Deadlock and Partisan Bitterness

Why does American politics seem so deadlocked?  The media mostly focuses on issues where Democrats and Republicans refuse to compromise because they strongly disagree: immigration, guns, health care.  But American politics often seems deadlocked even when both parties agree.  For example, supermajorities of both parties want to protect DREAMers, but they’ve never reached an agreement to do so.  How is this possible?

1. Transactions costs.  Hammering out a deal is hard work, so many mutually beneficial deals don’t happen.

Critique: Economists routinely appeal to these alleged costs, but how high can they possibly be?  Seriously, why should it take more than a single day for the DREAM Act to become a law?  Vote, vote, sign, done.

2. The hold-out problem.  Suppose we agree that X is good, but you want X a lot more than I do.  In this situation, it makes sense for me to demand some “compensation” from you even though we basically agree.

Critique: This might make sense for a year or two.  But if we’ve failed to reach an agreement after many years of negotiation, you’d expect both sides to moderate their demands to cut their losses.  Yes, they could conceivably be investing in their reputations for intransigence to secure favorable terms in the future, but does anyone seriously expect to see the day when one party finally submits to the other?

3. Insincerity.  For example, perhaps Republicans only claim to want to protect DREAMers in order to seem nice and reasonable.  In fact, however, they never genuinely favored the DREAM Act in the first place.

Critique: This is often plausible, but it’s hard to see it as a general explanation.  Politicians have clear incentive to lie about their goals, but why would average citizens bother to lie in anonymous polls?

4. Partisan bitterness.  The two main parties intensely dislike each other.  Like a quarrelsome couple, they could find something to fight about at a fancy restaurant on Valentine’s Day.  As a result, the two parties have trouble cooperating procedurally even when they agree substantively.

Critique: This is my preferred story.  What I wrote about divorce a decade ago cleanly explains political deadlock as well:

Unfortunately, the Coasean argument overlooks a pretty obvious fact: Couples contemplating a divorce often hate, loathe, and despise each other. We’ve all heard of stories of divorcing couples deliberately destroying objects of sentimental value to each other. Indeed, many couples in this situation wallow in petty spite; they can’t stop bad-mouthing each other to anyone who will listen.

With these facts firmly in mind, how confident are you that Coase’s zero transactions costs assumption is remotely true? At risk of sounding Austrian, transactions costs are subjective: Bargaining with your mortal enemy hurts.

If this story seems grim, I should add that bitter politics has one major advantage over bitter divorce.  Namely: Partisan bitterness throws much-needed sand into the gears of the state.  Given public opinion, amicable government is likely to be big government.  As long as political antipathy is too shallow to cause civil war, both libertarians and pragmatists should welcome it.  Will Rogers once mused, “Be thankful we’re not getting all the government we’re paying for.”  I’d add, “Be thankful we’re not even getting all the government both parties support.”

P.S. I’m well-aware that deadlock locks existing bad policies in place, too.  But I see little political support for repealing such policies, and broad political support for adding new bad policies.  Tragic, but that’s the world we live in.

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Including the Renegade

In the last six months, I’ve found myself stuck in two separate Sermons on Inclusion.  These were public events.  Neither was branded as left-wing.  Both, however, gave the floor to speakers who explained the supreme value of making everyone feel included in the community.

In each case, my mid-sermon reaction was the same: “I don’t think I’ve ever before felt so excluded in all my life.”

Why would I react so negatively?  It’s not because I disagree with the one-sentence summary of the sermons.  Sure, be friendly to people.  Make them feel welcome.  It’s common decency.  So what’s the problem?

I’m tempted to blame the glaring hypocrisy.  It was obvious that the speakers had zero interest in making Republicans, conservatives, macho males, traditional Christians, veterans, or economists feel included.  In fact, the Sermons on Inclusion were full of thinly-veiled accusations against members of these groups.

