Juniorbird.com

The recent compromise in Minnesota begs the perpetual lefty question: is the Tea Party’s insistence on certain aggressive policies genius or ignorance? After all, in MN, they insisted that the state require photo ID at polling places to vote — something the courts have consistently held is a tool to repress minority voting, and something the courts have consistently not permitted.

The stock “they’re idiots!” interpretation is that Tea Party members either:

• Don’t know about this history of court rulings
• Don’t believe these rulings apply to them
• Are racist and just don’t care

All of that is possible. In fact, the Tea Party being a large group, I’m confident that at least some of those are true of some members, just as they would be true for any other large group. 

But I’m actually not betting on that here; I’m betting on brilliant. When you’re negotiating, it’s always good to know which points are important to you, and which are ones you can compromise on. Sometimes, to get the most leverage, you might throw in some points you would never expect to win on, and then roll over on those points straight away.

Requiring ID at the polls seems like one of those. You can give up on it easily, at the end, because you know it’ll be caught up in the courts for years even if you got it. But the liberals hate the idea, so they’re prepared to fight against it and maybe even give up something meaningful to stop it. And, hey, best-case scenario, it gets passed and the current fairly-conservative Supreme Court finds it’s fine in a state like MN, without a history of discrimination at the polls, or simply denies cert and allows the more-conservative Circuit Court’s interpretation to stand.

So I think it’s brilliant.

The good thing, is that it’s easy to fight tactics like this: just give them the chance to win on it! Let ‘em have that point. In fact, speak in public about how you understand that’s such a big point to the opposition, even though you find it despicable, you’re going to give it to them right now. And then they’re stuck with it. Then they have to give away a negotiating point they might actually have won on.

And there’s two long-term outcomes:

1. Turns out requiring IDs at the polls works in the way people expect, is clearly discriminatory, and the courts knock it down
2. Turns out requiring IDs at the polls makes no difference in this day and age, and things are fine

Heck, you’ll know in one election, when you compare the racial breakdown of the exit poling data. Sure it’s a little risky medium-term, but it’s got short- and long-term benefits, and why not play the long game? I have the feeling the Tea Party is!

So a few days ago I predicted that Gadhaffi would be the first to go. Since then, everyone important out there has used another spelling of his name, but, despite being wrong about the orthography, I was sure right about the politics. Unfortunately, unlike Mubarak, Gadhaffi is hanging on; he’s shown, as I put it roughly, the “strength of will” to kill his own people.

Of course, it’s not will; or, perhaps, not just will (and, even if it is, I don’t mean that in a positive way, but it surely takes a good dose of nerves or sociopathy to call for such a thing to happen). The prospective mass murderer or genocide needs a solid structure around them, with people willing to pull the trigger at the street level. Most of all, said leader needs to believe that there’s no alternative — that things truly can’t get worse if they kill a bunch of civilians and plunge their homeland into (temporary or long-term) chaos — and they need to share that frame with their triggermen.

That creates a substantial conflict: on the one hand, we want to make these criminals pay for their awful crimes à la Saddam Hussein. On the other hand, we want to get them to just give up quickly, à la Hosni Mubarak, so as to minimize the human and financial costs of their overthrow. Sun Tzu once said “To a surrounded enemy, you must leave a way of escape… Show him there is a road to safety, and so create in his mind the idea that there is an alternative to death. Then strike.” Leaving that alternative in his mind gives your enemy a strong reason to give up; someone who’s sure to die will quite likely just choose to fight to the last.

And that’s just what Gadhaffi is doing here. He’s assuredly concluded that he has three possible fates if his regime falls:

1. He’ll be extradited to Britain, put in prison for the Lockerbie bombing, and quite probably die from a shank someday soon in some dim hallway.
2. He’ll be imprisoned and, fairly promptly, executed by the replacement regime, à la Saddam Hussein
3. He’ll be killed promptly upon capture, or shortly thereafter, à la Ngo Dinh Diem

While there’s little evidence that Gadhaffi has been a reasonable man since, say, 1970, even a reasonable man might well decide to fight on and possibly retain power — and his head — given these alternatives. We can all cross our fingers that the rebels will be successful, but, since Gadhaffi is unlikely to surrender, we’ve got to hope he’s crazy enough to put a bullet through his own head, or that his loyalists are progressive enough to do it for him.

Fortunately, a person who might be a member of the provisional government, which may or may not exist, seems to have made a first step down that path. If Gaddhaffi’s survival depends on his supporters believing that they’re all part of one group, there are still two possible groups that that they can believe they share:

1. The group of true believers in the Jamahirya
2. The group of people who will lose their heads shortly after the Brotherly Leader and Guide

The members of group 1 are pretty much beyond any influencing; they have fundamentally accepted a frame that describes the world in a way in which Libya must be run as it has been. The members of group 2, however, have only accepted a frame that says that the revolutionaries are their enemies and will kill them. If that frame can be rendered illegitimate and replaced with one that explains the world in such a way that they won’t be killed by the revolutionaries, then these individuals will go over to the other side.

The possible member of the new government stating that members of Gadhaffi’s tribe will “be forgiven” for his actions challenges the current we-must-all-hang-together-or-we-shall-surely-hang-separately frame. But, of course, the obvious question is: must anyone hang?

It’s difficult to say “yes, let’s not prosecute these people who’ve committed multiple crimes against humanity,” and, indeed, modern civilization depends to a great extent on enforcement of international law. On the other hand, Truth and Reconciliation Commissions have been successful at allowing peaceful transitions to take place in other countries. These commissions generally trade immunity for information: the objective is not to find out who did what and punish them, but to get the truth out so that nobody is stuck wondering what happened to a loved one long gone.

That’s a tough ethical pill to swallow, but, with so many states in the Middle East under pressure, there may be some value to having some UN-run centralized Truth and Reconciliation commission that can provide some form of immunity to leaders who agree to leave without a fight, be open and complete about any past acts, and return any wealth stolen from the countries they run. Sure, we might have to set them up in some quiet place with a pension, but that might be a fair trade for quicker regime change in Saudi Arabia, Bahrain, Yemen, and Syria. (As a side benefit: that regime change may result in states friendlier to the Western world.)

