The US exported the idea of televised debates to England, and they might have found a way to make for much better political theater. Cleggify them. Not at that national level, but for state and local offices with much lower interest and stakes.
The truth is that our two major parties have a lot more in common than they do differences. However, there's a host of local "consensus" challenging discussions that would be very helpful. Drug laws are the obvious one here, since they turn a potentially valuable tax source into a cost center. However, there are others, like over-broad sex offender registries, zoning laws, tax incentives for new employers and other civic initiatives that don't fit either party's ideological bend.
These issues will not be brought up if the only two candidates in the public eye are looking towards their careers with the parties. However, a flamboyant or pragmatic third candidate who has little or no hope of election can at least force discussion of them, and make for much better television. If the younger GOP and Dem activists have to defend the things on which they agree, that would be better for bipartisanship.
I'm only looking to change local televised and radio debates, not Presidential ones. Igniting interest in local politics would be good for national politics in general, ideally breaking some of the focus on social "wedge" issues. Multi-candidate primary debates are more fun that two-candidate ones, but they are generally only trying reach a narrow part of their party's base. Someone who's only a mild risk to upsetting the system could force a more interesting political scene at the local level.
Wednesday, April 28, 2010
Saturday, April 24, 2010
Official pie loving
To borrow from the Huffington Post: For Reagan, it was Jelly Beans. For Clinton, it was McDonalds. W loved his BBQ. For Obama, it's pie.
Sadly, this doesn't mean I'm likely to end up working at the White House, seeing as they have both an economics advisor and a pastry chef.
Sadly, this doesn't mean I'm likely to end up working at the White House, seeing as they have both an economics advisor and a pastry chef.
Friday, April 23, 2010
Optimism!
These days, the dismal science of economics is producing quite a lot of bad news. If you can find the time to read this 5-part piece, it's a great explanation of what to expect over the next couple of years (full disclosure: I don't own property and have a very cash-heavy portfolio). Meanwhile, Greece has officially gone the Bear Sterns route, meaning the next country up gets to play Lehman Brothers. Oh, and don't forget about this year's Social Security shortfall.
What does this mean? At first blush, it seems like the death of modern prosperity, capitalism and possibly civilization as we know it. It will certainly seem this way for many, and I do not want to minimize the pain that is to come in any way. But does this really mean the beginning of a long, dreary future?
Hardly. We will, as a society, be considerably less wealthy going forward, but also less busy. Easy credit encourages ever-increasing productivity, requiring a constant increase in the time required to work off the debt. A new computer with better editing software lets everyone write a paper or legal brief faster, giving the authors more time to write more briefs. Not surprisingly, the burn-out rate in the creative professions has been growing steadily. Anxiety and depression are now so common among students that faculty know their department's procedures for handling it better than the fire escape routes.
In an easy credit society, every marginal unit of labor competes with any capital or process improvement that reduces labor. When interest rates are very low and the cost of employment, in the form of wages and mandates such as health care and unemployment insurance, grows steadily, automation always wins. It wins out on farms, producing vast amounts of infertile corn. It wins in factories, with fewer people required to operate the robots that do all the machining, assembly and clean-up. It even wins in retail, replacing mom-and-pop clerks with shelves that force customers to do much of the labor.
The coming years of deleveraging will be bad, and despite enormous spare capacity there will not be demand for much new economic activity for several years. The "new normal", however, ought to be a more pleasant place. Mechanics, plumbers and handymen will find plenty of non-tradable work keeping up houses and cars that people cannot afford to replace. Climate and environmental pressures will ease as people replace 300-1000W desktop computers and TVs with 30-100W laptops. Bicycle commuting will rise as more people buy up depressed "urban infill" housing, with accompanying benefits to health, traffic and national security.
The new normal will be smaller, more Aldi than Walmart, and more labor will move from the factory and fast food kitchen to the home. The future may be hot, flat and crowded, but I think we're heading towards a pie-friendlier world.
What does this mean? At first blush, it seems like the death of modern prosperity, capitalism and possibly civilization as we know it. It will certainly seem this way for many, and I do not want to minimize the pain that is to come in any way. But does this really mean the beginning of a long, dreary future?
