Tuesday, February 23, 2010
If we�re going to have a reasonable political discourse in this country we have to acknowledge that success is in the eye of the beholder. A successful America for Democrats is far different from that of Republicans and Libertarians. So it makes no sense to talk about success and failure independent of the definition held by the respective parties and factions.
Tuesday, February 09, 2010
This year, the Oscars are using a preferential voting system to determine the winner in the Best Picture category on March 7. Although attempting to understand the system can seem like trying to divine the secrets of cold fusion, the process is actually logical -- sort of.I swear, I looked at that for the longest time thinking Bush v. Gore was a movie I hadn't seen. Otherwise, I have no idea what that last sentence means. Do we really know what people's second choice was in 2000?
... (skipping long explanation of preferential voting) ...
What all this means in practical terms -- apart from a lot of slips of paper -- is that, because it's unlikely that auditors will work their way past most voters' fourth or fifth choices before arriving at a winner, it actually could be preferable for a film to garner a lot of second- and third-place votes than to be a polarizing choice that splits evenly between first-place votes and, say, eighth- and ninth-place on the ballot.That, in turn, means a movie could pull a Bush v. Gore -- win Best Picture despite not getting the most first-place votes.
It appears that this method, at least in the writer's eye, will lead to less edgy pictures being made for fear of that love/hate vote. Does it also work that way in politics?
(h/t: Eric Barker.)
Tuesday, February 02, 2010
We New Englanders know a thing or two about participatory politics. Most of our towns have Grange Halls where a town meeting happens annually. Most of the town's major political decisions happen there. But it's not the same as a caucus. You talk about resolutions, things that matter greatly to you. You talk about candidates and maybe meet a neighbor who's decided to take the plunge and run for a legislative office. One of them may be sitting next to you tonight. We live in a republic, I tell my students, but there are places where democracy happens, and caucus night is one of them. Maybe the biggest.
But they don't happen spontaneously. There are people working hard to make that caucus happen. This year, for the first time, and as result of Mrs. S becoming part of the local party leadership, I've been able to see up close the work it takes to put on a caucus. And it's much more than I thought. Training conveners -- I'll do that for the first time tonight -- hiring the hall, getting maps so people find their precincts ... it's more than I had imagined. I spent a few hours making copies, running convention calls to other precincts, stuffing envelopes, etc., with several people I now can call a friend who I didn't know before. I have found it rewarding as well as tiring. And I know some of those friends worked many more hours than I did.
When you go to your caucus tonight -- and you should, no matter your party -- thank the people who work the registration table and the people who bring the caucus together. They worked hard to give you the chance to exercise the most democratic part of our political process.
Wednesday, December 23, 2009
While in the legislature, there was a bill before it for the creation of a county. The author of if wished to run the boundary line, so as to support his popularity ; to this the colonel was opposed, because his interest was affected by it. They were hammering at it for some time ; whatever the author of the bill would affect by speaking, the colonel would undo by logrolling; until the matter was drawing to a close, when he rose and made the following speech:Any parallels between this story and the Senate health care bill are coincidental. Or not. Anyway, seemed worthy of its own post.
"Mr. Speaker, � Do you know what that man's bill reminds me of? Well, I 'spose you don't, so I'll tell you. Well, Mr. Speaker, when I first come to this country, a blacksmith was a rare thing; but there happened to be one in my neighbourhood : he had no striker, and whenever one of the neighbours wanted any work done, he had to go over and strike till his work was finished. These were hard times, Mr. Speaker, but we had to do the best we could. It happened that one of my neighbours wanted an axe, so he took along with him a piece of iron, and went over to the blacksmith's to strike till his axe was done. The iron was heated, and my neighbour fell to work, and was striking there nearly all day ; when the blacksmith concluded the iron wouldn't make any axe, but 'twould make a fine mattock ; so my neighbour wanting a mattock, concluded he would go over and strike till his mattock was done ; accordingly, he went over the next day, and worked faithfully ; but towards night the blacksmith concluded his iron wouldn't make a mattock, but 'twould make a fine ploughshare ; so my neighbour wanting a ploughshare, agreed that he would go over the next day and strike till that was done ; accordingly, he again went over, and fell hard to work ; but towards night the blacksmith concluded his iron wouldn't make a ploughshare, but 'twould make a fine show ; so my neighbour, tired working, cried, a show let it be � and the blacksmith holding up the red hot iron, threw it into a trough of water near him, and as it fell in, it sung out show. And this, Mr. Speaker, will be the way with that man's bill for a county ; he'll keep you all here doing nothing, and finally his bill will turn out a show, now mind if it don't."
I guess I had thought it was pretty well known that legislators trade votes and seek favors. Rentseeking has been around for centuries. Ever since James Madison wrote of factions in Federalist #10, we have known that we cannot remove the causes of special interests without removing liberty itself, so we have to control its effects.
Madison wrote, "When a majority is included in a faction, the form of popular government, on the other hand, enables it to sacrifice to its ruling passion or interest both the public good and the rights of other citizens." This is the situation in which we find ourselves today. The majority in the Senate prefers to gain control of the health industry, as it would any other if it found a pretense. This is the tyranny of the majority. So why did Madison think this would be nevertheless a good form of government? This is why he preferred a republic to a democracy, because a republic could better infuse the minority position into the legislative process:
In the next place, as each representative will be chosen by a greater number of citizens in the large than in the small republic, it will be more difficult for unworthy candidates to practice with success the vicious arts by which elections are too often carried; and the suffrages of the people being more free, will be more likely to centre in men who possess the most attractive merit and the most diffusive and established characters.
It must be confessed that in this, as in most other cases, there is a mean, on both sides of which inconveniences will be found to lie. By enlarging too much the number of electors, you render the representatives too little acquainted with all their local circumstances and lesser interests; as by reducing it too much, you render him unduly attached to these, and too little fit to comprehend and pursue great and national objects. The federal Constitution forms a happy combination in this respect; the great and aggregate interests being referred to the national, the local and particular to the State legislatures.