Like Sun Tzu said: maybe we need to leave our enemies a way out. And maybe the best thing we can leave our children is the full truth of what happened. That will last long after Gadhaffi’s hanged.

It’s been really exciting watching the revolutions in the Middle East — change in Tunisia and Egypt has opened up the possibility of living in an exciting new world. It’s been particularly intriguing for me, since I specialized in revolutions as an undergrad. Sadly, I had little to say about the whole Tahrir Square deal, since said specialization pretty much included studies of Latin America, Southeast Asia, and Africa, but not much time at all on the Middle East. So I just didn’t know a lot about the specifics. However, now things seem to be spreading. And I know quite a great deal about spread of revoulution!

(Mmm, spread. Makes me want bread and butter.)

So, why the revolutions now? And, will they spread?

Let Me Pimp Myself Here

I was a double major in college — Poli Sci and Psych — and merged the two by writing a senior thesis asking “why do individuals join revolutionary groups?” There were two parts to that thesis — the thesis itself and the literature review that drove the experiment outlined in the thesis. Unfortunately, all I learned in the thesis was that you should figure out if your best friend has a raging methamphetamine addiction before asking them to blind-code your data. However, I did learn a ton writing that literature review. For this here blog entry, I’m going to draw on the perspectives outlined therein.

So I have this diagram — sadly only available in very-low-quality format — that kind of explains how these things work. Here is my information design achievement:

Yeah, sorry again about that quality. And the hyphenation on the first decision point.

Anyway, let’s walk through this for your typical resident of the Middle East and North Africa:

1. The individual begins to perceive themselves as deprived, relative to comparable others. This is exactly what we saw happen in Egypt — Egyptians had their (subsidized) cost of living go up, and felt they were doing worse compared to others that they saw on Al Jazeera and also themselves, just a few months previous.
2. Existing — and, in some states, worsening — poverty made the cost to join the revolution fairly low. At the same time the authoritarian state’s aggressive response to that revolution actually increased the cost of exit — or, maybe better said, decreased the benefit of exit — by making the individual vulnerable to retaliation for past participation in the revolutionary group.
3. Citizens of Arab states have 50 years of practice with being extrapunitive — they’ve been taught to blame all their ills on Israel. This may have been convenient to those who ran their states for that time, but it also meant that, when things got bad, those citizens wouldn’t think “I need to work harder,” they’d think “things outside me need to change”
4. Again, the rulers of Arab states have inculcated their populace with collective orientation, under the badge of Arab Nationalism. They worked together to throw out the colonizers; they worked together to fight the Israelis; they even worked together to collectively own large businesses and key assets like the Suez Canal.
5. And there’s been a withdrawal of legitimacy. The existing governments of most Arab states drew legitimacy from past acts — resistance to colonizers, wresting power from feudal rulers, fighting Israel (and, for Egypt, winning in 1972), monopolizing the oil industry — but none of these are new, and none took place in the last two decades. For Arabs in their teens and twenties, they’ve never actually seen their governments do any of the things that they’re supposed to be proud of their governments for doing.

Follow that down the diagram and you get revolution!

So What’s Next?

What’s next depends on a lot of things. Our leaders worried about the “domino effect” in Southeast Asia through the 1950s and ’60s. The theory was that these countries all shared a set of traits that ensured that, as soon as one went Communist, that would destabilize the non-Communist governments in the other states and result in them adopting Communist governments.

Does the Arab world contain just such dominoes? Well, again, we have a low-quality diagram from my senior thesis that explains it all:

And again, let’s walk through it:

1. The individual identifies not just as a solitary person but as a part of a larger group. This needs to be a strong, meaningful, primary identification.
2. The group frames reality in a manner that defines and explains the current situation as unjust.
3. This leads the individual to become discontent with the current power structure and their role in that structure
4. The group challenges the description of reality that gives legitimacy to the existing powers. (Typically, they frame reality in a way that gives legitimacy to some other power or organization.)
5. The regime loses legitimacy in the eyes of the people.
6. If the individual is collectively-oriented, and the individual perceives membership in the group as at least as important as the things the group frames as just and valid, then they participate in revolution.

So, what will happen next? Well, that really depends on the legitimizing frame for the existing regime, the injustice frame communicated by the group, and the degree to which the average citizen of a given state identifies with, and is oriented towards, that group.

Let’s take it state-by-state. Traveling vaguely from west to east, we have:

• Morocco
• Algeria
• Libya
• Syria
• Jordan
• Yemen
• Saudi Arabia
• Bahrain
• Iran

Morocco

Morocco’s an interesting case. The ruling dynasty successfully aligned itself with Arab nationalism in the ’50s — in fact, you could say that they defined Arab nationalism starting in the 16th century — and have cultivated the perception of a progressive, liberal, capitalist state. To the extent that frame is perceived as accurate, it can’t be effectively challenged by frames stressing personal rights, empowerment, an end to corruption, and Islamic law, like those seen in Egypt. The disjunction of Islamic law vs. non-Islamic-centered law is not strong enough to prevent those two frames from overlapping, unless the citizens begin to identify as Muslims or Muslims of the Maghreb, rather than Moroccans.

Algeria

Algeria rode the Arab nationalist wave to eventual victory in a long, bloody war that separated that country from colonial ruler France (and brought down the French 4th Republic). From the ’60s to the ’90s, the revolutionary, nationalist FLN ran the country as a one-party state. In the early ’90s, the FLN attempted to bring the country to multiparty democracy, but the military took over government after Islamist parties seemed headed to win the elections. (Ironically, the Islamist parties seemingly proposed to end democracy if they won and establish a unitary Islamic state.)

Since that time, the Algerian government has effectively liberalized and used various military and social tools to marginalize the radical Islamists, and has built a multiparty or, depending on one’s outlook, somewhat-more-than-one-party state. Nonetheless, continual violence since the War of Liberation and continued economic mediocrity certainly must create a perception of relative deprivation, which some parties translate into an injustice frame. Whether or not the limited multiparty structure of the state means that power discontent is translated not into the withdrawal of legitimacy of the state but, instead, political change within the system, depends on the perceived legitimacy of the state and the frame of its leaders.

