Category Archives: politics

Nov 18 2009
5 Comments
Economics, politics, Uncategorized

On Reforming the Missouri Payday Loan Industry

This Monday I attended a legislative forum on payday loans held by Missouri House representative Mary Still (D, MO-25). Also on the panel were Representatives Stephen Webber (D, MO-23), Chris Kelly (D, MO-24), John Burnett (D, MO-40) and Charlie Norr (D, MO-137). Roughly 18 people were scheduled to testify though unfortunately I was only able to be there for the first 5-7 or so witnesses. Here is the Columbia Tribune covering; here is coverage from the Columbia Missourian.

The big concern with payday lending is that we want to prevent people from overborrowing. It is a simple scenario: people in financial difficulty borrow money and can’t repay the loan on time, so the loan rolls over with additional fees or interest, aggravating an already difficult financial situation. As an outcome, this is undesirable, particularly when the victims are vulnerable to exogenous economic shocks and politically weak, like single mothers, or people with terminal illnesses living on a very limited income.

So what are the problems with payday lending? My biggest problem with both sides of the debate is a lack of data. Or rather, a lack of clear data. Payday loan providers tend to show off their own data that claiming that people who take out these loans are generally financially stable and use them as bridge loans. But data from organizations dealing with complaints (473 in Missouri in 2008) about payday lenders show that people making complaints are generally low-income and not financially stable. Some complaints also highlight questionably ethical or downright illegal conduct by payday loan companies in collecting debts, from vicious harassment to threats of jail or violence (this is particularly undesirable when it impacts the poor and politically weak). But we don’t know the true size or magnitude of these problems since neither sides of the market have incentives to accurately self-report (we can safely assume some proportion of consumer complaints are efforts to game the system and not legitimate complaints, though the Better Business Bureau does distinguish between legitimate complaints and illegitimate complaints).

Payday loan companies might be truly reporting the consumer data that they have. But there is no guarantee that their data is correct. Generally the only vetting of clients happens through an employment check, and clients may have incentives to provide deceptive or misleading information to get loans. So that data set may have serious problems. But data from organizations like the Better Business Bureau also faces some selection bias: it is likely that their survey data comes from people looking to use these legal structures to force a renegotiation of their loan terms or have registered complaints about the conduct of loan companies (I was unable to find a methodological note on their 2007 survey of 3,700 borrowers, which is important given that the industry did 2.8 million loans in Missouri in 2008). So BBB data may not include input from a representative sample of customers. I also don’t trust a lot of the data on industry profits, which this study by Tobacman and Skiba puts at around 10.1% (here is a Columbia Tribune article that provides an unattributed statistic of 6.6% for the 5 biggest payday lending companies). The problem with profit data from payday lenders is that a large number of transactions happen in cash, which leads me to believe that  there is some level of revenue that companies have the option of keeping off their books.

Here more data is useful in determining the size of the market and the impact of regulation. But we don’t need it to claim that the existence of claims alleging serious misconduct by businesses merits attention. What we do need is a cost benefit analysis that examines the incentives the market faces. Specifically, if regulation is enacted (and it is fairly well demonstrable that even basic regulations curtail payday lending operations substantially) where does the market re-locate? A possibility is that some of this business becomes part of the black or grey market. Is it worse to be gouged by regulated providers (companies with business licenses) or gouged by unregulated providers? Do markets with unregulated providers have better ability to vet clients, make better loans, and have fewer negative outcomes, since they aren’t constricted by the law? Do those markets have better social outcomes, despite the absence of legal protections for either party? Or do black markets end up looking up like the Mafia? This line of questioning is to me unanswered, but there are valuable lessons for the market in the economic literature.

Jon Zinman of Dartmouth has a forthcoming paper in the Journal of Banking and Finance that examines credit market substitutions that consumers make in the absence of access to credit. It finds that the market looks different when interest caps are in effect: payday loan providers start charging larger service fees where they still exist and households shift to credit cards and bank overdrafts to find liquidity. Zinman finds particularly Oregon interest rate caps left households worse off when their options for liquidity were curtailed by the exit of payday loan providers.

