Pur Autre Vie

I'm not wrong, I'm just an asshole

Wednesday, October 04, 2017

The Pareto President

A quick observation. A sign of a weak leader is that he or she cannot withstand opposition even from relatively weak factions. A weak leader is therefore forced to seek changes that practically no one opposes. In principle this can be done, but it takes skill and luck. A strong leader is not constrained in the same way.

Of course whether this is good or bad depends on the merits of the legislation. But to use an analogy from economics, a strong leader can push through legislation that is "Kaldor-Hicks efficient," meaning that the people who gain from the change could theoretically compensate the people who lose. A weak leader, by contrast, is constrained to settle for "Pareto efficient" legislation, meaning legislation that produces no losers (or, equivalently, legislation that actually provides for some kind of compensation for the losers).

(Note that a strong leader could also push through legislation that isn't efficient at all, costing the losers more than it benefits the winners. This would be an argument for inserting lots of "veto points" so that just about everyone has to be bought off in order for legislation to pass. The counterargument is that veto points are themselves subject to severe abuse. It's not an argument I care to address right now.)

Anyway this is what we see with Trump. Every time he proposes something, whatever group is hurt by the proposal kills it. A stronger President could push things through, forming a coalition of the groups that stand to gain and then rallying them to get the bill passed. But Trump is weak. Alternatively, Trump could design legislation that doesn't impose material losses on anyone. But this is difficult even for very smart people, and Trump is stupid.

I'm not making any predictions about the tax cut legislation. Tax cuts should inherently be pretty easy since no one actually cares about the debt. But in general I expect the Trump administration will continue to struggle to get even mildly complicated legislation through Congress.

1 Comments:

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