Libya

One of the challenges of revolution is that meaningful revolutions tend to eat their young — in Russia, France, Cambodia, India, and other major revolutions, the structure and momentum of the change that was created led to the increasing empowerment of radicals and the concomitant disempowerment and assassination of moderates. Libya under Gadhaffi has tried to avoid that fate by opting for “perpetual revolution,” or a political structure that attempts to concentrate agents of philosophical change in centralized positions while continually breaking down and rebuilding peripheral organizations using varying levels of violence, in order to continually advance society and prevent the creation of power bases outside the central presidium while, by successive approximations, increasing the reach and actualization of the basic philosophy of the key central agents.

This strategy worked well in Mao’s China, but it requires the leadership to continuously create a frame that delegitimizes the status quo. Mao was prepared to arrest change and insert a new frame by killing, between 1 and 20 million Chinese during the Cultural Revolution. The legitimizing frame that Mao was able to reintroduce by stages during the Cultural Revolution ensured his own power and required others’ use of violence and excess. It’s not clear if the members of the Libyan armed forces are susceptible to accepting such a frame; reports of defections suggest that they’re accepting a frame that challenges Gadhaffi’s legitimizing frame.

If the people with the tanks and the airplanes perceive the current situation as potentially illegitimate philosophically and illegitimate in that it’s unable to protect their status as they protect the state, then change is rapid. (See: Egypt.) It appears that Libya is quite vulnerable to this kind of situation. Couldn’t happen to a nicer Socialist People’s Arab Jamahiriya

Syria

Syria has two things going for it:

• The answer to “what did you do for me lately” is “we de facto absorbed Lebanon, and kind of beat Israel in doing it.” That’s not a bad thing to have in your back pocket if your legitmizing frame has to do with struggle vs. Israel and the greater glory of Greater Syria.
• The shift to Bashar Assad, after his father Hafez passed away, gave the regime the opportunity to shift policy without having to delegitimize the previous legitimizing frame, à la Libya.

Together, I suspect those, plus the strong degree to which residents of Syria identify as members of a group called Syrians, should keep Syria the way it is now… at least for a while.

Jordan

Jordan also has a lot going for its current regime, although a completely different package of things than its neighbor Syria. Jordanians already established, a long time ago, what it means to be Jordanian, and that fairly strong group identification — with the concomitant identification of the Hashemites as at least a philosophical leader — should militate against Jordanians identifying with an anti-regime group, and also ensures that the regime’s legitimizing frame is not associated too strongly with any specific state of affairs.

Yemen

Yemen’s a tough one, particularly because, in many ways, the residents of Yemen seem to have a weak identification as members of the group of Yemenis — especially for rural Yemenis, local allegiances are much stronger. This certainly makes it easier for individuals to identify with outgroups that possess frames that challenge the regime’s legitimizing frame.

However, with so much of the state run through personal relationships, that provides a lot of mechanisms for local leadership to manipulate identification with the local group and provide locally-relevant frames that perpetuate the status quo. This is a frequent tool of one-party states and one of the big advantages of such states in delivering legitimacy. Whether or not this is enough for Yemen is hard to say, but certainly Saleh’s power rests not on the acceptance of the masses but on the assent of the state’s traditional, quasi-feudal power structures. Yemen’s a different game than elsewhere.

Saudi Arabia

Saudi Arabia’s Islamic state structure should effectively cut revolution off at the pass — no outgroup can adopt a frame that delegitimizes the state based upon insufficient application of Islamic law, as they can in most other states. This means that only a more liberal group could challenge state legitimacy, and, frankly, that doesn’t strike me as the trend.

Bahrain

Bahrain has been the site of substantial violence, a lot of which comes from the fact that the ruling class identifies as being as members of a different group than do the residents of the country. Currently, the ruling class is perceived as being legitimate, even as specific policies are seen to be wrong. We’ve progressed up to Power Discontent and stopped there. The most likely outcome is the elevation of a younger family member to the throne in fairly rapid order, which will shift the state’s legitimizing frame just slightly and leave some room to decrease the discontent. Eventually, a structure will be created that ensures the wealth of the ruling family and the power of the citizens, much as in Britain. If everyone’s smart about it.

Iran

Ahh, Iran. Everyone hopes that we see a return of the people to the streets, the destabilization of the state, a liberal, democratic regime. Sorry, not this year. Did you miss the revolution they had already? The one where they switched from an (odd, halfway) parliamentary democracy to a fascist regime? Oh, you did because we liked to call their weird partly-democratic state “Islamo-fascist” for propaganda purposes. Well, they weren’t fascist, now they are — military, quasi-military, nationalist, corporatist, aggressive. There’s no power discontent among in-power groups, no injustice frame except for among the people who just lost power. And that’s nothing new. The legitimacy of the regime remains.

And Obama Fiddled While Rome Burnt

There’s a message in the popular press that Obama should “do something” to “encourage democracy.” Good luck with that! All of the important inputs to these crises were created over the past 30 years. If we’ve learned anything about the politics of the Middle East, it’s that we can’t change the enmities built up over 5000 years in three decades, why should we be able to address three decades in just a few days?

Really, all the groups are formed, what discontent exists is there and has been created by policies that have existed for years, frames have been communicated over years and dozens of group interactions… there’s nothing we can do about the revolutionary groups.

The only lever Obama has is over the incumbent leadership there: if some of the key benefits of power are derived from the support of the US, as with Egypt, then he can make it clear that we’d never support leaders who used violence against their people. This could work on, say, Egypt, or possibly even Bahrain. It wouldn’t work on Libya or Syria, which don’t need us, and, at the end of the day, I’d be shocked if the Saudis care.

So what should we do? I guess make sure that Facebook keeps running. That’s about all we can do. This is one of those times when we’re not the center of the world, when we can’t make anything happen.