So there are two differing theories on expensive loans. First there is the idea that access to expensive credit leaves a percentage of users (we don’t know what percentage) worse off, because they aggravate the financial distress of people already struggling. There are several models in the economic and behavioral literature that support this. I point particularly to Rabin and O’Donohue in 2006, along with Carrell and Zinman 2008 (payday loans make airmen in the USAF worse off), and Campbell et al 2008 (where payday loans exist people are more likely to have their bank accounts involuntarily closed).

On the other side of the debate are arguments that restricting access to credit is bad. Here is Karlan and Zinman defending usury in the Wall Street Journal. Here is Deyoung also in the WSJ, looking at firm-level microdata from Colorado and concluding that regulation increases the cost of credit which leaves consumers worse off. Here is Adair Morse, who examines data from disaster financiers during the San Francisco earthquake and finds out that even expensive credit is key to maintaining the pre-disaster trends in human well-being (using human welfare indicators like the number of births, deaths, foreclosures, and substance abuse). And here is Greg Elliehausen who finds that consumers act rationally in calculating the costs of high-interest loans (my thought: the fact that consumers make rational calculations doesn’t mean that calculations are right or that outcomes are optimal, ex: the subprime loan market).

The problem that we face is that both sides of the debate are true in some fashion. Studies on both sides are hobbled by selection biases at some level. Morse, particularly, notes that her study faces a huge selection bias: people applying for disaster financing in San Fransisco are not representative of people applying for payday loans in conditions of economic instability, nor are the data on outcomes generally capable of catching people who are left worse off. Interesting aside: Morse references the Italian immigrant who later founded the Bank of America after events left him in a position to be a monopoly supplier of loans after the earthquake.

Perhaps regulation should focus on improving the vetting process, to select out the people who are likely to be worse off if they obtained a high interest loan. That avenue isn’t attractive to me because as a libertarian I distrust paternalistic government, but if we can establish that some level of regulation minimizes or eliminates undesirable social outcomes then it is better than the status quo. I do caution against regulations that drive this market underground because that hurts our ability to be conscious of its existence and as social engineers the limits on what we know about populations is very meaningful in terms of what we can or can’t conceptualize in terms of solutions.

I think that the lesson from the economic literature is that populations are not homogenous, generally, and that there are sectors of the market that would benefit from regulation, specifically the slice of consumers who would be left worse off in the case of default. It is also a very pertinent question of social policy as to how we can aid or assist this sector of the population without incentivizing free-riders. The difficulty lies in tranching the payday loan market without closing it.

Tagged , , , , , ,
Nov 05 2009
Leave a comment
Economics, politics

Things You Don’t Hear Very Often, Tom Daschle Edition

From an interview with Tom Schaller of FiveThirtyEight:

“If there’s a silver lining, it’s that we conserved our resources. We spent half what the RGA spent,” said Daschle. “It was the right call because neither race would have been helped by more spending.” He said the DGA spent $4 million in VA to the RGA’s $5M, and about $3.5 million in New Jersey to the RGA’s $7 million.

You don’t hear politicos say that more campaign money would have been useless very often.

Tagged , ,
Oct 25 2009
Leave a comment
Economics, politics

Words to Live By

From Hayek:

When I say that the conservative lacks principles, I do not mean to suggest that he lacks moral conviction. The typical conservative is indeed usually a man of very strong moral convictions. What I mean is that he has no political principles which enable him to work with people whose moral values differ from his own for a political order in which both can obey their convictions. It is the recognition of such principles that permits the coexistence of different sets of values that makes it possible to build a peaceful society with a minimum of force. The acceptance of such principles means that we agree to tolerate much that we dislike. There are many values of the conservative which appeal to me more than those of the socialists; yet for a liberal the importance he personally attaches to specific goals is no sufficient justification for forcing others to serve them. I have little doubt that some of my conservative friends will be shocked by what they will regard as “concessions” to modern views that I have made in Part III of this book. But, though I may dislike some of the measures concerned as much as they do and might vote against them, I know of no general principles to which I could appeal to persuade those of a different view that those measures are not permissible in the general kind of society which we both desire. To live and work successfully with others requires more than faithfulness to one’s concrete aims. It requires an intellectual commitment to a type of order in which, even on issues which to one are fundamental, others are allowed to pursue different ends.