Yet on reflection, glaring hypocrisy is too ubiquitous in life to explain why I personally felt so excluded by the Sermons on Inclusion.

The real reason I felt so excluded was that the preachers of both Sermons on Inclusion spoke as if human beings naturally value their cultural heritage.  Frankly, I usually don’t.  I don’t value my religious heritage.  My mother was Catholic, and I was raised Catholic.  But I deem the religion false and don’t care about it.  My don’t value my ethnic heritage.  My mother was Irish, my father was Jewish, but neither identity matters to me.  I don’t support Ireland or Israel… or any other country for that matter.  My parents raised me to be an American nationalist; my schools taught me about the wonders of democracy.  But in all honesty, the only institution I really believe in is business.

So what am I?  A renegade.  And I’m not alone.  Lots of people turn their backs on the religion of their birth.  Lots of people never feel – or lose interest in – their ethnic heritage.  Lots of people dissent from “their” political culture.  Cultural loyalists may call them traitors, sell-outs, self-haters, or gusanos.  Yet despite our cosmic diversity, we renegades have one thing in common: We refuse to be ruled by the circumstances of our birth.  And any sincere Sermon on Inclusion ought to acknowledge our existence and outlook.

Unfortunately, this omission is hard to correct.  Why?  Because one of the main goals of Sermons on Inclusion is to foster group pride, and the existence of renegades is an affront to group pride.  You can’t favorably discuss the assimilated Irish without tacitly snubbing people who cherish their Irish identity.  You can’t people who leave Orthodox Judaism without tacitly snubbing Orthodox Jews.  Et cetera.

But don’t Sermons on Inclusion lionize some renegades, like anti-war veterans or the transgendered?  Sure.  But since the the Sermons barely acknowledge the existence of these renegades’ groups of origin, there’s little tension.  It’s easy to welcome renegades from group X if your default is to exclude typical members of group X.

Are efforts to promote inclusion therefore self-defeating?  Not if you’re careful, because actions speak louder than words.  As I’ve argued before, the best way to make people feel included is just to be friendly and welcoming.  Sermons divide us.  Common decency brings us together.

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Technological Unemployment: A Self-Test

Normal people worry about technological unemployment.  Economists keep telling them to relax, but to little avail.  You can’t trust a coven of eggheads, can you?

Rather than rehash the textbook arguments, let me propose an easy way for the public to test its own understanding.

Step 1: Create a graph where the x-axis runs from 1948 to the present, and the y-axis shows the overall level of technology.

Step 2: Sketch whatever you personally believe about the evolution of the overall level of technology during this period.  Do NOT proceed to Step 3 until you have finished Step 2.

Step 3: Compare your graph to the actual history of U.S. unemployment from 1948-present.  I repeat: Do not peek until you’ve completed Step 2.

Step 4: If technology were an important cause of unemployment, the two graphs should look a lot alike: more tech, more unemployment.  (If you favor the more sophisticated theory that it’s tech growth, not tech level, that raises unemployment, eyeball that instead).

Step 5: So what do your own eyes tell you?

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What’s Historic?

I regularly read Wikipedia’s “Historical Events on This Day.”  It’s fun, and I learn new history.  But I’m still puzzled by the selection criteria.  Wikipedia casually blends three very different kinds of events:

1. Critical political, diplomatic, and military events that plausibly changed the lives of millions or even billions of people.

2. Terrorist attacks.

3. Natural disasters and major accidents.

“Historical events” for February 11, for example, include crucial events like the beginning of the Arab Spring in Egypt, the release of Nelson Mandela from prison, and the establishment of Iran’s theocracy.  But it also lists two plane crashes and a small terrorist attack in Saudi Arabia.

It’s tempting to say, “Terrorism might be a tiny issue by itself.  But since it provokes massive overreactions, it’s indirectly important.”  But why would a couple of old plane crashes be on a list of events of historical importance?  And most acts of terrorism, of course, have little or no effect on policy.

