Monday, February 27, 2012

Citizens United and the Legitimate Question of Campaign Finance

Bill Maher is in the headlines for announcing that he will make a $1 million gift to the pro-Obama SuperPAC Priorities USA Action. The Daily Beast's Llyod Grove has a piece on Maher, who expands on what motivated his decision:
No, I think it’s practical,” the comedian told me Friday afternoon when I accused him of being a political romantic. “The difference between a country governed by Obama and one governed by Rick Santorum is worth a million dollars to me. Not just because I think the country would be better, but because I think it would actually better protect the money I have left.” (emphasis mine - JMG)
One of my biggest frustrations with liberals is the habit of ignoring the complexity of issues out of hand, simply because conservatives hold an opposing view. Campaign finance and the Citizens United v. Federal Election Commission decision is, in my opinion, an acute example of this.

The issue of money and speech is complex, and there are a number of valid viewpoints depending what conditions you value. Simply stating "corporations aren't people" is not an actual argument, and does not really approach the problem that I think Mr. Maher has raised here. Yes, he has a lot of income and yes, I am very concerned about the issue of moneyed interests dominating our political economy. But if Mr. Maher (or any individual) has the means, and feels it is worth the investment, I am not sure what principle one would call upon to deny a person from making whatever donation he or she would like to make to his or her preferred candidate.

Just to be clear; I am very concerned about the issue of certain (rich) people's speech being worth more than others, simply because they donate a lot of money. But that does not immediately imply that we should deny people the freedom to make the same choice that Mr. Maher has made.

You Don't Say?

I will be honest in that I do not particularly like Maureen Dowd's columns. To me, her writing jumps off the page as successive attempts to be clever rather than clear. That being said, her latest piece on the Republican primary and the party's exceptional need to placate its most radical constituentcies has a collection of excellent quotes. My favorite:
“Republicans being against sex is not good,” the G.O.P. strategist Alex Castellanos told me mournfully. “Sex is popular.”
Who knew?

Sunday, February 26, 2012


Just a little celebratory post, with a bit of an oldie but a goodie: Atul Gawande's excellent "Cowboys and Pit Crews." Thanks for reading!
Many doctors fear the future will end daring, creativity, and the joys of thinking that medicine has had. But nothing says teams cannot be daring or creative or that your work with others will not require hard thinking and wise judgment. Success under conditions of complexity still demands these qualities. (emphasis mine - JMG)

Saturday, February 25, 2012

The Inmates Run The Asylum

"That's why [Obama] wants you to go to college. He wants to remake you in his image,"
I'm not sure how this is a criticism. Being a Columbia graduate, Harvard Law Review President and University of Chicago Constitutional Law professor would be pretty nice.

Friday, February 24, 2012

In Which I Feel Bad for Mitt Romney

Mitt Romney gave a speech today at Detroit's Ford Field, and the optics are woefully bad for the candidate. Liberal news outlets are picking this up as yet another example of Mr. Romney's glaring enthusiasm gap.

Now, Mr. Romney's alleged inability to fire up conservative voters has been well documented, but I think this dog ain't barking. According to the Detroit Free Press, the Romney campaign and the Detroit Economics Club jointly organized the event, and were quite cognizant on the optics issue. The only reason they did not use a smaller venue was that it sold out:
They scrapped three earlier plans: one to have Romney stand in the end zone, speaking up to guests seated in the stands; another to have him on the sidelines near midfield, speaking to guests seated in the stadium's middle sections, and an initial plan to hold the event at the Westin Book Cadillac, which quickly became oversold. (emphasis mine - JMG)
I mention this only because it is unfortunate how we're more focused on how Mitt Romney looks, rather than what he's saying.

h/t TPM

Thursday, February 23, 2012

Policy and Incentives

The United States' Federal Budget has many problems. They are compounded by Republican party's a priori allergy towards taxes, irrespective of context. On that note, Ezra Klein talks some sense about budget policy, and the radicalism of the current state of the Republican party's fiscal proposals:

You can’t look at that and say revenues have nothing to do with our current deficits.

