Posts tagged politics

In the address he gave to the Commonwealth Club of San Francisco, not long before he was elected President of the United States for the first time, Franklin Delano Roosevelt gave this account of the history of popular government: 

When we look about us, we are likely to forget how hard people have worked to win the privilege of government. The growth of the national Governments of Europe was a struggle for the development of a centralized force in the Nation, strong enough to impose peace upon ruling barons. In many instances the victory of the central Government, the creation of a strong central Government, was a haven of refuge to the individual. The people preferred the master far away to the exploitation and cruelty of the smaller master near at hand.

But the creators of national Government were perforce ruthless men. They were often cruel in their methods, but they did strive steadily toward something that society needed and very much wanted, a strong central State able to keep the peace, to stamp out civil war, to put the unruly nobleman in his place, and to permit the bulk of individuals to live safely. The man of ruthless force had his place in developing a pioneer country, just as he did in fixing the power of the central Government in the development of Nations. Society paid him well for his services and its development. When the development among the Nations of Europe, however, had been completed, ambition and ruthlessness, having served their term, tended to overstep their mark.

There came a growing feeling that Government was conducted for the benefit of a few who thrived unduly at the expense of all. The people sought a balancing-a limiting force. There came gradually, through town councils, trade guilds, national parliaments, by constitution and by popular participation and control, limitations on arbitrary power.

Paul Krugman’s graph of the debt/GDP ratio against interest rates

Update: You can see what I have to say in the wake of Thomas Herndon, Michael Ash and Robert Pollin’s critique of Carmen Reinhart and Ken Rogoff’s work on national debt and growth in my column “An economists mea culpa: I relied on Reinhart and Rogoff.” (You can see my same-day reaction here.) Also, on the substance, see Owen Zidar’s nice graph in his post “Debt to GDP & Future Economic Growth.” I sent a query to Carmen Reinhart and Ken Rogoff about whether any adjustments are needed to the two figures from the paper with Vincent Reinhart that I display below, but have not yet received a reply to that query. I think that covers most of the issues that recent revelations raise. 

Note that I have revised “What Paul Krugman got wrong about Italy’s economy.” This post is now the go-to source for what I originally said there, relying on “Debt Overhangs, Past and Present” (which has Vincent Reinhart as a coauthor along with Carmen Reinhart and Ken Rogoff). My original passage is in an indented block a little above the colorful pictures your eye will be drawn to below.

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In a world where people wrote frankly, Noah Smith has written the response to my Quartz column “What Paul Krugman got wrong about Italy’s economy” that Paul Krugman should have written: 

• Noah Smith: “Fancy Stimulus Tools: Policy vs. Politics,”

instead of what Paul actually wrote in response to my column:

• Paul Krugman: “Another Attack of the 90% Zombie.”

(The brief summary of my column is that electronic money could help the UK and the Federal Lines of Credit could help both Italy and the UK stimulate their economies without the problems that might arise from adding substantially to their debt by a simple increase in government spending, as indicated by my original title: “How Italy and the UK Can Stimulate Their Economies Without Further Damaging Their Credit Ratings.”)

Read more …

I am very interested in how the Republican Party will respond to losing the presidential election. In this post, I have collected some links addressing that question. I see three possibilities.

1. More Pro-immigration. As I see it, the adjustment that maintains competitiveness in presidential elections but keeps the Republican Party’s values as close as possible to what they are now would be to become more pro-immigration. The key issue this would address is clear in the title of one of my recent posts: “Central Political Fact: Mitt Lost Despite Getting Almost 60% of the White Vote.” To be specific about how to change perceptions of the GOP without changing core Republican values, the approach I recommended to Barack in my post “Obama Could Really Help the US Economy by Pushing for More Legal Immigration” would work even better for the Republican Party if they initiated it. I predict that, if the Republican Party were willing to put up with serious grumbling from their base, outflanking the Democratic Party in being pro-immigration, while continuing to make a strong distinction between legal and illegal immigration would dramatically improve the fortunes of the GOP. Noah Smith’s post “Asian-Americans Destroy the Maker-Taker Narrative” is in the same spirit, saying that the Republican Party is in trouble if it continues to be primarily a White party.  

2. More Libertarian. Matthew Yglesias, in “The Central Tension of the GOP Coalition,” in addition to recommending less ethnocentrism, adds another possibility: becoming more libertarian (at least on gay rights) in order to appeal to the young. He writes:

… one option would be to stay committed to the idea of dismantling the welfare state and try to ditch the existing coalition in favor of some different, younger, less-white, less-ethnocentric coalition that’s more likely to want to cut retirement security programs.

