Tag Archives: U.S. politics

macroeconomic models and tax cuts

The Economist has a piece on macroeconomic models used to evaluate tax policy.

Lurk near PhD economists online or at conferences, and you will hear them talk about “crisis in macro”. They mean that the models and assumptions most dominant among macroeconomists have failed repeatedly since 2007 to predict or even describe what’s happening. A defence, popular among academics, goes like this: we did get it wrong, but as responsible social scientists, we’re busy and fascinated right now, trying to figure out what was broken and how to fix it. It is a fair defence. In particular young macroeconomists have been using bigger datasets and faster computers to more accurately predict human behaviour. Economists are more likely to accept now, for example, that people with and without access to credit or wealth react differently to the same policy, an idea that is slowly working its way into models at central banks and even at the Joint Committee on Taxation.

This progress is unfortunate for Republicans. In the 1990s social science was on their side. Because data and computing power were harder to come by, macroeconomic models relied on thought experiments. The seminal model showing the ideal capital-gains tax rate as zero, for example, dates to 1986. It assumes that the economy consists of only one person. Also, she is immortal. The Wonder Woman economy, if you will. That model is now interesting only for a lecture on the history of economic thought. We’ve moved on, macroeconomists protest. But economists have. And Republicans haven’t…

But if you are going to insist on modeling the future and then planning around it, you have to do it right. The economists at the Joint Committee on Taxation are thoughtful. They read the most recent research. They examine their own models and, when they can, update them—conservatively. If, as Republicans have been insisting for 20 years, we have to assess our tax policies with dynamic scoring, there is no better way to do it than through the JCT. Unfortunately, as modeling has improved, it has not improved in the direction Republicans prefer, which leaves them where they are now. They wanted social science in policy-making, and they got it, in the form of a $1trn tax bill.

I don’t know how any ethical person can support the Republican party right now. They don’t care about facts, logic, or evidence, and certainly not economic growth or raising the living standards of their constituents. They are blantantly and shamelessly committed to lining the pockets of their big-business funders. It’s corrupt, undemocratic and shameful.

November 2017 in Review

Most frightening stories:

  • I thought about war and peace in November. Well, mostly war. War is frightening. The United States of America appears to be flailing about militarily all over the world guided by no foreign policy. Big wars of the past have sometimes been started by overconfident leaders thinking they could get a quick military victory, only to find themselves bogged down in something much larger and more intractable than they imagined. But enemies are good to have – the Nazis understood that a scared population will believe what you tell them.
  • We should probably be sounding the alarm just as urgently, if not more urgently, on biodiversity as we are on global warming. But while the case against global warming is so simple most children can grasp it, the case against biodiversity loss is more difficult to articulate.
  • A theory of mass extinctions of the past is that they have been caused by massive volcanic eruptions burning off underground fossil fuels on a massive scale. Only, not quite at the rate we are doing it now. Rapid collapse of ice cliffs is another thing that might get us.

Most hopeful stories:

Most interesting stories, that were not particularly frightening or hopeful, or perhaps were a mixture of both:

  • You can get an actuarial estimate of your life span online. You can also search your local library catalog automatically whenever you consider buying a book online. Libraries in small, medium, and large towns all over the U.S. appear to be included. Only, not my library. Boo, Philadelphia Free Library.
  • “Transportation as a service” may cause the collapse of the oil industry. Along similar but more mainstream lines, NACTO has released a “Blueprint for Autonomous Urbanism“, which is my most popular post at the moment I am writing this.
  • It’s possible that the kind of ideal planned economy envisioned by early Soviet economists (which never came to pass) could be realized with the computing power and algorithms just beginning to be available now.

 

we’re #1…in road deaths in the industrialized world

It’s not just health care costs, life expectancy, infant mortality, education, drug addiction and infrastructure. As more evidence the U.S. is gradually slipping behind the rest of the developed world in many areas, here is a New York Times article on how road deaths are worse here than our peer countries in terms of wealth. And not just western Europe, but again our close cultural and historical cousins like Canada and Australia.

It didn’t used to be this way. A generation ago, driving in the United States was relatively safe. Fatality rates here in 1990 were roughly 10 percent lower than in Canada and Australia, two other affluent nations with a lot of open road.

Over the last few decades, however, other countries have embarked on evidence-based campaigns to reduce vehicle crashes. The United States has not. The fatality rate has still fallen here, thanks partly to safer vehicles, but it’s fallen far less than anywhere else.

As a result, this country has turned into a disturbing outlier. Our vehicle fatality rate is about 40 percent higher than Canada’s or Australia’s. The comparison with Slovenia is embarrassing. In 1990, its death rate was more than five times as high as ours. Today, the Slovenians have safer roads.

Let’s not set our sights too high – could we start by just making America average again? Let’s try to catch up to our peers with similar levels of wealth and technology, instead of continuing to slip further behind. Or we could just bury our heads in the sand, not learn about the world, let our politicians tell us how great we are, and never find out that there could have been a better way.

