Archive | Public Choice

Concluding Thoughts on the Cato Unbound Symposium on Democracy and Political Ignorance

The Cato Unbound symposium on my book Democracy and Political Ignorance: Why Smaller Government is Smarter is wrapping up up today. I am grateful to political theorist Jeffrey Friedman, Yale Law School Professor Heather Gerken, and Sean Trende of RealClearPolitics for their thoughtful critiques of the book, and to Jason Kuznicki of Cato Unbound for his excellent work organizing and hosting this event. Here is a link to my final post in the exchange, which summarizes the discussion as a whole, and responds to final posts by Jeffrey Friedman and Sean Trende. [...]

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My Response to Jeffrey Friedman’s Critique of Democracy and Political Ignorance

Cato Unbound has now posted my response to political theorist Jeffrey Friedman’s insightful criticism of my book Democracy and Political Ignorance: Why Smaller Government is Smarter.

Here is an excerpt:

In his critique of my book, Jeffrey Friedman continues his longstanding efforts to show that most political ignorance is inadvertent rather than rational. In his view, voters are ignorant because they believe our society “is a mighty simple place” and “think they have information adequate to [the] task.” They simply don’t realize there is lots of other information out there that could help them make better decisions.

Friedman is a top-notch political theorist who has made valuable contributions to the literature on political knowledge… But on this point, I think he is barking up the wrong tree… Moreover, the mistake is of more than theoretical importance. Inadvertent ignorance has very different implications for political theory than rational ignorance….

Inadvertent error might explain why voters ignore highly abstruse (though potentially relevant) bodies of knowledge. But it cannot account for widespread ignorance of very basic facts about politics and public policy. For example…., two-thirds of the public in 2010 did not know that the economy had grown rather than shrunk during the previous year, even though most said that the economy was the single most important issue in the election. Similarly, most had little if any understanding of the Obama health care plan, another major issue. If you think the economy or the president’s health care plan is the biggest issue on the public agenda, it isn’t rocket science to figure out that these basic facts are highly relevant. Yet the majority of the public is often ignorant of such basics….

The inadvertence theory also cannot explain why political knowledge levels have remained largely stagnant for decades, despite massive increases in

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Baptists, Bootleggers, and Marijuana Prohibition

Public choice economist Bruce Yandle famously developed the concept of a “baptist-bootlegger coalition” to describe situations in which regulation is supported by a strange bedfellow alliance of groups who favor it for narrowly self-interested reasons and those who support it out of moral or ideological considerations. The paradigmatic example was the way in which Baptists (who opposed alcohol for religious reasons) and bootleggers (who wanted its sale to be illegal in order to protect their business interests) supported Prohibition in the 1920s. It looks like a similar alliance is emerging to oppose marijuana legalization:

Pot legalization activists are running into an unexpected and ironic opponent in their efforts to make cannabis legal: Big Marijuana.

Medical marijuana is a billion-dollar industry — legal in 18 states, including California, Nevada, Oregon and Maine — and like any entrenched business, it’s fighting to keep what it has and shut competitors out. Dispensary owners, trade associations and groups representing the industry are deeply concerned — and in some cases actively fighting — ballot initiatives and legislation that could wreck their business model.

That pits them against full legalization advocates, who have been hoping to play off wins at the ballot box last fall in Colorado and Washington state that installed among the most permissive pot laws in the world. Activists are hoping to pass full legalization measures in six more states by 2016….

This spring, the Medical Marijuana Caregivers of Maine joined the usual coalition of anti-pot forces of active law-enforcement groups, social conservatives and public health advocates to oppose a state bill that would legalize possession of small quantities of the drug. The medical marijuana lobby argued that criminal organizations would start smuggling pot to neighboring states, and they complained that the bill’s tax plan was unworkable and unfair.

“The main objections

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Sports Stadium Corporate Welfare Continues in Detroit

Despite the having filed for bankruptcy, Detroit is going ahead with plans to spend over $400 million in public funds on a new hockey arena for the Detroit Red Wings [HT: Josh Blackman]:

Detroit’s financial crisis hasn’t derailed the city’s plans to spend more than $400 million in Michigan taxpayer funds on a new hockey arena for the Red Wings.

Advocates of the arena say it’s the kind of economic development needed to attract both people and private investment dollars into downtown Detroit. It’s an argument that has convinced Michigan Gov. Rick Snyder and Kevyn Orr, the emergency manager he appointed to oversee the city’s finances, to stick with the plan. Orr said Detroit’s bankruptcy filing won’t halt the arena plans.

“I know there’s a lot of emotional concern about should we be spending the money,” said Orr. “But frankly that’s part of the economic development. We need jobs. If it is as productive as it’s supposed to be, that’s going to be a boon to the city.”

But critics say the project won’t have enough economic impact to justify the cost, and that it’s the wrong spending priority for a city facing dire economic conditions.