The Real Problem

Like I said at the beginning, in the ’50s and ’60s we all thought that Communist victory in Vietnam would bring all of Southeast Asia into the Soviet orbit. And it did cause the fall of royalist regimes in Laos and Cambodia; but it stopped there. Why? Because the Thais loved their King. Because, in the Philippines, Ferdinand Marcos either bought or killed his opponents. Because, in Indonesia, Suharto didn’t worry about that buying option and just straight up killed everybody who was even slightly Red.

Is there a Suharto in the Middle East today, somebody who has the strength of will to destroy a popular movement? And would that even be good for us?

That’s the real problem — we’re just along for the ride. We have no Suharto because we didn’t create one (we created Suharto). Who knows if the awful things that happened in Southeast Asia in the ’50s and ’60s at the behest of our government were worth it, but they certainly were part of a larger strategy to arrest Communism. But we have no Middle East strategy.

No, “support Israel” isn’t a strategy, it’s an activity. A strategy is a plan to get you somewhere, and includes a detailed description of that somewhere. The last time we had a Middle East strategy was when Carter brought Sadat and Begin to Camp David. “Support Israel” says “we’re here, we like how things are, let’s keep them this way.” Well, as they say, changes aren’t permanent, but change is.

Sure, there’s a vague concept that the Future Middle East is filled with democratic, states. Unfortunately, when we get one of those, we actually don’t like it so much. We kept our armed forces in Iraq until we’d destroyed the structures behind the radical Islamic parties there, and only then gave power back to the country’s residents. And when the Palestinians held free and fair elections and put Hamas in power, well, we just cut off aid and let them starve and die of disease. Nope, democracy apparently isn’t our cup of tea when it involves empowering groups with agendas different from ours.

Unfortunately, while we’ve been passively defining our goals as not-things-we-hate, the radical Islamists have been actively reshaping the Middle East. They’ve set up circumstances and group structures that will tend to empower them. And we — let’s be honest — fear that.

Fortunately, we needn’t fear it so much. Sure, there’s the threat of terrorism, but the Rooskies had nukes, which make a much bigger boom. And we have secret weapons: Hollywood and McDonalds’. If there’s one thing that even the post-industrial America is good at, it’s cultural imperialism. It’s not just the Russians who want to be us these days — even the French do! We just need to continue to preach not a religion but the gospel of prosperity and indulgence (not the prosperity gospel). Heck, we’ve already started winning — all the Arabs watch Al Jazeera, and who knew they needed a 24-hour cable news network? (The lesson here is that Ted Turner may be the great modern American imperialist.)

So this is an exciting month, and it will mean great things for the Middle East and for the average Arab, but, as we see changes happen now — and much scarier, much slower changes happen over the next couple of years — we need to remember: we’re in this for the long haul. We can fight for 50 years to win again if we have to. Because we’d better be at least that patient, China’s got a 500-year plan and they’ll take us to school out in the 2400s unless we start to step it up.

Facebook is super-fun for political arguments. Well, maybe not if you’re not me. Me, I like to use social networking tools to have vigorous, vitriolic disagreements, apparently even in the comments section of posts made by friends from college whom I’ve barely seen since. Which occasionally leads to interesting questions. Earlier this week, a friend said the following: “Keeping the Democrats out will at least lead to less growth in government spending.” I like this assertion, because it’s totally testable. Let’s test it!

I had so much fun with the “are high taxes better for California businesses?” blog entry that I thought I’d do the same here. Now, the first step was to turn that statement into something we could test: that is, the rate of change of government spending should be lower when the Republicans are in charge than when the Democrats are in charge. To me, it also made sense to look at the deficit: you could set spending to $100 but taxes to $0 and still run a deficit, despite that low spending.

What Money?

I grabbed some data from FRED and set to it. They have spending, receipts, and GDP information going back to 1951 on a quarterly basis. (Their earlier data isn’t quite the same, so I just started in 1951. Nearly 60 years seems long enough to me.) I started by taking spending as a percentage of GDP, in order to make things somewhat comparable year-on-year as the economy grows and the value of a dollar decreases.

This does, however, introduce a big problem: spending as a percentage of GDP spikes whenever there’s a recession. Why? Well, to get spending as a percentage of GDP, you just take (spending)/(GDP). In a recession, GDP — the denominator — shrinks. So, even if spending stays the same, that will result in an increase of the final value. (Just like, if you have 2/4ths, and subtract one from the bottom, you get 2/3rds, which is larger!) I can’t think of a trivial way to work around this, but it’s worth being aware of.

Making Data Look Funny

Yeah, that goes uphill. We could all figure that out! What we really want to know is: when do they try to make it less, and when do they try to make it more? That will answer the question at the beginning of this entry.

So that means we don’t so much want to know the level of spending in a given period — we want to know the change — that is, is the spending lower or higher than the previous period? To get that piece of information, I took the slope of the line each quarter. If the slope’s going up, then things are getting more. If it’s going down, then things are getting less.

The dataset did look very erratic, so I took a moving average to decrease the size of the peaks and valleys while still keeping the same overall data profile. The data are quarterly, and so may bounce up and down within a year as a big expenditure hits or as taxes come in — timing effects that may not actually reflect how responsible (or not) the budgeting is over the full year for which the budget is approved. In the graphic below, you can see the un-smoothed data in blue, the smoothed in pink.

When you look at this graph, values above 0 mean an increase, values below 0 mean a decrease. It’s not the case that a downward slope means that spending is decreasing — a downward sloping line with values over 0 means spending’s getting larger slower. An upward sloping line with values under 0 means spending’s getting smaller slower.

Putting That in Context

Here’s the same data overlaid on charts that show if we had a Republican or Democrat in the White House and also which party controlled the House of Representatives. (Spending legislation originates in the House, so I looked only at these two entities here.)

As you can see it’s really all over the map. It’s not obvious that there would be any relationship here. We’ll look into that further in a minute.

Now, it’s not just about spending — it’s about the size of the deficit, too, or so we’ve heard so much over the past few months. We can do the same sort of graph for the deficit here. (The deficit is calculated on a quarterly, not cumulative, basis here, so if it’s over 0 then they’re adding to the deficit in that quarter, if it’s under then they’re subtracting from it.)