Oct 23 2009
Leave a comment
Economics, politics, Uncategorized

Executive Flight

Earlier I argued that the order resetting executive compensation for the companies accepting bailout money from the US government would not impede the ability of the companies to retain their top executives because it was a predictable outcome once the companies made the decision to seek help and that any executives that would have left because of the order should have already left. Turns out that part of the story is correct. From the Washington Post today:

Even before the Obama administration formally tightened executive compensation at bailed-out companies, the prospect of pay cuts had led some top employees to depart.

But Thursday, he ruled only on slightly more than three quarters of the pay packages that were to be under his purview. The balance reflected executives who have left since he began his work in June or will be gone by the end of the year.

Many executives were driven away by the uncertainty of working for companies closely overseen by Washington, opting instead for firms not under the microscope, including competitors that have already returned the bailout funds to the government, according to executives and supervisors at the companies.

Tagged ,
Oct 22 2009
3 Comments
Economics, politics

Will Bailout Execs Quit?

The Obama Administration made big news today by announcing that the 25 highest compensated executives at the 7 biggest recipients of funds (Citigroup, AIG, Bank of America, GM, Chrysler, and the financing arms of GM and Chrysler) will see markedly reduced compensation this coming year. The blogosphere is of course up in arms about this; lots of libertarians and conservatives think that this is a horrendously bad decision, and that this will cause executives to flee these companies. I think differently. Here are a couple reasons:

1. Expectations: executives at these companies had to know this was coming once they asked for bailout money. Government money makes business decisions at these companies a political affair and it was unreasonable for executives to not make the calculation that politics would work in their favor. That is to say, the mass exodus everyone is predicting should have happened months ago. That an exodus has not happened is telling. Perhaps it is also true that these executives have nowhere to go; would you hire a GM executive with a resume detailing their role in running their companies to the ground?

2. More expectations: I bet executives at these companies look at the endgame. Ultimately either these companies will unwind their operations or will return to profitability. In 2-5 years it will have been better for executives at companies that expect to return to profitability to have stayed with the company than to have left and tried to find work elsewhere. At some point these companies will unwind themselves from the government lifeline and have freer reign to reset compensation schemes at which point loyal executives should expect to see themselves handsomely compensated.

3. Some of next year’s compensation for these executives will be in the form of stock options, not cash, in what looks like an effort to have executives invested in their company’s performance. An attempt to solve the principal-agent problem? Likely.

4. And finally, it seems to me that part of the message that the Administration is sending is that these executives are expendable. If we can find smart people like Geithner to run big, important organizations like the Treasury Dept. for a salary that’s just under 200K, then it seems obvious that we can find qualified, motivated people to replace executives who do choose to leave. There are a lot of smart people in the world and these executives don’t have a monopoly on the qualities that make good executives. In fact, it’s probably true that some of them just don’t, since it was under their watch that these companies asked for a bailout.

So is the Administration’s decision to cut executive compensation a big deal? I don’t think so. My argument boils down to two claims: first, that there will be no executive flight (it would have already happened), and second, that even if there is executive flight, it doesn’t matter because these people are replaceable.

Tagged ,
Oct 20 2009
Leave a comment
Economics, politics

Against Eric Hobbs On Healthcare

It feels silly to respond to an article this bad from an author who doesn’t seem to have the ability to think coherently, but Eric Hobbs (VP of the Mizzou College Republicans) has a column titled “Liberals Make me Laugh” in the Maneater this week. I can’t address the entirety of the article as there are far too many warrantless arguments made without little to no attempt at spinning a coherent narrative, but I will note that the first half of the article barely contains a single identifiable argument. My best attempt at a translation is that Hobbs makes something like the following claim: It is patently laughable that the Senate Finance Committee vote on health care legislation this past Tuesday was a vote on concepts to be included in a bill to be finished later, as opposed to a bill that had actually been written. Or alternatively, that Senate committees shouldn’t vote on concepts to be included in legislation and should instead limit their decision making to only formally submitted bills. This seems like an impossible standard to hold committee grunt-work too; the purpose and nature of Congressional committees is that they are where legislation gets fleshed out and compromises made. Cutting out that process seems to me to be unwarranted.