That last bit, "State legislatures", of course refers to the fact that Senators at that time were to be appointed by the state legislatures and not by popular, direct election. It seems highly unlikely that, if they were so elected today, that Sen. Ben Nelson would have an opportunity to be vote #60. But that's not how we pick them today, even though I believe it means senators do not have enough "acquaintance with all their local circumstances." A couple of paragraphs later,
It will not be denied that the representation of the Union will be most likely to possess these requisite endowments. Does it consist in the greater security afforded by a greater variety of parties, against the event of any one party being able to outnumber and oppress the rest? In an equal degree does the increased variety of parties comprised within the Union, increase this security. Does it, in fine, consist in the greater obstacles opposed to the concert and accomplishment of the secret wishes of an unjust and interested majority? Here, again, the extent of the Union gives it the most palpable advantage.Madison clearly understood the ability of legislative leaders to vote-trade, as Harry Reid and Ben Nelson and the rest of the Democrats have now done. I don't think we should be surprised by it. Colbert King tells us to simply get over it: "My friends, dry your eyes, suck it up, and get on with it." And truly, Mr. King is right that the temptation to trade votes and to place pork in legislation is a temptation to which their has been bipartisan surrender and failure. This shock that Sen. Nelson has engaged in vote trading is a bit disingenuous. Challenge the constitutionality of the language of Nelson's bribe, or that of the binding of future Senates not to change the actions of the Independent Medicare Advisory Board. And sure you can point out who got which thirty pieces of silver. But let's not pretend this doesn't happen. It is the nature of government to logroll and always has been. (More on this in the preceding post.) James Joyner concurs:
This doesn�t mean we shouldn�t shine a light on these abuses. By all means, we should. But let�s not pretend that they�re a recent invention.But it would be a good outcome if his most brazen legislative language -- how often do we explicitly name the state who gets the goodies? how often do we get a Senate Majority Leader so unashamed that he accuses those who don't get pork as having failed? at least Dodd had enough shame to drag a stick behind his tracks as he snuck off with $100 million for U Con -- reminded our populace of how voting out one set of pork-consumers doesn't mean you get clean government. Sometimes you get hungrier pork-consumers.
Boettke and Rogers, in a wonderful (and wonderfully thin) volume The Beginners Guide to Liberty (whole thing at that link), remind us of a story:
There is an old tale that many economists use to set up the discussion of how well the market works in comparison to government policy. A Roman Emperor is asked to judge a contest between two singers. After hearing the first contestant sing, the Emperor awards the prize to the second singer under the assumption that surely the second cannot be worse than the first.The point of the story is that even when markets fail -- and the authors acknowledge that they do -- governments can fail too. When government failed in the second Bush Administration, people chose a different government. Perhaps next time they'll realize that when markets fail, the answer is to use markets to solve the failure.
Thursday, December 17, 2009
That's right. TARP legislation said that the money was to be paid back:
By a vote of 217 to 212, the House approved additional spending for "shovel-ready" construction projects and money to avoid layoffs of teachers, police and other public employees. No Republicans voted for the bill, and 38 Democrats voted against it.
The Senate is expected to consider the measure early next year.
Leftover money from the government's $700 billion bank-bailout fund would cover $75 billion of the bill's price tag.
TRANSFER TO TREASURY.�Revenues of, and proceeds from the sale of troubled assets purchased under this Act, or from the sale, exercise, or surrender of warrants or senior debt instruments acquired under section 113 shall be paid into the general fund. (Sec. 106(d))If you read Sec. 120, though, they gave the Secretary of the Treasury an out:
SEC. 120. TERMINATION OF AUTHORITY.And on the 9th of this month Secretary Geithner took advantage of this authority:
(a) TERMINATION.�The authorities provided under sections 101(a), excluding section 101(a)(3), and 102 shall terminate on December 31, 2009.
(b) EXTENSION UPON CERTIFICATION.�The Secretary, upon submission of a written certification to Congress, may extend the authority provided under this Act to expire not later than 2 years from the date of enactment of this Act. Such certification shall include a justification of why the extension is necessary to assist American families and stabilize financial markets, as well as the expected cost to the taxpayers for such an extension.
In order to accomplish these goals, pursuant to Section 120(b) of EESA, I certify that I am hereby extending the authority provided under the Act to October 3, 2010. This extension is necessary to assist American families and stabilize financial markets because it will, among other things, enable us to continue to implement programs that address housing markets and the needs of small businesses, and to maintain the capacity to respond to unforeseen threats, as described above.Now read that last part carefully. It says he's extending it for limited purposes of extending the mortgage modification program (which is a mess) and to encourage some more lending to small businesses, the ostensible reason President Obama invited fat-cat bankers to the White House on Monday. There is no provision for extending TARP for a jobs bill. It is quite simply fresh government spending, another stimulus package meant to cover up the fact that the money states took in last year was simply a one-year patch that was not followed by enough job growth to keep those people in jobs. From the Reuters report:
Italics added. Get that? We are using the TARP money for this spending, but we are not using it for the purposes that Geithner said he would keep TARP open, even when the Administration asks for it. Two months of the unemployment benefits are being attached to a must-pass defense bill in an act that stretches the word "germane" beyond any recognition.
The bill would provide $48.3 billion for infrastructure projects that promise to get workers back on job sites by April. Highway construction projects would get $27.5 billion, while subway, bus and other transit systems would get $8.4 billion.
...The bill would also help cash-strapped state and local governments avoid layoffs of public employees.
States would get $23 billion to pay 250,000 teacher salaries and repair school buildings, and $1.2 billion to pay for 5,500 police officers.
States would also get $23.5 billion to help pay their share of federal healthcare programs for the poor.
The bill does not include two approaches backed by the White House: increased lending for small business, and funds to make buildings more energy-efficient, but Democrats say they plan to take up additional job-creating measures next year.
The bill also extends unemployment benefits and healthcare subsidies for the jobless for another six months, at a combined cost of $53.3 billion.
We need a new word for pork that goes mostly to state and school district budgets: statefare. Goodness knows they're desperate for the cash. Will there be any Republican governors this time who say no?
Wednesday, November 18, 2009
Even though the 6th District is among the least diverse in the country and Sherburne County is the whitest county in that district, the GOP still uses the fear of forced integration and public access for everyone as a reason to fear Democrats. To them, patriotic principles are at odds with protecting the weak. Many of us were taught that America is a �melting pot,� but here in Sherburne County you�re either one of us or one of them.Now for some reason we have to first assume that the only reason anyone burns a cross is because of racism. The fact that it's Halloween, or even Guy Fawkes Day, has nothing to do to change that inference in this writers world. (BTW, did you ever wonder where Jack O' Lanterns came from? I did too, now I know.) The SherCo list is a bit more problematic, but it was written in 2007 by someone unknown, and it took me some time to find it on their page (it's at the very bottom of their main page, in small font.) And let me again point out that very little of Sherburne County is in east St. Cloud.
...There is a stain on this part of the state. It�s ugly and real and always right under the surface of any political conversation. It�s played a big part in every election and yet it�s never come up in a debate or candidate interview.
Maybe it�s time it did.
Monday, November 16, 2009
Assuming no major changes in federal government tax and spending policies, the federal deficit and debt picture looks bleak. The picture is similar to that of the CBO (2009b) and Auerbach and Gale (2009), although in the present case all the macroeconomic endogeneity has been accounted for.From a new paper by Ray Fair, of FAIRMODEL fame. I use FAIRMODEL in some of my teaching in forecasting. His latest iteration is a little higher in terms of debt-to-GDP than in the paper but not appreciably so. The emphasis is mine. Both those runs of his model show negative GDP growth in Q4 of 2011, which would appear to suggest that fixing the debt problem means a W recession pattern. Fair assumes the tax increase or transfer payment reduction to fix the recession begins in the first quarter of 2011.
...Personal income tax increases and transfer payment decreases have similar effects on the economy. A tax increase or spending decrease of 4 percent of nominal GDP is enough to solve the debt problem. The real output cost is about $300 billion per year.
