Wednesday, July 16, 2008

Economic Scorecare for Presidential Candidates

It’s often stated that economists agree about the majority of issues. In that spirit, Greg Mankiw had a recent piece titled What If Candidates Pandered to Economists? These are the issue he came up with that a large majority of economists would agree (without ‘Raise Funds For Economic Research’ which I’m not sure about): Support Free Trade, Oppose Farm Subsidies, Leave Oil companies and Speculators Alone, Tax the Use of Energy, Raise the Retirement Age, Invite More Skilled Immigrants, and Liberalize Drug Policy. I’d like to add three more to that list: Oppose Ethanol Subsidies, Liberalize Labor Laws, and Ensure Central Bank Independence.

I have been toying with the idea creating an economic scorecard to measure the candidates and hopefully this gives my chosen issues a bit more weight. Economists have well developed opposing arguments about Healthcare, Income Taxes, Entitlement Spending, and School Spending. Those are complex issues that there can be quite a bit of reasonable disagreement on. This post does not attempt to judge the candidates based on the merits of there positions on those issues. Instead, I am judging candidates based on issues where economists know with I would estimate greater than 80% confidence what is the correct stance.

I give each candidate a score of 0-10. 10 being straight from Mankiw’s principles, 0 probably being whatever Lou Dobbs says. The Format is Obama's score first, McCain's second:
- Support Free Trade 5- 9 - McCain strongly does, Obama probably secretly does.
- Oppose Farm Subsidies 3 - 8
- Leave Oil companies and Speculators Alone 3 - 3
- Tax the Use of Energy 8 - 4 - McCain wants to get rid of the gas tax, Obama would keep it. Both want some sort of cap-and-trade system, although McCain sometimes doesn't seem to understand it.
- Raise the Retirement Age 3 - 5
- Invite More Skilled Immigrants 5 - 5 - I cannot find a policy difference
- Liberalize Drug Policy 4 - 0
- Oppose Ethanol Subsidies 1 - 8
- Liberalize Labor Laws 3 - 6
- Ensure Central Bank Independence 5 - 5 - Sadly I cannot find positions for either candidate...
Bottom Line: Obama 40 - McCain 53

Based on this not at all scientific analysis, John McCain is 33% better than Barack Obama on these issues with pure economic answers. There’s a fair degree of art in these scores. For example, I assume Barack Obama will be a more free-trade oriented President than he claims he will be (Austin Goolsbee gets him a couple points on the scorecard). I did not give Obama points for the fact that he will likely be more able to push trade deals through Congress than McCain, if he chooses to do so. McCain scores better than I would have expected. However, I did not have any category for his arguing that further tax cuts will raise revenue – the dubious claim for which he is so often blasted on the econ-blogosphere.

So, McCain wins. However, this is not an endorsement. Perhaps the most important issues are not addressed in this comparison – Foreign Policy, Taxes, Social Security, and Health Care. I have my views on those issues but they’re lower-confidence stances and I won’t go into them in this post. Furthermore, both McCain and Obama’s campaigns center on personal qualities beyond the issues as the main reasons they should be President. McCain promotes his honor and experience. Obama is promoted as a smart internationalist who has the potential to be a uniting figure both domestically and internationally. So, this chart may only amount to 1/3 of what makes up my voting decision. However, it does say something about the candidates that they probably know the right answers to these issues, but they have chosen to take some different positions.

Tuesday, July 15, 2008

Barack Obama Distances Himself from Hyper-Literate Progressive-Rockers

I fear Barack Obama may be losing his grip on the all important hyper-literate progressive-rocker demographic. According to a recent interview, Brent Scowcroft will be a major influence on the foreign policy of an Obama Administration. Scowcroft, as readers of this blog would know, was the basis for the villain in the Decemberists music video for 'Sixteen Military Wives'. In that video, 'Henry Stowcroft' , a composite character based on Henry Kissinger and Scowcroft, attempts to take over the model UN at his elite private school with amoral tactics. Eventually he gets what's coming to him, as the France-led international community turns against him, in this brilliant Wes Andersonesque music video.

