Positive Liberty

The tin-foil hat brigade is marching to war over the issue of Obama’s eligibility to be president, based on the claim that he might not be a natural born citizen.
Not wanting to sully the pure waters of PL, I have written an egregiously long post at my personal blog fisking their specious arguments. Or, to quote my favorite movie line:

“Thank you for playing, ‘Should we or should we not follow the advice of the galactically stupid?!;”

Before I moved to Michigan, I never thought about the auto industry. Now that I live in Michigan, it’s impossible for me to not think about the auto industry. And the question of the day is whether they should get the $25 billion bailout they’re begging for. Keep in mind the real cost could be less in the long run, because the government would get an ownership stake, and could presumably sell for a reasonable return if the industry recovers.

The big argument for saving the industry is the absolutely, undeniably, devestating effect it’s failure would have on Michigan. There is simply no way Michigan can afford to lose so many jobs at once, and the social services that would be demanded to help out those who lost their jobs would be impossible to provide given that the state’s budget already has a serious structural deficit problem. It’s the dreaded “too big to fail” argument all over again.

But…I cheated, as do almost all who talk about bailing out the auto industry. The truth is, the auto industry in the United States isn’t doing so badly. It’s just the Big Three in Detroit, General Motors, Chrysler, and Ford. Because the other automakers are primarily Japanese, it’s unpatriotic to just say, “F**k the Big Three. Let them die and we’ll all drive Toyotas.” But there’s good reason to say that, and to object to a bailout. GM, Ford and Chrysler are very badly run companies. They’ve had two decades to respond to the competitive threat posed by the Japanese automakers, and they’ve completely failed. It’s often said that this financial crisis couldn’t have come at a worse time, given the dire straits they were already in, but a more reasonable way of looking at it is that they’ve been in dire straits for so long that eventually they’d run into such a crisis.

In one respect I feel sorry for them. For years their real moneymakers have been trucks, SUVs and minivans. But they knew as well as anyone else that the real future market, as gas prices climbed, would be small cars. They needed to switch to small cars, but GM, at least, lost money on every small car it sold, so they needed to keep producing trucks to stay solvent. But the question is how did they fail, over the course of decades, to ever figure out how to produce a profitable small car? That’s bad management.

What’s the point of bailing out a business that’s been screwing up for years? Let’s not forget that Chrysler got bailed out once before. That bailout was hailed as a success because Lee Iacocca famously paid back the loan early. But 20 years later, they’re begging for help again because they’ve screwed up.

But the fact remains that letting all three go under at once may be too high a price to pay for standing on principle. It would harm millions of people who bear no blame for the Big Three’s failure, not just their employees, but the employees (and their families) of suppliers and other assorted businesses, and could harm many others if the state budget has to be seriously wacked (education, police, fire, and public health could all suffer serious cutbacks–and while libertarians might like that as a long run goal, a sudden cutback in these government programs, with no market solutions ready to step up and fill the gaps, would result in real harm to real people in the short run).

So here are three suggestions that will never be considered by Congress.

1. Let one of the Big Three die.  Just announce that we’re only saving two of them to prevent a Michigan catastrophe, not for the sake of the businesses themselves.  Then draw straws from a hat, and the unlucky one is on its own.  (And if it survives anyway, it will demonstrate what a fraud the bailout is.)
2. Let them all die and give everyone who loses their job a lump payment of $83,000.  It’s being claimed that their collapse will cost 3 million jobs, and $25 billion divided by 3 million is just over $83,000 each. 
3. Let the state governments bail them out.  Why does it always have to be the feds?  Because it’s easier for the federal government to hide big wastes of money.  But it’s claimed that state governments will lose $150 billion in tax revenue, and if that’s so, then $25 billion ought to be a cheap price to pay.  Picture yourself as a CEO, and you’re told that if your company doesn’t invest $25 billion in upgrades, you’ll lose $150 billion dollars.  Easy call.  If the states really believe the scare stories they’re spinning to the feds, they should be willing to do it themselves.

