An Anti-Political Year

The final citywide turnout in Chicago’s primary elections last week was under 10%. I believe that’s the lowest in the city’s history. At just over 10% the turnout in the precinct where I worked was actually higher than the citywide average. We’re either dramatically over-registered or voters just plain weren’t interested. Alexis Simendinger of RealClearPolitics thinks there’s a strong anti-incumbent sentiment:

Less than eight months before a closely divided electorate decides which candidates they’ll send to Congress, Democrats vying for House and Senate seats face a downbeat populace that may stay home in November, while Republican candidates find themselves challenged to unite around a common vision beyond opposition to Obamacare.

Nearly five years after the end of the Great Recession, Americans express continued pessimism about the economy and the direction of the country, challenging the party that holds the White House

The survey, conducted jointly by the Tarrance Group and Lake Research Partners, found that likely voters hold both parties in generally low regard and are perilously amenable to the idea of bouncing their own members of Congress out of office.

Democratic pollster Celinda Lake, who helped unpack the data during a media event hosted by the Christian Science Monitor, described voters’ mindset this year as “ornery.”

“It’s an anti-incumbent year,” she warned.

In an anti-incumbent year, voters show up at the polls to vote the rascals out. If Chicago is any gauge, it’s an anti-political year. The voters won’t show up at all.

IMO that sort of mood actually favors incumbents. They’re more likely to have at least a little organized support to get their vote out.

Still, with 10% turnout anything can happen. Getting 5% of registered voters to vote for you could conceivably allow even fringe candidates with very highly motivated supporters to get themselves elected.

Related: Thomas Edsall, “How Strong Will the Democratic Backlash Be?” Again, if Chicago is any gauge there won’t be a “Democratic backlash”. It isn’t unknown for the number of Republican election judges in primary elections to exceed the number of registered Republicans here. Talk about your “Republicans in name only”!

I do wonder how much of a monkeywrench the incompetent debut of Healthcare.gov will throw into things. It’s darned hard for technocrats to run on competence with that kind of record or to run as a reform candidate when you’re an incumbent.

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How Do You Determine What Companies Need?

Matthew Slaughter supports expanding the number of tech workers imported into the United States:

In many recent years, demand for H-1B visas has far exceeded supply. In 2013, the government received roughly 124,000 applications in just four days—and then stopped accepting petitions on April 5. The government has closed the visa window suddenly before, as recently as 2008. All current forecasts suggest strong visa demand again this year thanks to dynamism in high-innovation sectors and continued economic recovery.

[…]

Talented immigrant STEM workers do not crowd out American-born STEM talent. Companies that cannot hire talented immigrants in America often don’t hire anyone at all. Or these companies may hire—but overseas. In 2007, Microsoft opened a research center in Vancouver, in part to “allow the company to continue to recruit and retain highly skilled people affected by the immigration issues in the U.S.,” according to the company’s announcement. In May, the startup Blueseed announced it would skirt U.S. immigration restrictions by building a barge in international waters 12 nautical miles off the coast of San Francisco. There the company could accommodate international entrepreneurs.

I completely support American companies getting the employees they need. However, I think that Mr. Slaughter is too gullible in taking the companies’ word for what they need. Quite to the contrary I think that there are plenty of qualified tech workers already available in the U. S. but the companies don’t want to pay the wages necessary to hire them. I don’t have nearly as much sympathy for them as Mr. Slaughter does.

I’ve already proposed my solution to the problem: requiring companies to advertise the jobs for which they’re trying to secure H-1B visas in a common clearing house, requiring them to hire qualified domestic workers that apply for the jobs offered in the common clearing house, and imposing substantial penalties when companies fail to comply with the wage regulations that are part of the H-1B visa program. Then, when you’ve got such a program in place, remove the quotas entirely.

I note, too, that Mr. Slaughter confuses strong sales with “dynamism in high-innovation sectors and continued economic recovery”. Wages have been pretty flat in the tech sector for a half dozen years or more. Aren’t changes in the market clearing price for labor a better gauge for determining the demand for labor than sales?