But the arguments that Republicans like Hobbs are making seem to me to miss the point; first, they miss an important argument the left makes, and second, they are never couched in any kind of intellectual modesty so that any engagement becomes a confrontation. As for myself, I’m hesitant to come to big picture conclusions about a public option or even the entire thrust of the Democrat push for insurance reform but there is a fundamentally attractive premise at the heart of the liberal desire for universal healthcare. It is that our national policies, both foreign and domestic, often are co-opted by moneyed interests skilled at navigating the halls of power, and that conservative leadership particularly are never identified with the desire to evaluate costs and benefits in a way that speaks beyond the cultures of money and power. Alternatively I could state that the left is far more inclusive in the demands it is willing to be responsive to than the right.  I am particularly fond of citing the statistic from the 2008 Republican National Convention that 1.5% of delegates were black, or discussing the participation of women in the Republican party. The left is willing to ask why we’re willing to make a tradeoff like the decision to go fight a second war in Iraq when the money could be spent with a much more clear return providing healthcare to those who desire it and can’t afford it; the right, as far as I know, rarely crosses this conceptual bridge, eliding the debate with statements about the invincibility of markets and tenuous claims about freedom and national security. The conservative movement ends up crippled by a paucity of ideas and an unwillingness to engage in civil debate.

There is a caveat; the inclusive nature of the Democrat project does not mean that policy is not influenced by moneyed interests, or that populist demands do not get co-opted by the system, or that they are even smart demands to begin with. The attraction of the Democrat project is its inclusivity and that, I think, is a starting point lost on a GOP that insultingly layers its new website with pictures of token minorities.

Note that I’m careful to not assign moral standing to particular ideological stances or real-world actors; I think corruption is an inevitable part of politics, and it is clear that Democrats are just as corrupt as Republicans. But it seems to me that there is inherently more competition in the market for Democrat ideas than there is in the market for Republican ideas; part of the reason is the exclusionary nature of GOP participation and part of it is that the GOP meta-narrative is one that is fundamentally anti-intellectual; as a result, the GOP has lost its intellectual moorings (and most importantly, its intellectuals).

Oct 13 2009
2 Comments
Economics, politics

Great Last Lines, Healthcare Edition

I attended a debate sponsored by the Residence Halls Association last night and am quoted in the Maneater along with funkbrother and Truman Scholar Eliseo Rick Puig. Here is the article. It would be more accurate to say that 47 million Americans without healthcare represents more than just a market failure; in some demographics, it does represent a market failure, in others, it represents the limits of what the market can do. But a nuanced comment like that isn’t a terribly great sound byte.

The College Republicans (led by Brett Dinkins) were embarrassingly underprepared for this debate; they at one pointed cited an article in the Washington Examiner as countervailing evidence against budget analysis prepared by the Congressional Budget Office, seemingly implying that the CBO was itself responsible for a 11 trillion dollar national debt. Such a statement shows ignorance of the structure of Congress and the way money itself is spent (politicians write appropriation bills and pass them; the CBO is essentially a glorified secretarial/research agency that calculates the fiscal impact of a proposed bill). And worse, they stuck to a terribly inarticulate “markets are best” prescriptivism that is at best really annoying and at worst extremely dangerous; I made the argument that markets are not homogenous and and behave vastly differently depending on the parameters. The market for subprime mortgages is far different from the market for lemons, for instance, or for national security; these markets behave differently and we treat them differently, for good reason.

More later.