Which isn’t to say it’s not difficult for elected Republicans to admit that taxes need to rise. The Club for Growth might primary you. Grover Norquist will come after you. But being responsible is difficult. No Democrat who says Medicare and Medicaid and Social Security can’t be cut can be considered fiscally responsible. And no Republican who pledges to oppose all tax increases, regardless of circumstances, can be considered fiscally responsible. There’s no curve here. There’s only math. And politicians who want to be applauded as “responsible” can’t be permitted to ignore it. (emphasis mine - JMG)
The kind of policy "flat-earthism" that Klein is talking about permeates the the Republican party so much right now because the party's constituents are demanding it. I think this is the real tragedy of the Republican party these days. Perhaps even a tragedy of our politics in general.

Ideally, elected representatives and they constituents they represent would work in concert. People have policy preferences and vote accordingly. In turn, paid representatives of the state have a responsibility to the people they represent, to be clear about the realities of the state's finances. To me the problem is coming from both ends; GOP voters want to hear strident re-confirmations of preconceived conclusions about spending and taxes. Republican officials are not responsibly trying to cultivate a discussion of what are budget problems are, and what possible solutions might be.

Intellectual curiosity is a tricky thing. But without it, I think, we are worse off as a nation.

Tuesday, February 21, 2012


Mitt Romney has recently (and correctly) implied that spending cuts harm economic growth:
"If you just cut, [said Romney] if all you're thinking about doing is cutting spending, as you cut spending you'll slow down the economy," he said in part of his response. "So you have to, at the same time, create pro-growth tax policies."
Which leads me to wonder why Mitt Ronmeny's economic plan is largely spending cuts:
[Romney] has pledged to cap federal spending at 20 percent of GDP. He has pledged to cut taxes to about 17 percent of GDP. He has pledged to a floor on defense spending at 4 percent of GDP. And he has pledged to balance the budget.

So let’s add it all up: Romney has to cut federal spending down to 17 percent of GDP. Federal spending is currently at 24 percent of GDP, and the Congressional Budget Office predicts that it will be around 22 percent for the next decade. For comparison’s sake, Paul Ryan’s budget would keep spending above 20 percent of GDP for at least the next 20 years.

That’s a lot of numbers, so here’s the bottom line: Romney is proposing to cut more than twice as much from the budget as Ryan. And Ryan’s budget, as you’ll remember, was already quite austere.
I think it is fairly clear that the logic behind Mitt Romney's candidacy is tautological; Mitt Romney wants you to vote for him to be President because he wants to be President. I hope I've been unequivocal in that I find the current field of candidates for the Republican party's Presidential nomination to be a callow lot. My contempt of Mr. Romney, however, is accentuated by the fact that it is clear to me that he knows better.

Photo source

The Power of the State

Ta-Nehisi Coates contemplates the human toll of our Drug War:
When people talk about ending the War on Drugs, or decriminalizing marijuana, or reining in stop and frisk, they are not simply talking about the right of private citizens to get high, they are talking about the right of private citizens to not be subject to lethal violence at the hands of the state.
I would like to start this by stating that I am somewhat sympathetic to the plight the individual of police officer. They are charged with protecting the public and servicing their employers (the taxpayers) with a judicious enforcement of the law. Individual officers do not have the luxury of contemplating the justice or barbarism of their job requirements while in the pursuit of a suspect who may or may not be armed.

Society at large, however, must deliberate exactly such questions, usually in the legislative process of a law's creation. Which I why I am so exasperated how self-proclaimed advocates of "limited government" continue to advocate an unlimited expansion of the state's ability to intrude on a person's private narcotic choices through the most onerous and violent apparatus of the state - the police force.

The problem is, and will continue to be, that the politics of the War on Drugs remains a winner among the Republican party's disproportionately older, rural, married and Caucasian constituency. The calls for "smaller" government are not really premised in any deep philosophic distaste for government power. It is premised in a deep seated philosophic distaste for government power in areas where government is objected for whatever personal or rent-seeking reason; like environmental regulations or minimum wages. The proclamations of support for a "small government" ideology should not be read as actual calls for "less" government, but simply "less" of government that "we dislike".