Again, there are large fluctuations in both directions. Are there any trends? Time for some statistics.

Heavy Number-Crunching

So the question is: do you do better if you pick a Republican House or President at controlling spending or the deficit than you do if you pick Democrats for those positions?

I looked at this by doing a series of t-tests. A t-test basically says: we have two samples we’ve pulled from the world. Are these two samples part of the same larger group, or are they drawn from different groups? If Republicans are better at controlling spending or the deficit than the other party is, or vice versa, the t-test will show that the deficit or spending levels each year are drawn from different groups, depending on who’s in power. If not, then it’ll all look like one big, equivalent level of spending, regardless of who’s in power. Guess which way it looks?

If you guessed that there are no statistically significant differences, you’d be right! I looked at these numbers both from 1951 on and starting in 1980, when Reagan was elected and the modern Republican Party came into being and: there’s no statistical difference in either period. (I tried to look at before 1951 or just with split-party government, but there were too few data points for Republicans controlling the House in the former and the latter overall.)

What does this mean? This means that if you vote for one party or the other in the belief that this party will lower spending or the deficit (or raise it, for that matter!), you’re most likely to be disappointed.

However, there were some trends. This chart shows these trends. Again, the percentages along the side are the percentage change quarter-to-quarter:

Also again, none of these trends are statistically significant, so you can’t count on anything repeating itself if you vote one way or the other — but it’s interesting to note that it’s Democratic Presidents and Republican Houses that lower the deficit. We can see that for Democratic Houses and Presidents, there’s a clear effect of taxes, keeping deficits from growing as fast as expenditures do. The opposite is true of a Republican House: they cut taxes enough that their spending cuts don’t impact the deficit as much as they could. Interestingly, Republican Presidents look pretty much like Democrats.

All of these differences are small. Two-tenths of a percent down? Three-and-a-half-tenths of a percent up? It hardly makes a difference over the long term. Small mean effect sizes plus wide variance here means, again, that there’s no statistically significant difference between Democratic and Republican policies when it comes to spending and the deficit — you’re drawing from the same set of ideas, either way, and getting the same end results. Which party spends more? They both spend a ton.

Obviously, the Democrats got thrashed in last night’s elections. This was pretty much as expected. Based on the restults, the coverage I saw last night, public statements by major players, and a few too many years spent following politics (some college was even silly enough to give me a degree in it!), here are my first thoughts on what happened and what’s going to happen.

What Could the Democrats have Done Differently

The big question is: could the Democrats have won by making different choices on what other policies they pursued?

To me, the answer to that looks to be “no.” Healthcare reform is about even in popularity in the latest polls (although it’s behind for both Republicans and Independents). Passing cap-and-trade doesn’t seem like it would’ve added any new votes.

Could the Democrats have performed better by being more conservative — passing less legislation, or focusing more on spending cuts? Evidence there also suggests “no.” The biggest piece of this evidence is the royal whipping the “Blue Dogs” took. In realistic terms, how far to the right of the positions taken by the “Blue Dogs” who lost should the Democratic party have been prepared to go to win this election? Going to the right of these guys clearly would’ve meant giving up every substantive legislative achievement of the past Congress, and I can’t imagine that would be a decision anybody would make ever.

Bill Clinton won on “it’s the economy, stupid!” Barack Obama would’ve done well to listen to James Carville’s rallying cry as well. The economy is in the shitter and people are worried, of course they want change. If I’m right on that assertion, then the only thing the Democrats could have done is have a larger stimulus. (Regardless of your economic leanings, you’ve got to believe that a larger stimulus would’ve caused short-term growth; the question is, when looking at different options to grow an economy, which give you the right medium- and long-term tradeoffs?)

The Obama administration had to have known that the Democrats’ electoral performance in this cycle was going to depend substantially on how the economy was going. Reality essentially forced them to play that hand. Yet, like a bad poker player, they never went all-in on the must-win pot. I simply don’t understand what downside existed to getting the largest stimulus package possible.

Dangers for the Democrats

The most obvious danger is now that there’s going to be a call from within the party to move to the right. As I said above, even the rightmost party members lost; I can’t imagine where that move would get them.

The reality is that, unless the economy improves, the party stands a significant danger of losing the White House in 2 years. That needs to trump any move to the right or the left.

There’s also a danger that Democrats and Progressives will blame the loss on the economy. It’s also a reality that the Obama team, which won the primaries and the White House substantially on outstanding communications, has failed to do a good job of communicating with the citizens of this country for 20 months now. We need to accept that Obama is no Reagan. Where we go from there is difficult.

Dangers for the Republicans

I saw Eric Cantor on the news last night, talking about how this election was a mandate to repeal health care reform, cut spending, and more. It’s certainly true that the electorate was happy to kick out the Democrats, but I think that’s reading too much into it. Looking at the Senate map, we see a few standout losses for the GOP. West Virginia, Colorado, and Nevada all looked winnable, and are all conservative states — in West Virginia’s case, with a history of social conservativism; for the other two states, a tendency to libertarianism. Yet, in three races that required the victor to appeal to people across geographic and socioeconomic lines, the Democrat won. That’s not a shining endorsement.

Similarly, in many of the states in which Republicans had major House gains, there’s a danger that the party will see an endorsement of the policies Cantor talked about. That may be true, but in places like Florida, Texas, Virginia, and Pennsylvania, Republicans were in charge during the last redistricting cycle and drew seats that should lean to the party’s positions. These wins could be an endorsement of policies, or they could be a validation of decade-ago redistricting plans. If they are the latter, then going too far to the right could put many of these seats at risk.

There’s also a major gotcha in the widely-touted Republican goal to roll back Obamacare. A logical first place for them to start — one that many party members have advocated beginning with — is to repeal the mandate that all individuals buy health insurance. This is an attractive first step, since such a mandate seems unfair to many in the center and with libertarian bent.

