’s engagement with the legislative process and with politicians in Washington. At one point Schmidt says he’s exasperated with Washington’s failure to increase the number of H-1B visas for highly-skilled foreign tech workers:

Now, the following arguments are so obvious, it’s hard for me to believe that anyone would believe that they’re false. These industries are full of very smart people. There are very smart people who don’t live in America. They come to America, we educate them at the best universities, they are smarter than I am, and then we kick them out. If they stayed in the country, let’s just review: They would create jobs, pay taxes, have high incomes, pay more taxes than the average American, and generally increase the GDP of the country…It’s the stupidest policy the government has with respect to high tech.

Then he gives a depressing public choice accounting of why nothing’s ever been done about this obvious problem:

In the current cast of characters, the Republicans are on our side, our local Democrats support us because our arguments are obvious, and the other Democrats don’t—because they don’t get it. The president understands the argument and would like to support us, he says, but there are various political issues. That’s roughly the situation. That’s been true for twenty years, through different presidents and different leaders.

Eric Schmidt has a far deeper understanding of Washington than do most of the GOP candidates. Between amorphous but powerful “political issues” and the inability of average Americans to influence legislative behavior, domestic presidential power is deeply circumscribed.

I know “Candidates promise stupid stuff in primary debate” is not exactly a shocking headline, but I think the sheer scope of stupidity in this case reflects an evolution in the cult of the presidency and the growing power of the executive in other areas. I think this ubiquitous assumption of the omnipotent president is, in part, bleed-over from the extreme deference Congress gives the executive in foreign affairs. You can understand how seekers of executive office and the public might assume that the same power that lets a president wage indefinite war and engage in torture with impunity and assassinate U.S. citizens abroad might transmute somehow to the domestic sphere. We can joke about the silliness or unworkability of some of these GOP proposals, but the assumptions about modern presidential power that animate them are pernicious and should be resisted. With boldness, of course.

Bookmark and Share

Are You Better Off Than You Were…in 1973?

Economists have been fretting about income stagnation in this country for a while. Tyler Cowen popularized it anew earlier this year with his ebook, titled, appropriately enough, The Great Stagnation. Here is Cowen explaining his thesis if you’re interested:

Here’s the graph showing steady real wage growth (in red) since WWII which abruptly ends in 1973. We’ve basically been treading water ever since:

There are many reasons for this income stagnation. Cowen argues that a main driver of our pocketbook woes is that the pace of innovation has slowed dramatically since the middle of the 20th century. By the 1970s, we’ve already got the contours of the modern industrial and consumer economy: cars, planes, televisions, kitchen appliances, penicillin, plumbing, mass literacy and education, cheap energy, etc. We sucked a century of economic growth out of these innovations. By contrast, since the 1970s the innovations we’ve seen have not lead to a comparable increase in our standard of living. We’re not getting richer as fast as we used to.

You might wonder, "But surely the rise of the internet and the amazing gains in communications technology since the 1990s have done us some good." And they have, but while that good has made it much easier to entertain ourselves and keep in contact with each other, it hasn’t really shown up in our paychecks. 

David Leonhardt echoes Cowen’s argument in an excellent and ominous piece in the NYT over the weekend. Leonhardt notes that while the Great Depression was not exactly a rosy time for the country, at least Americans of the 1930s were on the cusp of taking advantage of all of those transformative technologies and innovations listed above. Today, we have no analogous progressive boom to look forward to. Yes, we have plenty of high-tech gadgets that improve our daily lives in ways that don’t necessarily show up in GDP, but they’re not making us any richer.

The financial crisis has exacerbated all of these stagnation trends, with real median household income falling by 10% since 2007. It’s an extraordinary drop and the largest in decades. The crisis is compounded by longer-term problems which Leonhardt lists as "a decade-long slowdown in new-business formation, the stagnation of educational gains and the rapid growth of industries with mixed blessings, including finance and health care."

Leonhardt builds a pursuasive case, concluding that our problems "raise the possibility that the United States is not merely suffering through a normal, if severe, downturn. Instead, it may have entered a phase in which high unemployment is the norm."

He makes a meager attempt at an optimistic conclusion but abandons it quickly:

Maybe some American scientist in a laboratory somewhere is about to make a breakthrough. Maybe an entrepreneur is on the verge of creating a great new product. Maybe the recent health care and financial-regulation laws will squeeze the bloat.

For now, the evidence for such optimism remains scant. And the economy remains millions of jobs away from being even moderately healthy.

Tyler Cowen always makes the point that he believes our innovation stagnation is a temporary lull, and those pocketbook-enhancing breakthroughs and innovations will indeed rescue us from our current plight. Matt Yglesias also finds a small bit of optimism:

[O]ne good thing about relative American decline is that with every passing year it becomes more and more likely that something cool and useful will be invented in some foreign country…. [G]rowth in the develop[ing] world means that the circle of potential innovators is growing much larger. That at least creates the conditions under which we might see some good luck.

We can see that the developing world is now reaping the same gains that the U.S. experienced in the early part of the 20th century; catch-up growth propelled by the "low-hanging fruit" of mass education, urbanization, transportation infrastructure, etc. This innovation stuff is not zero-sum: It’s marginally better if breakthroughs happen here, but if they come from Bangalore or Shanghai, that’s pretty great too. We desperately need it.  

Bookmark and Share

Solution to Israel-Palestine: First, Assume No Hamas

You know the old economist joke:

A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist solution: “Let’s smash the can open with a rock.” The chemist solution: “Let’s build a fire and heat the can first.” The economist solution: “First, assume a can-opener….”