Conservative constituencies support the War on Drugs, and continue to make such polices politically popular, because for whatever reason they're allergic to certain to use of certain narcotics. I would argue, but can't empirically substantiate right now, that this relates to how an individual's culture and partisanship mediates their political ideology; as opposed to some deep-seated deliberation on the appropriate level of state power.

I conclude this to be the heart of the matter. Our Drug War's socially and economically ruinous tactics of incarceration and interdiction persist (and will continue to) because there exists a strong conservative constituency for such polices. My major complaint is that there is nothing "conservative" about this.

To avoid misunderstanding: I think the logic behind empowering the state to interfere with the incidence of externalized costs and benefits is well understood, especially when the incidence of such costs are unjust, inefficient, or non-welfare maximizing. Also, the scale and seriousness of a individual's, or a society's, drug dependency is certainly a legitimate point of discussion.

But the immediate conclusion that the modern state's most awesome power - the monopoly of violence through the power of a taxpayer provided police force - is the first and most appropriate tool to "force citizens to be sober" from a predetermined set of narcotics has to be the least "conservative" thing I can imagine.

Friday, February 17, 2012

Market Outcomes Are Not Always Ideal Outcomes

Mike Konczal explains things in ways far more clear than I ever could:
Privatization replaces the democratic role of citizens finding solutions to collective problems and transforms it into consumers trucking and bargaining in a marketplace. Finding solutions in a public space emphasizes accountability, voice, transparency, rules and claims through reasoning that goes beyond the self. The market emphasizes cost-benefit thinking, profit-seeking strategies, bargaining and the satiation of individuals’ wants; good things in many circumstances, but not necessarily when it comes to the powers of the state. (emphasis mine - JMG)
This is really something I want to hammer home in the face of a long-standing misconception that markets always produce the best outcomes. Markets produce human welfare maximizing results when they are competitive. This is one of the major reasons markets persist as the economic system of rich and successful Western nations.

But the end goal is not to have more "market" relative to "government". Markets are not a goal into themselves. The goal is to maximize human welfare through just and equitable mechanisms; whether it be through the market or through the government shouldn't be a major concern. Moreover, there are a number of goods and services where a profit motive is more harmful than helpful, as this Mother Jones piece on Pontiac, Michigan's privatization ordeal can attest:
Gov. Rick Snyder put Louis Schimmel in charge of Pontiac last September, invoking Public Act 4, a recent law that lets the governor name appointees to take over financially troubled cities and enact drastic austerity measures. Under the law, passed last March, these emergency managers can nullify labor contracts, privatize public services, sell off city property, and even dismiss elected officials.

Schimmel got to work quickly, firing the city clerk, city attorney, and director of public works and outsourcing several city departments. City fire fighters were told that they would be fired if their department was not absorbed by Waterford Township's. Schimmel has proposed putting nearly every city property up for sale, including city hall, the police station, fire stations, water-pumping stations, the library, the golf course, and two cemeteries.

Williams and his six colleagues on city council have been stripped of their salary and official powers. "Nearly the whole city has been privatized," he laments.
The mind-set that places an emphasis on fiscal balance, or profit-maximization on public-service sector goods and services completely misunderstands the logic of the public service sector in the first place. The use of taxpayer funds to provide public goods is grounded in the understanding that there we all benefit when our (or our neighbor's) children are learning in schools, our streets are not overflowing with garbage and we're not continually being accosted by beggars who have no safety net recourse.

Moreover, not only does it make poor philosophic sense for the state to profit from the services it provides the public, or outsource its services to profit-maximizing actors; it is becoming clear that state budget surpluses, and perhaps even perfect fiscal balance, can be a drag on our economic growth.

Thursday, February 16, 2012

The Myth of Ownership

Binyamin Appelbaum and Robert Gebeloff of the New York Times have written a very good piece that was published a few days ago, and I just got a chance to sit down with it. While the article is quite long, I highly recommend you read it.