However, the individual mandate is economically chained, whether the GOP wants it or not, to the requirement that insurance companies must provide insurance to everyone. Without the individual mandate, an economically rational person will take advantage of guaranteed coverage and wait until they’re in the emergency room to apply for and get insurance. The only economically rational actors who will always carry insurance will be individuals with chronic conditions that require ongoing care.

As a result, insurance companies will be stuck with massive pay-outs with little pay-ins. In just a few years, this will require either an insurance company bailout — sure to be unpopular, and probably resulting in an effective nationalization of health insurance — or moving all the high-cost insured to Medicare — effectively creating a single-payer system. It’s a poison pill, and the Republicans had better have a clever plan to get around it. Otherwise, their attempt to repeal healthcare reform will just speed us to a single-payer, “socialist” result.

The Republicans also need to be aware that some economists believe that their proposed economic policies will cause a double-dip recession. If things get worse over the next two years, rather than better, it may be the GOP that’s out on its ass, not the Democrats. Just like Obama, they’re making a big bet on the economy getting better. The GOP needs to go all-in where he didn’t.

Redistricting, Polarization, and the Example of California

This will be two redistricting cycles in a row in which the GOP has controlled key states. Last time, they drew new districts that cost a lot of Democrats their seats. It’s reasonable to assume they will again.

And here’s a problem: this creates safe seats for both parties. In order for the Republicans to create seats that they’re likely to win, they need to cluster Democrats into (a presumably smaller number of) districts in which they have a large advantage.

Are safe seats bad? The example of California suggests so. The last time that elected officials were in charge of drawing district lines for the state legislature, the two parties collaborated to create as many safe seats as possible. This has been awful for the state: pretty much any incumbent can win by going to Sacramento and advocating for the right thing at all costs, not compromising an inch, even if they don’t actually get anything done.

The more safe seats we get nationally — heck, the more safe states we get nationally — the less incentive that there will be for our Congresspeople to compromise to get things done, in just the same way.

And, of course, with a consequence-free bully pulpit for our elected representatives on both sides of the aisle, we’re sure to see more and more radical talk from the left and from the right. That will translate to polarization, and to gridlock, just like in California.

See, we really are leading the nation!

The Republican Big Tent & Delivering

The Democratic Party achieved its greatest feats from the ’30s to the late ’60s, when it was able to get both the Dixiecrats and the northern liberals to get behind the New Deal, the Fair Deal, and the Great Society. But the Civil Rights struggle broke up that coalition and set the stage for the modern Republican party to emerge.

Now the Republican Party has grown in its own right, and its southern base represents more than just the old Dixiecrats — it’s an aggressive, exceptionalist, big-business group. The Western base shares the aggressive exceptionalism, but with a big dose of the area’s traditional libertarian values.

Now it’s the challenge of the party to somehow get those two groups moving in the same direction. The big problem is: for the traditional libertarians, we need to cut the deficit; for the business-focused, we need to cut taxes. Sometimes it’s easy to do both. Right now, with the economy the way it is, it will be very, very hard.

Worse, red states tend to be more net recipients of Federal funds, while blue states tend to be net donors. So cuts are likely to hit disproportionately on the Republican base. This all adds up to a challenge: how will the GOP deliver on its fiscal message over the next two years? If they can somehow strike a successful balance, there’s a chance they can be the “big tent” party of the future. If not, one side or the other is going home unhappy.

Their big asset in all of this, of course, is that both constituencies hate the modern Democratic Party. But how long will standing against Obama hold them together, when taxes need to rise or deep cuts need to be made, when tort reform alone won’t fix the medical spending problem, or when banks’ mortgage portfolios blow up again and they need another bailout?

The Republican Philosophical/Public Opinion Cycle Challenge

Here’s the thing: the GOP is all about repealing healthcare reform, because the new system’s “socialist.” However, the new system is actually based upon the system implemented in Massachusetts by former Republican Presidential challenger and then-Republican Governor Mitt Romney, which itself originated in concepts from the very conservative Brookings Institution. These concepts came about in the late ’90s and early part of the ’00s — about 10 years ago.

A lot of people on the left think that labeling Obamacare “socialist” is disingenuous — a statement not that the GOP doesn’t like the policy, but that the GOP doesn’t like that the Democrats implemented the policy. However, there’s an explanation that doesn’t involve any lying or propaganda, and that still explains what’s going on for many Republican leaders: this explanation is that consensus political philosophy within the Republican party is iterating faster than that philosophy can spread to the rest of the electorate.

If one accepts that the Tea Party is distinct from Neoconservativism, which I think it is in many ways, then there’s plenty of evidence for that theory. Heck, the fact that Palin has such large positives combined with such large negatives is strong evidence, as is the party’s insistence on both tax cuts and budget balancing, which are an incompatible pair unless you show a lot more cojones than any party has showed since, maybe, LBJ or even FDR.

And here’s where the GOP runs into trouble. Reagan changed the thinking of a lot of liberals; the result was consensus in key parts of the Democratic party around Welfare Reform in the ’90s; Bill Clinton could’ve vetoed it, but instead he backed it. It took 15 years, but the Republicans sold the Democrats on the concept.

And then the cycle sped: it took 10 years, but Obama put forth a conservative solution to healthcare reform, and people liked him for it and voted for him. Single-payer had lost.

Except, in the interim, the Republican (or should I say conservative?) political philosophy had moved on: this plan is in fact, viewed through that orthodoxy and using that movement’s vocabulary, “socialist.” And that creates a problem.

First of all, it creates an atmosphere in which Democrats think Republicans are lying and manipulative, because, once the Democrats compromise, they get called the same nasty names as ever. That minimizes the chance of compromise down the road.

Second, and more seriously for the GOP, it means that the party will never be able to create a true, massive consensus around any radical policy shift it wants to pursue — because it’s iterating philosophy faster than certain large groups within society can accept that philosophy. Now, the GOP can still be a leading force, and get a lot done, but it will never have a Reaganite hold on overall American philosophy unless it waits for the rest of the country to catch up.

Ultimately, this will be a dangerous cycle to the party. And, with modern communications tools, I can’t see the cycle of philosophical iteration getting any longer — it’ll probably get shorter. Usually this kind of increasing radicalization of the leadership combined with slower evolution of the party apparatus and even slower evolution of popular opinion results in the party eating itself. How this will play out for the GOP, I can’t guess.

