Friday, January 31, 2014
Tuesday, January 28, 2014
Wednesday, January 22, 2014
a variety of people, some of them well-intentioned, arguing that while sure, inequality is an issue, the crucial thing now is to get the economy growing and create more jobs; these people will argue that populism is a diversion from the main issue.Who does he have in mind ? Jon Chait caught Paul Krugman not at all debating David Brooks.
The New York Times’ Ross Douthat lists a few in his most recent column: Senator Mike Lee endorsing family-friendly tax reform ..., and Marco Rubio endorsing more generous tax credits for low-income workers without children.The confessedly mean Chait's critique is much too kind
The weakness of these plans is that, because they add on to the existing party agenda rather than try to replace it, they don’t fully make sense. For instance, Rubio claims his tax credit plan is deficit neutral, which means his proposal to redirect more tax credits to low-income workers without children would have to come out of the pockets of low income workers with children. Or else he’d have to break his vow and add to the deficit. Lee’s tax reform likewise has no real numbers, for the same reason: The math does not work.That's true as far as it goes, but Chait doesn't note that, given the requirement that helping the non rich not include increasing the deficit or taxing the rich more, Lee and Rubio's proposals are diametrically opposite. Lee says taxes should be reformed to make them more family friendly, Rubio says they should be reformed to make them less family friendly. Douthat describes the two exactly opposite proposals as steps in the same direction. I think it is clear that he is fairly smart, but he just isn't intellectually serious.
Monday, January 20, 2014
Sunday, January 19, 2014
Associate Professor of Political Science at George Washington University, John Sides, attempts to rebut Dan Balz's fine analysis yesterday that the Republican Party has an uphill battle to win the presidency in 2016. I find his argument unconvincing.Here not Sides uses only the popular vote.
He begins by providing his credentials."In April 2012, two other political scientists — Seth Hill and Lynn Vavreck — and I did a presidential election forecasting model for The Washington Post. The model had only three factors: The change in gross domestic product in the first two quarters of the election year, the president’s approval rating as of June of that year and whether the incumbent was running. That model forecast that Obama would win in 2012, and — although there is nothing magic about this model — it was ultimately accurate within a percentage point".
But later he decides to look at who won the election
Since the passage of the 22nd amendment limiting the president to two terms, only one time (1980-88) has the incumbent party held the White House for more than two consecutive terms. The regularity with which control of the White House changes hands also suggests that the playing field may tip in the GOP’s favor in 2016.This is Bad statistical analysis. The result of taking a small sample, arbitrarily making it smaller and then deciding which of two variables to average.
The result of the gross data mining is to reject the null that the party that has held the White House has a 50-50 chance at a p level of 7/64 (one tailed) or 14/64 two tailed. I count 6 cases 1960, 1968, 1976, 1988, 2000 and 2008 with one exception to the "rule". This is the sort of data analysis one finds from political scientists and baseball color commentators.
As an aside, Sides's claim of fact is ambiguous and can be interpreted so it is false. The correct claim would be "Since the *ratification* of the 22nd amendment ...." passage can refer to passage by two thirds of the House and the Senate. After the 22nd amendment was passed by congress in 1947, Harry Truman was re-elected in the fifth straight Democratic victory. A statistic which depends on the distinction between congressional approval and passage of an amendment does not pass the laugh test.
But my main point is that, when he isn't grossly cheating, Sides looks at the conditional average popular vote not the outcome of the election. He does this because election outcomes have weird unpredictable stochastic elements (butterfly ballots pregnant chads and such like) which add noise. It is obvious and plain certain that Sides switched from popular vote to outcome to get the (still feeble result) he wanted. Notably, in 2000 the popular vote went the wrong way for him, so the result vanishes even if one scores elections as won or lost based on popular vote (as opposed to averaging popular vote which makes sense). In 1960 the popular vote was an lamost perfect tie. In 1968 and 1976 it was very close. The margins were (with positive supporting Sides) 1960 0.17 1968 0.7 1976 2.06 1988 -7.72 2000 -0.51 2008 7.27 the average was negative until 2008 (see how shameless sample trimming can be) and is now roughly 0.223% (I was hoping for negative based on 1988 which wasn't as horrible as I remember). The standard deviation of the mean is greater than root(22) so it is well over 4. We have a z-score on the order of 0.05. Such almost complete absence of evidence against the null is actually very rare (except when the null is true by definition except for measurement error). Even artificially trimming the sample, the raw data provide no evidence for the 8 year itch hypothesis. It is a pattern found by sifting and resifting a tiny sample. An excellent example of how one should not analyse data.