A national sales tax is more contractionary in the model than are personal tax increases and transfer decreases, due in large part to decreases in real wealth and real wages. A national sales tax thus does not look like a good idea, although there is more uncertainty here regarding the ability of the model to deal with this case.
Would the federal elected officials risk the W to get the debt issue off the 2012 agenda? It depends on whether they can impose the taxes fast enough and get the pain out of the way before the summer of 2012 when voter decisions for November are being made. Losing $300 billion a year means losing 1-2% of GDP per year, which will cost many jobs.
Tuesday, October 13, 2009
The Czech Cabinet meets in emergency session today to consider how to persuade their stubborn President to sign the Lisbon treaty � under intense pressure from Paris and Berlin to complete the ratification as soon as possible.Jeremy Rabkin, author of the Case for Sovereignty, described it a few years ago:
With President Klaus demanding a last-minute amendment as the price of his signature � the final approval required in the 27-nation European Union � the Government is locked in a trial of strength with its head of state and on the brink of a constitutional crisis. If it supports his demands the treaty might have to be reopened amid lengthy delays, possibly allowing time for David Cameron�s Conservatives to win the next British election and hold a referendum on the treaty as they have promised.
If the the Czech Government opposes President Klaus then it may have to resort to a form of impeachment or strip him of his treaty-signing powers so as to complete ratification.
Barely disguising the anger felt in European capitals, Fredrik Reinfeldt, the Prime Minister of Sweden, which holds the EU�s rotating presidency, told a signing ceremony by Poland that Czech assent was eagerly awaited. He added: �We do not need more delays.�
All members of the EU have now bound themselves to a scheme in which the European Court of Justice treats mere treaties as superior to national constitutions � and national courts give priority to the rulings of this European Court, even against their own parliaments and their own national constitutions. This is way, way, way, beyond anything we could accept in America. To find an analogy, you must imagine that NAFTA officials in Montreal claim the authority to override the U.S. Congress and the U.S. Supreme Court � and federal judges in America agree that the NAFTA policy must take priority.
What makes the European scheme particularly bizarre � at least from our point of view � is that Europeans aren't really prepared to pursue their "Union" to its logical conclusion. They don't trust the EU to have an army or police or even criminal courts of its own. So Europeans are entrusting supremacy to a government they don't really trust � at least not enough to entrust with traditional attributes of sovereignty.
In the long run, the American scheme is bound to be more respectful of individual rights and personal liberty, because we start from the recognition that people can disagree whereas the EU is always presuming some consensus that will � supposedly � be discovered by bureaucrats and judges.Daniel Hannan warned months ago that "in order to preserve the anti-democratic order in Brussels, the national leaders must sacrifice a measure of their domestic democracy, too." It is now on full display in Prague.
Monday, September 21, 2009
This woman attends both the town hall by Rep. Bachmann and the T.E.A. party on Lake George across the street as someone opposed to both. (I wonder if she was the one who I watched boo repeatedly from the bleachers at the town hall. I wanted to take a video of her and give it to her children to see; I wondered how she would explain her booing not only of the Representative but also the questioners who were opposed to H.R. 3200. But I have no idea if this is that woman or not, and booing is part of your First Amendment rights.) She gets into discussions with people at both with whom she disagrees, and gets it all in print. Bully for her.
What caught my eye was this passage:
Bachmann�s assumption that the poor should be happy in their hearts to rely on religious charity is simply laughable.Now a woman who's studied "feminist rhetoric", whatever that is, didn't use the same word "ingratiate" twice without a reason. What would be her reason? The word "ingratiate" simply means to bring someone into the good graces of another, most often yourself. Its etymology contains the Latin word "gratia" for "favor, grace." So shall I understand that this woman believes you should be able to get something from another without exchanging anything in return? What does she want in lieu of gratitude?
It ignores the fact that, to many people, charity is ingratiating � and it is always undependable and inconsistent.
Is it really such a beautiful thing that a family trying to treat a member�s terminal illness is ingratiated to begging money off �the generous public� at car washes and charity suppers?
There are two ways to do that. You can be moocher, someone who begs money from someone else by being mostly annoying; we give the bum money not out of generosity but to make them go away. It would be great if every time I had a poor person approach me I felt Christian love and charity towards them. I don't; I consider that part of the human condition of being always in sin. I had someone approach me as I went into the Ace Bar on the east side last week and ask specifically for $1.50. I tried to see if I had that exact amount. I had $1.35 and gave it to her. and she seemed disappointed. No thank you was forthcoming. As I turned another man, who had seen me fish for change in my pocket, presented himself looking for some money too. I shrugged and said I had no more. This wasn't true, but all I had was $20 bills in my pocket, and I didn't feel THAT generous particularly when he just asked for "change".
It would be nice to say I felt I had done some good deed, but that wasn't really what I felt as I walked away. We all want, as Adam Smith said, to be seen by others as being good. When I give money and am somehow seen as still coming up short, my desire to do more is diminished.
The other way to get something without exchanging anything in return is to use government to take from someone else and give it to you. The writer identifies herself as "a pro-public-option taxpayer" -- does this mean she would like to use force as a substitute for gratitude? What is the moral argument for that? Dennis Prager explores this:
On what moral grounds can the state force a citizen essentially at gunpoint to give away his legally and morally earned money? Why isn't taxation a form of legalized stealing? The obvious answer is that common sense dictates that citizens have the moral right, even the moral obligation, to vote to give money to, at the very least, enable a government to fund a police force, sustain a national defense, and help those incapable of helping themselves or of being helped by others.But this student of "feminist rhetoric" would rather argue for something potentially immoral than be bothered with offering the simple value of gratitude.
But at some point beyond that, taxation becomes nothing more than legalized stealing. Obviously, people will differ over where exactly that point is, but no rational person disputes that such a point exists. No one could argue that a 100 percent tax -- even if it paid for every need every member of the society had -- was moral and not simply a form of theft.
So moral problem No.1 with taxation is the morality of forcing other people -- under threat of violence -- to give their money away.
Thursday, August 27, 2009
Once we acknowledge that government is here to stay--a proposition to which George W. Bush and Karl Rove were as committed in the last presidency as [President] Obama and Nancy Pelosi are in this one--the only question is whether government will be allowed to do its job well. Liberals, none more so than Teddy Kennedy, believe it should be.to which Taranto notes an interesting taxonomy:
Doesn't this presuppose we know what the job of government is? Does the op-ed writer have any understanding of the differences we have over this?
So there are two kinds of people in the world, those who "acknowledge that government is here to stay" and those who don't. As the former category is capacious enough to include George W. Bush, Barack Obama, Nancy Pelosi and Karl Rove, we can pretty much write off the nonacknowledgers as irrelevant--if, indeed, they exist at all.
The acknowledgers, in turn, are divided into two subgroups liberals, who believe government should "be allowed to do its job well," and nonliberals, who do not.
