Monthly Archives: March 2016

Martin Gurri on Donald Trump

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He writes,

The right level of analysis on Trump isn’t Trump, but the public that endows him with a radical direction and temper, and the decadent institutions that have been too weak to stand in his way.

The American public, like the public everywhere, is engaged in a long migration away from the structures of representative democracy to more sectarian arrangements. In Henri Rosanvallon’s term, the democratic nation has devolved into a “society of distrust.” The reasons, Rosanvallon argues, are deep and structural, but we also have available a simple functional explanation: the perception, not always unjustified, that democratic government has failed to deliver on its promises.

Recall that Gurri wrote The Revolt of the Public, which predicted the revolt against the establishment that Trump represents.

Read the whole post, which includes this:

The charts show Ted Cruz and Marco Rubio, Trump’s chief opponents, drowning deep below the awareness threshold. They and their messages were largely nonexistent to the public.

Why Are Taxis Inefficient?

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James Hamilton writes,

A new study by Judd Cramer and Alan Krueger at Princeton found that only 40% of the miles that taxis drive in Los Angeles and Seattle are spent carrying a passenger someplace the person wants to go. By contrast, for UberX the numbers are 64% and 55% for the two cities, respectively. In terms of hours worked, taxi drivers in San Francisco spend only 38% of their work hours with a passenger on board. For UberX, that number is 55%.

Why should this be the case? One possibility that comes to me is the different economic model. My guess is that taxi companies make much of their money by renting to taxi drivers the vehicles and the taxi licenses. Maximizing the number of rides is not such an issue for them. But Uber gets a share of money on every ride, and that is where their revenue comes from, so they have no choice but to put a lot of effort into maximizing the number of rides.

Honor, Face, Dignity, and Victimhood

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Jorg Friedrichs writes [UPDATE: link fixed],

In short, status is more salient for honor and face than for dignity cultures. In honor cultures, hierarchy is like a “pecking order” with “cockfights” rife among status-anxious rivals because the honor code requires defending honor against real or perceived challenges from peers. In face cultures, hierarchy is engrained in the collective consciousness of the group and status anxiety cannot burst into conflict because people must know their place. In dignity cultures, self-worth is a birthright so status and, by implication, status anxiety should matter less.

There is a lot of interesting, speculative discussion along these lines.

On a related note, in a recent Cowen-Haidt discussion, Jonathan Haidt brought up one of his old posts.

I just read the most extraordinary paper by two sociologists — Bradley Campbell and Jason Manning — explaining why concerns about microaggressions have erupted on many American college campuses in just the past few years. In brief: We’re beginning a second transition of moral cultures. The first major transition happened in the 18th and 19th centuries when most Western societies moved away from cultures of honor (where people must earn honor and must therefore avenge insults on their own) to cultures of dignity in which people are assumed to have dignity and don’t need to earn it. They foreswear violence, turn to courts or administrative bodies to respond to major transgressions, and for minor transgressions they either ignore them or attempt to resolve them by social means. There’s no more dueling.

Campbell and Manning describe how this culture of dignity is now giving way to a new culture of victimhood in which people are encouraged to respond to even the slightest unintentional offense, as in an honor culture. But they must not obtain redress on their own; they must appeal for help to powerful others or administrative bodies, to whom they must make the case that they have been victimized.

Three Axes to Explain Terrorism

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The front page of today’s WaPo has me thinking about this.

First, there is the story of the massacre of Christians on Easter in Pakistan.Along the libertarian freedom-vs.-coercion axis, the preferred explanation is blowback. That is intervention by western governments in foreign countries produces terrorism. However, it is difficult to see how this story applies here.

Next, there is a story of how terrorists met in prison in Belgium. You can see that the reporter has an urge to tell an oppressor-vs.-oppressed story of how prisoners from the oppressed class of Muslims turned into terrorists. But if you read all the way through, you see that the attempt does not really work. Still, seeing the headline, many progressives will jump to the conclusion that better treatment of prisoners is the solution to terrorism.

For me, the best explanation of terrorism lies along the conservative civilization-vs-barbarism axis. And I think that President Obama’s steadfast refusal to see Islamic terrorism along those lines is something that many Americans find frustrating and demoralizing.