Hardly. We will, as a society, be considerably less wealthy going forward, but also less busy. Easy credit encourages ever-increasing productivity, requiring a constant increase in the time required to work off the debt. A new computer with better editing software lets everyone write a paper or legal brief faster, giving the authors more time to write more briefs. Not surprisingly, the burn-out rate in the creative professions has been growing steadily. Anxiety and depression are now so common among students that faculty know their department's procedures for handling it better than the fire escape routes.
In an easy credit society, every marginal unit of labor competes with any capital or process improvement that reduces labor. When interest rates are very low and the cost of employment, in the form of wages and mandates such as health care and unemployment insurance, grows steadily, automation always wins. It wins out on farms, producing vast amounts of infertile corn. It wins in factories, with fewer people required to operate the robots that do all the machining, assembly and clean-up. It even wins in retail, replacing mom-and-pop clerks with shelves that force customers to do much of the labor.
The coming years of deleveraging will be bad, and despite enormous spare capacity there will not be demand for much new economic activity for several years. The "new normal", however, ought to be a more pleasant place. Mechanics, plumbers and handymen will find plenty of non-tradable work keeping up houses and cars that people cannot afford to replace. Climate and environmental pressures will ease as people replace 300-1000W desktop computers and TVs with 30-100W laptops. Bicycle commuting will rise as more people buy up depressed "urban infill" housing, with accompanying benefits to health, traffic and national security.
The new normal will be smaller, more Aldi than Walmart, and more labor will move from the factory and fast food kitchen to the home. The future may be hot, flat and crowded, but I think we're heading towards a pie-friendlier world.
Monday, April 19, 2010
All politics are national (updated!)
[realized that I've got three arguments tangled together here, so I'll try and unwrap them]
This story brilliantly shows how "cooperative federalism" can co-opt civil society in favor of a central authority:
Court to hear arguments on campus Christian group
Central questions:
(1) Does a group have a right to define its membership?
The issue here is whether the group has the right to demand voting members sign a "statement of faith" declaring that they believe only certain things to be morally right. Failure to include this kind of statement opens the group to the possibility of having its charter overridden by activists who can assemble a crowd in time for club elections.
This approach has been suggested to "tame" the British National Party and helped get McCain the GOP nomination. With both progressive and Tea Party activists able to assemble large, relatively motivate crowds, groups that oppose either would do well to limit access to its membership. Is a statement of political belief fundamentally different from a statement of moral belief?
In pie-centric terms: Should I be required to admit pie cabinet members who don't believe in sustainable homemade pie making? Actually, it's not that hard to imagine such people. They argue for continuing to underfund massive social programs and punishing political cooperation. I am happy to talk to such people, but do I have to open my group's identity to them?
(2) Is this a form of federal "regulatory capture", giving it effective control of civil society?
The implicit imprimature and improved access to potential members that come from recognition and subsidies guarantee that groups that comply with the central authority will grow faster than those that do not. In this environment, control of government means control of the rules of civil society. Once civic groups such as churches and clubs or states and municipalities become dependent on a special subsidy or tax status, they get co-opted by the taxing authority. At that point, a change in tax or recognition rules becomes an existential threat, and so every group must choose between its sense of mission and keeping its lights on. China's ham-fisted censors could learn a lot from this more subtle approach.
Want to see women in the Catholic priesthood? Don't appeal to Rome, appeal to Washington and demand they pay full taxes on discriminatory seminaries. Don't like abortion? Mandate that insurance companies not include such coverage in subsidized plans. Want to make helmets mandatory for motorcycles and bicycles, mandate seatbelt use and force the creation of bicycle lanes? Tie them to highway funding.
Well intentioned efforts to support civil society inevitably result in unhealthy relationships. Internationally, this happens when NGOs get funding from governments and effectively become tools of their sponsor's policy. What are civic organizations supposed to learn from ACORN's demise at the hands of edited video tapes? How about this: if you take federal money keep your group's views as close to mainstream as possible.
(3) How do we make politics local again?
"Values based" politics unite people nationwide who share a sense of identity. Media sources that pander to their audience's ideology. Heavily gerrymandered districts and seniority rules that reward federal and state legislators for long service guarantee that the extremes of both parties make the leadership more nervous than voters in the middle.