Tagged , , , ,
Oct 12 2009
Leave a comment
Economics, law, politics

A Theory On Repealing Don’t Ask, Don’t Tell

My theory on President Obama is that he views the military as a potentially dangerous place for his Presidency. The US military is a unique institution in America and one of the great successes of this democracy have been establishing fundamental parameters on the ability of the military to act that keep it firmly under civilian control. As Commander-in-Chief, he faces a difficult route to successfully utilizing the world’s most powerful force in the conflicts abroad, particularly in Afghanistan; as a Democratic President he faces a conservative faction of the population who is not convinced of his ability to successfully protect the homeland. Not to mention his workload, which is as impressively stacked as as the cords of firewood former President Bush cut on vacation.

The objection is utterly simple: Why can’t the President just sign an executive order circumventing DADT? I suspect that the answer is that the President manages through coalition-building; as a President elected during wartime he fears that signing an executive order directing the military to disregard DADT without directly engaging the chain of command would undermine his effectiveness as Commander-in-Chief and provide his political opponents with profoundly damaging political ammunition that’s amplified by poor outcomes in Afghanistan or Iraq. Better to step slowly and surely than risk aggravating relations with the military. The evidence for this is his very careful engagement of the military and especially his retention of Robert Gates as Secretary of Defense.

The endgame here is to make sure change permanent. It would be disastrous, for instance, if Sarah Palin or any number of potential other Republican presidential nominees won the 2012 elections and proceeded to re-institute DADT. The odds of that re-institution are vastly smaller with a 2012 Obama win; policies tend to be path-dependent in the sense that they create a culture invested in their own existence and the longer that a certain institutional culture has been in existence the the stronger it is. This argument allows us to flesh out the argument more fully: the President believes in transforming the institutional culture of the military with the permanent repeal of DADT as the endgame, not the catalyst.

Tagged , ,
Sep 09 2009
Leave a comment
Economics, politics

Some Quick Budget Numbers

During the last 3 Republican administrations (Reagan, Bush I, and Bush II), US national debt rose a collective 7.1 trillion dollars. During the last Democratic administration (Clinton) the US national debt rose 1.5 trillion dollars. That is to say, Republican administrations accumulated .44 trillion dollars in debt in a average year, compared with .187 trillion dollars a year during Clinton’s tenure. Here is the data from the White House Office of Management and Budget (page 129).

The point of this exercise is not to weigh the relative merits of Republican vs. Democratic presidents. There are far too many variables to be weighed to make that an easy conclusion. However, I do think that the right-wingers who find President Obama an easy scapegoat for ballooning government debt doth protest too much; most of the massive national debt was incurred during conservative Republican administrations. This does suggest an alternative explanation for the advocacy of some right-wingers: they want a Republican administration that loads up the pork for them and it seems unlikely that a Democratic president will give it to them, especially a Democratic president who is beholden to different special interests than the far right.

Tagged ,
Sep 08 2009
2 Comments
Economics, law, politics

Against Marcus Bowen on Missouri’s Texting While Driving Law

University of Missouri law student Marcus Bowen addresses recent legislative efforts to curtail texting while driving in his latest Missouri Record column. At first glance, the column looks like an intelligent effort to discuss the issues surrounding this latest driving hazard; a second reading reveals that Marcus, a Republican, has a clear ideological agenda here that clouds his thinking and leads him to some intellectually specious conclusions.

Let me start with the first argument that caught my attention in Marcus’s column. He strongly implies that Missouri Governor Jay Nixon’s signature on a bill prohibiting people under 21 from texting while driving is a ‘publicity stunt’ and not a ‘substantive stand against distracted driving’. The warrants for this argument are that Nevada legislators rejected an age-based ban earlier this year because ‘everyone texts, not just teens’, and that the median age for people who text is 38.