In graduate school we read a book called Palestinian Politics After the Oslo Accords, and while it offered some good analysis, we mostly made fun of it because somehow, amazingly, it only mentioned Hamas on two of its 254 pages. An entire book about modern Palestinian politics only mentioned Hamas twice, both of them throwaway references! The consensus of the class was that it’s pretty easy to talk about the Palestinian national movement and the way forward in the peace process if you elide a major impediment to both. First, assume no Hamas!

I felt the same way reading John Judis’s much-praised essay in the New Republic in support of the Palestinians’ bid for statehood at the UN. Judis accuses the U.S. of severe myopia in promising to veto the bid in the Security Council. He lays much blame for the failed peace process on the Netanyahu government, which he says essentially scrapped the entire negotiation framework built by previous administrations, instead deciding to go on a “construction binge” in the occupied territories in order to appease right-wing domestic constituencies. Judis suggests that the process by which the state of Israel gained UN recognition in 1948—with strong U.S. support—is eerily similar to the current Palestinian appeal. He argues that our opposition to the latter is not only hypocritical and craven, but antithetical to our interests in the region.

Andrew Sullivan nods approvingly at Judis’s essay, calling it “an elegant, factual, calm dismemberment of where the Obama administration has ended up on Israel-Palestine.” Sullivan blames the U.S. fumbling of this whole UN episode on the Obama admininstration’s capitulation to what he calls the “Greater Israel Lobby,” as well as the president’s inability or unwillingness to overcome “Netanyahu’s adamant resistance to any serious attempt at a two-state solution.”

Both men seem to be in agreement that if not for Obama’s lack of vision, pro-Israel lobby fundamentalism, and Netanyahu’s cynicism and bad faith, we’d be in much better shape. I agree with a lot of both mens’ analysis. But do you notice anything missing from them? There is hardly a mention of Hamas! And no mention of the fact that the Palestinian leadership is currently cleaved geographically, politically, and militarily. “Palestine” is now much more accurately described as the two competing statelets of Hamasistan and Fatahistan. Remarkably, this fact doesn’t merit mention in either Judis’s or Sullivan’s essay.

Judis’s 2200-word piece mentions the word Hamas exactly twice. The first is just to point out Hamas’s “important role” in the Second Intifada (along with “other radical Islamist groups”). The second Hamas mention is this:

By seeking to win statehood through UN recognition and assistance, the Palestinian leadership is visibly underscoring its commitment to a two-state solution; by doing that, and by rejecting a strategy based on terror and violence for one based on negotiation and multilateral assistance from the United Nations (which, again, was created to resolve exactly the kind of conflict that is occurring between the Israelis and the Palestinians), it is potentially marginalizing Hamas.

But is “seeking to win statehood” through the UN really a good mechanism for Hamas-marginalization? What happens the day after statehood when all of the core issues remain as unresolved and intractable as ever? What if the Abbas/Fayyad strategy of “negotiation and multilateral assistance” is shown to have gotten us no closer to the end of occupation or settlements or to real autonomy for the Palestinian people? Might that discredit the conciliatory approach and end up embolding Hamas even more? Judis doesn’t say.

Judis does make other oddly oblique references to Hamas. For instance, he scoffs at those who argue against the UN bid just because “some Palestinians still don’t recognize the right of Israel to exist.” I agree in principle, but again, who are those “some Palestinians?” A couple of bad eggs? Well no, they are the political and terrorist organization that won a sweeping legislative victory in 2006, whose official charter calls for the destruction of Israel, who currently governs nearly half of the Palestinian people after it took over the Gaza Strip by force in 2007, who continues cross border rocket attacks against Israeli civilians, and who is against the UN statehood bid that Judis wants the U.S. to support! Why not mention any of this?

Sullivan’s impassioned defense of Judis’s argument is even worse. He doesn’t mention Hamas at all, not once, let alone any hint of the current divisions in Palestinian society which make any talk of a unified cohesive “Palestine” ridiculous.

Look, I believe in the right of self-determination for the Palestinian people. I think continued occupation of Palestinian land is as unjust as it is unwise. I think Israeli settlement activity in the West Bank is illegal and immoral. I think anyone who believes they have a biblical deed to land comprising “greater Israel” is bonkers.

And I do agree with Judis and others, that the U.S. and particularly Israel really suffered a failure of imagination regarding this whole UN episode. The main argument here is that international recognition of a Palestinian state with defined or sort-of-defined borders is also a de facto recognition of a right of Israel to exist. There are a lot of creative scenarios that potentially follow from this, none of which Israel or the U.S. seem to have pursued.

But in apportioning blame for the ongoing failure to end the most intractable conflict in modern history, I am far more ecumenical than Judis and Sullivan. I prefer the view of Aaron David Miller, who has a more structural take on the problem:

There is no conflict-ending agreement now available to Israelis and Palestinians. The gaps are just too big, the suspicions too deep, and the regional environment too uncertain; and the capacity of an American (or any other mediator) to serve as an effective broker is just too implausible.

And Miller rejects the idea that the path not taken by the Obama administration would have yielded better results.

Did the president have an alternative? Could he have done things differently these many months? I have close friends, former colleagues whom I respect and admire greatly, who argue yes….

I don’t agree with any of this, of course. Neither Abbas nor Netanyahu would be willing to pay the necessary price required for a deal. But who really knows in the wonderful world of counterfactuals?