If you're strapped for time, I can tell you that the basic gist of Appelbaum and Gebeloff's work is a profile a series of self-identified fiscal conservatives (in the sense that they prioritize the budget deficit over other issues) who also draw benefits from the state in some way or another. I think it would be too facetious to characterize the whole thing as cognitive dissonance on the interviewees part; they are real people with real struggles, that, as Appelbaum and Gebeloff explain,
"describe themselves as self-sufficient members of the American middle class and as opponents of government largess are drawing more deeply on that government with each passing year." (emphasis mine - JMG)
Ta-Nehisi Coates has touched on the power of the myth of self-sufficiency (which he terms the "Cowboy"), and he has done a very good job of it. I would like to expand on it a bit, specifically the way the myth of self-sufficiency plays into a myth of ownership; that we are the sole owners of our life's outcomes, without regard to environmental influences like government.

The subjects of Appelbaum and Gebeloff's profile allude to an ideal of self-sufficiency, and they experience frustration, guilt, and resentment over their need for public benefits. Part of the problem with their thinking is the assumption that, absent direct in-kind transfers, they would then be "free" of onerous government interference.

The fact is that government "interferes" with our daily lives in some of the broadest and most minute ways. I would argue on the balance that is a good thing, too. When you buy ground beef, the FDA has (hopefully) made sure the meatpacking facility that made it meets basic health standards. When you buy gas for your car, a local weights and measures inspector has (hopefully) checked to make sure the pump hasn't been rigged to rip you off.

To be "free of government" one would need to be free of society, or more plainly, free of other people. Unless we truly live on an island or in a cave, the notion that all of our life's successes and failures are attributable to oneself and oneself alone is, well, mythical. An understanding of oneself as "independent" in the context of the market is a denial of the myriad connections that exist between market participants.

It's no accident, then, that calls for "limited government" are commonly framed in the conceptual rather than concrete ways. Government spending in abstract is politically unpopular because people enjoy mythological beliefs about their independence. In the same turn, government spending specifics are popular because they tend to cultivate a political constituency of real people, with real needs on a scale that calls for public action.

I'd like to close by relating this to some of my prior comments on the trap of making normative moral judgments based market outcomes. When people are unsuccessful the the market (i.e. not rich) there's a tendency to attribute personal failure. I think a lot of the respondents found in the NYT piece have internalized this. They judge themselves based on their lack of material wealth, and their inability to enjoy their neighbor's standard of living without public assistance.

Tuesday, February 14, 2012

Portugal's Decriminalization Success

Over at Forbes, E.D. Kain checks in on Portugal's now decade-old drug legalization experiment. The numbers are pretty impressive:
The number of addicts considered "problematic" -- those who repeatedly use "hard" drugs and intravenous users -- had fallen by half since the early 1990s, when the figure was estimated at around 100,000 people, [Joao] Goulao [President of the Institute of Drugs and Drugs Addiction] said.
I think it is clear that the United States still has quite a ways to go in catching up to Portugal in understanding that drug addiction is a public health problem, not a law enforcement problem. As the AP article explains:
A law that became active on July 1, 2001 did not legalise drug use, but forced users caught with banned substances to appear in front of special addiction panels rather than in a criminal court.

The panels composed of psychologists, judges and social workers recommended action based on the specifics of each case.

Since then, government panels have recommended a response based largely on whether the individual is an occasional drug user or an addict.

Of the nearly 40,000 people currently being treated, "the vast majority of problematic users are today supported by a system that does not treat them as delinquents but as sick people," Goulao said.
A legal regime where some recreational drugs are culturally encouraged, and others are classified as serious felonies, strikes me as a really nonsensical arrangement. News like Protugal's continues the case against supporting our expensive, wasteful and socially ruinous regime of interdiction and incarceration.

Policy Incompetency is Generally Bad Politics

I understand the Bush years as a failure of competence. The executive himself was a fairly incompetent individual, which seemed to have a spillover effect onto the executive branch, and government regime, as a whole. Warning signs of the 9/11 attacks were missed, major pieces of spending legislation were push though without fiscally necessary pay-fors, the housing market bubble was allowed inflate unabated and the market was left to "solve" over-the-counter derivatives without oversight. In the last approval rating poll Gallup conducted, 34% of respondents approved of former Pres. Bush's job performance. The biggest drivers of our projected federal budget deficits continues to be Bush era policies and crises.

