The Disappearance of the Tea Party

Peter Spiliakos writes,

I suspect that many Republican politicians sincerely see their own party as composed of sober businessmen, plus crazy people wearing tricorne hats, plus crazy people waving fetus selfies, plus crazy people jabbering about Mexicans. The behavior of establishment Republican politicians can be seen as trying to placate/gull the various crazies so that the real work of the business lobbies can finally get done.

Amusing sentences (“fetus selfies”). In thinking about this, I am inclined to differentiate between two aspects of the Republican base. On the one hand, there is the Tea Party. On the other hand, there is the Trump/Fiorina Party.

At one point, I thought that the Tea Party’s issues were the bailouts, government spending in general, and Obamacare. On those issues, I am with the Tea Party and I share their disappointment with the Republican establishment, as represented by John Boehner, Mitch McConnell, and John Roberts.

The Trump/Fiorina party looks different. Trump wants to appeal to xenophobia, and Fiorina wants to mobilize the right-to-lifers. If the Republican establishment would prefer to be softer on immigration and less obsessed with the abortion issue, then I am with the establishment.

Of course, Democrats and the media do not see this distinction between the Tea Party and the Trump/Fiorina Party. They use Tea Party as an all-purpose boo-word. So they treat Trump and Fiorina are synonymous with Tea Party.

But to me the difference matters. And I am struck by the disappearance of what I thought of as the Tea Party as a factor in current politics. I hope that in the next several months the Tea Party comes back and the Trump/Fiorina Party recedes.

In an essay that I saw after writing this, Jerry Taylor makes the case that the Republican race, and in particular Rand Paul’s poor showing, is an indication that libertarianism is weak among the masses. And he also throws some cold water on my own hopes:

According to a survey conducted by the Public Religion Research Institute, more than half the Tea Party is made up of the religious right while only 26 percent—the smallest ideological bloc within the group—can be loosely described as Libertarian. And Tea Partiers have always manifested a large degree of nativist populism.

Have a nice day.

The Third C is Conscientiousness

Broadly speaking, our results point to a quantitatively large and significant role for credit scores in the formation and dissolution of committed relationships. Three sets of empirical results support this conclusion: First, credit scores are positively correlated with the likelihood of forming a committed relationship and its subsequent stability. Second, partners positively sort into committed relationships along the credit score dimension even after controlling for other similarities between the partners. Third, a positive correlation notwithstanding, within-couple differences in credit scores are apparent at the start of relationships. Notably, the initial match quality in credit scores is highly predictive of subsequent separations even when controlling for other factors, such as couples’ use of credit and the occurrence of financial distress.

Jane Dokko, Geng Li, and Jessica Hayes write,

These results lead us to hypothesize that credit scores, in addition to measuring an individual’s creditworthiness regarding the repayment of debt obligations, reveal information about an important relationship skill. We argue that one such skill could be an individual’s general trustworthiness and commitment to non-debt obligations. To make this argument, we turn to survey-based measures of trustworthiness to show that the average credit score of a geographic area (typically a county) is highly correlated with the same area’s average level of trustworthiness. We also find that when individuals have a long exposure to greater trustworthiness, as measured by surveys, they tend to have higher credit scores even years after they leave those areas. Similar to how credit scores predict the formation and dissolution of committed relationships, we find that survey-based measures of trustworthiness also have predictive power for these outcomes. Interestingly, such statistical relevance diminishes when the couples’ credit score levels are controlled for, underscoring the overlapping between credit scores and survey-based measures of trustworthiness.

Pointer from Tyler Cowen.

In mortgage underwriting, they used to talk about the three C’s: collateral (the house, particularly the borrower’s equity in it), capacity (the borrower’s income relative to mortgage payments and other debt obligations), and credit history.

In fact, I think that the third C should be called conscientiousness, one of the Big Five personality traits. The authors of the paper instead use the term trustworthiness. That this trait should matter for relationship stability, and that it is well measured by credit scores, should surprise no one.

I worry that pursuit of this line of inquiry, like research on the role of IQ, will not be good for the career of a young researcher.

The Nuclear Option

From an article in Scientific American.

“If we are serious about tackling emissions and climate change, no climate-neutral source should be ignored,” argues Staffan Qvist, a physicist at Uppsala University, who led the effort to develop this nuclear plan. “The mantra ‘nuclear can’t be done quickly enough to tackle climate change’ is one of the most pervasive in the debate today and mostly just taken as true, while the data prove the exact opposite.”

The report claims that nuclear power could replace all fossil-fuel electricity generation within thirty years.

I personally would rather see how some newer designs work, both in terms of safety and cost, before advocating a lot of nuclear power plant construction.

Olivier Blanchard Profiled

By Steven Pearlstein. The profile says a lot of good things about Blanchard, most of which are true. But it also includes this:

But for Blanchard, who had spent the better part of his career helping to build the new consensus, the crisis had not only revealed the inadequacies of what had been done so far but raised questions about whether it was possible to come up with one all-purpose economic model.