This is a rather depressing and fatalistic view, but I think the correct one. It’s true that Netanyahu is not a credible partner for peace. Neither is Hamas. The president of the United States cannot change that. There are insuperable structural impediments to peace right now, and wishing them away by eliding them from your analysis is not the answer. Assume No Hamas is not a negotiation strategy.

Bookmark and Share

Small Businesses, Engines, and Backbones

President Obama’s proposal to change the marginal tax rate of millionaires in some unspecified way has given the Republicans another chance to trot out one of their favorite tropes: millionaires and small businessmen are "job creators" and you can’t raise taxes on job creators.

I’ll save the debate about tax rates for another day. What I’m interested in is this Republican tick of calling all affluent people or small business owners "job creators," thereby inuring them against any adverse regulations or tax hikes. These classes are invariably described by politicians as the "backbone" or the "engine" of America.

Dana Milbank has a nice column today poking fun at this tick. It turns out Milbank himself has formed a C-corporation for his various journalistic activities on the advice of his accountant, and so is now legally a member of the venerated American small business job-creating nobility. Except not really:

I am a job creator.

I am not a job creator in the sense that I actually create jobs. I have never knowingly created a job, and my long-term business plan, approved unanimously by my board of directors, does not call for the creation of a single one. […]

Like the overwhelming majority of small businesses, I am a one-man operation. And, like most small businesses, I would not hire anybody even if the government dropped my tax rate to zero.

According to Small Business Administration statistics, based on 2009 Census data, 21.1 million of the 27 million small businesses in the United States are “non-employer firms,” which have no workers other than the owner.

This means, "when officials talk about protecting the "job creators" from tax hikes, they are mostly protecting a bunch of doctors, lawyers, freelancers, contractors and the like." Also, a huge majority of these non-employer firms, including Dana Milbank Inc., do not earn $1 million/year or anywhere near it. It’s true that the remaining 6 million or so firms which do employ people, well, employ lots of people. But that’s just to say that we have a big private sector in America and most people work in it. Arbitrarily venerating a certain sized firm, and fawning over their unique job-creating abilities, doesn’t really make sense, and it’s disingenuous too.

It’s important to distinguish between firms that employ people and firms that actually "create jobs." Most businesses fail and therefore destroy jobs, and established small businesses often have no interest in expansion. Most of the net private job growth comes from a very small handful of successful startups that soon grow large. Figuring out exactly where in the economy true innovation and growth comes from is not nearly so simple as just mouthing platitudes about the nobility of "small businesses" and their backbone- or engine-like features. I think when politicans do this they really are just going for a type of "regular guy" mood affiliation and appealing to certain cultural constituencies which enjoy a nice boot-strap narrative.

Because it turns out that actual small businesses aren’t even that prevalent in this country. Compared to the rest of the OECD countries, the U.S. does not have a large share of people working in objectively small enterprises, defined as those with 50 or fewer employees. In fact, we have the lowest share in the industrial world:

economy businesses 1to50

Conversely, we have the largest share of people working at firms with 250 or more employees. Matt Yglesias makes the point that this is actually a great thing. Look at who we’re grouped with in the chart above, and look at who tops the list. As a general rule, on any economic indicator list it’s nice to see countries like Denmark, Germany, the UK, and France nearby. If instead you find yourself clustered with Greece, Italy, and Portugal, it’s time to worry. An economy that features a lot of small businesses is not a very high-productivity economy, and probably not a particularly functional one either.

Luckily we don’t have that problem! But you wouldn’t really know it from watching politicians fall all over themselves trying to sing the plaintive, romantic ode of the American small-timer, as if all this economy needs is more corner stores or something.

Bookmark and Share

Mo’ Money, Mo’ Problems: Profit Repatriation Edition

I was asked the other day what I thought about the oft-proposed idea of a repatriation holiday for profit that U.S. companies are hoarding overseas in order to avoid paying taxes. Let them bring it back home with little or no tax penalty, the story goes, and then watch them inject all that new cash into the domestic economy and stoke demand and production and new jobs all over the place.

Lovely story, but first, forgive me for thinking that the lack of supply-side tax giveaways to corporations is not exactly the most serious problem facing the U.S. economy right now. But the real issue is, as the WSJ reports today, U.S. companies already have tons of cash on hand:

Corporations have a higher share of cash on their balance sheets than at any time in nearly half a century, as businesses build up buffers rather than invest in new plants or hiring.

Nonfinancial companies held more than $2 trillion in cash and other liquid assets at the end of June, the Federal Reserve reported Friday, up more than $88 billion from the end of March. Cash accounted for 7.1% of all company assets, everything from buildings to bonds, the highest level since 1963.

The article finds a spokesman from a leading oil and gas company to say—shocker—that tax-free repatriation of corporate profits is an awesome idea, under the rationale that "whatever companies use the money for—such as investments, dividend payments or stock buybacks—the U.S. would benefit by having the funds come home. ‘That’s money that’s going to be put into productive use in the United States,’ Mr. Agosta said."

Well as Chief Financial Officer, Mr. Agosta would naturally be happy with more dividend payments. But surely the fact that these companies are already sitting on piles of cash means that giving them slightly larger piles of cash isn’t going to change their investment/production/hiring strategy very much.

The main problem is that your production/hiring strategy changes only when customer demand for your product changes. But when your customers are out of work or have stagnating wages, or underwater mortgages or major household debt, it doesn’t matter how much cash your corporation has, there’s no one to buy your stuff and no reason for you to invest in expansion or new hiring.