Personally, I like number one.  I do think government has the capacity to protect people from massive economic harm–in the short run.  But saving all three reinforces the false impression that it’s a matter of national important to have American label cars.  It’s not.  Even if we mistakenly believe that it’s important to have cars made in America, Toyota, Honda, Subaru, Volkswagen, and Daimler-Benz are doing that. 

We’re going to bail out the Big Three, there’s no doubt about it.   But they’ve done nothing to deserve it.

You need to be able to change strategies as the facts change. (Henry Paulson)

If the government changes the rules every day, how are you supposed to make an investment decision? (Axel Merk)

Treasury Secretary Hank Paulson is on the verge of screwing up big time. His comment is disturbingly reminiscent of FDR, who thought it was quite obvious that you’d give some idea a try, and if it didn’t work quickly you’d junk it and try something else. It didn’t work back then–his constant jiggering of the rules was the primary reason the Depression lasted as long as it did–and it won’t work now. Businesses need one thing from government more than any other, a clear statement of what the rules of the game are going to be. And since business investment is the real key to recovery (that is, to people keeping their jobs), that’s what Paulson ought to be focusing on. Instead, he thinks the government money is the magic medicine, and he just needs to find the right way to inject it.

Imagine a sports league that kept changing the rules. Say, for example, the NFL suddenly passed a rule saying that a forward pass must go at least 20 yards beyond the line of scrimmage before a receiver touches it. All the West Coast offense quarterbacks would be about as useful as 180 pound offensive tackle. But teams could adapt to it. They’d just focus on finding deep passers. But let’s say that the next season the league banned passing altogether. Then the teams would be scrambling to find option-style quarterbacks. And the next year, deciding that was a bad move, the league reinstates passing and bans quarterbacks from running past the line of scrimmage with the football. The teams would once again have to find new quarterbacks if they wanted to be successful. But none of those teams could have made a good investment decision during that time period, because they simply couldn’t know what the rules would be the next year.

That’s what FDR did in the Depression, and it clearly didn’t work. Notably, the economy began recovering after the Supreme Court struck down his New Deal legislation, the rules of which changed regularly, sometimes on a monthly basis. When he was re-elected and the Court began upholding his legislation, the economy sank again. Curiously, both then and now people take that as evidence of how deeply the economy was broken, not how poorly designed the legislation was.

There’s no reason to think that this will work today, either. Paulson asked for $700+ billion with the argument that he knew what to do with it. He clearly doesn’t, and his confusion is delaying the day on which financial institutions can begin making sound investment decisions.

This is why, when the topic is government and the economy, I can’t get too worked up about taxes. They’re not a fundamental problem. Granted marginal tax rates can be so high they discourage investment, but that’s just a damper on economic growth, not a real threat to it. The greater threat by far is regulation, either regulation that is so complex businesses find it nearly impossible to comply with, or regulation that is so unstable that businesses don’t know what will be a good business decision tomorrow, and may not even know what will be a legal investment tomorrow.

Just commit yourself, Hank. As nobody really believes the $750 billion is really money well-spent, you’re better off just committing yourself to any one of the innumerable unsatisfactory methods of spending it, so that businesses can adjust. And don’t change your mind again, no matter how much buyer’s remorse you suffer.