Until recently, the Decemberists have played at some Obama events in the Pacific Northwest. ...The Decemberists are also known to open their shows with the Soviet National Anthem (No evidence that they support class and race-based genocide however). Obama distancing himself from the vanguard of the hyper-literate indie rock scene is clearly a post-primary move to the center.

It's a hot story. Check back at this blog regularly for updates, as it develops. Obama's fiery rhetoric towards Luxembourg will be reported here first.

Barack Obama Opposed to Satire

If you haven’t seen already, the most recent issue of The New Yorker features a cover cartoon that has the Obama and McCain campaigns ‘outraged’. The cover features the caricatures of the Obamas as they must be imagined by readers of the most radical reactionary anti-Obama scare emails. Among other things, Barack Obama is not wearing an American flag lapel pin and not saying the pledge of allegiance. I think it’s a mildly funny satirical carton that shows how crazy these criticisms of Obama are. Even though The New Yorker has no direct interest in this, it is a public service to bring this craziness to the forefront and expose how stupid it is.

But, as is often the case, mine is not the only opinion. Team Obama portrays the cartoon as a mean-spirited hate piece. It appears to the darker angels of our nature and adds weight to the crazy scare emails about Obama. Barack Obama is deeply offended (He may actually be offended, but he has chosen to be publicly offended).

The Obama campaign’s reaction to this cartoon strikes me as a significant blunder. By complaining loudly about the cartoon (and allowing John McCain to also publicly denounce the piece) Obama is making it a bigger story. In fact, the biggest story right now is that Barack Obama is upset about a cartoon in The ‘right-wing’ New Yorker. While this seems trivial and strange, it also makes him look defensive and and not very confident. It makes marginal voters wonder why he is protesting so much. Is he not really ‘one of us’? as Hillary Clinton would constantly ask, but of course never ask... This question is pretty ridiculous, but it’s also the type of question that determines who gets to be President in a democracy (Remember Thomas Dewey couldn’t be President because he had a mustache).

Full Disclosure: I voted for Barack Obama in my primary. He got my vote mainly because I thought he represented a more internationalist streak in the Democratic Party, whereas Hillary Clinton represented a mean-spirited streak.

Saturday, July 12, 2008

Obama Bribes Clinton For Support

This is public knowledge, but it seems a little odd to me that there isn't more criticism... When she suspended her runf for the Presidency, Hillary Clinton's campaign had about $21 million in debt. $11.4 m of this debt is to herself. Part of the agreement when Clinton dropped out to support Barack Obama was that he would help pay off her campaign debt. Consequentially, at all of his events, Obama reads a few lines about the importance of donating to the Clinton campaign to help with the debt.

This strikes me an awful lot like a bribe. Clinton has said she does not expect to repaid her money, although she certainly wouldn't reject the return of her 11.5 mil... Of course, while she might not her her money back the Clinton '12 Campaign would certainly at least benefit from starting out with good credit. That's less direct, but is still a bribe.

Anyway, the other day, Obama forgot to read these lines at an event in New York. So, he had to jumpy back on the stage and cut the music to say "This is not the speech part, but it is important... Sen. Clinton still has some debt, and I could have had some debt if I hadn't won. So I know the drill... It's very important to us, and obviously Sen. Clinton will be grateful as well."

Fortunately, this effort to raise money for Hillary has been incredibly unsuccessful. Thus far , Obama has not yet raised $100,000 thousand for Clinton. And $4,6000 of that amount is from Barack and Michelle.

Wednesday, July 9, 2008

Urban Public v Private Mass Transit

Mike Munger had a pretty interesting podcast on Econtalk this week about mass transit in Santiago, Chile. An thus Russ Robert's program has inspired another one of my posts...

The case for a public light-rail or subway system is reasonable enough to me. In New York or London, with the tremendous amount of commuters in a dense area, the financials probably make sense. It makes sense for the government to do this, because eminent domain may be necessary to build a connected rail system, and competing rail lines across the city may be inefficient (although, I am a little skeptical of this second argument).