The obvious explanation, sadly, is that the innumeracy of the news infects the study of history.  One of the main goals of history is to create enough psychological distance (and hindsight!) to sift the fundamental from the ephemeral.  But doing this is easier said than done.  Without a strong default view that vivid, emotionally engaging headlines aren’t worth remembering, even people who think about history for a living fail to see trivia as trivial.

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We Wanted Tech

“We wanted workers, but we got people instead.”  This line from Max Frisch didn’t just give George Borjas the title of his most recent book.  At last Friday’s immigration conference in St. Cloud, Borjas declared it his all-time favorite immigration epiphany.  The point, he explained, is that immigrants aren’t just machines that produce stuff; they have broad social effects on our culture, politics, budget, and beyond.

Borjas is right, of course.  In fact, he doesn’t go far enough.  After all, even machines aren’t just machines that produce stuff.  They too have broad social effects on our culture, politics, budget, and beyond.  If you look closely at any major technological development, you can justly say, “We wanted tech, but we changed society instead.”

Consider cellphones.  When they were first introduced, you might picture them as more convenient phonebooths.  But they’ve revolutionized not only our society, but our psychology.  Many human beings now interact with their phones more than they interact with fellow human beings; go to any public place and you will see this to be true.  Even when we are talking to fellow human beings, cellphones have changed the tone and tenor of our conversations.  When I casually chat with my friends, for example, we often fact check each others’ assertions.  And cellphones are crucial for social media, which has dramatically swayed not only public discourse, but elections and policy.  Without Twitter, would Donald Trump’s candidacy even have been able to get off the ground?

When driverless cars come, they’ll disrupt our whole society again.  Commuting time will plausibly skyrocket, especially in high-rent areas.  If you can relax – or even sleep – in your car, why pay $1M for a tiny apartment downtown?  Indeed, once you get rid of the driver’s seat, we’ll probably turn cars into small motorhomes, so “living out of your car” could become an alternative lifestyle rather than a tale of woe.  And what will happen to all the truck drivers, taxi drivers, Uber drivers, and delivery drivers?

Still not convinced?  I trust you’ll admit that nuclear technology did more to the world than slash electric bills.

Verily, we wanted tech, but we changed society instead.

How should you react to this truism?  You could say, “Duh, everybody knows this already.”  That’s my knee-jerk reaction to Frisch’s quote, too.  But both “duhs” are too dismissive.  “Obvious once you think about it”≠”Obvious.”

What else is there to say?

1. You could retreat to agnosticism.  “Well, there are direct economic benefits, plus an array of intangible social effects.  We don’t know how to measure these intangibles; we don’t even know if they’re good or bad.”  This is basically what Borjas said about immigration in his Friday talk.  There’s no reason we couldn’t generalize it.

Reaction: Philosophically, agnosticism of any kind is incoherent sophistry.  We always have some information.  We can and should combine this information with common sense to form reasonable guesses about whatever question is on our minds.  Crucially, “information” includes psychological evidence about the errors to which the human mind is prone.  And one of the best ways to keep your guesses reasonable is openness to bets.

2. You could start by measuring the direct benefits, then see if any of the broader social negatives are plausibly in the same ballpark.  If not, the standard conclusion still goes through despite the complexity of the world.

Reaction: Once you factor in the value of time, this is typically the best approach for laymen.  It’s a quick way to resolve a wide range of policy disputes, especially if you embrace some version of weak deontology rather than consequentialism.

3. You could try a lot harder to study the measurement of so-called “intangibles.”  This might require a massive research program to fill in the enormous gaps in our knowledge.  Or perhaps if you play around on Google Scholar, you’ll discover that many researchers have already measured the stuff you imagine “no one knows.”

Reaction: This is the best approach for experts.  If you do good work and/or publicize it, you also help laymen reach the truth with modest mental effort.  So earn your paycheck!