Monday, August 10, 2009
I don't know about Bachmann, but I can tell you I made the opposite journey. Voted for Carter in 1976, for John Anderson in 1980. I cannot even say that, when I voted for Reagan in 1984 that I did so with great enthusiasm; it was much later that I realized the breadth of his intelligence. But I was attracted to Friedman and Margaret Thatcher earlier, and given the disastrous fiscal policies proposed by Mondale the vote for Reagan that time was not hard.
A MinnPost reader stumbled on the fact that Clark was a former Repub and asked me to check it out. Sure enough, she grew up in a Republican family and voted Repub as a young adult, including for Ronald Reagan in 1980 and 1984 (ouch, don�t tell Walter Mondale).
Of that 1984 vote for Reagan, Clark says: �If I could take that back, I would. He [Reagan] was kind of the nail in the coffin� of her Republican sympathies.
During the Reagan years, she says, she saw her ancestral party abandoning the needs of families and failing to walk the walk on fiscal responsibility. She�s been a Dem ever since and served as deputy chair of the DFL. (An aside, because I happen to recall it, Rep. Bachmann was a Democrat as a young adult, campaigning for Jimmy Carter. The Reagan years turned Bachmann into a conservative Republican and Clark into a liberal Democrat.)
But I don't get how Clark claims the Republicans "abandoned the needs of families" and "failed to walk the walk of fiscal responsibility." The balanced-budget high-spending Republicans of the east coast are not those of her previous homes in Illinois and Virginia. Did not Reagan's foreign policy precipitate the fall of the Berlin Wall, saving us $100 billion in defense spending? The ones who squandered the peace dividend came after the fall of the USSR.
Did the budget balance that came at the end of the Clinton years come thanks to Clinton, or thanks to the 18 year run of good economic performance that came after the 1981-82 recession (with a small pause in 1990?) Didn't all that income help families? It took me a long time and perhaps some time with Robert Bartley's The Seven Fat Years to understand what Reagan had wrought. Clark failed to learn the lesson.
Clark is undoubtedly aware of the difficulties of running as a pro-choice DFLer who voted for many tax increases and a healthy stealth pay increase through per diems (you'll note I've never removed this from the blog sidebar.) First Ringer highlights the uphill fight Clark faces; even if Bachmann is a lightning rod for liberals, her district has a pretty substantial base of people who will vote for her, and gets an IP candidate that last time tanked Tink. If in a DFL highwater year with Obama at the top of the ticket Bachmann can get 49% even after sticking her foot and calf in her mouth on national TV (to the extent MSNBC can be called that), it's hard to see how Clark finds a plurality.
And the side benefit is, SD 15's state senate seat is now up for grabs unless Clark reverses field or should lose the endorsement to Dr. Maureen Reed. The latter is the longest of long shots; the only way Clark doesn't get the DFL endorsement is if she decides her party has dressed her up just to carry her up to the volcano, and declines to be tossed in.
Tuesday, August 04, 2009
Democratic Rep. Paul Hodes (NH-02) believes reading every bill in Congress �would slow down the business of Congress to a crawl and it would be hard to get done what needs to be done.�From the Nashua Telegraph (h/t: Ed.)
This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer. -- Will RogersIf you make babies read, they hold the hammer less.
Thursday, July 30, 2009
The main worry expressed by the Blue Dogs is that the Congressional Budget Office has predicted that leading bills on Capitol Hill won�t bring down medical inflation. The irony is that the Blue Dogs� argument � that a new public insurance plan designed to compete with private insurers should be smaller and less powerful, and that Medicare and this new plan should pay more generous rates to rural providers � would make reform more expensive, not less.Jacob Hacker.
House Democrats reached a deal with conservatives in their caucus that would reduce the overall cost of the package and ensure more funding for rural hospitals, concessions that could allow the Energy and Commerce Committee to finish its consideration of the legislation.Apparently Collin Peterson and Keith Ellison are unhappy with the compromise. I am beginning to wonder if any bill gets you to 218 and 60.
Wednesday, July 15, 2009
Link added in cite. Some of my writings on the subject are here, here, and here.
Amidst the debate over systemic regulation, the independence of U.S. monetary policy is at risk. We urge Congress and the Executive Branch to reaffirm their support for and defend the independence of the Federal Reserve System as a foundation of U.S. economic stability. There are three specific risks that must be contained.
First, central bank independence has been shown to be essential for controlling inflation. Sooner or later, the Fed will have to scale back its current unprecedented monetary accommodation. When the Federal Reserve judges it time to begin tightening monetary conditions, it must be allowed to do so without interference. Second, lender of last resort decisions should not be politicized.
Finally, calls to alter the structure or personnel selection of the Federal Reserve System easily could backfire by raising inflation expectations and borrowing costs and dimming prospects for recovery. The democratic legitimacy of the Federal Reserve System is well established by its legal mandate and by the existing appointments process. Frequent communication with the public and testimony before Congress ensure Fed accountability.
If the Federal Reserve is given new responsibilities every effort must be made to avoid compromising its ability to manage monetary policy as it sees fit.
Friday, June 26, 2009
|Lost personal income % 2012
|Lost jobs 2012
This is a tax therefore that varies but bears down hard on Collin Peterson's district. It will cost CD-3 more jobs, but the impact there is less as a share of income.
Saturday, May 09, 2009
We are very fortunate in MN's Second Congressional District (of which I am chair) to have a number of people interested in running for elective office this year and 2010. Key concerns, particularly for first-time candidates, are how and where to get information as to organization, communications, volunteers, fundraising, etc.
After spending the day in class, I can confidently say that I was very impressed - across the board - with the pace, content, ideas, and focus of the sessions. The Faulkner Strategies group provided the materials and the instructors. Their delivery is lively, fast paced and yet, full of valuable information. I would highly recommend anyone considering a run for office - from dog catcher on up, to go to this location on website of the American Majority to get on the mailing list for the next class. Attending it may be the best political investment you can make.
Wednesday, March 18, 2009
C'mon. If suicide were a proper penalty for piddling away taxpayer dollars, the National Mall would look just like Jonestown after refreshments.-- David Harsanyi (h/t: Russ Roberts)
UPDATE: This is almost as good:
I go back to Art Laffer�s four prosperity killers: inflation, higher tax rates, re-regulation, and trade protectionism. You can put a check mark next to each box.Yup.
Tuesday, March 17, 2009
More pressure has ensued, and now we have congresspersons contemplating a 100% tax on the bonuses. I'm not even sure that Mr. Liddy in sackcloth and ashes will slake the thirst for vengeance over payment on these contracts.
It is worth recalling however, as a reader wrote me today, that we have been here before. The Clinton Administration in its 1993 tax law change wanted to cap the amount of executive pay that could be deducted against income taxes. My correspondent writes:
There was also a loophole, a provision that said that Bonus Compensation was taxed differently than standard compensation. Bonus compensation under those provisions is fully deductible. That was the year when people like Michael Eisner of Disney got large bonuses for performance. Over time, Executive Compensation was shifted from Salary to Bonuses, and such provisions were written into Executive Contracts and those of other high performing employees. Presumably �Bonus Compensation� was to be tied to performance or certainly used as an incentive to get a star performer to move into a failing area of the business to help �right the ship�. Another point that is sometimes missed is that compensating someone with a bonus is being more responsible to the shareholders because this allows the company to structure its tote sheet in a way to reduce the overall corporate tax burden.I think in fact they get it. One person reported to me that a client of his, who works for a large firm, was asked to move as a division president of a part of the firm that was struggling. The compensation agreement called for base salary and bonus, and that the bonus was to be as a minimum equal to base salary. That minimum was what the fellow received for two years; he got more in year three as the division turned around.