As I’ve mentioned before there’s already good reason to believe that tech companies colluded to fix wages. I don’t think these same companies would be above lying about what they need.

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It’s Not Just Putin

There’s a lot that I agree with in former Defense Secretary Robert Gates’s op-ed in the Wall Street Journal on the challenges that Russian President V. Putin presents to the West. For example his list of Russia’s particular grievances is pretty good:

His list of grievances is long and was on full display in his March 18 speech announcing the annexation of Crimea by Russia. He is bitter about what he sees as Russia’s humiliations in the 1990s—economic collapse; the expansion of NATO to include members of the U.S.S.R.’s own “alliance,” the Warsaw Pact; Russia’s agreement to the treaty limiting conventional forces in Europe, or as he calls it, “the colonial treaty”; the West’s perceived dismissal of Russian interests in Serbia and elsewhere; attempts to bring Ukraine and Georgia into NATO and the European Union; and Western governments, businessmen and scholars all telling Russia how to conduct its affairs at home and abroad.

I also completely endorse something that’s written between the lines of the op-ed but from which, unfortunately, he steps away. It’s not merely President Putin we have to worry about. He is merely an expression of what most Russians believe:

The only way to counter Mr. Putin’s aspirations on Russia’s periphery is for the West also to play a strategic long game. That means to take actions that unambiguously demonstrate to Russians that his worldview and goals—and his means of achieving them—over time will dramatically weaken and isolate Russia.

but

No one wants a new Cold War, much less a military confrontation. We want Russia to be a partner, but that is now self-evidently not possible under Mr. Putin’s leadership. He has thrown down a gauntlet that is not limited to Crimea or even Ukraine. His actions challenge the entire post-Cold War order including, above all, the right of independent states to align themselves and do business with whomever they choose.

Let me suggest something that may not have occurred to you. The largest problem in the crisis in the Ukraine isn’t Putin or Russia or Ukrainian right-wing extremists or weakness in U. S. policy. It’s Germany.

As with so many other European crises over the last twenty years the crisis in the Ukraine was fomented by Germany and is insoluble without German cooperation which so far has not been forthcoming. The reason that Germany was divided after World War II wasn’t to protect Germany from Russia. It was to protect the Europeans including Russians from Germany. Recently, some commenters here have expressed discomfort with Germany’s shouldering the cost of its own defense on the grounds of the dangers of an armed Germany. Why is a Europe dominated militarily by Germany unacceptable while a Europe dominated economically and politically by Germany is acceptable?

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What If You’re Wrong?

I really don’t have much to say about the Hobby Lobby case and the PPACA’s regulation requiring that employers provide birth control as a “no extra charge” component of the insurance they provide to their employees . Just about all that I can add is that sexual relations is not an insurable risk and, consequently, requiring birth control be provided as part of the package seems like a stretch if you’re adhering to anything remotely resembling insurance which I gather that the administration is not. It’s just a word.

See also here:

Contrary to protestations from certain entities that subvert all issues for political gain, the Hobby Lobby case is not about birth control or women’s rights or even universal health care. It is, in Dershowitz’s summation, about “whether or not the statutes in the penumbra of the Constitution require a religious exemption.”

An entire school of red herrings has been produced in arguing about this case.

I’m not a lawyer so I have no authoritative basis on which to remark about the law. Based on my reading it’s my understanding such as it is that the law of closely-held private companies is pretty mature and that they are generally held to be alter egos of their owners.

My impression, too, is that, regardless of the vitriol being poured out in the opinion pages, the government’s case is quite weak. I hold the outrageous and naive belief that the members of the Supreme Court generally ground their opinions in the law and I suspect they will in this case, too. That’s not to say that the Court doesn’t take other considerations into account as well, e.g. the Court’s reputation or possible future implications of their decisions. I think that partisanship, which since the members of the Court are human is necessarily a factor in its members’ decision, is way down on the list of reasons for Court decisions.