Whatever you conclude, know that immigration is nothing special.  Everything has broader social effects.  These complexities are no reason to defer to popular prejudice, which is what I suspect Borjas hopes we’ll do.  Instead, these complexities are a reason to think broader and work harder to get the best answers we can.

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Immigration and Redistribution: The Research to Trust

Evaluating the quality of research is laborious.  Unless you re-do the whole paper yourself, how do you know the authors were not only truthful, but careful?  Faced with this quandary, one of my favorite heuristics is to ask: Did the authors want to find this result?  If the answer is No, I put a lot more credence into the results.  In research as in the law, statements contrary to interest count more.

For example, when I learned that most economists find little effect of national education on national GDP, I was simultaneously surprised and convinced.  Surprised, because I know that most economists want to find a big effect of national education on national GDP.  Convinced, because if legions of smart people fail to find the result they want, the best explanation is that what they want to believe isn’t true.

Moving along…  Many people debate the effect of immigration on redistribution.  Libertarians (like me) want to find that immigration reduces redistribution, because we like immigration but dislike redistribution.  As a result, non-libertarians sensibly discount libertarian claims that this is so.  Sensible libertarians would do the same.  People who agree with you are still flawed human beings, right?

So how can we approach the truth despite these impediments?  Well, most of the researchers who study the effect of immigration on redistribution are, in fact, left-wing.  They like immigration and redistribution, so they want to find that immigration increases redistribution.

In practice, however, they usually don’t.  And it disturbs them!  Here are two notable examples.

First, Alesina, Miano, and Stantcheva’s recent NBER working paper:

Support for redistribution is strongly correlated with the perceived composition of immigrants — their origin and economic contribution — rather than with the perceived share of immigrants per se. Given the very negative baseline views that respondents have of immigrants, simply making them think about immigration in a randomized manner makes them support less redistribution, including actual donations to charities. We also experimentally show respondents information about the true i) number, ii) origin, and iii) “hard work” of immigrants in their country. On its own, information on the “hard work” of immigrants generates more support for redistribution. However, if people are also prompted to think in detail about immigrants’ characteristics, then none of these favorable information treatments manages to counteract their negative priors that generate lower support for redistribution.

While Alesina et al. maintain a scholarly tone, their sympathies are pretty clear:

Anti-immigration parties have an incentive to maintain and even foster the extent of misinformation. Because information is endogenous, a vicious cycle of disinformation may arise. The more natives are misinformed, the more they become averse to immigrants and redistribution, and the more they may look for confirmation of their views in the media.

Second, Soroka, Banting, and Johnston’s chapter in Globalization and Egalitarian Redistribution (Princeton University Press and Russell Sage Foundation, 2006):

International migration does seem to matter for the size of the welfare state. Although no welfare state has actually shrunk in the face of the accelerating international movement of people, its rate of growth is smaller the more open a society is to immigration. To the extent that spending growth is inescapable, mandated by the aging of populations in industrial societies, specific parts of the welfare states—especially the parts that redistribute from rich to poor or from the old to the young—may truly have shrunk in the face of migratory pressures. Whatever the details, the typical industrial society might spend 16 or 17% more than it now does on social services had it kept its foreign-born percentage where it was in 1970.

Their sympathies, too, are also pretty clear:

What do the propositions imply? They do seem to vindicate Miller’s (1995) worries about threats to the national basis of the welfare state… The attitudinal problem is more among natives than newcomers and reflects more the apprehension of cultural threat than the fact of threat. But those apprehensions, combined with often realistic appraisals of cost and benefit, mean that the human component of globalization may represent a constraint on the expansion of welfare states that seemed fully consolidated two decades ago.

If you want to go meta, you could naturally object, “Libertarians want to believe that non-libertarian researchers support their desired conclusions.  So why should I trust Bryan’s summary of the research?”  Yes, it’s a problem, but it’s not insuperable.  Try reading Alesina et al.’s literature review and see for yourself if I’m being unfair.

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