Now fast forward to the �Banking Crisis� and �Bailout Packages� and we have a sudden attack on �Bonus Payouts�. People who apparently don�t understand how business works or how to get top level performers to stick their careers out on the line are attacking people who get such rewards.
A couple years ago, as Democrats were taking office, Business Week discussed the distortion in the structure of compensation induced by the Clinton tax policy.
Bill Clinton had what he thought was a great idea to curb the soaring paychecks of the nation's executives. It was 1991, shortly after the launch of his Presidential campaign, and he had just read a best seller on corporate greed by compensation guru Graef Crystal.
Clinton's brainstorm: Use the tax code to curb excessive pay. Companies at the time were allowed to deduct all compensation to top executives. Clinton wanted to permit companies to write off amounts over $1 million only if executives hit specified performance goals. He called Crystal for his thoughts. "Utterly stupid," the consultant says he told the future President.
"We were trying to shame companies into changing their behavior," says former Clinton senior adviser Bruce Reed. "And companies have been shameless in ignoring what we did." Or perhaps just astute in exploiting the flimsiness of Section 162(m) of the IRS code, as the measure is formally known. Reed acknowledges that the Clinton team deliberately watered down the proposal to make it more palatable by, for example, not applying the performance requirement to the award of stock options.
This is part and parcel of a process we've referred to for years as "the regulatory dialectic." Often the dialectical process is technological in nature, and other times it's provided intentionally by the process, as it was in 1993. The underpayment of base salary was induced, in no small part, by previous fits of populist pique against executive compensation, and now that it produces an undesired outcome -- "bonuses" for executives at failing firms that aren't really bonuses at all. So now we'll respond with some new law hastily written and barely passable as not a bill of attainder, and what will happen? Probably something unexpected, and at some time in the future undesirable. Rinse and repeat.
Monday, March 16, 2009
What's my point?
The press likes to cover up when Dems makes mistakes, get in trouble with the law, go back on their word. The press will use the name of the politician but not identify the party. However, if a Republican messes up, the party label is always included.
This practice is unfair to the population in general because it hides bad behavior and often implies that only Republicans make errors. Therefore, my recommendation to all who write about politics is to include the name of the party of the person being discussed, either side. Our writing is for all people, not just the "insiders." It's time everyone knew who was making the mistakes or reneging on their word.
Tuesday, March 10, 2009
When Bush didn't save New Orleans, it was because he was a Republican. Roll eyes, here. (Never mind that the Governor was a Democrat.) Of course government didn't work well between 2000 and 2008. Insert snicker, here. Some people think government doesn't work well when Republicans are in charge because Republicans (fill in the blank here with your own partisan vitriol).Russ Roberts yesterday. To paraphrase Churchill, laissez-faire may be the worst economic system of all time, except for all the others we've tried.
But once Obama got into the White House, I think some people actually thought it would be different. He cares, after all, and he has such a high IQ.
Krugman is going to have to come to grips with the possibility that maybe it wasn't Bush that made government so incompetent. It was government.
Thursday, January 22, 2009
Monday, January 19, 2009
The mainstream media has extended its honeymoon with the new administration; even as scandals, bailouts, proposed federal works programs, a falling economy, and questionable cabinet appointments take place.Our local campus has a YAL chapter; I agreed to serve as its adviser when they said they needed one in order to form. Here's their press release:
Many Americans say, "Give him a chance. He can fix our problems." But, why be fooled again?
Government is limited by the United States Constitution for a reason. Society is a responsibility of the people, not the government.
We already know the real Barack Obama. We know his cabinet appointments; we know his voting record; and we know his beliefs.
He promises more foreign intervention, more socialism, more restrictions on our civil liberties, and a greater disregard for the Constitution.
Rather than wait for another politician to disappoint the American people, let's stand up as patriots and say one day of Barack Obama is enough.
Tomorrow, Barack Obama�s Inauguration Day, students will participate in an activism event on college campuses nationwide declaring, �Change? What change?�That "R3volution" is of course a Ron Paul trademark. Please do not infer from my advising of the group that I am in agreement with the positions of Rep. Paul. I believe, however, that students who disagree with liberal orthodoxy on this campus need to organize, and am happy to let a hundred libertarian groups bloom.
Thus far, 41 chapters of the group Young Americans for Liberty (YAL) have confirmed their participation. Each chapter will distribute flyers, hand out pocket constitutions, and talk to students about the dangers of Barack Obama�s policies on their campus.
The local YAL chapter at the University of St. Cloud will host their own event on campus at Atwood Memorial from 10:00am � 3:00 pm. Media is welcome to attend.
�This is no doubt a historic day, but Barack Obama does not offer real change. His policies only enforce bigger government, an increase to the already massive budget, the same foreign policy, and the continued destruction of our civil liberties,� says Sam Swedberg, President of the YAL chapter at the University of St. Cloud State .
YAL�s event, Real Change Requires R3volution, seeks to peel back the marketing of Barack Obama and expose his policies for what they really are � not real change. Before taking office, Barack Obama has put forth an $800 billion economic plan, promised more troops in Afghanistan, and begun talks of reviving the draft.
�Not all young people are excited about the policies of President Obama. Who do you think will pay for all of this reckless spending? Who will fight and die in these unnecessary wars oversees? Our generation will,� says Jeff Frazee, Executive Director of YAL, in Arlington, VA.
For more information about the event, please visit http://www.yaliberty.org/change and join us on campus at Atwood Memorial tomorrow, Tuesday, from 10:00am � 3:00pm.
I would point out to them (and will when I see them next) that no policies have yet been enacted; his fellow Democrats are already shredding big parts of Obama's stimulus plan, including the $3000 tax credit for new jobs. But a compromise between Obama and the Democrats is unlikely to produce less state control of the economy.
Friday, December 19, 2008
A look back at Senate appointments made over the past 50 years shows a decidedly mixed electoral record. Of the 51 Senators who sought a full term in their own right, just 23 (45 percent) won their races. (Twenty one appointed Senators did not seek election to their appointed post.)Chris Cilizza (h/t: Ed). Of those that ran for their spot there's a 76.6% chance of re-election. But is that really that remarkable? Collier and Munger  show that the longer a representative is in office the greater their re-election probabilities. With less time, and holding a statewide office that draws well-known and well-financed challengers, it probably doesn't make much difference that someone running for that office has had the position before by appointment or by prior election. States, unlike House districts, don't get gerrymandered. And because the senator only faces one challenger in six years as opposed to three, s/he's more likely to survive past six years than his or her House counterpart.
