Principle Write-downs

Yesterday we observed Megan McArdle claiming that "as a matter of principal," the Constitution should prohibit laws that require people to use markets. Today we have Matt Yglesias writing about the liberal desire for "principle write-downs."

I love the concept of a principle write-down. I suppose sometimes that's the only way to avoid moral bankruptcy.

Lapsing into Speechlessness

I am not a complete fatalist when it comes to the power of logic in political debate, but I do get pretty pessimistic sometimes. The latest example is this from Megan McArdle: "As a matter of principal, I think that our constitution should not permit laws requiring people to buy services from private parties."

Okay, that sounds like the kind of principle a reasonable person might build into the Constitution. But wait - should the government be able to:

1. require drivers to maintain liability insurance? (seems like a good policy - get it?)

2. require litigants to file paper copies of their pleadings? (Or require paper copies of tax returns to be filed? Bear in mind that the internet is only a few decades old while the Constitution has been around since the 1800s.)

3. require people to put their dogs on leashes in public spaces?

4. require vaccination of dogs?

5. require people to wear clothes?

6. require building owners to maintain fire extinguishers?

7. require corporations to hire boards of directors?

8. require financial institutions to maintain segregated bank accounts?

And so on. A huge amount of economic activity in this country is carried out in the private sector, which means that a lot of laws will directly or indirectly require people to participate in markets. And I truly can't comprehend why anyone would want it to be otherwise. Particular laws may be annoying - who knows, maybe nudity laws should be constitutionally prohibited. Maybe leash laws are silly. But to say that these laws are wrong as a matter of principle because they require people to engage in market transactions strikes me as so utterly wrongheaded that I can't begin to think how I would formulate a logical argument against it. I suppose I could make consequentialist arguments about whether it's a good idea to force most economic activity into the public sector, but mostly I think I would just keep listing examples and sputtering.

[note: edited post to make it funnier, in my opinion]

Nothing is Shit Anymore

One of Tony Soprano's refrains is, "Everything turns to shit," which I find highly compelling. But there is a countervailing tendency to re-imagine cultural products in such a way that they are stripped of their gloom. Think of the British "Office" vs. the American "Office." The U.K. version is pretty emphatic about the inescapable shittiness of life. The U.S. version is so much sunnier that it's barely recognizable.

SPOILER ALERT - DO NOT READ FURTHER AND DO NOT WATCH THE VIDEO IF YOU HAVEN'T READ INFINITE JEST

This came to mind when I watched the Decemberists' video for their new "Calamity Song":



To me, this video feels very appealing, but it also feels like a violation. I want to grab the Decemberists and shake them and tell them to read the fucking book. Again, if necessary. This is not Infinite Jest. This is not Eschaton.

But the video does appear to capture what Colin Meloy says he was going for:

Despite the grim stakes that are implied by Eschaton, Mr. Meloy said there was "almost a 'Looney Tunes' aspect" to the "Calamity Song" video. He made the case that its spirit of "hilarious chaos" was exactly what was needed in a time that sometimes feels as uneasy as the one Wallace envisioned in "Infinite Jest."

"There’s this kind of resigned dark humor that people can hold onto," Mr. Meloy said. "It can be a moment of levity. Whether or not we are really moving into the end times, I think is hard to say, but at least we can have a sense of humor as we go down."

I don't have any real insight here. This tendency to turn everything sunny and rounded and safe seems like a noble impulse with horrible results. In other words, it is like liberalism from the conservative perspective. And still, I find the video almost irresistible. Who wouldn't want to live in the world of Infinite Jest as depicted in this video?

Well, so, I'm incoherent, but anyway I think the book and the video speak for themselves, so hopefully this post isn't wasted.

Texas Not Relying on Energy Jobs? I Douthat Very Much

In his column arguing that Texas is a public policy success story, Douthat quotes a blog post by Matthias Shapiro: "[T]ake the energy sector completely out of the equation and Texas is still growing faster than any other state."

Shapiro's methodology is to look at the sectoral breakdown of employment numbers and find that the energy sector and related sectors account for "about 25% of the job increases in the last year."

Sigh. So imagine a small town in the middle of farm country. There are a few non-agricultural jobs - teachers, police, a generalist lawyer (wills, real estate, family law), maybe a family doctor, maybe a baker, a barber, grocer, whatever. Now a factory comes to town, employing 800 people. There is a boom in housing construction for the (roughly) 800 new residents. Non-farm employment soars - more barbers, more bakers, more teachers, more police, more everything. There could even be some professions in town that weren't there before. The total increase in employment is 2,000 jobs, but 1,200 of these are in sectors other than manufacturing.