There are some major gaps in the story that Marcus assumes away here. First, an aside: Missouri is the 23rd state implement some kind of texting while driving ban, and one of nine to implement an age restriction. Suddenly, Governor Nixon doesn’t look like he’s after a maverick publicity stunt here; actually, it seems like Nixon realized that Missouri was a little behind a national trend that was worth latching onto. The second problem Marcus runs into here is in how he interprets the statistics available. Since Marcus doesn’t provide a citation for the research studies he cites besides ‘Nevada researchers’, I was forced to use the old trusty Google to verify the numbers. The most likely source of the median age statistic actually comes from a Pennsylvania-based company called Cellsigns; aside from their own research, they also cite Nielsen Mobile as a data source. And it’s true that their research show that the median age of texters is in fact 38. But Marcus fails to ask a key question: does the statistic describe the median age of texters, or does the statistic describe the median age of those people texting while driving? There is nothing to indicate that the study was designed to answer that latter question, meaning that for the purposes of this discussion, the evidence is useless. And what is the use of knowing the median age of texters, anyway? We’re concerned with those most likely to text while driving and discouraging that behavior.

Fortunately, Cellsigns has some useful data that we can extrapolate from. This blog post gives us an age-based breakdown of texters. Most notably, the average number of text messages in the 13-17 demographic is 1742 a month; for 18-24 it is 790; for 25-34 it is 331; and for those 35-44, it is 236. What does this tell us? Most importantly, it tells us that people around 15-17 years old who are just starting to legally drive text an average of 58 times a day. For those median texters who are 38, that number is about 8 texts per day. Those are the meaningful numbers Marcus needs to be looking at. We can continue here and draw some further conclusions. People texting 58 times a day instead of  roughly 8 times a day are far more likely to be texting while engaged in other activities, including driving. And that’s before we even note the massive difference between these two demographic groups; teens and young 20-somethings grew up with technology and feel far less concerned about texting all the time; people who are 38 right now are far less likely to make decisions that fragment their attention span because that’s how their preferences and habits have evolved over time. Additionally, the under-21 demographic is distinguished by worse driving; drivers are less experienced and more likely to make bad decisions. It’s why drivers under 21 are more likely to be in accidents. Sanctioning reckless and imprudent behavior is likely to have some deterrent effect at the margin here which is why it’s a good idea.

Next, I take issue with Marcus’s final conclusion: that banning texting while driving will suck up police resources and provide us with a false sense of security and that a real solution is a ‘comprehensive education program’. The first argument I make is that police resources are already heavily vested in the arena of traffic safety and that passing a law that enables them to write another specific ticket will not materially detract from their ability to enforce traffic laws. Second, Marcus fails to appreciate the nature of economic tradeoffs and opportunity costs. The resources necessary to implement Marcus’s unspecified  ‘comprehensive education program’ have to come from somewhere; that means that we have to choose between funding comprehensive text messaging education services and funding other things, like for instance better crime labs or the license plate scanners that the local Columbia Police Department have been requesting. Where exactly will that tradeoff happen, Marcus? Perhaps you should do a cost-benefit analysis of your proposal before you present it next time. Not to mention that the only two examples of such educational programs you cite are the Welsh police video that’s made the rounds on YouTube and the US Dept. of Transportation video of Governor Corzine advocating seatbelt use. Can you provide me with data indicating how successful these education programs were? I can at least give you an example of where people’s habits are stronger than government warnings and educational programs: cigarette education has been around for decades and there are warnings everywhere, yet as far as I can tell annual smoking related deaths are still in the millions.

And finally, let me leave you with this piece of advice. One of the great conclusions that economists have come to in the past few decades is that incentives matter. Government education is intrinsically a less incentive compatible way to solve a problem than by changing the incentive structures that they face. Not to mention, Republicans seem to take issue with government educational or motivational efforts; anyone who is familiar with the right-wing furor over President Obama’s speech to schoolchildren will understand that Marcus’s idea is much more likely to generate conservative opposition than acceptance.

Edit: I have advocated for a long time that a statistics course and a good economics course be required for law students. I’ve had far too many conversations with otherwise extremely intelligent law school graduates who didn’t understand basic statistical principles and as a result made some rather egregious mistakes in their thinking.