The Obama Administration has not fared particularly well with the Supreme Court and that’s not just due to the partisan divide. The large number of unanimous Court decisions that found against the administration is adequate refutation of that belief. Unless you think that Ruth Bader Ginsburg is a right-wing partisan hack.

Here’s my hypothetical question. What if you’re wrong? What if the Court finds unanimously in favor of the plaintiff, sending a rebuke to the administration?

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The Council Has Spoken!

The Watcher’s Council has announced its winners for last week.

Council Winners

Non-Council Winners

The announcement post at the Watcher’s site is here.

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Don’t Take Away My Parmesan!

Around here we buy and enjoy Dubliner cheese. It’s a parmigiano-style cheese made in Ireland that’s not as good as Argentine reggianito or the real parmigiano-reggiano, produced in Italy in Parma, Reggio-Emilia, and a few other designated areas but it’s widely available, half the price of the Argentine, and a quarter of the price of the Italian.

If the Europeans get their way Kraft and other American cheesemakers will no longer be able sell Parmesan cheese, execrable as what they sell under the name is:

More than half the members of the U.S. Senate rose in defense of American dairy last week, in what could be a sign of how hard it will be to forge a comprehensive trans-Atlantic trade deal.

The trouble comes from the European Union’s rules concerning “protected designations of origin” (PDO) and “protected geographical indications (PGI).” EU law allows producers of many foods—from Parmesan cheese to prosciutto—to apply for legal protection for the names of their products. The European Commission then decides whether a name has become generic or not and then how much protection a product deserves. So cheddar gets no protection but feta does. And to be prosciutto di Parma, your ham must not only be produced near that Italian city, but it must meet a host of requirements on how long it has been aged, what the pigs have been fed, and more.

I’m not convinced by the Europeans’ arguments. At some point doesn’t common usage obliterate protection? The list of common foods that include European place names in their names is enormous—Swiss cheese, hamburgers, wieners, just to name three—and those names have been common parlance for a century of more. Practically all common names for types of cheese are derived from place names, e.g. cheddar, roquefort, gruyere, cheshire, stilton. Even the name American cheese, now the name used to describe what I usually refer to as “American-type cheeselike food product” is derived from a place name.

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A Signalling Problem

Riddle me this. How does this reality of European defense spending:

At 1.9%, France last year fell short of the 2% that is supposed to be the technical requirement for membership. Mr. Rasmussen’s Denmark spent 1.4% of its GDP on defense, Angela Merkel’s Germany 1.3%, Italy 1.2%, and Spain 0.9%. This is what a country spends if it thinks its main security threat is Belgium.

constitute an argument for greater U. S. commitment to Europe? When you consider all of the NATO countries only four—Estonia, Greece, the United Kingdom, and the United States—spend more than the 2% of GDP guideline for membership in the alliance. Most, like Germany (1.3%), spend less. Some, like Luxembourg (.4%), Spain (.9%), and Canada (1%), spend much less. Some of the free riders, e.g. Luxembourg and Canada, cannot plead poverty. Luxembourg has the highest median household income in the world. The free riders mostly just have other priorities.

In aggregate the countries of Europe have a higher GDP than the United States but their aggregate defense spending is a fraction of ours. I attribute a good deal of the discrepancy to bad signalling on the part of the United States. Take the war in the Balkans as an example.

We had very few interests in the Balkans. Germany, on the other hand, had substantial financial interests, particularly in Croatia. The Germans had been courting the Croats for years prior to Croatia’s declaration of independence. Italy had substantial interests as well, particularly as the refugees of the conflict began streaming across their border. The carnage in Yugoslavia was a mostly European problem that should have been soluble by the Europeans.

When we joined the intervention in the Balkans it signalled to the Europeans that we would provide the military muscle to handle even purely European crises. We have repeated that signal again and again since then. Is it any wonder that our European allies have interpreted our actions as absolving them from any need for paying for their own defense let alone paying for more general European security. They preferred to spend the money on social welfare as who wouldn’t under the circumstances?