However, I think the case for a government run bus system is quite hard to make. The major American cities all started with private transport systems that were eventually pretty much all taken over by the government by the mid 20th century. So, we do not have much experience in the United States with private mass transit. However, I do not see much advantage to the government running our bus systems. The government has no particular advantage over private companies in running bus transport.

Presumably, you would get the best bus service by allowing private companies to compete as the bus companies would be directly responsible to their customers rather than indirectly to voters who make their decisions in the booth based on mass-transit. Under a private system, the price system should cause the best routes to win out, there will be differentiated service based on needs, and efficient number of buses on the streets, and the best most cost-efficient buses and systems will win out. A government monopoly would have the same problems that government monopolies have. The public system is not directly responsible to it's customers, does not set prices based on the market, has centrally created routes without competition, and would most likely be run at a loss at the public's expense. It has the problems of a government run institution and of a monopoly. There may be advantages to having one system connect across a city. I'm skeptical of this, but one winner would quickly arise in a competitive system if this were true.

There is one good argument I can think of for public involvement in the buses, and that is to ensure service to poor neighborhoods. Now a government bus system could be designed to make certain that the poor have service. To the extent that this would not happen in a purely competitive system, these routes would be a subsidy to the poor. Why not go around this and offer incentives to bus private companies that give rides to the poor? This would be more transparent and also more efficient at making sure the subsidy goes to the right group of people. Also, I would expect that an incentivized private system would do a better job at servicing the favored poor than a public system that does not have to compete for their business, and also deals with a lot of other bizarre incentives.

A private bus system with subsidies to strikes me as a Pareto improvement. I can think of no strong arguments against this idea. If you can, please post.

Tuesday, July 8, 2008

Best Films Since 1983

Inspired by Entertainment Weekly (as I often am) and Ross Douthat I came up with my own list of the Top 50 movies since 1983. They did Top 100, so I had to cut quite a few movies, although many of them would not be in my own 100 best. Also, I didn’t list any films from E’s list that I haven’t seen (Oddly, most of them I have no interest in seeing).

I disagree with Entertainment Weekly a good deal, and 21 of my 50 are not on their 100 (My additions are shown with asterisks). I have noticed that compared with their list, I have a few tendencies/biases: I definitely have a bias in favor of foreign films compared to E. I tend to rank violent mafia, gangster, and war movies higher. Also, anything that deals with government and corrupt gets a boost. I noticed I have a fairly strong pro Martin Scorsese/Wes Anderson/Clint Eastwood/Coen Brothers/Quinton Tarentino bias. Also, I think movies have gotten a lot better over the last 8 years or so, and also that the late 1980s was a particularly bad era for film.

When you know that, you can probably guess my list. But just to make it official, here is the correct list of the Top 50 movies since 1983.

Top 50 (in order, additions with asterisk):
1. GoodFellas (1990)
2. The Lives of Others (2006)
3. No Country For Old Men (2007)
4. Pulp Fiction (1994)
5. Fargo (1996)
6. Unforgiven (1992)
7. *Reservoir Dogs (1992)
8. Rushmore (1998)
9. Saving Private Ryan (1998)
10. There Will Be Blood (2007)
11. *The Usual Suspects (1996)
12. This Is Spinal Tap (1984)
13. *Pan’s Labyrinth (2007)
14. *City of God (2001)
15. Broadcast News (1987)
16. *The Royal Tennenbaums (2002)
17. *Blood Diamond (2007)
18. Scarface (1983)
19. Fight Club (1999)
20. *Adaptation (2003)
21. The Sixth Sense (1999)
22. *Million Dollar Baby (2003)
23. Schindler's List (1993)
24. Gladiator (2000)
25. *American Beauty (1999) – Apologies to Ross Douthat
26. Rain Man (1988)
27. The Naked Gun: From the Files of Police Squad (1988)
28. *Knocked Up (2007)
29. The Matrix (1999)
30. There’s Something About Mary (1998)
31. *Gangs of New York (2003)
32. L.A. Confidential (1997)
33. Boogie Nights (1997)
34. *Scent of a Woman (1990)
35. Office Space (1999)
36. The Departed (2006))
37. * Leaving Las Vegas (1995)
38. *The Big Lebowski (1999)
39. Sideways (2004)
40. *Casino (1995)
41. *Best in Show (2000)
42. Full Metal Jacket (1987)
43. *Downfall (2004)
44. *Rudy (1994)
45. The 40 Year-Old Virgin (2005)
46. *Autofocus (2003)
47. *Batman Begins (2005)
48. *The Spanish Apartment (2002)
49. Swingers (1996)
50.* Braveheart (1995)