Tagged , ,
Aug 19 2009
Leave a comment
Economics, politics

Dale Carpenter on Ted Olson on SSM

Dale Carpenter from the Volokh Conspiracy blogged earlier today about a NYTimes profile of Ted Olson, a lawyer highly regarded in conservative circles and highly decorated for service for the Bush Administration. He has won 44 of 55 of the cases he has taken to the Supreme Court (including the decision responsible for Bush ascending to the White House after the Florida election debacle). Most recently he has taken up the cause of getting California’s Proposition 8 (banning same sex marriages) struck down in the courts, a journey that will likely lead to the Supreme Court. It is a worthwhile read and is the best treatment of national media to the core of the debate, which are about the rights of people to enter into binding contracts.

Dale Carpenter’s post is a noteworthy read too. He even extended the libertarian thinking at the core of Olson’s argument to its logical end:

The second suggestion is to identify libertarians as supporters of gay marriage. I think that’s descriptively true: libertarians are far more likely than traditional conservatives to support same-sex marriage. But as a substantive policy matter, it’s hard to see same-sex marriage as a genuinely libertarian cause. It enlarges the empire of marriage, and thus of state regulation. It’s true that one voluntarily enters this system of regulation, but the government offers many special advantages and inducements to enter it. From a libertarian perspective, marriage is a subsidy made available to encourage us lead a certain kind of life favored by the government, just as the state encourages us to own a home, go to college, contribute to charity, buy fuel-efficient cars, etc. In part because of its channelling and traditionalizing potential, same-sex marriage is a conservative cause, in my view, though I appear to be one of about five people in the country who actually believes this.

I of course have long advocated ending the state’s subsidy on marriage because I as a persistently single person have no access to the benefits governments give to married couples and frankly, I think it’s kind of unfair. Extend the subsidy to 100% of the people.

This is of course an argument that would be laughed at in most venues, and even if I’m not terribly serious about that advocacy, there is an argument there and people should understand it, particularly when they start extending the advocacy of subsidies to other things. Because you can never just subsidize ONE thing; people start getting jealous and demanding subsidies appealing to their most vested interests.

What is the socially optimal equilibrium in the market for subsidies?

Aug 14 2009
Leave a comment
law, politics, pop culture

Line of the Day: Fem IR and Hillary

“We have our own work to do at home,” Verveer told me. “We trivialize the importance too often of these issues: the ‘women’s issue’ — you put it in quotes, that little category over there, the box you check. What we have to do is realize these are the issues; if we want societies to prosper and if we want our own security, we have to raise the status of women.”

Women’s issues are being framed by this administration in terms of realpolitik: U.S. security depends on women’s empowerment. Global economic growth depends on women’s participation.

Women’s empowerment won’t be delivered at the end of a gun or through economic sanctions or even overt criticism, if it cuts into accepted cultural practices. This is messy stuff; some of our most sensitive allies have horrific records on women’s rights. Programs that show success tend to be slow-moving and incremental. Can all this complexity attract — much less sustain — the attention of the public?

Maybe — if we stop viewing everything Clinton does as entertainment.

From the NYT, here.

Aug 10 2009
2 Comments
politics

Corruption at YDA and a Modest Proposal for Change

I was hoping to finish the political blogging from this weekend’s Young Democrats of America national convention and get back to economics blogging, but there are too many issues that I feel are unresolved. The most pertinent ones right now are the rather credible (in my eyes) allegations of voter intimidation, outright bribery, and other mechanisms of vote fraud that came out of the election.

The basic problems are these. Voting at the YDA elections happens via an open ballot as per DNC bylaws. What this allows is for state chairs to functionally control their voting delegates: there were numerous allegations of blatant voter intimidation that came to my ears. The basic scenario is that state presidents can control their delegates by holding things like the plane ticket home as leverage.

There are two solutions. The first is obviously moving from an open ballot to a secret ballot. However this involves changing the DNC national bylaws, which might not be politically possible given the resources of those concerned with YDA elections. The second is to introduce some kind of structural change to the election process itself, where the people (state presidents) who are in charge of their delegation’s votes can’t control their delegations. Allowing state presidents to be the ones signing off on the legitimacy of the votes cast by their delegates allows them to control those votes and auction them off to the highest bidder. In this election, that’s precisely what happened; I know personally that a political deal was struck that cut Missouri’s votes in half and I have heard very credible allegations that the delegation from Washington D.C. received $2,500 to vote one way.