I have some ideas for future posts, but that's how I'd like to frame the question. Can we make a more respectful civil society by disaggregating control of it? If so, how? If not, what is the correct path?
This story brilliantly shows how "cooperative federalism" can co-opt civil society in favor of a central authority:
Court to hear arguments on campus Christian group
Central questions:
(1) Does a group have a right to define its membership?
The issue here is whether the group has the right to demand voting members sign a "statement of faith" declaring that they believe only certain things to be morally right. Failure to include this kind of statement opens the group to the possibility of having its charter overridden by activists who can assemble a crowd in time for club elections.
This approach has been suggested to "tame" the British National Party and helped get McCain the GOP nomination. With both progressive and Tea Party activists able to assemble large, relatively motivate crowds, groups that oppose either would do well to limit access to its membership. Is a statement of political belief fundamentally different from a statement of moral belief?
In pie-centric terms: Should I be required to admit pie cabinet members who don't believe in sustainable homemade pie making? Actually, it's not that hard to imagine such people. They argue for continuing to underfund massive social programs and punishing political cooperation. I am happy to talk to such people, but do I have to open my group's identity to them?
(2) Is this a form of federal "regulatory capture", giving it effective control of civil society?
The implicit imprimature and improved access to potential members that come from recognition and subsidies guarantee that groups that comply with the central authority will grow faster than those that do not. In this environment, control of government means control of the rules of civil society. Once civic groups such as churches and clubs or states and municipalities become dependent on a special subsidy or tax status, they get co-opted by the taxing authority. At that point, a change in tax or recognition rules becomes an existential threat, and so every group must choose between its sense of mission and keeping its lights on. China's ham-fisted censors could learn a lot from this more subtle approach.
Want to see women in the Catholic priesthood? Don't appeal to Rome, appeal to Washington and demand they pay full taxes on discriminatory seminaries. Don't like abortion? Mandate that insurance companies not include such coverage in subsidized plans. Want to make helmets mandatory for motorcycles and bicycles, mandate seatbelt use and force the creation of bicycle lanes? Tie them to highway funding.
Well intentioned efforts to support civil society inevitably result in unhealthy relationships. Internationally, this happens when NGOs get funding from governments and effectively become tools of their sponsor's policy. What are civic organizations supposed to learn from ACORN's demise at the hands of edited video tapes? How about this: if you take federal money keep your group's views as close to mainstream as possible.
(3) How do we make politics local again?
"Values based" politics unite people nationwide who share a sense of identity. Media sources that pander to their audience's ideology. Heavily gerrymandered districts and seniority rules that reward federal and state legislators for long service guarantee that the extremes of both parties make the leadership more nervous than voters in the middle.
I have some ideas for future posts, but that's how I'd like to frame the question. Can we make a more respectful civil society by disaggregating control of it? If so, how? If not, what is the correct path?
Tuesday, April 13, 2010
Carbon accounting is tricky, and the wrong approach anyway
I just came from a talk by a guy affiliated with the CO2PE group about accounting for the carbon cost of manufacturing. The speaker presented a novel means of accounting for the carbon cost of manufacturing parts in terms of tonnes of CO2 equivalent emitted. It was very technical, and highlighted the enormous significance of location (and thus source of grid electricity, with coal burning places the worst and those with large hydroelectricity and nuclear power the best).
However, the discussion afterword quickly fell into "What about X?" questions in his accounting. After a couple "we will have to consider that", mostly related to water, the answer became "we have to start somewhere, and tweak the accounting later." The major difference between his formula and the 54 wildly divergent "carbon footprint" surveys is its transparency, which is good. However, I doubt anyone left the room satisfied that that this was a good method. That is was also the best most of us had seen (indeed, the only formula), highlights how difficult it will be to have carbon trading schemes that involve manufacturers directly.
He did, however, make a subtle point that there's an enormous amount of inefficient equipment in use today. Getting rid of this equipment will require two things: (1) a rise in energy prices due to something like a carbon tax and (2) functional credit markets. Given the state of finances in the Western world, we're looking at a combination of higher taxes, cut services and high inflation. A tax that encouraged investment, by say, covering the Social Security Deficit with a carbon tax (~$4.74/ton this year), could potentially shore up the fiscal situation and ease a lot of fears worldwide.