Now there are rumors that the factory is leaving. The mayor is asked, "Aren't you worried about the employment situation if the factory leaves?"

"Only a little," the mayor replies. "When you look at factory employment in this town, it accounts for less than half of the new jobs. Even if the factory leaves, we will still have 1,200 jobs that we didn't have before. We'll be fine."

A prominent columnist concurs: "Nor are the jobs confined to the manufacturing sector."

The columnist quotes a blogger, who notes, "Take the manufacturing sector completely out of the equation, and the town is still growing faster than any other town in the state." The blogger uses the same methodology as Shapiro: he simply looks at the percentage of jobs in the town that are categorized as "manufacturing" or related sectors, and notes that the majority of jobs aren't even in the manufacturing sector.

So hopefully the error here is obvious. Each job in an export sector tends to support several jobs in non-export sectors such as services and local goods production. If the factory shut down, not only would 800 jobs be lost, but there wouldn't be a customer base to support most of the other 1,200 jobs that have been created in the town. Shapiro's methodology is laughably crude, because it doesn't take this into account at all.

For what it's worth, my understanding is that the aerospace industry in southern California was once estimated to have a multiplier in the 3 to 4 range - each job in that industry generated 3 to 4 jobs indirectly (I will try to find a more precise estimate and update this post). So as a back-of-the-envelope matter, Shapiro's numbers seem consistent with roughly all of the Texas employment "boom" stemming from the energy sector. And this wouldn't be surprising: the price of oil has fluctuated a lot, but oil remains very expensive by historical standards. I imagine the Norwegians are doing just as well as the Texans, if not better, despite the notable absence of Rick Perry or anything resembling his policy agenda.

(And indeed, Norway's unemployment rate was 3.6% in 2010, according to the CIA World Factbook. And 76% of its labor force is employed in "services," so we're not talking about an oil-based economy here, right, Douthat/Shapiro?)

Proposed Onion Headline

Romney Vows to Get DC Man Fired, Take His House

This is My Moment - My Moment!

Rick Perry has launched his campaign, along the way suggesting that if Ben Bernanke visits Texas, he might be treated to a little chin music. Official story here, Krugman reaction here, Yglesias post with video here. Here's my transcription of the video. Perry is responding to a question about the Federal Reserve - we don't hear the question:

Oh, the Federal Reserve. I'll take a pass on the Federal Reserve right at the moment, to be real honest with you, but I know there's a lot of talk and what-have-you about him. If this guy prints more money between now and the election, I don't know what y'all will do to him in Iowa, but we'd - we would treat him pretty ugly down in Texas. I mean, printing more money to play politics at this particular time in American history, is almost treacherous, uh, treasonous, in my opinion.

Okay, so. The macroeconomic theory implicit in Perry's response is of course asinine, reminiscent of Tim Pawlenty's infamous accusation that Obama has stealthily turned the dollar into a fiat currency. This is a good test of Perry's intelligence and/or character - if he were adequate in both categories, then he never would have said anything like this. And of course, when it comes to the violence, what the fuck?

But to me, the real test here is for Romney. Does he have the courage and skill to go on the attack? Can he turn this into a macaca moment? Here's how I envision it (slightly exaggerated to emphasize my point):

Yesterday Rick Perry made three shocking suggestions about the chairman of the Federal Reserve, Ben Bernanke. I won't spend much time on the first, since we all know that Rick Perry doesn't want to see any harm come to Chairman Bernanke. But the second suggestion, that Chairman Bernanke might goose the economy to get President Obama re-elected, is beyond the pale. If Rick Perry has any reason to doubt Chairman Bernanke's honor or his dedication to public service, he should say so. Otherwise he should keep his mouth shut. President Obama has plunged first the U.S., and now the world, into the deepest recession since the Great Depression. This is not Chairman Bernanke's fault, and I believe he has done his best to keep the economy afloat. His motivation is not partisan. He is just doing his best to create jobs. It's one thing to oppose Chairman Bernanke's monetary policy. A lot of reasonable people have reservations about some of the measures the Fed has taken during the Obama recession, and I count myself among them. But to impugn Chairman Bernanke's honor from the cheap seats, as Rick has done, is completely uncalled for.

But what I find really disturbing is Rick's suggestion that taking measures to improve the job market before November of 2012 would be treasonous. Now, I want to see Obama defeated in 2012 as much as anyone. In fact, I think we're not going to see real job creation in this country until businesses know that a market-friendly administration is on the way. But let me be clear: I wouldn't sacrifice one job, not one job, to improve my political chances. Americans don't need jobs in 2012, they need jobs right now. There's only one person I want to see lose his job, and it's the guy who's responsible for this whole mess: President Obama. Are you going to help me? Are you going to help me make him a [crowd joins in] ONE TERM PRESIDENT!