1. Stop campaigning until 2012. We don’t need a president who is on a permanent campaign, we need a president who will govern.
2. Focus on just 3 goals for your presidency. Be Reagan-like, not Carter/Clinton like.  You can accomplish a few things, but you can’t accomplish everything, so prioritize.  Be willing to let less important goals slide.
3. Think strategically, not just tactically. Use small achievements to build a track record that will help you achieve your big goal(s).
4. Use Camp David as a place to think. Go without your advisors so you can have time to contemplate without people trying to sway you.
5. Don’t judge yourself by what others think of you–have an inner moral compass that points to true North.  (Then, again, if you don’t have it now, you can’t get it and we’re all screwed.)
6. Remember that foreign policy comes first. Presidents who forget that are always forcibly reminded. This is hard for you Democrats especially, who tend to care more about domestic policy, but Congress writes the laws, while only the President can deal with other countries.
7. Learn economics. All your domestic policy plans will depend on it.  Don’t just select a handful of macroeconomic specialists–get some microeconomic specialists to actually teach you the details of how the economy works, especially the concept of incentives.  (You just might manage to <em>not</em> string out an economic downturn for a decade, as FDR did.)
8. Remember that presidential power is the power to persuade, a bargaining power, not the power to order anyone around.  You will have to buy support for your policy proposals, rather than assuming people (especially Congress) will support them just because they are “right.”
9. Don’t over-reach.  Like it or not, incrementalism is more successful than revolution.  The public is easily scared by big change, and the civil servants in the bureaucracy will be around longer than you so they can stall you indefinitely. 
10. Don’t play winner take all.  Elections are zero-sum games, but governance is best when played as a positive-sum games.  Look for opportunities where the other side can also claim success, and be bold enough to share the credit with them.   That buys you both credibility and support. It’s a government of separated institutions sharing power, so you can’t do it all on your own.

A particularly painful battle appears to have been lost.  But demographically, it appears the war is still winnable.

Michigan had two controversial ballot measures this year, allowing marijuana for medicinal purposes and allowing research on embryonic stem cells.  Surprisingly, both passed.

The medical marijuana measure won 63% - 37%, and won <i>in every single county</i> in the state.  The closest counties were one at the tip of Michigan’s thumb, and on of our conservative western counties, where it won by only a few hundred votes, but in many of the other conservative counties it received 55% or more of the vote.

The stem cell research measure won against the most one-sided campaign I’ve ever in my life witnessed.  In my area of Michigan, “No on 2″ signs have been required yard decoration for months, and every television commercial I saw was in opposition (including the despicable advertisement accusing scientists of wanting to create half human-half cow mixtures).  It seemed that all of the money and momentum was against allowing stem cell research, and yet it won 53% - 47% (about a 250,000 vote difference).  The results in this case were much more mixed, with the “yes” counties scattered across both the lower and upper peninsulas, but separated by many “no” counties.  Still, this is good for Michigan’s economy, and as the measure limits the research to stem cells drawn from embryos that (a) were created for in vitro fertilization, (b) were going to be destroyed as excess embryos, and (c) are voluntarily donated, there is reason to cheer this outcome as well.

Because I don’t like people who believe God personally favors their victory, this is the shirt I am wearing today.

I have been pondering not voting at all this year.

Looking over a sample ballot from my area, I realized that I don’t actually have a real preference on any of the races. I was joking about voting Natural Law Party for president, just because I don’t like any of the other candidates, until I realized that Ralph Nader was their candidate. And my local congressional race, the Michigan 7th district, is between an incumbent moralist Republican and a free-trade bashing Democrat. That’s like asking me if I’d like to be poked in my left eye or my right.

But one of my colleagues was shocked, and argued that I had a civic duty to vote. His arguments were:

1. On U.S. citizenship tests, voting is one of the answers to the question, what are the duties of a citizen.
2. Society has agreed it’s a civic duty, so it must be.

I don’t think much of those arguments. The citizenship test is something written by some government bureaucrat, with occasional pressure from reactionary Congressmembers, each of whom is remembering what their high school social studies teacher taught them. And in the U.S. system, it’s theoretically dubious to argue that government gets to tell citizens what their civic (as opposed to legal) duties are. After all, we’re the sovereign, not them.

The second argument fares no better. Are we really happy letting society tell us what our duties are? In the old south, it was a citizen’s civic duty to support the oppression of black people. And since when does majority support in itself make something right? “Everybody’s doing it” has never been a very strong argument.

My argument is that civic duty is just a nice myth we tell our kids–a Platonic golden lie–to ensure we get enough participation in democracy that it’s not a total sham. But as a political scientist, I don’t teach “civics,” I teach political science. I focus on what is demonstrably true, and no one has yet demonstrated to me that we have a civic duty to vote.