So, I’ve been looking into all of our candidates, and the positions generally cleave down a simple line. Sure, there are differences on a variety of important issues and many, many details, but one key factor stands out: do we need tax cuts to help business or not? If you believe that the answer is yes, then you’re almost required to vote for one candidate; if you believe taxes aren’t a major issue, then it’s likely that the candidate on the other side is more appealing.

Now, there’s a lot of rhetoric on either side of the issue. I’m going to try to bypass a lot of the economic theory disagreements and start from a basic question: are our taxes on business high or not? (tl;dr: no, in fact high taxes are good for California.)

My approach to this question is going to be a little weird: I’m going to proceed from the insight that, in the past, California was a highly-competitive state. Companies chose to locate here, we were a center of innovation, we had the best universities in the world, and our economy was larger than most countries’. Starting with aerospace in the 1950s, through semiconductors in the ’70s, computers in the ’80s, biotechnology in the ’90s, and the Internet in the ’00s, we’ve been leading members of the economy not just of the United States but of the whole world.

Clearly, back in some good old days, things were going well. We made the right moves to incubate all of these industries and take a leading role in their growth. In fact, it seems reasonable to me to assert that whatever we were doing back then was a best practice that we should seek to emulate, unless we can come up with a specific reason not to.

So, are our taxes higher now than they were then? If so, logic might suggest that we should cut them. If not, logic might suggest that our problems stem from areas other than taxes.

Are Our Taxes High?

I chose to measure taxes on business as a % of state GDP. This has the advantage of putting the amount of money collected in context, while still being pretty easy to understand. (My tax numbers come from the US Census Bureau, and go back to 1963.)

So, here’s California’s state taxes:

The green line is California. The magenta line is the average of all states. The pink line is the long-term average of the magenta line, with the dashed pink lines showing 1 standard deviation above and below that line. Here we can see that California seems to have somewhat higher taxes, although, taking the long-term average of the California tax vs. that long-term average of all states’ taxes, California’s taxes are only about 4% higher. (That’s not 4% of GDP, that’s 4% of the total tax level, or about 0.2% of GDP. The scale of the chart to the left exaggerates the difference.) (Oh, and what’s a standard deviation? Well, 60-some percent of the points you have in most any set of data will fit within one standard deviation of the average. Standard deviation’s an attempt to say whether or not a data point is average. A point within two standard deviations is, statistically, probably average. A point within one standard deviation is, statistically, probably really really average. So, everything within those dotted lines is probably pretty much the same.)

Now, as I said above, I want to compare to past, successful times in California, not to practices in other states that may or may not work. So, I re-graphed California’s tax levels as the difference between that year’s tax level and the long-term average tax level.

The blue line is obviously the tax level. For context, I’ve got dotted lines at one standard deviation above and one standard deviation below. As you can see, most every year of taxes is within one standard deviation, or, as they say in the math business, “the same.” (In fact, if I’d put in two standard deviations, only the top and bottom peaks in that line would actually fall outside that level — again, from a mathematical point of view, the tax level has remained about the same.) However, the upward trend is undeniable. Compared to past California taxes, we’re about the same but increasing.

But Wait…

So I wanted to compare California to past glory days: that demands a standard for glory. I’m defining glory as “being the best damn state in the Union.” In economic terms, I want to see when California’s share of the US GDP was maximized. So, let’s overlay that on the graph we just saw (State GDP numbers from the BEA):

The new red line is that standard for glory; again, I have dashed lines at one standard deviation out. As with the tax line above, I’m showing the difference from the long-run average share of US GDP; when the line is above 0, California’s doing better than average, when it’s below, worse. Here we see something funny: the state’s share of US GDP seems to have an upward trend, just as the share of taxes has an upward trend… that is, higher taxes don’t seem to hold back the state’s awesomeness.

This eyeball result surprised me a little, so I double-checked it. Turns out the math proves that impression out. The r-squared of these results, a statistical measure of how highly related the two numbers are, is 0.53 on a scale of 0 (not at all) to 1 (completely) — that’s not tremendously high, but it is noticeable. Even more, the direction of that correlation is positive — that is, for each increase in tax, you get a commensurate increase in share of US GDP.

Another way of saying that is: California seems to be most successful when taxes are high.

Are Some Taxes High?

OK, but we hear a lot about capital gains taxes and about death taxes and things like that. Is it possible that the problem isn’t the overall business tax level, but on specific components of the tax that businesspeople would be exposed to. My data set breaks down taxes by type, so, let’s take a look:

This graph just shows the breakdown of total taxes by tax type. At the top, in brown, is the “death tax” — as we can see, not much. The yellow Select Sales Tax is sales taxes on specific items, mostly gas and sin taxes. At the bottom is the light blue property tax, not a big part of overall taxes for businesses even before Prop 13. Unfortunately, two big tax components are subsumed in other, larger components, and I don’t have the data to break them out:

• Gross Receipts tax is part of General Sales Tax. This tax is significant just because California subjects many small businesses to this tax, while other states don’t. I may or may not deal with that in another blog entry, but it’s interesting to know.
• Capital Gains Tax and Personal Income Tax are both in the blue of Individual Income Tax.

Anyway, as we can see, there’s been a long-term trend to collect fewer regressive sales taxes, and an increase in collection of the Income Tax group of items. Since I don’t have the breakdown, I can’t tell you if this means new income taxes, or just that capital gains have become large thanks to a booming economy and a vigorous investment capital market.

But, Once Again, Wait…

However, we can ask, just like we did for the overall tax levels: do these tax components lead to awesomeness or not? After all, we could find ourselves in a situation in which some taxes were higher than they should be, and others lower, and thus taxes need to re-balanced within an overall tax level, for maximum efficiency.