Goering on Propaganda

An article on History News Network has this disturbing quote from Hermann Goering:

The Nazis fundamentally understood that public opinion was merely something that could be manufactured: propaganda would make people believe anything the regime wanted them to. As Reichsmarshal Goering told the Nuremberg Tribunal: “it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in every country.”

Blame the Jews, the Communists, the Mexicans, the Muslims, the Koreans, the Chinese, the Russians, the atheists, anything to avoid looking internally for real causes of and real solutions to complex probems.

October 2017 in Review

Most frightening stories:

  • Donald Trump’s proposed tax policies are based on numbers he just makes up. This is not a matter of differences of political opinion, it is a matter of made-up numbers that can be compared to actual measured numbers taken from reality. Large swaths of the public seem unaware or unconcerned about this difference. large enough swaths of the public are concerned enough, however, that we are accepting of a situation where the (very recently retired members of the) military appears to be taking a very active role in executive branch decision making.
  • U.S. diplomats in Cuba are being subjected to some kind of directional noise weapon, and nobody knows who is doing it or why.
  • It is possible that a catastrophic loss of insects is occurring and that it may lead to ecological collapse. Also, there is new evidence that pollution is harming human health and even the global economy more than previously thought.

Most hopeful stories:

  • The U.S. Democratic party could consider embracing an anti-monopoly platform. Spun the right way, this would be a pro-business policy in the sense of creating a level playing field for businesses of all sizes to compete and innovate, rather than a system that is unfairly skewed in favor of big business at the expense of small business, workers, and consumers.
  • Evaporation theoretically could be harnessed to produce enormous amounts of energy for human use.
  • Supersonic (civilian) travel is almost back.

Most interesting stories, that were not particularly frightening or hopeful, or perhaps were a mixture of both:

  • A lot of the recyclables picked up at curbside in the U.S. are shipped to China for use as raw materials for manufactured goods that will be exported back to the U.S.
  • Even if autonomous trucks are not ready for tricky urban situations, they could be autonomous on the highway with a small number of remote-control drivers guiding a large number of tricks through tricky urban maneuvers, not unlike the way ports or trainyards are run now. There is also new thinking on how to transition highways gradually through a mix of human and computer-controlled vehicles, and eventually to full computer control. New research shows that even a small number of autonomous vehicles mixed in with human drivers will be safer for everyone. While some reports predict autonomous taxis will be available in the 2020s, Google says that number is more like 2017.
  • I mused about what it would take for a metropolitan area in the U.S. to achieve statehood. It seems like a tough uphill climb but I can imagine it having benefits not just for the metro area but for the economy and country as a whole.

I’ve been reading a little about Socrates lately. There was a debate in ancient Athens, during its radical experiments with direct democracy and free speech, that a smooth-talking rhetorical style could tend to carry the day over solidly argued logic and facts. So these concerns are not new, and there probably was no golden age when groups of Americans or other human beings were a lot better at logic-based decision making than we are now. Still, what is frustrating is that any individual human being clearly is capable of logic-based decision making, and yet we are repeatedly swayed and misled by faulty logic in groups.

The insect thing is really wild. I just spent three weeks in tropical Asia and was struck by how un-buggy it was compared to past trips. Which probably has absolutely nothing to do with the peer-reviewed journal article mentioned above. My garden in Philadelphia actually was quite buggy this summer, somewhat ironically with the striped mosquito varieties that have drained significant quantities of my blood on past trips to tropical Asia.

U.S. military in Africa

The intercept has a long piece on the U.S. military’s misadventures in Africa. Sometimes I wonder if there is really any geopolitical strategy, or if it is as simple as they are fighting us because we’re there, and we’re there because they’re fighting us. If this is the case, there is clearly no military solution. But if the military is making its own foreign policy and conducting diplomacy directly with foreign militaries, is it surprising that military ideas are the only ideas?

https://theintercept.com/2017/10/26/its-not-just-niger-u-s-military-activity-is-a-recruiting-tool-for-terror-groups-across-west-africa/

 

Uranium One

I’m at a disadvantage traveling and trying to post on my phone, so my posts may be short for awhile.

So just what is/was Uranium One? According to Lawfare.com, almost nothing. It was a business transaction between a Russian government-linked company and a Canadian company owning U.S. uranium mines. Such transactions have to be reviewed by a panel including many U.S. government agencies, which seems like a good idea. The State Department, overseen by Hillary Clinton at the time is one of the many departments involved. The transaction was reviewed and approved by the book. And seriously, that’s all. To suggest otherwise is propaganda, not professional journalism based on facts and logic.  We seem to live in a country now where even educated people don’t realize there is a difference.

https://lawfareblog.com/unpacking-uranium-one-hype-and-law

 

 

a “benign junta”?