It is true that even using a small portion of the cash to pay out dividends to Mr. Agosta and other affluent shareholders may have some salutory downstream demand effects. But "give rich people more money so it can trickle down" has been tried before, and despite it being the central, and only, economic idea of one major U.S. political party, it is not a very good growth strategy. Yes, even if you start calling all the rich people "job creators."

As Matt Yglesias notes, it is the gap between potential and actual output that is killing us right now. In other words, a major fall-off in consumption and aggregate demand. Here’s the graph:

That gap between the lines is why companies aren’t producing more stuff or hiring more people, and magnanimously giving them a giant tax windfall wouldn’t change that. Why would we think they’d do anything other than hoard it as they’re doing now?

I’m no fan of our onerous statutory corporate tax rate (Statutory being the operative word: few pay the full statutory rate.) There is certainly a place for major corporate tax reform within the context of a system-wide tax reform effort. But right now, we can either get used to the "new normal" of depressed output levels, or else we get policymakers to take advantage of historically low borrowing rates and make up for some of the slack private consumption with increased public spending. But just arbitrarily deciding to suspend all the tax rules every so often to give corporations cash they don’t need and won’t use, doesn’t make a whole lot of sense as a sound growth strategy.

Bookmark and Share

The Arab Spring and Nervous Dictators

It is amusing to watch the surviving Arab dictators scramble to stave off the contagion of unrest and instability that has transfixed and transformed the region. 

Today we see Saudi Arabia getting tough with the U.S. over the upcoming Palestinian bid for statehood at the UN. If the U.S. vetoes the bid, the Saudis have threatened to  downgrade the Saudi-American relationship

Saudi Arabia would no longer be able to cooperate with America in the same way it historically has. With most of the Arab world in upheaval, the “special relationship” between Saudi Arabia and the United States would increasingly be seen as toxic by the vast majority of Arabs and Muslims, who demand justice for the Palestinian people.

Saudi leaders would be forced by domestic and regional pressures to adopt a far more independent and assertive foreign policy. Like our recent military support for Bahrain’s monarchy, which America opposed, Saudi Arabia would pursue other policies at odds with those of the United States, including opposing the government of Prime Minister Nuri al-Maliki in Iraq and refusing to open an embassy there despite American pressure to do so. The Saudi government might part ways with Washington in Afghanistan and Yemen as well. 

Of course, the "special relationship" between Saudi and the U.S. has always been seen as toxic in the Arab world, just like the special relationship between the U.S. and Egypt, Jordan, Tunisia, et al. Also, the "vast majority of Arabs and Muslims" have been demanding justice for the Palestinian people for many years prior to this op-ed being published. The Arab Spring hasn’t changed any of this. So what has prevented Saudi leaders from embarking on this new "independent and assertive" course before?

It won’t shock anyone to learn that Arab publics on the whole are not huge fans of America, in large part because they see us propping up their oppressors and view us as complicit in their oppression. Yes, these regimes made a nod to public opinion by playing a neat double game: Egypt under Mubarak presented itself as a champion of the rights of Palestinians and keeper of the peace process—a position he used to justify his rule to the West for decades. But in reality he never did anything tangible to improve the lives of the Palestinian people or to hasten a peace accord, and he was glad to help enforce the Israeli seize on Gaza for many years.

In the case of Saudi Arabia, its double game consisted of exporting extremism by lavishly funding Wahhabist madrassas abroad, while at the same time joining the U.S. in counterterrorism efforts by making its own country one of the most inhospitable places on earth for al-Qaida and related groups. We also allowed these Arab leaders to present the face of solidarity and resistance and confrontation to domestic audiences in Arabic, while giving Western audiences and leaders an entirely different line. This can only go on for so long before it breeds cynicism on both sides.

Saudi’s belated threat to reassess some basic tenets of its foreign policy is not evidence of strength, but of weakness and fear. Dictators do not scramble to align themselves with public opinion unless they absolutely have to. Al-Faisal’s piece generously concedes that this shift is motivated by "domestic and regional pressures." While he is surely right about that, he’s wrong about the effect such a shift will have on his people. It’s true that pro-U.S. dictators in Egypt and Tunisia have not faired well in the Arab Spring. One could see how the surviving dictators in the region might take the lesson as, "We should be more hostile to American interests and that will keep our people happy and quiet." But of course, popular uprisings in Iran and especially Syria have exploded that thesis. Being a platinum member in the axis of Zionist and imperialist resistance is not helping Bashar al-Assad very much right now, and I don’t think Ayatollah Khamenei sleeps so soundly either these days.

If Saudi Arabia really believes it can hide its own shortcomings by deflecting blame to the U.S., or that a strategic shift of policy on peripheral issues like Afghanistan or the composition of the Iraqi government will make the Saudi people forget that they have no political freedom, good luck. The Saudi monarchy is better insulated from mass popular uprising than most, because Saudi Arabia is not a poor country. But we have learned that nothing quells an awakened and restive populace hungry for democratic change except for one of two things: a brutal murderous government crackdown, or regime-ending political revolution. If the day ever comes, there’s no doubt that the Saudi monarchy will choose the former, as it did by proxy in Bahrain. But petty threats of a U.S. relationship downgrade, or the tired tactic of conspicuous Palestinian flag-waving, will not forestall such a reckoning. I for one look forward to it.