Not in the Top 50 (in approximate order):
Casino Royale (2006) Waiting for Guffman (1996) Glory (1989) Natural Born Killers (1994) Terminator 2: Judgment Day (1991) Speed (1994) Spider-Man 2 (2004) The Truman Show (1998) Austin Powers: International Man of Mystery (1997) Napoleon Dynamite (2004) Back to the Future (1985) South Park: Bigger Longer & Uncut (1999) The Lord of the Rings trilogy (2001-03) Titanic (1997) Toy Story (1995) The Silence of the Lambs (1991) The Lion King (1994) Ghostbusters (1984) Jerry Maguire (1996) Dazed and Confused (1993) Beverly Hills Cop (1984) Men in Black (1997) Clueless (1995) Do the Right Thing (1989) Shrek (2001)

Have not Seen:
Breaking the Waves (1996) Crouching Tiger, Hidden Dragon (2000) The Piano (1993) The Breakfast Club (1985) Children of Men (2006) The Player (1992) Pretty Woman (1990) Eternal Sunshine of the Spotless Mind (2004) The Incredibles (2004) Menace II Society (1993) Ed Wood (1994) In the Mood for Love (2001) Far From Heaven (2002) The Talented Mr. Ripley (1999) The Blair Witch Project (1999) Y Tu Mamá También (2002) Michael Clayton (2007) Moonstruck (1987) Lost in Translation (2003) Evil Dead 2: Dead by Dawn (1987) Drugstore Cowboy (1989) Out of Africa (1985) Thelma & Louise (1991) Sid and Nancy (1986 Donnie Brasco (1997) Witness (1985) All About My Mother (1999) Dirty Dancing (1987 sex, lies and videotape (1989) Big (1988) Scream (1996) Memento (2001) A Room With a View (1986) Blue Velvet (1986) Hannah and Her Sisters (1986) Die Hard (1988) Moulin Rouge (2001) Crumb (1995) Edward Scissorhands (1990) Hoop Dreams (1994) Aliens (1986) Wings of Desire (1988) The Bourne Supremacy (2004) When Harry Met Sally... (1989) Brokeback Mountain (2005) Fatal Attraction (1987) Risky Business (1983)

Report: Biofuels Policy Completely Backfires

The Guardian tells us:

Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report... The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises.

..."Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam. "It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."

Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as "the first real economic crisis of globalisation".

President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."

... it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices. Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.

"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

If only we had experts to explain to politicians and the public the effects of a policy like Ethanol subsidies. Otherwise this could have been avoided and Americans, Europeans and the worlds poor would be better off. Sad, but what I will find most interesting is when and what goverments will start to reverse themselves if any.

(HT: Tyler Cowen)

Saturday, July 5, 2008

Jesse Helms

Five-term Senator from North Carolina Jesse Helms died yesterday. You can't say anything bad about him now, so he is getting some positive obituaries.

But, I can. Generally, I think Democrats are being misguided conspiracy theorists when they talk about the racial undertones of the Republicans message. They want to claim the moral high ground, but any honest Democrat would see the same thing if they looked deeply at what Democratic candidates say (Or not too deeply at Hillary Clinton's comments). But, Jesse Helms is an exceptionm and by all evidence a genuinely nasty racist man. He started out a populist reactionary Democrat, but found he could be elected as a populist reactionary Republican. He promoted reactionary and thinly-veiled bigoted views throughout his many terms in the Senate.