3. More Populist. A final possibility is for the Republican Party to become more populist—for example, by attacking the rich and “big business.” That seems to be the direction Bobby Jindal has in mind, based on his recent interview with Jonathan Martin: “Jindal: End ‘dumbed-down’ conservatism.” Bobby also calls for less anti-intellectualism in the GOP. 

I wanted to back up some of the claims I made in my Quartz article yesterday (“Second Act: Obama Could Really Help the US Economy by Pushing for More Legal Immigration”) about the political feasibility for Barack to dramatically change America’s approach to immigration.  

In Wednesday morning’s Wall Street Journal, Gerald Seib had an interesting analysis of the situation now for the Republicans: “Tough Loss Leaves GOP at a Crossroads.” Gerald poses the question from the Republican points of view “What went wrong?” Here is his answer:

But the most significant critique will be the one that says the party simply failed to catch up with the changing face of America. Exit polls showed that Mr. Romney won handily among white Americans—almost six in 10 of them—but lost by breathtaking margins among the nation’s increasingly important ethnic groups: By almost 40 percentage points among Hispanics, by almost 50 points among Asians, and by more than 80 points among African-Americans.

The groups Barack did well among are groups that are becoming a bigger and bigger fraction of voters. 

Neil Irwin’s note “Republicans’ immigration problem in two numbers” on Wonkblog, ties the big margin for Barack among Hispanic voters to Barack’s advantage on immigration policy:

Asked how U.S. immigration policy should deal with illegal immigrants, 74 percent of Republican voters said that they should be deported to the country from which they came. But only 29 percent of voters overall shared that view. (Some 64 percent of all voters favored giving illegal immigrants a chance to apply for legal status).

My argument is that by focusing first on reform of legal immigration, Barack can get support for that from a bigger fraction of the Republican coalition than the 26% or so who are somewhat tolerant of illegal immigration. What I don’t know is how support for an expansion of legal immigration shifts as the size of the expansion increases.   

We traditionally celebrate our nation on July 4. But in a very real sense, Election Day best symbolizes what America is all about. Most of us care deeply about the outcome of the election, though not all with the same hopes. But the greatest value of free elections is in all of the out-of-equilibrium outcomes that, because of the regularity of free elections, never come close to happening. Abraham Lincoln had it right in what he said about the importance of our democratic experiment:

Four score and seven years ago our fathers brought forth, on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.

Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

But, in a larger sense, we can not dedicate—we can not consecrate—we can not hallow—this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they here gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.

As an independent, I am a fan of divided government. Since Democrats have lately been doing better in their Senate races, while the Republicans are quite unlikely to lose the House of Representatives, there is an excellent chance that the winner in the presidential election will not have a majority in both houses of Congress. Brian Beutler somewhat overstates the case that divided government will win in his post “Why the GOP Agenda is Likely Dead Even If Romney Wins.” Mitt is more likely to win in a situation where the Republicans also do will in their Senate races, than in a situation in which the Democrats hold the Senate. So the folks betting on Intrade are today giving an 18.4% chance that Mitt will win along with the Republicans getting both houses of Congress, while Mitt has a 13.8% chance of winning but facing a Democratic Senate, and quite small chances of winning but facing a Democratic House. (Mitt’s overall probability of winning is 33% according to Intrade.) So conditional on Mitt winning, Intrade suggests he is more likely than not to have both houses of Congress with him, but there is a substantial chance he will be checked by a Democratic Senate.  

On the other side, Intrade gives only a 2% chance that Obama will be elected along with both houses of Congress being in Democratic hands. So an Obama victory has a very high chance of also being a victory for divided government. Overall, Intrade gives divided government an 80% chance of winning, with the bulk of the 20% chance of divided government losing falling on Mitt’s side.  

Let me make the prediction that, even if Mitt wins the presidency and the Republicans win the Senate as well as the House, Republican control of both houses of Congress would last no more than two years. The President’s party often loses seats at the first midterm election— and the Republicans seem eager to try enough bitter medicine for the body politic—that I suspect an all-Republican government would suffer somewhat larger than usual losses at the elections in 2014.  

What all this boils down to is that anyone who fears truly extreme results from the presidential election is unlikely to see those fears realized. We are likely to continue to experience the blessings of divided government bestowed upon us abundantly by the framers of the Constitution through their ingenious design of checks and balances.