The trouble, of course, is that realizing that future savings requires investment in real things today. I think this is a big part of why so little progress has been made, especially in the US. Our economic policy since 1982 has heavily encouraged, through gov't guarantees, Federal reserve action, tax incentives and "degregulation" (aka regulatory capture) financial investments (housing, 401K's, IRA's, etc) at the expense of infrastructure and physical capital. Changing that requires a fundamental shift in how we view retirement, wealth and the role of government.
The concept of "too big to fail" and the S&L crisis heartily confirmed that our economy would be structured to favor financial instruments. Problems with unions and energy supply in the 1970s probably had a lot to do with that, but basically the federal government has been quietly moving downside risk away from private investors and into the public purse since Lockheed's debacle with the L-1011. This form of economic planning is largely invisible to the average citizen. They are invited to join in the benefits with tax-deferred savings, higher property values, and access to a society that "feels" wealthier. Now that the blush is off the rose, we've seen a few groups that would like less economic planning, but still plead for government action that will give them jobs.
However, the kinds of policies that will result in a clearer, more efficient economy will be visible. You can't ignore a wind turbine or a solar rooftop, and rising energy prices will hit everyone. Getting there will require credit markets that are actually healthy, not relying on clever debt-hiding schemes. Given where we are now, and how all major markets now rely on some kind of government guarantee or subsidy, an explicit move must be made. Using a carbon tax to cover entitlement shortfalls is my personal favorite, since it fixes a temporary shortfall with a temporary revenue stream. It also puts a very powerful lobby on the side of clean technology and physical-plant investment. However, actually getting the metal bashed will require successful financial reform.
Hopefully those of us in the metal-bashing world will bear in mind the lessons of Greece, Enron, Madof, Lehman Brothers and the failure of Sarbanes-Oxley to prevent the financial crisis. Accounting is good when there are no places to hide or fudge numbers, but "off balance sheet liabilities" are especially common when the rules are vague and incomplete. Open standards for carbon footprints are a huge step in the right direction, but at best they tell us how much trouble we're in. Getting out of it means creating incentives and allowing investment.
However, the discussion afterword quickly fell into "What about X?" questions in his accounting. After a couple "we will have to consider that", mostly related to water, the answer became "we have to start somewhere, and tweak the accounting later." The major difference between his formula and the 54 wildly divergent "carbon footprint" surveys is its transparency, which is good. However, I doubt anyone left the room satisfied that that this was a good method. That is was also the best most of us had seen (indeed, the only formula), highlights how difficult it will be to have carbon trading schemes that involve manufacturers directly.
He did, however, make a subtle point that there's an enormous amount of inefficient equipment in use today. Getting rid of this equipment will require two things: (1) a rise in energy prices due to something like a carbon tax and (2) functional credit markets. Given the state of finances in the Western world, we're looking at a combination of higher taxes, cut services and high inflation. A tax that encouraged investment, by say, covering the Social Security Deficit with a carbon tax (~$4.74/ton this year), could potentially shore up the fiscal situation and ease a lot of fears worldwide.
The trouble, of course, is that realizing that future savings requires investment in real things today. I think this is a big part of why so little progress has been made, especially in the US. Our economic policy since 1982 has heavily encouraged, through gov't guarantees, Federal reserve action, tax incentives and "degregulation" (aka regulatory capture) financial investments (housing, 401K's, IRA's, etc) at the expense of infrastructure and physical capital. Changing that requires a fundamental shift in how we view retirement, wealth and the role of government.
The concept of "too big to fail" and the S&L crisis heartily confirmed that our economy would be structured to favor financial instruments. Problems with unions and energy supply in the 1970s probably had a lot to do with that, but basically the federal government has been quietly moving downside risk away from private investors and into the public purse since Lockheed's debacle with the L-1011. This form of economic planning is largely invisible to the average citizen. They are invited to join in the benefits with tax-deferred savings, higher property values, and access to a society that "feels" wealthier. Now that the blush is off the rose, we've seen a few groups that would like less economic planning, but still plead for government action that will give them jobs.