For some reason, very election Jesse Helms ran as strictly opposed to affirmative action (See the famous ad at the bottom). He had made some explicit and very racist statements while a Democrat earlier in his career (Wikipedia provides a good enoguh overview). Unlike Robert Byrd, Al Gore, Strom Thurman (worse than Strom Thurman!) and many other old Southern Democrats I find no evidence of him distancing himself at all from his explicity racist history. And he acted a lot like we would expect a bigot to act in Congress. There were reasonable arguments to oppose making Martin Luther King's birthday a Holiday (King did have connections with some communists and his foreign policy views seem quite reactionary, but Washington and Lincoln had some serious issues themselves... I don't really like holidays dedicated to people, but that's for another blog post). However, I view Helm's opposition to the Holiday as more than coincidental. Helms was strictly opposed most of Israel's actions for mysterious reasons. He was also quite protectionist in his trade views. He seemed opposed to anything that dealt with people who were different than him.

Helms was a cold warrior in a sense, and he did support Ronald Reagan. Those aren't good enough reasons to fondly remember him. I'm an apologist for a lot of the things Goldwater and Reagan did and said, but not this guy. Good bye Jesse.

Thursday, July 3, 2008

A Splendid Exchange

William Bernstein’s wise decision to appear on EconTalk to appeal to the all-important ‘Joe’ demographic has paid off. I just last week finished his book, A Splendid Exchange: How Trade Shaped the World. The book is a discussion of the history of trade since the beginning of human history. Many of us free traders base our support on our understanding of the increasing benefits to exchange of expanding the market. Bigger markets and increased trade are almost always good. In this book Bernstein shows how markets actually expanded, connected, and have been controlled, and tells us about the great innovators and innovations in trade throughout history that contributed to these processes.

International trade is quite ancient. Indian trading partners has embassies in Augustus’s Rome. Much of the history of trade is a history of the different groups who were able to control the chokepoints. There’s quite an advantage to monopolizing trade routes, but fortunately this has become increasingly difficult to do. When Muslim Arabs conquered the Middle East, they cut off Europe from the East, and controlled that trade. The group to finally break that dominance was the Portuguese, who attempted to establish their own monopoly of the East-West trade. I find the Portugese quite intresting as they were quite unlikey for this role; Bernstein calls them ‘the dog who caught the car’. Coming out of the Middle Ages, Portugal had a population of one million, primitive capital markets, and a limited understanding of the outside world (Portugal wanted to conquer the Sahara as a route to India, and explore to find a mysterious Eastern Christian kingdom that could help in further Crusades). Despite their limitations, in the years after Vasco de Gama rounded Africa, Portugal was the main power on the seas especially in the Indian Ocean. They did this with the help of the plague (which devastated the other fleets of the India Ocean), brutality, and by militarily taking control of the major check points.

Unfortunately for them, Portugal’s larger and more advanced Europeans rivals soon became jealous and there was a competition to control these routes which the Portuguese could not win. Portugal was surpassed by the Dutch, who in turn were eclipsed by the British after the Glorious Revolution. Fortunately now, international trade is largely free trade, and it is more important to keep open routes than to dominate them. Bernstein discusses this transition and the politics of trade. Smith, Ricardo, and Cobden all make appearances in the book as do some lesser know theorists that Bernstein revives. Perhaps more interesting, and unknown to me, were the internal politics of China. The kingdom's insular rulers kept the biggest power largely away from an active role in international trade for most of its history.

Bernstein, a neurologist by day, is more of a popularizer than a leading edge researcher. Although people thought I was crazy carrying it by the pool, I considered this book a sort of light read. Nonetheless, I thoroughly enjoyed it. Enough in fact, to put it on my Amazon recommendations list! (On the right side of this blog)


Tuesday, July 1, 2008

The Battle for Spain

Since the 1990s. Anthony Beevor has made a living as an expert at uncovering new information from the Soviet archives. His recent book ‘The Battle for Spain: The Spanish Civil War 1936-1939’ is a rewrite of his 25-year-old history of the Spanish Civil War, filled in with new information from the now opened archives.