This American Historical Assocation blog talks about the dangers of so many generals being appointed to senior positions in the U.S. civilian government.

Cohen cautioned that it is normal for tension to arise in civil-military relations and that political generals have appeared at various points in American history. But he noted that the military is a far more powerful and important institution than it was prior to America’s rise to global dominance, making these tensions more serious. Like Kohn (and Whitt in her introduction to the briefing), Cohen is concerned about the growing separation of the military from civilian elites, noting, for example, that ROTC programs are far less common in our leading universities than they once were. He also worries that the high public esteem currently enjoyed by the military harbors hidden dangers. Maintaining civilian control of the military depends as much on “norms” as laws, and those norms are under assault.

These troubling trends make the generals’ prominent roles in the present administration a particular cause for concern. Kohn worried about the dearth of other agency voices to counterbalance the “troika” of Mattis, McMaster, and Kelly. Generals, he pointed out, are not diplomats or politicians, lacking their knowledge and experience. Although McMaster and the other generals probably see themselves—and are certainly seen by others—as “catastrophe insurance” for an erratic administration, they are trained to follow the orders of their commander-in-chief even if they consider those orders unwise. The irony here is that their commitment to civilian control and the chain of command limits their ability to influence or restrain the president.

Cohen agreed. He feared, for example, that the “troika” is less likely than civilian officials to resist or undermine a lawful directive by the president that they regard as reckless: going to war with North Korea was raised as an example. The only circumstance that might lead them to resign, he suggested, was if their honor was besmirched in the manner of Trump’s humiliation of Jeff Sessions. Cohen also warned of the rise of a “benign junta.” Noting that everyone in government is “the prisoner of their rolodexes,” he worried that Mattis, McMaster, and Kelly are likely to recruit fellow officers to staff junior positions, thereby expanding the military’s influence over the civilian sector.

Jeffrey Sachs on (gun) violence

I have just two things to say about the U.S. and guns, both of which I find obvious and evidence-based. First, the U.S. has a violence problem and guns are not the root cause of it. Eliminating guns would not eliminate the problem. Second, guns make our violence problem much more deadly.

I pointed out a really interesting data analysis that was posted on R-bloggers in 2015. What the numbers show very clearly is that the U.S. really does have a violence problem, with rates of violent death much higher than countries with similar economies, including our close cultural cousins like Canada and Australia, and, almost uniquely among richer countries, similar in levels of violence to many developing countries. These are hard numbers, so have a look and draw your own conclusions. My conclusions are backed up by my own personal experiences living in ultra-low-crime developed Asian countries (like Singapore) and significant time spent in developing Asian countries (like Thailand). In the latter, I generally felt equally or more safe on the street than I do in my home city of Philadelphia. Developing countries have problems with gang violence and organized crime to be sure, but it is random street crime that affects ordinary people, business travelers and tourists, and that just isn’t very common in most countries. The two countries I mentioned are actually pretty interesting because in Singapore, there are absolutely no weapons of any kind allowed in the hands of the public, while in Thailand, my impression is there are quite a few guns around.

So that said, here is Jeffrey Sachs talking about violence in the U.S. The rest of the article goes on to make a “states’ rights” pitch for gun control which I don’t feel strongly about one way or another. One thing I would favor though is to let individual cities pass and enforce stricter gun laws than the states they are in, if they want to.

Mass violence is deeply rooted in American culture. America’s European settlers committed a two-century-long genocide against the native inhabitants, and established a slave economy so deeply entrenched that only a devastating civil war ended it. In almost all other countries, even Czarist Russia, slavery and serfdom were ended by decree or legislation, without a four-year bloodletting. When it was over, America established and enforced a century-long system of apartheid.

To this day, America’s homicide and imprisonment rates are several times higher than Europe’s. Several large mass shootings occur each year – in a country that is also waging several seemingly endless wars overseas. America is, in short, a country with a past history and current stark reality of racism, ethnic chauvinism, and resort to mass violence.

Ouch, I certainly think he is on to something. But I also think the modern obsession with guns is fueled by an industry lobby funding political campaigns and saturating all forms of entertainment with guns. I would have to do research to prove it, but I bet the industry provides free guns to the entertainment industry just as the cigarette companies did decades ago. The military certainly does this openly, I believe with the idea of desensitizing the public to the carnage of foreign wars and desensitizing our children so they can one day be recruited to fight in those wars. Guns, fights and car chases are also sort of a lazy, easy and cheap substitute for actual storytelling. So one idea would be for a few movie and TV studios and game companies to make a pledge to go a few months and see if they can tell interesting stories that don’t have any guns in them. Another quick idea would be to adjust movie, TV, and game ratings to make it crystal clear that stories with guns in them are for adults only. If necessary to prop up earnings, sprinkle in some tasteful soft porn to compensate, which I believe would be much healthier for children.