So one wonders instead why it is that so many appointed Senators do not seek election? Some of it is the placeholder hypothesis -- you put someone in the spot that is not going to run because someone else wants to run for it in two years. But how many Beau Bidens are there? I don't think we can expect that there will be too many of them. If incumbency has advantages, such as free press or the franking privilege, why wouldn't more appointed senators choose to run and win? Are appointees typically weaker political figures with little experience? In that case, wouldn't time in office for Caroline Kennedy be invaluable to prepare her for runs in '10 and '12? Wouldn't she more prefer to be appointed than, say, Andrew Cuomo?
Friday, December 12, 2008
You wouldn't lump the current state Republican administration into the progressive camp, so they're talking more about the likes of former Govs. Al Quie and Arne Carlson, as well as retiring Congressman Jim Ramstad.Al Quie, progressive? I listened to the talks at the Center for the American Experiment surrounding Mitch Pearlstein's new biography of Governor Quie, and I wouldn't have put him in the category of progressive. I guess if you ever supported a tax hike -- even one in a period where the budget deficit dwarfs the news -- you're a 'progressive'.
The show, called �Minnesota�s Progressive Republicans,� was co-produced by Growth & Justice -- the economic policy group headed by former Strib and Pioneer Press reporter Dane Smith ...
Not that this is necessary. Mitch mentions a proposal from Senator Geoff Michel and Rep. Laura Brod to privatize the airport. That's hardly progressive; its mother is Margaret Thatcher. The British took in $40 billion from privatizing state industries and council houses; the Japanese, $100 billion for just two state industries (airline and telephone monopolies were sold off.) Michigan, long suffering from overspending in its state budget, has 97 state parks, leading one group to suggest selling a few off. Now who's more progressive? Governor Pawlenty, who has fought for a new state park at Lake Vermillion? (Think he might like to have that $20 million back?)
But G&J seems to equate progressive with tax-raising. I wonder if this is because, when looking at their staff, economists are few and far-between at this "economic policy group".
Wednesday, November 05, 2008
There is a just God who presides over the destinies of nations; and who will raise up friends to fight our battles for us. The battle, sir, is not to the strong alone; it is to the vigilant, the active, the brave.Vigilance and bravery and the will to act are by choice, as is one's faith.
Collins also notes that there were perhaps 25,000 voters who simply did not vote that race. Like commenters, I'm surprised there are not more undervotes. That's the kind of stuff that gave us hanging chads. The recount battle will be grist for the Final Word mill for the next few weeks.
Monday, November 03, 2008
From Labor Day through last Friday, about 750 national surveys asked voters one variant or another of the question: "How would you vote if the presidential election were being held today?" In 2004, only 239 such polls were taken. Forty years ago in the Nixon-Humphrey race, such a question was only asked 10 times from Labor Day through election eve.John Fund, in today's Political Diary. I am certain that technology has moved so that the cost of any poll is cheaper. But I wonder sometimes if all this polling leads to an information cascade? (c.f. Ivo Welch.)
Does the cascade lead to voting behavior too? We'll know soon. I'm thinking of running this experiment in class, but held off for fear it would be taken as a political statement. Such is the time in which we live.
Friday, October 31, 2008
"The reason that we want to do this, change our tax code, is not because I have anything against the rich," Obama said in Sarasota, Florida, yesterday. "I love rich people! I want all of you to be rich. Go for it. That�s the America dream, that�s the American way, that�s terrific.Ed Morrissey adds video. Jake Tapper makes a comparison to Ayn Rand, which these quotes make apt:
"The point is, though, that -- and it�s not just charity, it�s not just that I want to help the middle class and working people who are trying to get in the middle class -- it�s that when we actually make sure that everybody�s got a shot � when young people can all go to college, when everybody�s got decent health care, when everybody�s got a little more money at the end of the month � then guess what? Everybody starts spending that money, they decide maybe I can afford a new car, maybe I can afford a computer for my child. They can buy the products and services that businesses are selling and everybody is better off. All boats rise. That�s what happened in the 1990s, that�s what we need to restore. And that�s what I�m gonna do as president of the United States of America.
"John McCain and Sarah Palin they call this socialistic," Obama continued. "You know I don�t know when, when they decided they wanted to make a virtue out of selfishness."
The American businessmen, as a class, have demonstrated the greatest productive genius and the most spectacular achievements ever recorded in the economic history of mankind. What reward did they receive from our culture and its intellectuals? The position of a hated, persecuted minority. The position of a scapegoat for the evils of the bureaucrats.Ayn Rand.
Businessmen are a cheerful, benevolent, optimistic, predominantly American phenomenon. The essence of their job is the constant struggle to improve human life, to satisfy human needs and desires - not to practice resignation, surrender, and worship of suffering. And here is the profound gulf between businessmen and altruism: businessmen do not sacrifice themselves to others-if they did, they would be out of business in a few months or days-they profit, they grow rich, they are rewarded, as they should be. This is what the altruist, the collectivist and the other sundry 'humanitarians' hate the businessmen for: that they pursue a personal goal and succeed at it. Do not fool yourself by thinking that altruists are motivated by compassion for suffering: they are motivated by hatred for the successful.Rand, The Sanction of the Victims. ""I love rich people! I want all of you to be rich" to a point. Success begins at $250k, or less.
Thursday, October 30, 2008
Walk upon England's mountains green?
And was the holy Lamb of God
On England's pleasant pastures seen?
And did the Countenance Divine
Shine forth upon our clouded hills?
And was Jerusalem builded here
Among these dark Satanic mills?
Bring me my bow of burning gold!
Bring me my arrows of desire!
Bring me my spear! O clouds unfold!
Bring me my chariot of fire!
I will not cease from mental fight,
Nor shall my sword sleep in my hand
Till we have built Jerusalem
In England's green and pleasant land.
CLEMENT ATTLEE: What kind of society do you want?From The Commanding Heights.
NARRATOR: Attlee promised his party that they would build a new Jerusalem.
CLEMENT ATTLEE: Let's go forward into this fight in the spirit of William Blake: "I will not cease from mental fight, nor shall the sword sleep in my hand, till we have built Jerusalem in England's green and pleasant land."
NARRATOR: William Blake's hymn "Jerusalem" became an anthem for the Labor movement.
BARBARA CASTLE: You know, it seemed to people who'd been through a war, it seemed to them natural justice. Why not pool your resources? And so we broke into the concept of the sacredness of private property.
NARRATOR: When Labor took power, private owners were compelled to sell their businesses. Labor created a "mixed economy" in which newly nationalized industries coexisted with private enterprise. Now government-owned industries like coal, rail, and steel no longer enriched owners and shareholders, but worked for the common good.
TONY BENN: So it was an act of regeneration, of renewal. That was the hope, and it was the hope that gave us the welfare state, gave us the National Health Service, gave us full employment, gave us trade union rights, really rebuilt the country from the bottom up.