This is a topic I have long had a peripheral interest in, but this is the first full book I have read on the Spanish Civil War. One particularly sad part of the war is that it’s really hard to root for anyone. So, you’re just on the side of the victims. The fascists, communists, as well as most of the other factions are deeply flawed. Both sides had their share of pretty awful atrocities. Beevor estimates the Nationalists killed about 200,000 people, while the Republicans killed about 40,000. So the Nationalists killed more, but he argues with two warring vicious groups, the victors will just have more opportunities to commit atrocities.

Franco’s ‘Nationalist’ group (which he was not the top leader of at the start of the revolt) consisted of fascist Falangists, Carlists, Alphonsists, Catholic fundamentalists, and Anti-Masonists (not of the 1840s American variety). Their uniting cause was hatred of communism, although from a traditional rather than liberal perspective. They viewed the war as a crusade – a Second Reconquista. Franco, one of the few somewhat competent generals in the war, was fortunate to receive German support and also in that his major rivals for power died early in the conflict.

To most Westerners, the ‘Republicans’ were a more appealing group. That label contained trade-unionists, Anarchists, Stalinists, ‘Trotskyites’, some Liberals and Social Democrats. They wanted to overhaul Spanish society. To what is unclear, but a form of communism would be likely (The term ‘liquidating the bourgeoisie as in Russia’ occurs a few times). Certainly neither side promoted liberal democracy. Although the Republicans attempted to portray themselves internationally as the legitimate government and relatively moderate democrats, they became increasingly undemocratic and dominated by Stalinists. The Republicans did have leftist intellectuals on their side and they also better understood how to communicate with Western audiences. However, the Nationalists benefited from some well placed allies and lobbying. Nationalist aristocrats did an excellent job of appealing to the English elite, while German pressure kept the French from heavy involvement, and the Kennedy-led Catholic lobby in the United States prevented American aid to the Republicans.

The interesting counter-factual question is how things would have ended up if the Republicans had won. Franco’s group had some terrible qualities and Franco initial policies weren’t so different from the controlled economy communists wanted. But, besides his traditionalism, Franco didn’t have that strongly of held beliefs about organizing the country. And pressure from Western economics forces caused some moderation and liberalism in the country starting in the 1950s. As Beevor points out, by the late 1960s, Spain was a changed country – a tourist destination for the British rather than the bizarre Falangist utopia Franco envisioned in the post-war years. Eventually, after Franco died the country turned out alright, and today is definitely a prosperous Western European nation. Franco probably headed off a communist takeover, and Beevor points out Spain is much better off than any of the former Warsaw Pact nations of Eastern Europe. I attribute that to Spain’s proximately to wealth and access to trading lanes as much as Franco. It’s uncertain what the Republicans would have done if they had won the war and carried out their revolution. It probably wouldn’t have been good. It probably would have been better than the tyranny of the early Nationalist years, but a Spain closely linked to the Soviet Union would be destabilizing for Europe. After WWII, if would have been a beechhead in Western Europe for the Soviets and likely would have isolated the Spanish people from largely benevolent Western influences. So, like all good counterfactuals is unanswerable.

I don’t want to sound like I’m demonizing the actors in this conflict. Most were not evil, they were human extremists… Driven to their views by the extreme circumstances and with their worldviews much seemingly terrible behavior becomes permissible to ensure victory. For me, it’s a highly-regrettable toss-up. Franco was terrible, most of the communists were terrible. Weirdly everything turned out okay in the long-run for those who lived… But we would have been better off if Hemingway and Orwell had won the war.

As for the book, rather than the war, generally Beevor is informative and quite readable (although some of the sentences are worded like strained translations) But my biggest criticism of the book is the maps. For battles it very much helps to understand what’s going on when you have a map. All the maps of battles were in the front of the book which made fore a lot of flipping. Also, many of the important battles were not shown in maps. In addition, Beevor expects the reader to bring a knowledge of Spanish geography to the book, which I do not posses. Many of the towns and river he mentions are no where on any of the maps, which makes it a little more difficult to see what is going on. Nonetheless, overall I enjoyed. It was a good read on the plane ride to Spain. Of course, no one there wanted to speak about it.