Friday, January 17, 2014
Sunday, January 12, 2014
Saturday, January 11, 2014
There has been a whole lot of discussion of the implausibility of Christie's claim that he was blindsided by evidence that the traffic jam wasn't just a traffic study the day after his first sleepless night, after two resignations and after he complained directly to governor Cuomo about the investigation.
I think he is being almost honest. I am sure he was blindsided. I am sure he has long known that the lane closings were petty political revenge (I suspect that he knew this since he ordered them). But I am sure he was confident that his staff weren't such a bunch of fools as to e-mail proof -- oh and as to hand over the e-mails rather than losing them in a hard disk crash or something.
I am amazed. It takes me back to my childhood when I learned that the smart and evil Richard Nixon taped himself committing crimes and then didn't destroy the tapes.
The point is that his astonishment and sense of betrayal could be totally sincere. He was astonished to get caught. I am astonished too.
OK but this post should be about how we have gone way over the edge and into the frozen Hudson.
This tweet " robertwaldmann @robertwaldmann 9 Jan My whole timeline is Christie precognitive insomnia. Someone tweet something else. Anything." lamented the fact that the best tweeters of the worlds most powerful super power were obsessed with two phantom toll booths.
I was retweeted three times favorited twice and someone replied with news about Velveeta cheese.
"Mike Urbancic and Unholy Moses favorited your Tweet
9 Jan: My whole timeline is Christie precognitive insomnia. Someone tweet something else. Anything. Mike Urbancic Unholy Moses
9 Jan Vaughan Lovegrove, Joe Colucci and J. Bradford DeLong retweeted you
9 Jan: My whole timeline is Christie precognitive insomnia. Someone tweet something else. Anything. Vaughan Lovegrove Joe Colucci J. Bradford DeLong
Paul Greaves @greavespg 9 Jan @robertwaldmann @delong #FlavorFlav got arrested. There is a #Velveeta cheese shortage. Lots of good stuff other #ChrisChristie :-)"
We have a serious problem. We have a whole lot of serious problems. Why are we obsessed with the epitome of petty malice ? Are we just looking for someone who makes our twitter flame wars read like Platonic dialogs ? Uh oh did I just convince Brad DeLong to tweet a Platonic dialogue ?
Thursday, January 09, 2014
"state experimentation, a la welfare reform in the early 90s, could be pretty valuable." "if each of the various state policies were rigorously studied."
Yes indeed. Unfortunately, the two clauses together suggests you imagine that state experiments in welfare reform were rigorously studied back in the 90s.
Before going on, let me note my debt to your post "so the costs of welfare reform weren't so low after all" or something, which is one of the main influences on my thoughts most weeks (really).
So what have we learned from a state level welfare reform experiment ? Well we now know that welfare reform kills people
"research of Peter Muennig, Zohn Rosen and Elizabeth Ty Wilde
From 1994 to 1999, Florida randomly selected a group of welfare recipients into either the Family Transition Program (FTP), ... or the then-standard Aid for Families with Dependent Children welfare program (AFDC“participants in the experimental group had a 16 percent higher mortality rate than members of the control group (hazard ratio: 1.16; 95% confidence interval: 1.14, 1.19; p < 0.01). This amounts to nine months of life expectancy lost between the ages of thirty and seventy for people in FTP."
Odd that this statistically significant result from an actual experiment has had no influence on the debate at all. There is little point having laboratories of democracy if people ignore the experimental results and just go with their prejudices as we do.