My civic duty as I see it is to keep my nose clean and not impose any more costs or harm on others than is unavoidable. Everything else is optional.

But this is far from the first time I have had a fellow political scientist get upset with me because I argued there is no civic duty to vote. Of course political scientists are a self-selected group, the vast majority of whom have gone into the field because they like politics.
And as my grad advisor put it, a lot of them don’t learn the difference between advocacy and analysis–consequently, too many of them are advocates for civic duty, and too few of them analyze whether we can plausibly demonstrate the existence of such alleged duties.

The vatican has issued new guidelines for more rigorous screening of would-be priests to weed out potential pedophiles. Eliminating pedophiles is all well and good–it’s the one crime for which I advocate death by exceptionally cruel and unusual punishment–but the Vatican is going about it all wrong.

The guidelines target candidates who show “deep-seate homosexual tendencies.” Obviously they’ve mistaken men who like men for men who like children. Having known far too many women who were molested as children, I feel confident saying homosexuality isn’t the fundamental problem here.

Of course so long as the Catholic Church insists on “celibate” priests, they’ll attract a disproportionately large number of homosexuals, because they’ll find it less difficult to satisfy their sexual desires than will heterosexual men. (See Richard Posner’s Sex and Reason

And as homosexuals are no more likely to molest children than are heterosexuals, the Church could solve its priest shortage without increasing the proportion of pedophiles if it would just turn a blind eye to gay priests. At the very least, it would be no more dishonest than their current approach, and would be a less vicious lie than the one they’re currently promulgating.

I allowed my students to play presidential election lotto for extra credit.  Whomever equals or surpasses me in predicting how states goes will get extra credit points.  As they had to turn theirs in by today, I also must go on the record with my prediction.  I am particularly uncertain about Missouri, North Dakota, and North Carolina, so there’s a good chance I’ll have to give out extra credit this year, unlike in ‘04, when I got 49 right and no student equalled me.

A reminder that it’s only politics; it’s not like it’s really important.

Not votes plural really, just one: mine.  I’ve reached the point where I want to make a decision on whom to vote for, but I can’t.  I have voted Libertarian in all but one presidential election, even voting for the ridiculous Ron Paul on the reasonable basis that I was voting for the party, not the man. 

But that reasoning isn’t helping me overcome my revulsion toward Bob Barr, a politician I deeply despise.  Meanwhile McCain has thoroughly disappointed my early expectations, appearing erratic and rash, and Obama–while surpassing my expectations and impressing me in many ways–remains too antagonistic toward free markets.  I joke about voting Peace and Freedom or Natural Law party, but I’d have to go home and throw up afterwards to purge the bad humors.   As a political economist (hey, that’s me!) would put it, I do not have a transitive preference ordering, such that I prefer A to B, B to C, and A to C.  I am effectively, it not technically, indifferent among my alternatives. 

So why not sell my vote to someone who cares more?  “Because it’s illegal” isn’t a very satisfactory answer to me, either as a libertarian or as a political scientist.  The problem with our voting system is that it doesn’t allow people to express strength of preference–the person who loves Obama and fervently believes he’s the savior of the country gets only 1 vote to cast for him, the same number as I, who may only grudgingly give him my vote.

Given that my presidential ballot is of almost no value to me this year, but is of much greater value to someone else, it would be economically efficient to sell it.  Perhaps it would be democratically efficient, too.  After all, despite our romanticization of one-person-one-vote, isn’t there a democratic logic to representing <em>strength</em> of preference?  I’m almost at the point where I could cast my vote randomly and still ensure I maximized my preference, and how democratic is that?

The question is how much my vote would go for.  Certain people, who have told me how evil I am for saying one vote isn’t worth much, would presumably find it very valuable.  Of course that value would go down if they thought there was a good chance I might vote their way anyway.  And of course that value goes down if the election does not appear to be close (or at least it should; the every vote is crucial crowd has demonstrated poor math skills, so maybe they won’t recognize that a lopsided election diminishes the value of my vote).  And even in the best case scenario, they would only pay a discounted rate because they wouldn’t be able to verify how I voted (cursed Australian ballot!), and who would trust me, especially as I’d have to keep it uncertain so I’d have plausible deniability if hauled into court?