So, I did the same thing as the above: I looked at the correlation between each individual tax level and that year’s CA share of US GDP:

Obviously, that’s Greek to 90% of my readers. Let’s just say that this shows a strong correlation. (Severance tax is at 0 because it’s so low in CA to be measured here.) This further suggests that lower taxes lead to a higher share of US GDP. Except, upon further thought, looking at current-year correlations doesn’t make sense: after all, higher current-year taxes should lead to lower current-year investment which leads to lower future growth and thus lower future share of US GDP, not lower current share of US GDP. So, I re-ran the correlation, seeing how one year’s taxes affected the next year’s share of US GDP:

OK, again we have a pretty good predictor, except you’ll see that the column under Coefficients has changed sign from negative to positive. That’s pretty important, because the coefficient tells us the direction of the relationship. In the first correlation, we see negative coefficients; that means, for each one percent increase in taxes, you see that level of decrease in share of GDP. But, looking at future returns — as I understand the argument for lower taxes suggests we should — we see that a one percent increase in taxes leads to the coefficient’s level of increase in share of GDP. That is, higher taxes lead to higher future GDP.

Just to double-check, I used share of US GDP four years in the future, instead of just 1 year:

The result is: about the same; higher taxes lead to higher future share of GDP. It’s notable that every single kind of tax has a positive coefficient — there doesn’t even seem to be one that pulls down future share of GDP. In fact — fun fact here — the negative Intercept coefficient suggests that, if we set taxes to 0, we’d get negative growth over the long term.

So, What’s The Skinny On Taxes?

Given the data here, it’s reasonable to interpret things thusly:

1. California’s strength is in industries that are complicated and involve a lot of intellectual property development (see: aerospace, semiconductors, computers, biotech, internet, as described above)
2. It takes substantial cash investments to develop this IP
3. Therefore, California does well when it taxes highly enough to be able to make these investments
4. Further, despite the state’s current parlous, um, state, California has invested its tax collections well enough in the past that these taxes have enabled business growth, not business closure
5. And, thus, logically, we shouldn’t cut taxes, but instead need to get our spending house in order, to ensure that we continue to make these smart investments and enable future business growth in the way that we’ve enabled past business growth

So, does this mean that I’m for higher taxes across-the-board? No. But, I will say, that California’s strength depends on the government taxing and investing for long-term growth, not on the government getting out of the way.

There may be other states where things should be libertarian, or just lower tax to stimulate some kinds of business growth; that doesn’t seem to be the way in which California has been competitive in the past. And, since we’ve been exceptionally competitive, shouldn’t we follow our own example first, before we try to be some other state? It’s logical enough that there should be some long-term successful strategy in which some states have higher taxes and invest those taxes in complex, investment-heavy businesses, while other states have low taxes and therefore attract the kinds of businesses that appreciate low-tax, low-investment environments. Let’s have our strategy. That’s how all businesses, and most stand-out states and nations, succeed.

You remember those old movies from the 1930s? Filled with frugal people and their quaint lifestyles? I’m starting to worry that it’s not all memories. First it was the Murphy beds everywhere — two big Murphy bed-only stores popping up near us, and then the Murphy bed at the condo we stayed at in Palm Springs — which, let’s face it, I hadn’t until then encountered a single Murphy bed during my life. Then it was the gigantic, aisle-dominating displays of canning-related goods at Bed, Bath and Beyond. Seriously, they probably had more canning stuff than Tupperware.

Yep, we’re back in the bad old days, that’s for sure. No more throwing away our leftovers or sleeping in rooms entirely separate from those in which we spend our waking hours; it’s time to cut back! 1930 has returned. Fiscal prudence is good, but I’d hoped not to have to make myself master of botulism or sleep inside the wall.

I suppose that leaves us at a good place to talk about the imminent election, coming up in only a month. See, I’m frustrated: I don’t understand why anyone’s ok with the really, really miserable economy we have right now. Worse, from the point of view of the work I do, I feel like it’s headed further downhill. That’s really bad. While I greatly admire the resourcefulness and persistence of the Greatest Generation, I don’t think we all need to learn the same lessons as them in exactly the same way. It would be nice to be prosperous.

Now, I have a number of ideas of why things have turned out this way. But it’s election season, and I do think it’s probably time for me to be a bit more open-minded. So, I’m planning to spend the next month getting a better idea of what the various people I can vote for (or against!) are offering.

My perspective — as you might guess from the opening up above — is that the economy is problem #1. Further, I think that big issues, like the environment, education, China, and Iran, can all be looked at usefully through the lens of “gosh, the economy’s sure screwed up, what can we do over the short, medium, and long term to fix it?” Because ultimately we want to be rich, comfortable, and not blown up, and two out of three doesn’t really do it.

My perspective is further affected by the facts that:

1. I’m a big stats geek, so I expect numbers to add up and events predicted to be actually likely
2. I help people plan big, complicated things like designing and launching a new product or a new business every day, so I expect any plan to be full of specifics (or it doesn’t count as a plan)

I think that pretty much tells me what I’m looking for: people who have a specific, measurable, reality-based (in that it makes basic assumptions that can be measured and which are true right now) plan. People with proposals that aren’t specific or aren’t new also aren’t welcome.

And that’s really what I stand for here. I think everyone out there, from our President to the party not in power to our country’s bureaucracy has royally screwed up the current economic situation. Despite being a lifelong Democratic voter who thinks that the Republican party is racist, I’m prepared to vote for whoever I think will actually fix things. So, let’s see if I get impressed by any of these clowns out there. Because I want to get things fixed before this turns into a situation in which I can may leftovers and the wife and I pull our bed down from the wall every night and tie up our pillows to lift the whole thing back in, in the morning.

squashed:

A trial happened. This means that the judge made findings of fact. He found that there was no evidence that Prop. 8 served a legitimate government interest. This is important because the case will be appealed. The appellate court will review the judge’s legal reasoning without giving any deference to what the judge decided. (“De novo”.) However, the factual findings will remain intact unless the trial judge did a terrible job. (“Abuse of discretion.”) When the trial court found the testimony of the anti-gay-marriage expert unreliable, it will keep that “unreliable” label through appeal. And when the judge says, “the trial evidence provides no basis” for something there will continue to be no evidence unless the appellate court finds an abuse of discretion.

Read More