Bookmark and Share

What DOES Rick Perry Struggle Over?

I strongly oppose capital punishment, so naturally I found it revolting when the audience at last night’s GOP debate broke into hearty applause when informed that the state of Texas under Rick Perry has executed 234 people:

Perry notes that he has "never struggled at all" with the idea that one of those inmates might have been innocent. But of course, one was innocent. If you’re unaware of the case of Cameron Todd Willingham, do read this piece by David Grann published last year. It’s one of the most absorbing pieces of journalism I’ve ever read. How anyone can read this and then blithely assert that they’ve "never struggled at all" with the question of wrongful execution is well beyond my moral comprehension. 

Ta-Nehisi Coates writes that we should not be at all shocked by this sentiment from Perry, nor from the approving audience reaction; after all, this was a Republican debate in a country that strongly supports the death penalty. I get that. One is of course tempted to point out the vertiginous dissonance exhibited by a man and a party that thinks everything the government does is unconstitutional except for the murdering of citizens, but really, the electorate doesn’t care about dissonance.

No, it’s the relishing that gets me, and I imagine it would get me even if I were a supporter of capital punishment. It’s the total absense of doubt or self-reflection in the face of woefully incomplete or conflicting information. Surety under such conditions is a shameful vice and a mark of deficient character. Rick Perry and those audience members treat it as high virtue, laudable, strong, decisive. It’s disgusting.

I admit I am not familiar with the brand of conservatism that says doubt is to be shunned, that says bloodlust and hubris are worthy proxies for statesmanship and leadership; the conservatism for which proudly asserting that you "never struggle at all" with questions of imperfect justice and state power over life and death is some sort of perverse proof of presidential fitness rather than an automatic disqualification. It’s been said many times, but the Republican party that embraces these things is not ‘conservative’ in any way. It is a psychopathological support group for the expression of distilled cultural grievance and anxiety and bravado.

Look, I understand the case for capital punishment, but in my view if you have decided that you are for it, you should be for it just barely. If you find yourself in an audience where you are whooping over the awesomeness of the very idea of state execution, something has gone awry. But either way, you must have the moral courage to reckon with the Cameron Todd Willinghams of the world. The state-sanctioned murdering of innocents is an ineluctable result of the pro-death penalty position. To me, this decisively seals the case for the other side. But if it doesn’t seal it for you, I would hope that your conception of justice and humanity at least leads you to struggle with it. After all, if you do not struggle over Cameron Todd Willingham, what DO you struggle over? Rick Perry signed the death warrant. What does Rick Perry struggle over?

Bookmark and Share

Brooks: Government Should Only Do the Basics ie., Everything

In his column today, David Brooks claims to agree with Rick Perry that what ails America is too much government and not enough good ol’ pioneer American vigor:

The Republicans, and Rick Perry in particular, have a reasonably strong story to tell about [American] decline. America became great, they explain, because its citizens possessed certain vigorous virtues: self-reliance, personal responsibility, industriousness and a passion for freedom.

But, over the years, government has grown and undermined these virtues. […] The current task, therefore, is, as Rick Perry says, to make the government “inconsequential” in people’s lives — to pare back the state to revive personal responsibility and private initiative.

There’s much truth to this narrative.

Despite Rick Perry’s truth-telling, Brooks bravely insists that Republican small government orthodoxy is “necessary but insufficient” to restoring American greatness:

There are certain tasks ahead that cannot be addressed simply by getting government out of the way.

So in which areas does Brooks think we need a residual government involvement, consistent with his and Perry’s desire to make government “inconsequential” in people’s lives? Brooks lists three. They must be pretty narrow obligations, so as to encourage all those “vigorous virtues” that have been snuffed out through government suffocation. Let’s take a look:

In the first place, there is the need to rebuild America’s human capital.

Hmm, sounds sort of expansive. Maybe by “capital” he means DC and he wants to just reseed the National Mall or something.

It will take an active government to reverse this stagnation — from prenatal and early childhood education straight up through adult technical training and investments in scientific and other research.

Well ok, no government except for whole-life (and prenatal?) education and training and scientific research investment. Fine. But nothing more than that please, because remember there is “much truth” to Rick Perry’s idea about insidious government overreach destroying America.

What’s next on Brooks’s list? Must be something like paving roads. No one can argue with good ol’ government road paving.

Then there are the long-term structural problems plaguing the economy…[M]iddle-class wages have been stagnant for a generation. Inequality is rising, and society is stratifying. Americans are less likely to move in search of opportunity. Social mobility has been flat for decades, and American social mobility is no better than European social mobility.

All big problems, to be sure. But nothing the vigorous ingenuity of the American spirit can’t handle, right?

Tackling them means shifting America’s economic model — tilting the playing field away from consumption toward production; away from entitlement spending and more toward investment in infrastructure, skills and technology; mitigating those forces that concentrate wealth and nurturing instead a broad-based opportunity society.

Whoa, slow down Trotsky. A government-led shifting of America’s economic model? Tackling inequality, restructuring consumption incentives, technology and infrastructure investment? And I assume “mitigating those forces that concentrate wealth” is Brooksspeak for progressive redistribution. That sounds like a lot of stuff! But there’s one more little task:

Finally, there is the problem of the social fabric. Segmented societies do not thrive, nor do ones, like ours, with diminishing social trust….family structures won’t spontaneously regenerate without some serious activism, from both religious and community groups and government agencies.