So what kind of structural change would fit the bill? I have a suggestion: use Twitter to conduct elections. The basic framework is that you have delegates register their twitter names when they register for the national convention. As candidates come up for election, all eligible candidates tweet their vote using a randomly selected hashtag. Now we are looking at an election where votes are not filtered through state presidents and a system where vote fraud is a lot more difficult. You can only count votes from twitter handles that have been registered, so you can ensure that the people casting the votes are the people who registered. And you make all votes 100% transparent, which massively increases the amount of leverage that any single entity has to have over voters to control their votes.

There are a couple objections. First, it’s possible that outside parties could try to hijack the hashtag and spam votes. However, the use of hashtags that have been randomly selected immediately prior to the vote makes this difficult. And the fact that Twitter is searchable means that you could create a simple program to filter out only the votes cast by registered delegates. Second, not everyone has Twitter; but that’s not a truly meaningful criticism, since signup is easy and free and it takes less than a minute to learn how to vote.

This obviously wouldn’t work or necessarily be appropriate for real governmental elections, which are conducted by secret ballot. But YDA isn’t a governmental organization and it isn’t even that big so it’s not plausible to imagine anyone having the resources to make a serious attempt at rigging the vote or crashing Twitter. If Twitter got involved as an independent third party and and set up/managed the back end of open elections, we can eliminate all the problems associated with the status quo and the massive conflict of interests involved. This might even be a viable revenue stream for Twitter.

I will posting more emails from Martin Casas and the St. Louis Young Democrats bearing out my allegations of misconduct and corruption in that organization either today or tomorrow.  I don’t want him to be able to continue to operate in ways that are unethical if not blatantly illegal and hopefully my small corner of the internet will be a place where that can happen.

Tagged , , , ,
Aug 07 2009
Leave a comment
politics

YouTube Videos of YDA Candidates

I have YouTube video of Chris Anderson, A’shanti, and Rick Puig here. Anderson is running for President; A’shanti is running for Executive VP, and Puig is running for VP. I’ve blogged about them below and we would appreciate the support of YDA delegates at the convention here in Chicago.

Tagged , , ,
Aug 06 2009
Leave a comment
politics

More YDA Blogging: Why I’m Voting Chris Anderson for YDA President

As part of my 2009 YDA convention blogging, here’s why I advocate electing Chris Anderson president of the Young Democrats of America. Chris is currently the Executive VP and is running on a ticket that includes A’shanti Fayshel Gholar of Nevada for Executive Vice President, Zack Hawkins, Rick Puig, andJen Bissett for Vice President, Amy Groya for Treasurer, and Amanda Nelson for Secretary. Here is YouTube of Chris Anderson’s 2007 YDA speech, accepting the nomination for Executive Vice President.

I am personally impressed with Chris’s drive and cool, even-handed personality. With a record of service with YDA that began with a role as founding Young Democrats chapters at his high school and college, he’s demonstrated a commitment to the YDA that has taken him through every level of the organization. To my knowledge, he’s been to every YDA national meeting, facilitating training sessions that are critical to getting American youths involved and empowered in the democratic process.

Chris is also part of the first openly gay leadership team to successfully run for executive office in the YDA national organization and a strong advocate for LGBT rights. In a nation where the Republican party refuses to even engage a meaningful or fair dialogue on LGBT rights (read: human rights), this is incredibly important.

I plan on voting for the ticket headed by Chris Anderson this weekend. It seems to me that the ticket as a whole (and particularly the candidates who I know personally) represent the qualities that Young Democrats need in leadership: motivation, perspective, and perhaps most importantly, intelligence. If that strikes you as a cause that you would like to support, I ask for your votes at the National Convention this weekend.

Tagged ,
← Older posts
Newer posts →