Now one problem with using state level experiments is that the devil is in the details and the devil wrote all the details of the national Welfare Reform bill. The original idea from say Clinton (or implemented in Florida under Lawton Chiles) was to offer much more help to people on welfare trying to get off it and also to impose a deadline. The national bill imposed a deadline, made the budget a rigid block grant and left the rest up to the states.
The rigidity was key -- to be able to say that the Federal welfare entitlement was eliminated, the budget was made a function of time. This is why TANF enrollment didn't increase during the recession when, for any sane program design, it would have increased. It also meant that in the late 90s boom welfare budgets were flush. That meant that there happened to be more money for welfare to work assistance. This added to the insane delusion that good outcomes for the poor in the late 90s showed the reform worked (the childless poor did well too, as did the middle class and the rich). Now the reform causes less money for welfare to work assistance, because states can barely keep the poor from starving given the rigid Federal contribution.
In contrast, the Florida bill included massive (and not accidental) increases in help with training, child care, transportation and health insurance. I read and was convinced by, an article about how wonderful it was (in even the liberal New Republic). This makes the demonstrated fact that it killed people much more striking. We know that Floridas welfare reform killed people. We can be quite sure that national welfare reform did too.
But the mere fact that a reform killed Americans is not worthy of any notice (not even here my number one source for info on what went wrong with welfare reform).
Saturday, January 04, 2014
Ah but we haven't achieved a popular front of the legitimate left, because I can't resist alleging that you fall into a contradiction Your colleagues at the "Progressive Policy Institute ... support “centrist” policies because they believe in them, *NOT* just because more liberal policies are politically difficult ..." and " share the left’s ... goals, but disagree over ... political strategy" So is the disagreement about policy or politics ? You assert both. I note that some people (one associated with the Progressive Policy Institute) are unwilling to debate welfare policy without appealing to politics when the going gets rough (Ed Kilgore and Elaine Kamarck come to mind but you are legion).And compare it with this from his January 3rd post
“populists” and “centrists” need to more clearly examine their common ground before establishing battlegrounds, and in particularly separate arguments over political strategy from arguments over substantive policy.I have been writing that in comments for years.
n my 3 comments from Jauary 2nd You seem to be trying to be more irenic even than EJ Dionne. Oh the Ireny it burns (or soothes or does whatever ireny would do if "ireny" were a word).
However, it's hard to keep the peace in the world's oldest disorganized political party. In particular "Everyone legitimately on the Left" is a call to arms. Your peace proposal includes a shibboleth -- no enemies on the left among those who support universal health care. As you note, there are also those illegitimately pretending to agree with " progressives’—values and policy goals" bur really, say, serve the interests of their rich financier financers (I won't name names or count the ways in which they have let their masks slip).
OK I will. I think that we can agree that the Progressive Policy Institute is progressive. I think we can agree that The Third Way is " the kind of “centrism” that represents elites as against popular movements of the left or the right." I hope we can agree to disagree about the DLC (and AFDC which, like the DLC, doesn't exist anymore).
[part cut out and posted above]
Really honestly trying to just move on I clicked "American Service Provision is Extraordinarily Inefficient" and read your comrade at political animal Ryan Cooper "Anyway, this is just to say that the inefficiency of the kludgeocracy shows up in all kinds of ways. As Matt says, it might be time to move away from the “tax credit du jour” policy model and back towards good old direct government service provision." I think this has clear relevance to the debate between the PPI center-left and the further left about " program design". We have evidence on the efficiency of reinvented government. It is clear. It may be impossible to convince swing voters, but we should be able to agree among ourselves on whether the problem with big government is purely a matter of electoral politics or if the argument that progressive goals are better met by means other than direct provision is consistent with the available data. third comment
But really this post is brilliant. You are so right that on the legitimate left there are serious debates which are dwarfed by the clash with Republicrazy.
My comment on his January 3 post
Heh indeed. I'd consider pure 200 proof populism to be "soak the rich and spread it out thin" or precisely the proposal to increase taxes on the rich and cut taxes on everyone else.