For many observers the years after 1950 were the period when the chickens came home to roost for British industry. The signs of industrial weakness seemed to abound. By the 1980s Britain's share of world industrial production was no more than half of its share in the inter-war period, manufacturing exports but a quarter. The cotton industry was in trouble before the war but had virtually disappeared as a world force by the 1960s. From being the world's leading car exporter in the late 1940s, Britain saw in 1994 the sale of its last car firm, Rover, to the German firm BMW.Robert Millward, British Industry since the Second World War.
The journey will be difficult. The road will be long. I face this challenge with profound humility, and knowledge of my own limitations. But I also face it with limitless faith in the capacity of the American people. Because if we are willing to work for it, and fight for it, and believe in it, then I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on earth. This was the moment�this was the time�when we came together to remake this great nation so that it may always reflect our very best selves and our highest ideals.Barack Obama, June 3, 2008.
What Barack Obama is tapping into with the word "change" is nearly eight years of the left's constructing a description of an America that has been made so awful that "change" means changing America, not just changing policies.Dennis Prager, Tuesday.
Policies that he proposes under the banner of "change" are almost all policies that have been tried repeatedly in other countries-- and failed repeatedly in other countries.Thomas Sowell, this morning.
Politicians telling businesses how to operate? That's been tried in countries around the world, especially during the second half of the 20th century. It has failed so often and so badly that even socialist and communist governments were freeing up their markets by the end of the century.
I was showing a class the first hour of Commanding Heights this morning, and that inspired this post.
Wednesday, October 29, 2008
Let�s first consider the basic function of capitalism. Its success lies in efficiently allocating capital toward profit, the difference between costs and returns. When the system works, market prices provide the information and the incentives to invest where legal returns are greatest.John Baden last week, who continues this morning:
But this is perhaps not capitalism�s greatest asset. In addition to being an engine of prosperity, only free markets spontaneously and peacefully organize the daily, voluntary interactions of millions of primarily self-interested individuals.
Socialism works poorly because it is unable to efficiently coordinate and allocate resources. Hence, it never generates wealth for the masses�but socialist elites enjoy privilege and plenty. Their greed rigs the game to their advantage. Likewise, America�s investment bankers have rented and bribed politicians to rig the game to socialize risks and privatize profits. Fannie and Freddie�s failures and rich rewards to former managers, $100 million to one, are prime examples.
Our current problems flow largely from Wall Street bankers� financial innovations. They discovered ways to profit by misallocating capital, and in the process they decoupled risk from their returns. Under legislation for which they lobbied, they were rewarded for pumping evermore capital into overvalued housing.
...When politicians allocate capital, we can�t expect efficiency, but corruption by special interests is certain. Investment banks benefited from this political arrangement.
In response to my recent column, �What Went Wrong,� several people emailed me this question: What�s next? The answer is easy; America will attempt to emulate Europe�s welfare state. Our perceived crisis is inimical to sound policy and provides a good seedbed for political opportunism.The concept of mobile and stationary bandits is at the heart of a book I use in teaching comparative economic systems, Mancur Olson's Power and Prosperity. Olson's uses 'roving' rather than 'mobile', but the concept is identical. Or, as Jack Hirshleifer put it, there are always two ways to get something for yourself: You can produce it, or try to take it from others. "The way of production and exchange enlarges the social total of wealth. The way of predation and conflict merely redistributes that total (less whatever is dissipated in the struggle." (p. 2)
...Those who created the American experiment recognized the problem of constraining two kinds of bandits: the stationary and the mobile. Mobile bandits include highwaymen, pirates, common thieves, and muggers. These are conceptually easy to constrain; enlist honest police.
Stationary bandits are more difficult, and were a focus of America�s founders. Their challenge was to create a constitution to generate and maintain laws that foster progress�while constraining those making the laws. How might those in power be kept from rigging the game to the advantage of themselves and their most politically powerful constituents?
Over the long run this may be impossible in a large democracy comprised of numerous factions, interest groups, and ethnic and racial identities. No such nation has successfully dealt with this challenge. It is easier in a small, relatively homogenous country, not one like ours.
The current worldwide financial crisis gives license to our stationary bandits to advantage themselves and powerful constituents. Franklin Raines, White House Budget Director under Clinton, became CEO of Fannie Mae and received $90 million in salary and bonuses. Of course Fannie Mae had made large and strategic concessions and donations to politicians. That�s how politics works.
America�s automakers, protected for years by tariffs from foreign competitors, are but one of numerous corporate examples of powerful firms, and unions, shaping the rules and seeking to loot taxpayers. Such pleading is bound to increase; the political tide is with those who see and seize opportunities for advantage, always, of course, in the �public interest.� The results are ominous and the causes clear.
Those dissipation costs are important however. To take only one example, the death tax takes in very little revenue, but there is a large deadweight cost from investing in wealth transferring mechanism and away from capital formation. A 1993 paper by Richard Wagner at George Mason put that cost then at about $640 billion over eight years. It's likely much more than that now.
Baden's hope for smaller, more homogeneous economies has seldom found an example either. Europe -- whose values are still epitomized in the French Revolution's motto of Liberty, Fraternity, Equality (thanks to Dennis Prager last night for encapsulating the difference between the American and French Revolutions so succinctly) -- has no examples. You might choose the island economies of Hong Kong and Singapore, but neither turn out to be bastions of political freedom even as they uphold economic freedoms.
I see much of the political debate this fall in that last paragraph from Baden.
(h/t for Baden: Arnold Kling.)
Tuesday, October 28, 2008
At the last debate, Madia was less polished on policy than his two rivals and repeated an error made in his endorsement interview � that the Employee Free Choice Act would not allow a unionization drive to bypass a secret ballot.Again, it's pretty unusual for the StarTribune to not endorse Democrats, but given the question was initially asked of Madia two months ago, you have to conclude he's either not terribly interested in a key issue or obfuscating.
Now if we could get the STrib to watch this, they might change their mind on their other endorsement today:
This video from last June was accompanied by these comments:
Like Al Franken, Elwyn Tinklenberg is also willing to smear thousands of honest, hard working 6th district business owners with his accusations of intimidation. His wild, unsubstantiated charges are hardly representative of a thoughtful, moderate legislator.
Monday, October 27, 2008
A Halloween decoration showing a mannequin dressed as vice presidential candidate Sarah Palin hanging by a noose from the roof of a West Hollywood home is drawing giggles from some passers-by and gasps of outrage from others. ...The CBS station with that picture and video here. This was sent to me by reader and friend Tony Garcia who asks some tough questions:
Chad Michael Morisette, who lives in the house, tells KCBS-TV that drivers and bus passengers have been stopping to snap pictures of the macabre scene.
Morisette says the effigy would be out of bounds at any other time of year, but it's within the spirit of Halloween.
He says "it should be seen as art, and as within the month of October. It's Halloween, it's time to be scary it's time to be spooky."
- Is it acceptable to put Obama on a noose "as art, and as within the month of October. It's Halloween, it's time to be scary it's time to be spooky"?
- What if you depict Obama as arising from flames, as if from hell?
- What would be the legal hell raining down under "hate crimes" and/or terroristic threats if one used Obama & Biden instead of McCain & Palin?