Still, it ought to be worth something, so someone ought to be willing to pay me to vote their way.

Or perhaps I ought to just vote in the way that all the Syrians I met last June would want me to vote.  The president is, after all, the leader of the free world, and the Syrians that I met just want to be free and to have good relations with the U.S.  The next president’s actions may affect them as much as they affect me, so why shouldn’t I use the vote that’s nearly worthless to me and give them just a tiny little bit of representation.  Can anyone really plausibly argue that doing so would not be democratic?

Democrats are understandably thrilled with Colin Powell’s endorsement of Barack Obama.  Powell is one of the most respected men in this country, and specifically his support adds significant weight to Obama’s foreign policy credentials.  Given that Powell served in a Republican administration, and has said that he is a Republican, this endorsement can be seen as Powell setting aside partisanship to do what he thinks is right.  That’s something we can all admire, right?

But Democrats were outraged when Joe Lieberman chose to support John McCain.  Lieberman may not have the kind of public prestige Powell has, but he has enough to have been chosen as the Democratic vice-presidential candidate in the last election, and enought to win re-election to the Senate as an independent after his party dissed him in the primaries.  So is not Lieberman setting aside partisanship to do what he thinks is right?  Therefore, shouldn’t the Democrats, however grudgingly, admire Lieberman as well?

As I was saying to my U.S. Presidency class yesterday, we should support principles that we would like to see applied generally, not just when it benefits “my” party.  (The specific example was Bush’s signing statements, and asking if they thought Republicans would like Barack Obama to use signing statements to ignore sections of law passed by a Republican controlled Congress.)  This is why I am fundamentally unable to be partisan.  I like rules that apply equally to all (a good libertarian principle, too).  Partisans are the type who, as sports fans, are convinced that every call has gone against their team–I’m the guy who looks at the replay and admits that, yep, my guy fumbled before he crossed the goal line.

So either Powell is as bad as Lieberman, or, more plausibly, Lieberman’s actually as good as Powell.  I just don’t expect to see any Democrats admitting that.

I’m at a conference as you’re reading this, presenting a paper on economic development in Dubai and Syria.  While prepping last night, I read a thought-provoking line in an article about the history of Syria’s Baath Party.  In 1958, Syria and Egypt joined together to become the United Arab Republic, bu the union fell apart just a few years later, and the author wrote;

Syria’s secession was a powerful demonstration that the states created after World War I had developed great staying power.

Surprisingly, given how turbulent the Middle East has been, I think that’s even more true today. While no one likes to admit it, Saddam Hussein’s claim that Kuwait was really part of Iraq had real historical justification, and yet, given his devestating loss, whatever regime eventually evolves in Iraq probably won’t make annexation of Kuwait a primary objective. The borders of most Middle Eastern states have been stable for decades now, even though, for example, the United Arab Emirates still has some unresolved boundary issues with Saudi Arabia and Oman.

The biggest issue, of course, has been Israel, but it’s never been under less pressure from its neighbors than it is today. While Syria is still demanding the return of the Golan Heights, I learned on my visit there this summer that Syria has reduced the length of its mandatory military service, first from 3 years to 2, then down to 18 months. I asked a guy who had served his time how much training they did. “We learned to shoot, but most of the time we played sport” (soccer). Did you practice maneuvers, I asked? “No, we just played sport.” That’s not the actions of a country that has plans to attack Israel again. Even Syria’s political intervention in Lebanon is diminishing.

In the grand scheme of things, taking only about 100 years for a region to move from colonialism to stability–if that’s what’s actually happening–is a pretty good rate of progress.

[h/t Michael Heath]  From the lovely little personalized electoral map feature at Real Clear Politics, here is my electoral map.  Unfortunately there’s no way to simply export the map as a gif or jpeg, so I had to do it as a screen shot.  As it shows, McCain has to do a lot more than just hold on to the tossup states, a tall order.