So to recap, David Brooks agrees with Rick Perry that government needs to be made inconsequential in American life, except for three minor areas:

–womb-to-grave education and labor training

–a complete national economic restructuring touching upon every area of our economic life

–a program of national social engineering to foster communitarian behavior and the augmenting of American family life

But that’s definitely it! There’s nothing else government should do except for intervening in education, labor markets, something to do with prenatals, consumption behavior, the amount of trust in our hearts, the macroeconomy, the microeconomy, science, inequality, the social fabric, and family structuring. Inconsequential!

Brooks actually seems to think he is buttressing Rick Perry’s anarchic vision rather than demolishing it. This column would be great if he just elided the whole ridiculous first part where he tries to yoke his substantive ideas to Rick Perry’s skeletal ideology. Rick Perry agrees with absolutely none of this (save the part about single parenthood I guess). In fact, no Republican does.

Brooks concedes that Republicans have “done almost nothing to grapple with and address these deeper structural problems,” but he doesn’t say that there are many Democrats, including the president, who would be glad to sign up for his renewal plan, and indeed the White House has already endorsed or proposed many similar ideas. I await his next column which no doubt is an enthusiastic endorsement of Obama 2012.

Alas, as Jon Chait put it so well recently, after David Brooks writes something critical of Republicans, he tends to quickly “revert to the posture of even-handedness, sadly laying blame upon both sides with an emphasis on Democratic culpability.” I can’t sum up the Brooksian dilemma better than Chait:

One could write a great analysis of the reportorial, sociological, and ideological pressures of being David Brooks, and how those forces require Brooks to revert to a political equilibrium regardless of world events. I sort of wish we could clone Brooks so that the other one could write that piece. He’d do a masterful job of it.

Bookmark and Share

The Individual and the Collective in Rick Perry’s Oeuvre

Rick Perry has deftly (and quite tardily) positioned himself as the reigning champion of states’ rights and the so-called Tenther movement, which holds that most everything the federal government does is unconstitutional and should be left to the states. In his radical manifesto published last year, Fed Up, he reveals his antipathy to all sorts of federal functions: education spending, federal bank regulation, environmental regulation, Medicare, Medicaid, Social Security. Of course all of these positions are contingent upon the demands of good ol’ political opportunism:

In one of his more well-publicized shifts, Mr. Perry proclaimed that gay marriage was an issue for individual states to decide, but backtracked in recent weeks and now says he supports a federal amendment banning gay marriage. He has also signaled support for various federal actions to restrict abortion rather than leaving the issue to states. And he used $17 billion in federal stimulus money to balance the state’s last two budgets.

But hypocrisy aside, I will attribute to him his stated maximalist position:

“From marriage to prayer, from zoning laws to tax policy, from our school systems to health care, and everything in between,” he wrote, “it is essential to our liberty that we be allowed to live as we see fit through the democratic process at the local and state level.”

But the question today is, is that really the essence of liberty? To be free to be coerced by your local and state government?

The Libertarian party does not think so. In its platform it does not distinguish between levels of government when it comes to encroachment on individual liberty:

[A]ll political parties other than our own grant to government the right to regulate the lives of individuals and seize the fruits of their labor without their consent.

We, on the contrary, deny the right of any government to do these things, and hold that where governments exist, they must not violate the rights of any individual….

In this view, there is the individual and arrayed against him and his inviolable liberty is government, period. There is nothing special or priviliged about the liberty one enjoys within arbitrary geographic and legal jurisdictions we call “states.” To Libertarians, the regulation of private lives and the seizing of fruits of labor are not made appreciably more tolerable or noble by the fact that it’s being done from Perry’s state house instead of the White House.

Perry is clearly no libertarian. His view, consistent with the Tenther cult, is that there is something necessarily odious and despotic about federal coercion, but something pure and patriotic about state and local coercion. So Social Security is a Ponzi scheme, but retirement pensions for Texas public employees, partially paid for by taxpayers, is fine. Likewise, the EPA is some kind of envirofascist hotbed, but the Texas Commission on Environmental Quality does all sorts of things, all of which are presumably ok with Rick Perry.

I understand the philosophical case made by the Libertarian party. I disagree with a bunch of it, but I understand it. They have an ideological committment to protect the natural rights of the individual as against all collectives. They are not out to discover best governing practices or to optimize the efficacy of public policy. Presumably they think that their societal scheme is superior to all others, but the principle of individual inviolabity ultimately overrides any questions of practicality or efficacy. Fine.

The purist Rick Perry/states’ rights view I do not understand. (Leaving aside, of course, those areas in which that purity falls risibly short.) They do not claim to be individual rights champions. They openly say that their conception of liberty is endowed and ensured by a collective, in this case, the thing we call states. Perry says “it is essential to our liberty that we be allowed to live as we see fit,” but he doesn’t stop there, for his type of liberty is only derived “through the democratic process at the local and state level.”

But surely one’s definition of liberty should be universal, right? It can’t possibly be limited to the existence of a certain type of sub-national governing mechanism. Singapore, for instance, has no meaningful sub-national governance. Does this mean Singaporeans can never hope to know the sweet essence of liberty?