In 1992 Clinton ran making that proposal. There was a debate with a focus group with the dials and when Clinton said "only the rich got tax cuts" declared Bush supporters dialed in agreement. The pure populism was supported by Clinton suppoerters, undecided voters and Bush supporters. Also Clinton won the election.
Similarly Obama ran promising higher taxes for the rich and lower taxes for the middle class. Differently Obama delivered. Notably the class warrior populist proposal was made by all Democrats elected president after Reagan.
Of course Clinton was quite different from Edwards (and Obama) because his health care proposal was far to the left of theirs.
Also Al Gore is a hero to the left now because he is still saying what he always said about global warming.
I can't resist quoting from my comment on your Dionne post from yesterday "So is the disagreement about policy or politics ? You assert both. " and now from your current post "“populists” and “centrists” need to more clearly examine their common ground before establishing battlegrounds, and in particularly separate arguments over political strategy from arguments over substantive policy."
Friday, January 03, 2014
There are a large number of serious and, so far, unanswered questions about the financial panic of 2007-2009 and our current macroeconomic predicament. Among them are:
1)Why is housing investment still so far depressed below any definition of normal?
2)Why has labor-force participation collapsed so severely?
3) Why the very large spread between yields on safe nominal assets like Treasuries and yields on riskier assets like equities?
4) Why didn't the housing bubble of the mid-2000s produce a high-pressure economy and rising inflation?
5) To what extent was the collapse of demand in 2008-2009 the result of the financial crisis and to what extent a simple consequence of the collapse of household wealth?
6) Why has fiscal policy been so inept and counterproductive in the aftermath of 2008-9?
7) Why hasn't more been done to clean up housing finance (in America) and banking finance in Europe)?
I will try to answer
1. Housing. My guess is that trends were and are being chased. I think that the once normal level of housing investment was caused by irrationally high expected returns based on the false belief that the ratio of the price of a house to the CPI typically increased quite rapidly over time. Efforts to deal with this assume that the bubble began some time in the 21st century. The belief was strong in the late 20th. Current housing investment could be the new normal (I mean US houses are huge). I would guess also that people consider houses to be terrible investments now. Here I am thinking mostly of the perceived risk of a house as an investment.
2. Not much on labor force participation. I'd mostly guess this is the result of prolonged high unemployment. Also maybe higher than previously guessed elasticity of labor supply by people who are in their 50s and whose children are grown up and financially independent (last qualifier meaning not people like us whose children study on and on).
3) As usual, I reject the premise of your third question.
"Why the very large spread between yields on safe nominal assets like Treasuries and yields on riskier assets like equities?" Hmm it used to be that the alternative to safe nominal assets wich you considered were mortgage backed bonds and low rated corporate bonds. I think what we have here is a determination to defende the shortage of safe assets hypothesis from the data. I note that the S&P dividend yield is extraordinarily low http://www.multpl.com/s-p-500-dividend-yield/ there is no sign of extreme reluctance to buy equities.
Rather the data show that there *was* an extraordinary desire for safety back in 2008-9 causing extremely low stock prices which have since returned to normal. You can identify the return on stock with the required return only if you assume perfect foresight (that is that stock isn't risky at all).
I would conclude that Mill did not diagnose the US economy's current illness in 1828.
4) This is the tough one and the one most relevant to the post. I'd say that just NIP accounting says it was the trade deficit (so the *global* savings glut).
5) This is a pretty simple empirical question. Baker has a strong argument that forecasts of effects of reduced house prices based on pre-2006 data work well so there is nothing else. But Lehman. I tend to find Baker convincing on this one (which is boring). 6) That is politics not economics and, clearly, it comes down to the usual question: are Republicans more stupid of more evil.
7) I really hope that the answer to 7a is "Edward De Marco" but I fear that the problem is broader and not resolved. I'd say more generally terror of moral hazard if anyone but a banker is bailed out plus the bankers own Washington so will not be forced to take a haircut for their bad underwriting (even though the haircut could be in their collective interest as the problem is trying to free ride on the reduction someone else's principal).
7b is bankers don't like to be cleaned up and they are powerful in Europe too.
update: redundancy redacted plus link for a link, here are Arnold Kling's answers