…“We ignored the financial plumbing,” Blanchard said. “We thought we could model it with a few simple equations,” he explained, based on what turned out to be false assumptions about the ready availability of buyers and sellers and the easy substitution of one financial instrument for another.

I would say that Pearlstein’s article suffers a bit from an excessive reliance on MIT insider economists as sources. And as Larry Summers put it, “But insiders also understand one unbreakable rule: They don’t criticize other insiders.”

The insiders created the artificial consensus around representative-agent, rational-expectations models with no institutional or historical perspective on finance. And they have not really moved very far from that consensus. For better or worse, macroeconomics is where it is today because of MIT’s insider economists, exemplified by Blanchard.

Some Non-Brookings Courage

The Hill reports,

Five top Democratic economists are criticizing Sen. Elizabeth Warren (D-Mass.) and the left-leaning Brookings Institution for forcing one of its nonresident economic fellows to resign.

Read the whole thing. I don’t see how Brookings can say it is defending its integrity by caving into bullying. As I said earlier, you can either defend the research or you cannot. If Brookings had focused on the issue of whether or not the study is valid, they would have been fine. Instead, they let Senator Warren discredit the researcher, regardless of whether the study is valid.

You may remember that I did not like it when Congress beat up on Jonathan Gruber, either.

This Brookings incident has made me angry with many people on many levels.

Perspectives on U.S. Infant Mortality

New genius-grant winner Heidi Williams and colleagues write,

Effectively, either across countries or across regions within the US, we see that the observed geographic variation in postneontal mortality is heavily driven by variation in health gradients across socioeconomic groups. Notably, when we look at neonatal mortality we do not draw the same conclusions, suggesting that the inequalities we observe emerge especially strongly during the postneonatal period

Pointer from Joshua Gans. Read the paper before commenting. You will note that she deals with reporting differences.

Sanders, Warren, and Power

Two pieces from the Washington Post. First David A. Farenthold writes,

The biggest pieces of Sanders’s domestic agenda — making college, health care and child care more affordable — seek to capture these industries and convert them to run chiefly on federal money.

Sanders obviously understands that health care and education are the New Commanding Heights.

Second, Dana Milbank writes,

It’s a sign of some clout that Warren has Litan’s hide, and Weiss’s, and Summers’s. But if her party answered to the people rather than its donors, she’d have many more.

If you combine Sanders and Warren, what you get is socialism combined with demonization and intimidation of anyone who does not support left-wing views. This is the country that the Democratic left wants to live in?

Noah Smith on Natural Experiments

He writes,

With lab experiments you can retest and retest a hypothesis over a wide set of different conditions. This allows you to effectively test whole theories. Of course, at some point your ability to build ever bigger particle colliders will fail, so you can never verify that you have The Final Theory of Everything. But you can get a really good sense of whether a theory is reliable for any practical application.

Not so in econ. You have to take natural experiments as they come. You can test hypotheses locally, but you usually can’t test whole theories. There are exceptions, especially in micro, where for example you can test out auction theories over a huge range of auction situations. But in terms of policy-relevant theories, you’re usually stuck with only a small epsilon-sized ball of knowledge, and no one tells you how large epsilon is.

Pointer from Mark Thoma. Read the whole post.

Blame the DA’s

John Pfaff says,

Though we have a smaller pool of people being arrested, we’re sending a larger and larger number of them to prison.

the probability that a district attorney files a felony charge against an arrestee goes from about 1 in 3, to 2 in 3. So over the course of the ’90s and 2000s, district attorneys just got much more aggressive in how they filed charges. Defendants who they would not have filed felony charges against before, they now are charging with felonies.

He argues that this, rather than other people’s favorite reasons, accounts for the high incarceration rate. Pointer from Tyler Cowen.

I still have many questions. For example, has the number of mentally unstable, violent individuals gone way up? Or has the proportion of mentally unstable, violent individuals gone way up? Do other countries, with lower prison populations, have fewer mentally unstable, violent individuals? Do they have an alternative way for dealing with such individuals that works better? etc.

Hypocrisy and Cowardice at Brookings

The WaPo reports,

Sen. Elizabeth Warren, stepping up her crusade against the power of wealthy interests, accused a Brookings Institution scholar of writing a research paper to benefit his corporate patrons.

Warren’s charge prompted a swift response, with Brookings seeking and receiving the resignation of the economist, Robert Litan, whose report criticized a Warren-backed consumer protection rule targeting the financial services industry.

My remarks:

1. Robert Litan is one of the most decent individuals in the whole economics profession.

2. Giving Litan’s scalp (sorry for the pun) to Elizabeth Warren does nothing to bolster the integrity of Brookings. It amounts to speaking cowardice to power.

3. Go back and read this post. If Bob Litan crossed a line, then Martin Baily crossed it at least as far. The only charitable explanation for the differential treatment of Litan and Baily is that Brookings changed its policies in the interim (something suggested in the WaPo piece, but I do not know any specifics).

4. If I were in the administration at Brookings, I would not give in to political intimidation. I would obtain peer reviews of Litan’s study and either stand by the study or repudiate it, depending on those reviews.