Genghis Khan on Macro

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Stanley Fischer said,

one of the major benefits that were expected from the introduction of inflation-indexed bonds (Treasury Inflation-Protected Securities, generally called TIPS), namely that they would provide a quick and reliable measure of inflation expectations, has not been borne out, and that we still have to struggle to get reasonable estimates of expected inflation.

He cites a paper by D’Amico, Kim, and Wei arguing that a large liquidity premium can suddenly appear in the TIPS market.

Pointer from Mark Thoma.

There is much of interest in Fischer’s speech, but I was particularly struck by the remark on TIPS.

One more excerpt:

it remains a pity that the fiscal lever seems to have been disabled.

I have some objections to that statement.

1. The “automatic stabilizer” components of fiscal policy are significant and certainly have not been disabled.

2. The stimulus package enacted in 2009 was quite large.

3. To the extent that the fiscal lever has been used less than some Keynesians might want, this could perhaps be blamed on the high levels of debt that governments accumulated, even when times were good. If anything has been disabled, it has been the “off switch” for fiscal stimulus. When you run deficits at full employment, this is going to limit your flexibility to increase deficits during a recession.

Reconstituting the Administrative State

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Ilan Wurman writes,

whenever an agency or independent commission wants to make a new rule, it must submit the rule directly to Congress by a certain deadline. Congress would then have three options for responding. First, Congress could take no action, leaving the rule idle. (Whether this happens because Congress cannot reach a consensus or because lawmakers in fact approve of the rule is immaterial here.) After seven months of inaction, the rule would take effect and become binding law, provided the president assents to it. Second, Congress could pass a bill containing the rule, or an amended version of the rule; the president would then need to approve the bill, and then the rule would become law. (This second case is no different than the ordinary legislative process described in the Constitution.) Third, Congress could pass a “resolution of disapproval,” which would effectively veto the rule, meaning it would not be presented to the president and would not become law.

Read the whole article, which is about trying to revive the principle of separation of powers while continuing to have agencies that exercise all three powers. The example above would provide a legislative check on the rule-making powers of agencies.

With this legislative veto in place, Wurman argues that the agencies would not longer need to be independent of the executive. The agencies could instead fall under the control of the President, which is what the executive branch is supposed to do.

Wurman also proposes a way to check agencies’ judicial power. I was not able to follow the legal technicalities of his suggestion.

The ideas are impressive. However, in the end, I came away thinking of the proposals as putting lipstick on a pig. The pig is the notion that experts are capable of engaging in planning for everyone. That is the idea that is behind the creation of the agencies and giving them power in the first place. If we continue to operate under the assumption that expertise works well, then Wurman’s proposals would change nothing. And if we challenge that assumption, then the solution is to restrict the powers of the agencies.

To put this another way, it is the cultural status of the administrative state that needs to be changed. Its (un-) constitutional status derives from its cultural status.

Three Axes Explains Soda Taxes

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Catherine Rampell writes,

Why not just target the output, rather than some random subset of inputs? We could tax obesity if we wanted to. Or if we want to seem less punitive, we could award tax credits to obese people who lose weight. A tax directly pegged to reduced obesity would certainly be a much more efficient way to achieve the stated policy goal of reducing obesity.

Because taxing obesity would be “blaming the victim” from a progressive perspective. Taxing soda fits the narrative in which the obese are oppressed and soda manufacturers are the oppressors. Never mind about efficiency, tax incidence, and other economic concepts. A soda tax advances the oppressor-oppressed narrative, and therein lies its appeal.

Quantifying Consumers’ Surplus

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Tim Kane writes,

Simply put, the WTA value of modern things is vastly higher than older, more tangible, more commoditized goods. I have conducted some preliminary, not-ready-for-peer-review research and discovered a huge gap differential

WTA stands for “willingness to accept,” as in how much money would you be willing to accept to have only the medical care available in 1970? As Kane points out, measuring this is very important if we are going to make well-grounded statements about how economic welfare is distributed and how it is changing over time.

Unfortunately, this research probably will not definitively answer the question of whether there were more welfare gains in 1900-1950 than in 1965-2015. We cannot go back and find the WTAs for automobiles and air travel back then.