Today, Daniel Larison probes Mitt Romney's potential attack lines against now-surging Rick Santourm:
On role of government and fiscal issues, Romney could criticize Santorum for his votes for NCLB and Medicare Part D. Santorum is in many respects the embodiment of so-called big-government and “compassionate” conservatism, and this was especially true during his second term in the Senate. In other words, he represented everything that conservatives now think went wrong during the Bush years. Hammering Santorum on Bush-era fiscal irresponsibility hits Santorum where he is weakest with conservative Republicans, and it does so without forcing Romney to risk the backlash of any party faction.(emphasis mine - JMG)
Now, we can certainly sit around and debate how "conservative" or "unconservative" the George W. Bush presidency really was. Partisans on both sides do not need much time to find ways in which policy failures are not the "true" interpretation of their party's governing philosophy. But that's not the real issue here. As I see it, Pres. Bush's policy solutions failed to adequately address the problems they were approaching, or left budgetary time-bombs for later administrations to solve. Rick Santroum, who faithfully carried the administration's agenda while a Senator, could now pay the price for the general failure of the administration's policies.

This is why competency is so important when you're an elected leader, and especially the President. The specifics of No Child Left Behind or Medicare Part D are not as important as the perception of them, and more specifically the association they have with the (now politically toxic) Bush Presidency.

Monday, February 6, 2012

Morality and Markets

Suzy Khimm reports on a new study from the Journal of Psychological Science that studies the relationship between income inequality and personal beliefs of individual ability. In short:
In societies with more income equality, people may not only have more equal incomes, but they may also feel a pressure to seem more similar to others.
I have always been curious about the ways non-economic factors influence market activity, and maddened by the way neo-classical theory strives to eliminate such considerations from its models. Specifically, as exemplified in the above study, there is often a conflation between observations about an individual's market performance, and normative judgement about that individual. On that point, I wanted to draw your attention to something Larry Summers said in an Ezra Klein interview some time ago that just is not said enough:
[...] people see economic issues through moral frames and people think there’s an extent to which recessions are punishment for sins — mainly sins of excess — and you don’t expiate sins by binges. So there’s a kind of moral counterintuitiveness that has made it difficult for the public and for political figures to accept stimulus. (emphasis mine - JMG)
From a policy perspective, it is very frustrating that political opinions on fiscal and monetary stimulus is held up in conceptions of desert. There are very real concerns about the long-term inflationary risks of stimulative fiscal policy, without some type of monetary easing. But we are not having debates about this type of question. We are having Senators harp on about how the stimulus "failed" with critiques completely divorced from the actual theory of fiscal stimulus, and largely being accepted by people who are not particularly curious about the theory in the first place.

Economist can certainly do a better job of outlining how theory models and policy solutions are unrelated to normative values about society and individual choice. Critics need to do a better job of relating their objections to polices either in the broader theory itself, or its narrow malpractice in specific legislation.

Friday, February 3, 2012

It's All Politics

In the wake of this Planned Parenthood fiasco, I've been doing some reading on the Susan G. Komen foundation. I've found their aggressive marketing to be somewhat obnoxious, and their legal policing of their trademark to be abhorrent. They also spend quite a bit of their donor money on lobbyists. Lastly, this whole ordeal has restored a bit a faith in the progress our politics has made on the issue of women's health (although there's still quite a ways to go).

Just something that's been irking me with the Daily Kos reaction piece, and in passing opinions I've read, is the call to "rise above" politics and embrace the cause of advocacy for breast cancer survivors, patients, etc. For example, "Dr. Susan Love, MD, weighs in on the controversy":
Rather than putting politics into the breast cancer movement, lets rise above the political divisions and work together. Let’s redirect all the money that will be spent on investigating Planned Parenthood into funding studies looking to find the cause and prevent the disease once and for all. Let’s redirect our anger to making mammograms unnecessary because we know how to prevent the disease. (emphasis mine - JMG)
Now I think this is an excellent idea. I'd love it if we did not waste our time with frivolous investigations based more on political point scoring than actual concern for women's health. But I'm sure Rep. Stearns (R-Fl) believes his investigation is an important component of his job as a representative of his constituents. Moreover, the very act of deciding whether to fund Planned Parenthood investigations or breast cancer studies is a political one. The choice to divert taxpayer dollars to subsidize breast cancer research over testicular cancer research, or pancreatic cancer research, is a political one too. The choice to give cancer charities, and all charities tax-free status benefits is also a political choice.