Okay, so, I'm no speechwriter. But I think Romney (not a spokesman) should say something along these lines, suitably toned down (but maintaining the Rick/Chairman Bernanke dichotomy, to belittle Perry and associate Romney with the institutional dignity of the Fed). He needs to show that he's not afraid of Perry, that Perry is a blowhard who doesn't understand the economy, that Perry is a bit of a crazy man who wants Texas thugs to beat the shit out of a nice Jewish boy from South Carolina.

Perry will probably learn not to say stupid things in public, other than when he's articulating the Republican agenda. Better for Romney if this inevitable moderation in tone makes Perry look more like a child who has been spanked by Romney than like a Texas conservative finding his footing on the national stage.

Hey, Hey, LBJ

In my previous post, I argued that Matt Yglesias should know better than to criticize the press for asking process-oriented questions. As an example, I cited Marc Ambinder's prescient question about the debt ceiling, which was entirely procedural (it was all about leverage, not about a substantive issue). Sarang commented:

It's worthwhile to separate out two points. One (MY's point) is that it is bad for politicians and politics junkies to use these process issues to determine how elections will play out because they only affect outcomes indirectly through their influence on policy; to predict whether someone will get reelected the best thing to do is to predict the growth rate and stick it in the Hibbs model. This is largely true, but it runs into the other point, which is that everyone esp. Obama is in fact perceptions-driven and therefore to predict what policies they are likely to enact it is beside the point to ask what a rational person in their place would enact. MY's target audience is some mix of policy makers and pundits, so he is being descriptive on the first point and prescriptive on the second. This seems internally consistent.

So this reminds me a little of the argument that you should pay attention to technical analysis, not because it's anything other than chicken scratches, but because everyone is paying attention to those chicken scratches, so they move markets.

Today I dug up the Yglesias post I was thinking of but couldn't find. It spells out the point I am attacking a little more clearly. The title says it all: "Nobody Cares About the Press Corps' Process Questions."

So anyway I think Sarang and I are talking past each other. Sarang basically says, political maneuvers don't matter because elections are determined by macroeconomic factors, so you should pay attention to political maneuvers only inasmuch as politicians irrationally believe them to matter.

I think you should pay attention to political maneuvers because they are the means by which wars are launched, debts are defaulted on, and gays are barred from adopting children. Or to use a recent and ongoing example, Congress now uses pro forma sessions to prevent Obama from making recess appointments. Pay no attention, says Sarang. Obama's election will depend on macroeconomic aggregates.

I say pay attention: a huge number of executive branch positions remain vacant, and this matters. Maybe not as much as the 2012 presidential election, but enough that it is worthwhile for political reporters to note the issue. This is why I used the Ambinder example: if the safest financial asset in the world suddenly stopped making scheduled payments, it would be a very big deal, electoral impact or no. But since Ambinder's question was procedural, by Yglesias's stated logic (which I doubt he actually believes), it shouldn't have been asked in the first place. (One reason I doubt Yglesias thinks procedural questions are irrelevant is his longtime campaign against the filibuster, as well as posts like this, which addresses congressional hostage-taking - a classic procedural issue.)

So I stand by my point: paying attention to the accumulation and deployment of political power is a worthwhile endeavor.

A Significant Amount of Leverage Over the White House

Everyone loves Jon Stewart's coverage of Marc Ambinder's infamous question on the debt ceiling, which he presciently asked on December 7, 2010 (a date which will live in...) (start around the 4-minute mark if you just want the part I'm talking about):

The Daily Show - Dealageddon! - A Heartbreaking Work of Staggering Compromise
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Okay, so. I made a good faith effort to track down an Yglesias post arguing that political journalists spend too much time on horse-race bullshit and not enough time on the issues voters care about. This is the best I could do:

The Beltway convention of focusing exclusively on process, horse race speculation, and “he said, she said” has long struck me as not just annoying, but slightly more inexplicable than it appears at first glance.

(It's annoying because I know there's a more apposite post out there, but I can't find it after a fairly extensive search.)

So anyway, Yglesias really ought to know better. Ambinder's question is exactly the kind of inside-baseball, non-substantive question that the public doesn't care about. But it should. I'm not going to defend political journalism in all its manifestations, but paying attention to the accumulation and deployment of political power is a worthwhile endeavor. And deep in his heart, Yglesias knows this.