If, like Perry, you’ve already admitted that divining the collective will is a necessary precondition for liberty, then how we define the size and scope of that collective should not be a matter of dogma, but of pragmatism and efficacy. To pick a highly contingent and arbitrarily-sized collective—a “state” or a “municipality”—and say that it’s not just the optimal unit of collective human governance but the only means by which an individual can obtain liberty, makes absolutely no sense to me. Once you say collectives are necessary, you should be agnostic on the question of which collectives are best able to deal with various policy problems. It seems beyond obvious to me that sometimes the state or local collective will innovate, incubate, and administer best practices, and sometimes the federal collective will be the place to turn for optimal outcomes, efficiencies of scale, etc. Why people are hostile to that basic idea is tough for me to understand. We can and should have big debates about where we think problems will be best dealt with, but to say the answer is “always the states” because, well, a state’s a state, doesn’t seem to me to be the best strategy.

Here’s a good example. Matt Yglesias calls attention to one Cato scholar’s view that federal monitoring and tracking of hurricanes is illegitimate. Ok. So Matt wonders what the likely outcome would be if federal funding was eliminated for the National Weather Service and for all related weather-disaster entities. The abandoned functions, being really useful and important, would be picked up by someone else. Who?

Maybe the Gulf Coast states who are most often afflicted by hurricanes would form a consortium to do the monitoring and there would be constant disputes between the members about what constitutes a fair share of the budget to contribute. States further up the northeastern coast that are only rarely afflicted would try to free ride. Hurricanes asides, instead of having a single National Weather Service tracking the weather, maybe we’d have three or four private firms all reproducing each others’ data and selling it to clients. We’d have systematically higher costs and maybe (?) a slightly higher quality product.

I think the state-based or state consortium scenario is most likely. But would Louisiana or Mississippi’s weather monitoring system be prone to cutbacks during economic downturns? Would they stop monitoring after the threatening weather had passed their jurisdiction? Who would pay the overtime if Louisiana’s weather monitors had to stay late to keep New Jersey residents abreast of the latest data? Lots of collective action problems to sort out here.

When it comes to the question of whether hurricane monitoring should be a federal function or a state-based or private function, the relevant policy question isn’t “which view most comports with my philosophical biases or my idiosyncratic interpretation of the 10th amendment,” it’s, “which option will do the most reliable and cost-effective job at monitoring hurricanes.”  As Matt says, we have a well-functioning federal agency that does this, “it seems to work quite well and be useful to people, to municipalities, to states, etc. So why complain?” Why indeed.

Despite the current polls, I really don’t think Rick Perry will win the nomination. He hasn’t been a national politician long enough, and because he’s not very smart, he’ll blow it. But his Tenther legacy of irrational federal antipathy will surely live on.

Bookmark and Share

Kurdistan Prognosis: There Will Be Blood

I’ve been remiss in my self-assigned responsibility to be the generalist political blogosphere’s foremost unknown source of all things Kurdistan. I suppose this is similar in scope to the Flight of the Conchords’ ambition to be "New Zealand’s fourth most popular guitar-based folk-parody duo."

Anyway, in the past, I haven’t been particularly sanguine when it comes to the resolution of the final status of disputed territories in the north of Iraq. That’s not changing today.

As I noted here and here, these disputed areas—which lie within the three border provinces of Ninewa, Kirkuk, and Diyala—contain a volatile religious and ethnic mix of Arabs, Kurds, and Turkmens, all having powerful internal or regional advocates, all wary of administrative control under the other, and all feeling they have some historical or demographic claim to the land. A constitutionally-mandated referendum to decide whether these areas will be incorporated into the Kurdistan region or remain under Baghdad’s administrative control has been delayed many times. The various factions continue to argue over the details of implementation, while Baghdad and the Kurdistan Regional Government continue to navigate the fraught questions regarding the precise nature and scope of Kurdish "autonomy" in the new Iraq.

The real prize is Kirkuk, which is believed to contain 40% of Iraq’s total oil reserves. Although all oil revenue is shared between Kurdistan and the rest of Iraq according to a defined ratio based on population (17/83%), Baghdad is keenly aware of the Kurds’ longstanding nationalist ambitions, and with Kirkuk’s oil under its administrative control, the dream of an independent Kurdistan becomes a whole lot more economically viable.

Over the decades there has been much bloodshed over these issues of demography and oil in Kirkuk. In Foreign Policy, Sean Kane notes that the mutual antipathy is alive and well, and with the ongoing withdrawal of the U.S. military, it’s likely that more violence is on the way:

The United States’ military participation in the 22 combined checkpoints across the disputed territories in northern Iraq formally ended on August 1. This was an important event because peacekeeping and conflict prevention in Kirkuk and other territories disputed between Baghdad and Erbil have frequently been cited as among the key stabilizing roles that the U.S. military plays in Iraq. And the tripartite Combined Security Mechanism (CSM) of the U.S. military, Iraqi Army, and Kurdish peshmerga did increase coordination between Iraqi government and Kurdistan Regional Government (KRG) security forces while serving as a credible crisis management mechanism. It now faces a leap into the unknown without the U.S. glue that has held it together so far.

Kane notes that there have been a series of clashes in the disputed areas between the Iraqi Army and the Kurdish peshmurga, with each attempting to use military force to establish new facts on the ground, pushing the territorial and administrative boundaries in their favor ahead of any future referendum. Kane says that the Kurds may be wise to push the envelope now, as their political power and military clout may be at its apex. The Kurdish parties represent a crucial piece of Prime Minister al-Maliki’s governing coalition, and for this reason al-Maliki has been reticent to challenge or criticize Kurdish peshmurga actions in the disputed territories. And while in the past the Kurdish military forces have been seen as better trained and equipped than the Iraqi national forces, the gap has been narrowing and the two are now near parity. 