However, the kinds of policies that will result in a clearer, more efficient economy will be visible. You can't ignore a wind turbine or a solar rooftop, and rising energy prices will hit everyone. Getting there will require credit markets that are actually healthy, not relying on clever debt-hiding schemes. Given where we are now, and how all major markets now rely on some kind of government guarantee or subsidy, an explicit move must be made. Using a carbon tax to cover entitlement shortfalls is my personal favorite, since it fixes a temporary shortfall with a temporary revenue stream. It also puts a very powerful lobby on the side of clean technology and physical-plant investment. However, actually getting the metal bashed will require successful financial reform.
Hopefully those of us in the metal-bashing world will bear in mind the lessons of Greece, Enron, Madof, Lehman Brothers and the failure of Sarbanes-Oxley to prevent the financial crisis. Accounting is good when there are no places to hide or fudge numbers, but "off balance sheet liabilities" are especially common when the rules are vague and incomplete. Open standards for carbon footprints are a huge step in the right direction, but at best they tell us how much trouble we're in. Getting out of it means creating incentives and allowing investment.
Monday, April 12, 2010
New feature! A blogroll
I haven't been able to post as often as I'd like, and when I do I'm often rehashing the arguments from one of the authors on the right.
Today I'd like to highlight Simon Johnson's (former head of the IMF's) Baseline Scenario and Arms Control Wonk. Dr. Johnson's recurring theme is that no institution is too big to fail, but in his experience (and with 2 exceptions all of human history) many are too big to succeed. There's a lot of nuclear security talk these days, and the team at Arms Control Wonk do a great job of boiling it down.
Today I'd like to highlight Simon Johnson's (former head of the IMF's) Baseline Scenario and Arms Control Wonk. Dr. Johnson's recurring theme is that no institution is too big to fail, but in his experience (and with 2 exceptions all of human history) many are too big to succeed. There's a lot of nuclear security talk these days, and the team at Arms Control Wonk do a great job of boiling it down.
Sunday, April 4, 2010
Best Beignets Yet
I once heard that there were no good beignets in South Bend. Chicory Cafe, a fine establishment that all you South Bend readers ought to patronize (they give away bags of coffee grounds to customers who garden), does a passable job. However, for a real Beignet with real depth of flavor, read on:
Ingredients:
1.5 Cup warm (100-120F) pasta or potato water
1Tbsp dry yeast
4 cups all purpose flour
1 cup evaporated milk
2 eggs
1/4 cup sugar
1/4 cup molasses
1/4 cup butter, melted
3 cups whole wheat flour
Oil for frying
Confectioner's sugar for dusting
Combine the first two ingredients in a large bowl and let the mix get frothy.
Stir in the a.p. flour, cover and place somewhere warm.
Take your time (~20min) mixing up the ingredients in italics
Combine the early dough with the sugar mix, then add the butter.
Stir in enough wheat flour to make a soft dough.
Now chose "Make Soon" or "Make later"
Make Soon: Place bowl in a warm place for about 1hr until it approximately doubles in size
Make Later: Cover bowl and place in a cool, dry place like a refrigerator until 30min before you plan to start frying
Punch down the dough and roll it out on a well floured baking mat (or counter top) to about 1/4" thickness
Cut into 2" squares with a pizza cutter and fry in hot (350F) oil. Fry 3-5 at a time and flip once, ~2min per side or until golden brown.
Sprinkle with powered sugar immediately, ~1/2t per beignet. More just causes a mess.
Ingredients:
1.5 Cup warm (100-120F) pasta or potato water
1Tbsp dry yeast
4 cups all purpose flour
1 cup evaporated milk
2 eggs
1/4 cup sugar
1/4 cup molasses
1/4 cup butter, melted
3 cups whole wheat flour
Oil for frying
Confectioner's sugar for dusting
Combine the first two ingredients in a large bowl and let the mix get frothy.
Stir in the a.p. flour, cover and place somewhere warm.
Take your time (~20min) mixing up the ingredients in italics
Combine the early dough with the sugar mix, then add the butter.
Stir in enough wheat flour to make a soft dough.