- Am I supposed to believe this is the group of supporters that is against "divisiveness"? These are the same people who I am supposed to believe are "tolerant"?
- Is this the kind of change we can expect should Obama win?
It is no secret that the press has been in the bag for Senator Obama. �Howard Kurtz' last Friday made it quite plain:
Fifty-seven percent of the print and broadcast stories about the Republican nominee were decidedly negative, the Project for Excellence in Journalism says in a report out today, while 14 percent were positive. The McCain campaign has repeatedly complained that the mainstream media are biased toward the senator from Illinois.�We have joked often about bias at the StarTribune, which made last Saturday's endorsement of Senator Coleman for re-election all the more remarkable. When it turns out that the media are taking their children to Obama events to get souvenirs, it strains credulity to think they do not have some investment in the history that an Obama win would create in their minds, and damn the consequences both to the country of his policies later and to the newspapers' own reputations.
Obama's coverage was more balanced during the six-week period from Sept. 8 through last Thursday, with 36 percent of the stories clearly positive, 35 percent neutral or mixed and 29 percent negative.�
McCain has struggled during this period and slipped in the polls, which is one of the reasons for the more negative assessments by the 48 news outlets studied by the Washington-based group. But the imbalance is striking nonetheless.
I have received several emails and phone calls over the last week furious with coverage of the local newspaper. There has been a steady drumbeat of negative front-page articles regarding Rep. Bachmann -- this one on her withdrawing a pardon request for someone subsequently pleading guilty in the Petters scandal ran as their Sunday headline; if you can explain that choice as anything other than an attack to smear Bachmann by implication, the comments box is open -- and a preference for higher taxes for public works that borders on fetishism. It is almost an article of faith that this is true among local Republican leaders. �
But at the same time, I know many of the reporters and most of the editorial board, and I do not want to believe this of them. �I do not believe them to be intentional in that bias. �They may have it despite their attempts to work around them. �I don't think perception should be allowed to decide this without some supporting evidence.So I have a proposal. I wish to replicate the Project for Excellence in Journalism study for our local newspaper. �I need a few hours of volunteer time and access to the Times' archives for the last two months. �I propose using the public library for the archive. �Send an email to the comment box if you wish to participate. �I am particularly hoping one or two liberal readers to join this project. �We would replicate this for Obama/McCain, Coleman/Franken/Barkley and Bachmann/Tinklenberg. �I would hope to finish the project quickly, though finishing it in time for the elections is not important. �This is not a partisan event. �It's an attempt to give evidence on the quality of our own area paper's news coverage.
Friday, October 24, 2008
The SCSU Survey, directed by some of our faculty but managed by SCSU students, reports that Barack Obama leads John McCain in the state by five percent. The poll had 509 voters. SC Times reported Larry Schumacher reports that the poll included cell phones (the report says 130) for the first time, but that they did not screen for registered or likely voters "because of Minnesota�s same-day voter registration laws." �The report shows that there's little difference in either margin when you use a registered screen, voted in 2006 screen, etc. �Read the survey for the evidence. �I find that result -- the screen didn't matter -- the most interesting part of the survey.
Interestingly, the party ID questions showed initially a 30-24 split for Democrats with 37 percent not identifying with either party. �When pushed by the surveyer, the party ID gap for Democrats widens to 42-34. �
The survey's margin of error at this size is +/- 4.6%.
I know one of the survey directors, Department of Political Science chair Prof. Steve Frank, reads this blog from time to time, so questions you put here may be answered by him rather than me. �
Monday, October 20, 2008
To tell the story, let me use a very oversimplified model (and wonder at the end if it's TOO oversimplified, though no doubt my commenters will tell me anyway.) Let me that if Obama wins a majority of the electorate he will also win the Electoral College, so that I can place the race on a single scale and not worry about fifty state races. Let me also take advantage of a useful observation made by Mark Thoma that the standard deviation of polling data at the Gallup poll size is 1.67%.
The InTrade data give us virtually a representation of the probability of McCain winning and Obama winning. It says that (let me round a little for the Pittsburgh Steeler fans, like Ed) and say that currently, Obama has an 85% chance of winning and McCain a 15% chance. To put this in some context: after the Rays went up 3-1 on the Red Sox last night in the bottom of the 7th, at that time the Rays had about an 82% chance of winning. (For more, try Walk Off Balk.) You're behind, it's late, but you don't think of two run leads as hopeless.
Let me illustrate then with a bell curve -- please click the image to read more clearly:Statistics tells us that 15.7% of the distribution of the curve lies below one standard deviation, to the left of the line drawn on the left of that graph. The other line which intersects the peak tells us the mean. That number would be the share of votes in a two-party race that Obama would receive (ignoring Nader and Barr is part of my simplification here.) 15.7% is just about where the price on that McCain bet on InTrade is. (To the second decimal, I put it at 1.04.) So we conclude that the difference between McCain and Obama is about 3.5%, about 51.75% for Bam versus 48.25% for Mac. That's a bit better than the RCP average. Rather than despair over InTrade, I'd hold it up as a measure of hope.
So what can be wrong with that calculation? A few things, not all of which I think I've fully thought through. Obviously there's the unidimensional assumption. It's possible, as in 2000, for a candidate to lose the popular vote and win the EVs. I'm going to say that isn't a big deal here, but you can argue with that if you want. Second, as we approach November 4, the possibility of McCain moving the needle enough closes down and you get convergence towards $1 on the Obama contract. I haven't factored date of the poll into this, but it seems to me it matters, just as the reduction of the number of outs left last night diminished the Red Sox chances of catching the Rays. Lastly, and as Ed mentioned, the InTrade market is still a bit thin: I think someone with $50,000 could move that needle significantly, and it isn't as if the Obama campaign is short $50k. As I wondered last time.
I'd tell those who think the race is over: You can invest $.85 and return yourself a dollar in little more than two weeks. Not many other market opportunities for you to get that return. Whatcha waitin' for? (And for Maverick fans: Six-bagger!)
UPDATE: Welcome HotAir readers. Ed and I will have to disagree about this one. The market participants of InTrade don�t live in a vacuum. They read the data and the polls, they bring information into the marketplace about the likelihood that McCain wins versus those who think Obama wins. The prices are an outcome of that struggle between them. Those who get it right over time for other events tend to dominate that market; those who bring biases and uninformed opinion will over time lose money and depart from the market. They aggregate information from many people with different opinions, and a price comes out that reflects that information. In the stock market, that price is a fair assessment of a firm�s value, even though the marketplace is dominated by a few traders for many firms.
Any individual trader selected at random might not have as good information about the race as Ed Morrissey. But the aggregation gets the price roughly right, consistent with the odds.
This has been subject to a good deal of debate. Chris Masse has blogged the discussion between Robert Erikson of Columbia and Justin Wolfers of Penn on the matter of markets versus polls. There can, of course, be data manipulation -- and maybe there has been -- but it makes no more sense to say prediction markets cannot tell us anything about uncertain outcomes than it does to say marketmakers on Wall Street cannot tell us anything about the firms whose markets they make.