We’re in the position of the man who has an enormous pain in his head because he’s pounding his head into a brick wall. The first thing to do is stop.

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Do We Really Want to Maximize GDP?

At The American Sean Speer and Charles Lammam lay out the case that once the size of government has exceeded some fixed percentage of GDP that further increases in the size of government will be accompanied by declines in economic growth:

Di Matteo examines international data and finds that, after controlling for confounding factors, annual per capita GDP growth is maximized when government spending consumes 26 percent of the economy. Economic growth rates start to decline when relative government spending exceeds this level. In other words, there is a hump-shaped relationship between the size of government and economic growth (this relationship is often referred to as the Scully Curve, named after the economist Gerald Scully).

According to OECD data, the size of government in the United States was approximately 40 percent of GDP in 2012. While Di Matteo’s estimate of the tipping point is based on international data, it suggests that President Obama should reduce government to boost the U.S. economy. This conclusion is supported by a larger literature (see here, here, here, and here) that has also found that a smaller size of government than what currently exists in the United States would translate into higher annual economic growth.

While I’m open to the possibility that the assertion is correct, they don’t convince me that it is or that you can make that determination using the methods that are being employed. For one thing, I’m skeptical that all economies react the same way to big governments and most of the studies of the relation between government size and economic growth have been international.

I’m much more interested in ways and means for increasing production since I think that the particular problem of the U. S. economy is that we don’t produce enough of what we consume.

However, I’m suspicious about the premise as well. Do we really care about maximizing GDP? If we could add $10 trillion dollars to GDP and all of that $10 trillion would be put into the hands of one individual, would it be a policy we’d want to pursue? A hundred people? A thousand? Why?

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He’s a Card

I can only presume that this remark by Fred Hiatt at the Washington Post is intended as humor:

Even the now-ridiculed “reset” of U.S.-Russia relations was worth a try; no one knew for sure whether then-president Dmitry Medvedev might offer a viable alternative to Putinism.

Everyone knew. Except possibly Hillary Clinton and Barack Obama.

Don’t make the mistake of thinking that Putin and his policies are unpopular in Russia. He is significantly more popular there than President Obama is here. His actions in Ukraine have made him more popular.

On the meat of his column I both agree and disagree with Mr. Hiatt’s column. I agree with this:

There was no viable military option that could have discouraged Putin’s invasion of Ukraine, and there is no military option to reverse it.

and I disagree with this:

The president came into office believing that military assets were a 19th-century measure of power, of dwindling relevance in the 21st century. He believed that diplomacy could solve problems that George W. Bush had ignored, created or exacerbated; that the eventual abolition of nuclear weapons was perhaps the United States’ most important goal; that economic reconstruction at home had to take precedence over — and was a necessary prerequisite for — leadership abroad.

I think that President Obama believed that foreign leaders hated George Bush for the same reason that he did—because he was George Bush—rather than because he was president of the United States.

In the end I think that barring some catastrophe the idea that President Obama will reconsider his foreign policy as Mr. Hiatt suggests is far-fetched. I think he has entered the consolidation phase of his presidency rather than a reconsideration phase.

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Paying College Athletes

Yesterday on CBS’s Sunday Morning program they had a feature about whether college athletes should be paid. I don’t have a dog in this hunt but I don’t think the advocates really understand the argument they were making.

As I understood it they were arguing that due to the athletic scholarships they receive college athletes (not all college athletes are on scholarship) are already employees of the university and, consequently, the universities should shoulder the responsibilities of employers including paying their athletes cash wages.

To me the most obvious solution to the problem would be to end athletic scholarships.

I also suspect that the advocates don’t want to think about the fact that payments in kind are taxable and if athletes are employees then a Northwestern University athlete on scholarship owes on the order of $20,000 to the IRS but that’s a different subject.

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