I understand politics is awful is awful and that we hate it. But we have to understand that these types of questions are by definition of a political nature. We can't just avoid that, or "rise above" it; it's all politics. Until we embrace that (and maybe even if we do), we are just going to keep repeating these patterns.

(Bonus: Barbra Ehrenreich's excellent Harper's Bazzar piece on the SGK Foundation, Welcome to Cancerland)


There are many things wrong with Rick Santorum's latest foray into healthcare economics analysis:
“People have no problem paying $900 for an iPad,” Santorum said, “but paying $900 for a drug they have a problem with — it keeps you alive. Why? Because you’ve been conditioned to think health care is something you can get without having to pay for it.”
Well, iPad's are luxury consumer electronics with a very high elasticity of demand and numerous substitute options, whereas "health care" as a whole is a product of which we are all consumers at some point in our lives, most notably at birth and death. To whit:
The mother said the boy was on the drug Abilify, used to treat schizophrenia, and that, on paper, its costs would exceed $1 million each year.
Because when your child has an incapacitating mental illness like schizophrenia (my condolences for the poor woman), your elasticity of demand for treatment is very very low. This allows companies to change very high prices, and enjoy healthy profit margins on their product. Part of this is used re-coup R&D costs, but it is not a particularly big secret that a large part of the healthcare industry's business model is based on their consumers inability to alter their demand based on price.

Apple's business model is also profitable, but for very different reasons. Mostly, they've created brand that breeds consumer loyalty, which in turn has a similar inelasticity-of-demand effect. Also, the company has aggressively worked at maintainting a self-contained development and manufacturing/retail ecosystems, which prevents competitors from cutting into their margins with low-price/high-volume gambits.

I would like to also state that market specifics aside, the fact that Mr. Santorum seems more concerned with the balance sheets of Bristol-Myers Squibb rather than a mother and her sick child, is uniquely abhorrent coming from a man with a sick child of his own.

The Cost of War

Economists like myself are often in the business of talking about the cost of things. Sometimes this is straight forward, but the more we try to accurately describe our ledger's balance, the more we are confronted with quandaries. This is what is on my mind while reading the New York Times' latest report on the experiences of returning veterans.
Every severe injury is disfiguring in its own way, but there is something uniquely devastating about having one’s face burned beyond recognition. Many burn victims do not just gain lifelong scars, they also lose noses and ears, fingers and hands.
Calculating the cost of wars in enormous. Brown Universtiy's Watson Institute has been attempting to give a final price tag for the wars in Iraq and Afghanistan. The researchers on the project are doing some heroic work, to the extent that cost calculating can be heroic. However, I'm unsure how one can put a dollar value on this:
“The burns on a soldier’s face are huge: It’s your military uniform and you can’t take it off,” [Specialist Joey Paulk] said. “The surgery changed so much on my face that it completely changed my whole outlook on life.”
With this in mind, I'd like to bring the reader back to 2002, during the run-up to the Iraq War. I was, and continue to be, extremely angry at the glib disregard the war's advocates seemed to have not only the human cost of war itself, but the fact that there would be thousands of Americans and Iraqis, soldiers and civilians, who would end up wearing a uniform of permanent physical and emotional disfigurement.

And for what? A poll bounce and a flight suit photo op?

Thursday, February 2, 2012

Hold Tight

One of the beauties of the digital age is how much more decentralized political organizing, and more importantly fundraising, has become. With that in mind, I am elated with the news that Planned Parenthood has raised almost all the funds it lost from the Susan G. Komen Foundation.

As Colin Meloy once sang, "hold tight, it's just beginning"