A descent into violence so soon after the U.S. military’s departure would really be a terrible development, and would likely augur the reactivation of all sorts of sectarian strife throughout the country. We saw some of this just this week, which is dour reminder that there isn’t exactly a shortage of homicidal grievances about the place.

The issue in the north is the same as it ever was: The Kurds not only have a century of repression, forced displacement, and genocide to validate their territorial claims, but they also have legitimate constitutional grievance regarding the interminable delays in the census-and-referendum process. For their part, the minority Arabs and Turkmen in the disputed areas are very wary of waking up one day and finding themselves under Kurdish jurisdictional control. Baghdad is also worried that this whole process will turn out to be a de facto Kurdish oil grab, inching them ever-closer to their dream of full independence. Meanwhile, regional powers Iran and Turkey, with their own restive Kurdish populations, are not at all interested in seeing the Kurds of Iraq accrue any more power or autonomy than they already have.

I feel like I end all of my Kurdistan posts with the same ominous resignation; but once again, the Kurdish question is as vexing as ever, and particularly with diminishing American involvement, I find it very unlikely that the final dispensation of northern Iraq will come without more bloodshed.

Bookmark and Share

The Dream of the Forever Majority

Ross Douthat had a very astute column yesterday on something that’s been bothering me as well; how national politicians govern as if the dream of a permanant realignment of the electorate in their favor is always right around the corner:

This dream has hovered over national leaders from Richard Nixon and Ronald Reagan to Bill Clinton and Newt Gingrich. But it has loomed larger in the last decade, as our politics have grown more polarized and our country has suffered through a series of dislocations and disasters. Events like 9/11 and the Great Recession have persuaded partisans on both sides that a dramatic realignment is imminent; the breadth of the ideological divide has convinced them that it’s necessary. […]

Thus the assumption, on the left and right alike, that every presidential election is the most important in our lifetime — except for the next one, which will be more important still. […]

The dream of realignment has become the enemy of [political compromise]. It inspires politicians to claim sweeping mandates from highly contingent victories…. The losers, meanwhile, wax intransigent, while hoping for a realignment of their own. After all, why cut a deal today if tomorrow you might overthrow your rivals permanently? […]

None of this means that our parties need to give up their deep convictions, their grand plans, or their hopes of winning an enduring mandate.

But in the wake of the weekend’s downgrade, we need them to govern as though that final victory might never quite arrive.

This is good stuff. Washington is often accused of suffering from the dreaded “short-termism” with its inability to plan or focus on anything outside of a couple years’ time frame. Part of the reason of course is that we have a ton of elections every few years, and being a major officeholder seems to be enticing enough that no one really wants to give it up once they’ve got it. But most incumbents are in very safe seats so political survival can’t explain all of it.

No, I imagine Douthat is right that there is an apocalyptic tinge to the fevered anticipation and triumphalism of political operatives and officeholders. They really think that if they just play everything perfectly this time around, then the next election may just be the final decisive battle in the great partisan war for America’s soul. In their minds the zeitgeist is always forever on the brink of realizing that it was their party, all along, whom they really loved.

I remember Republicans and pundits confidently assert that the Bush victory in 2004 heralded an evangelical awakening that signalled a new normal in American politics. Four years later that was over of course, and the Democrats’ decisive triumph of the White House and Congress was the dawning of a new liberal age, buttressed by permanent ethnic demographic shifts and the newly-emboldened  youth vote. Well, that’s kind of over with as well.

Now we’re back to the trenches, with the White House and all of Congress up for grabs next year. We’ve learned that evangelicals can’t move elections on their own; and on the other side, while hispanic demographics are to some extent destiny, and young attitudes on various social issues will be dispositive, it’s not always easy to predict how all the spoils will be distributed.

I think one of the most recent examples of fatal short-termism was in 2009, when Republicans famously refused to negotiate or compromise during the health care reform debate. They calculated that total opposition and obstruction would help them in the upcoming midterms. They were certainly right about that, but in return for their sweeping House victory they got a comprehensive universal health law which they had no hand in influencing or shaping. Why did they trade seemingly transitory gains in one midterm election for a major defeat on a historic piece of substantive policy?

I think it’s because Ross is right: they never, ever believe the gains are transitory. They genuinely think there is a zero-sum struggle out there, and if they just accumulate enough points they’ll be crowned champion of the public square for good, their political enemies having gone the way of the Whigs. No one ever comes into power thinking that they’ve just inherited a very contingent, unsteady majority that is just as likely as not to be coughed up in a couple years.

Here’s a graph showing political party control in Congress and the White House:  PartyControlDebt

The presidency is very volatile. In Congress there are some sustained periods of party domination (I did not realize that the Democrats controlled the House and Senate for a quarter century beginning in 1955), but, whatever caused that prolonged stability is clearly not operative any longer (and this chart ends in 2007).

It’s just a fact that a first-past-the-post voting system militates toward a two-party consolidation, and in the long run, the parties adapt their platforms such that something near a 50-50 split is likely. As Ross notes, true permanent transformative shifts are quite rare; and in any event, the presidency seems to be exempt from them. What a party assumes is a historical realignment is most likely a very temporary triumph which will be stifled and attenuated by powerful veto points thoughout the rest of the system. I don’t know how to get politicians to govern as if this were the case; as long as they still have visions of permanent revolution and ultimate triumph, there isn’t much reason to be optimistic about the political system’s ability to forge collective action on big problems.

Bookmark and Share