Now chose "Make Soon" or "Make later"
Make Soon: Place bowl in a warm place for about 1hr until it approximately doubles in size
Make Later: Cover bowl and place in a cool, dry place like a refrigerator until 30min before you plan to start frying
Punch down the dough and roll it out on a well floured baking mat (or counter top) to about 1/4" thickness
Cut into 2" squares with a pizza cutter and fry in hot (350F) oil. Fry 3-5 at a time and flip once, ~2min per side or until golden brown.
Sprinkle with powered sugar immediately, ~1/2t per beignet. More just causes a mess.
Thursday, April 1, 2010
Drill, 'Bama Drill!
I make no secret of the fact that the policy goal of this blog is to find the set of incentives that will lead to a sustainable economy that provides a minimum level comfort to as many people as possible. As such, the opinions expressed here are generally opposed to activities that encourage greater use of fossil fuels. For the moment, however, I'm all for this: Recharging Debate, Obama Expands Offshore Drilling
I do not, however, believe that it will make a noticeable difference in US oil imports. I don't expect there to be any real impact on the price of oil, given the cost of extracting deep-water reserves and the years of work required to bring this stuff to market. This will do very little, if anything, for US employment. In other words, I doubt there will be any significant positive benefit from this decision, and it will likely be regarded by history as mistake.
That is precisely what I hope to see. History suggests that energy extraction is extremely bad for the local community, bringing environmental degradation (and loss of tourism dollars). It draws corruption like flies, the only thing worse is foreign aid or Federal pork-barrel spending. If the money doesn't get siphoned off, its effect on civil society is about what one would expect from people spending money they didn't earn and don't have to (or can't) maintain.
Nothing will defang the argument that "we're not exploiting our national resources" in the energy debate like actually exploiting them. Nothing will hurt oil's image in the public mind quite like a big spill, or even unsightly oil rigs, off formerly beautiful beaches. The political fight over issuing permits, arguments over subsidies will become political footballs that will increase uncertainty and make everyone involved look bad.
In short, this is likely to be a Pyrrhic victory for the extraction industry. Inshoring the problems of energy extraction over the objections of a large number stakeholders will highlight those problems. The only way this decision will impact energy security is if it is matched with enormous efficiency improvements and little regard is paid to environmental concerns. According to the CSIS, we're looking at a period of stagnating energy demand, meaning it may never be profitable to use a rig off the coast of Florida or Virginia.
If this move provides the political cover to pass a climate bill that creates a stable regulatory environment, it will be an unqualified success. If it changes the tone of the debate away from simply rehashing old arguments, it will be moderately successful. Alone it will do as much for energy security as Diet Coke has for obesity.
I do not, however, believe that it will make a noticeable difference in US oil imports. I don't expect there to be any real impact on the price of oil, given the cost of extracting deep-water reserves and the years of work required to bring this stuff to market. This will do very little, if anything, for US employment. In other words, I doubt there will be any significant positive benefit from this decision, and it will likely be regarded by history as mistake.
That is precisely what I hope to see. History suggests that energy extraction is extremely bad for the local community, bringing environmental degradation (and loss of tourism dollars). It draws corruption like flies, the only thing worse is foreign aid or Federal pork-barrel spending. If the money doesn't get siphoned off, its effect on civil society is about what one would expect from people spending money they didn't earn and don't have to (or can't) maintain.
Nothing will defang the argument that "we're not exploiting our national resources" in the energy debate like actually exploiting them. Nothing will hurt oil's image in the public mind quite like a big spill, or even unsightly oil rigs, off formerly beautiful beaches. The political fight over issuing permits, arguments over subsidies will become political footballs that will increase uncertainty and make everyone involved look bad.
In short, this is likely to be a Pyrrhic victory for the extraction industry. Inshoring the problems of energy extraction over the objections of a large number stakeholders will highlight those problems. The only way this decision will impact energy security is if it is matched with enormous efficiency improvements and little regard is paid to environmental concerns. According to the CSIS, we're looking at a period of stagnating energy demand, meaning it may never be profitable to use a rig off the coast of Florida or Virginia.
If this move provides the political cover to pass a climate bill that creates a stable regulatory environment, it will be an unqualified success. If it changes the tone of the debate away from simply rehashing old arguments, it will be moderately successful. Alone it will do as much for energy security as Diet Coke has for obesity.
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