I’m a big hockey fan and even used to play myself (not that I was any good). And, unlike many other Detroit institutions, the Red Wings have been very successful in recent years. Nonetheless, this massive stadium subsidy is utterly indefensible. Studies by a wide range of economists have repeatedly shown that stadium subsidies do not yield economic benefits for the wider communities where they are located.This recent book by political scientist David Schultz has a helpful survey of the evidence. Moreover, this kind of corporate welfare for powerful business interests is exactly the sort of wasteful crony capitalism that played a major [...]

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Penalties for Underperforming Politicians

Law professor Glenn Reynolds (AKA Instapundit) has an interesting column in USA Today advocating that we increase penalties for politicians who do a poor job in office:

As scandals explode across Washington… one thing that I’ve noticed is that the people involved don’t seem to suffer much….

Government officials are happy making and executing plans that affect the lives of millions, but when things go wrong, well … they’re willing to accept the responsibility, but they’re not willing to take the blame. What’s the difference? People who are to blame lose their jobs. People who are “responsible,” do not…

Given the low penalties for failure it faces, our political class is one for whom falling down is usually painless and even — given the surprisingly common tendency of people who have presided over debacles to be given promotions rather than the boot — actually pleasurable….

The problem is that they don’t have, in President Obama’s words, “skin in the game.” When it comes to actual wrongdoing, they’re shielded by doctrines of “absolute immunity” (for the president) and “qualified immunity” (for lesser officials). This means that the president can’t be sued for anything he does as president, while lower-ranking officials can’t be sued so long as they can show that they were acting in a “good faith” belief that they were following the law.

Such defenses aren’t available to the rest of us. And they’re not even the product of legislation passed by Congress after considered judgment — they’re judicially created….

Reynolds proposes that we eliminate judicially created immunity doctrines and impose tougher penalties on failed political leaders:

I’d favor some changes that put accountability back in. First, I’d get rid of judicially created immunities….

I’d also cut all payments to members of Congress whenever they haven’t passed a budget. If

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James Buchanan, RIP

Nobel Prize-winning economist James Buchanan passed away today. Buchanan was one of the founders of public choice economics, which seeks to apply economic analysis to politics. Closely related was his important work applying economic analysis to constitutions, most notably in his classic work The Calculus of Consent, coauthored with Gordon Tullock. The burgeoning field of constitutional political economy was in large part his creation. Buchanan also did path-breaking research on federalism, public finance, and the theory of externalities and public goods.

Buchanan was a giant of twentieth century economics, and his work has had a wide influence on scholars in many disciplines, including law. My own work on federalism and constitutional theory is indebted to him. Buchanan’s approach to public choice was also an important contribution to libertarian thought, since it undercut the view that government – including democratic government- can be depended on to promote the public interest and correct market failures. As Buchanan helped demonstrate, once we use the same economic tools to analyze government action as were previously applied to private sector activity, government failure often turns out to be worse than the market failure that government action was supposedly intended to cure. But Buchanan’s influence also extended to many liberal and conservative scholars, as well as libertarian ones. For example, John Rawls drew on his work extensively in his Theory of Justice, probably the most important work of left-liberal political philosophy of the last fifty years.

For a helpful concise summary of some of Buchanan’s most important contributions, see here. [...]

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Corporate Tax Breaks in Fiscal Cliff Deal

“Congress, apparently, couldn’t end the year without showering billions on a handful of interest groups, some of which you probably didn’t even know existed,” the Washington Post editorializes. the final bill incorporated a Senate measure that extended various corporate tax breaks and a farm bill extension. More from Brad Plumer and Matt Stoller have more and Tim Carney details how this happened. [...]

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The Other Beneficiaries of ObamaCare

Whether or not you believe the PPACA has been or will be good for the American people, it has certainly been good for the lobbyists and legislative staffers who wrote it, as Tim Carney explains. Glenn Greenwald comments further:

This is precisely the behavior which, quite rationally, makes the citizenry so jaded about Washington. It’s what ensures that the interests of the same permanent power factions are served regardless of election outcomes.

Adds Carney, this is “a good reminder of what Obamanomics and Bushonomics have in common.” [...]

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Massachusetts Highway Safety Director With Terrible Driving Record Resigns

Sheila Burgess, the Massachusetts Highway Safety Division Director with a horrible driving record and no qualifications for the job, has resigned. I blogged about Burgess here.

The resignation was almost certainly caused by recent revelations about her driving record and the fact that she got the job through political connections without having any real qualifications for it. In that sense, one could conclude that the political process worked well. A compromised and unqualified official was ultimately forced to quit. On the other hand, Burgess held this position for over five years before anyone in state government noticed (or at least cared) that she might not quite be the right person for the job. That may be good enough for government work, but it’s not actually all that good.

UPDATE: It looks like Burgess was already scheduled to leave the highway safety director position. The resignation is from her position as a state employee. Given this situation, it is possible and even likely that the resignation was not the result of the revelations about her driving record, as I suggested above. I apologize for the mistake, (which, however, I caught within 30 minutes of putting up the initial post). It is, however, still the case that Burgess held this position for several years before there was any effort to force her out. [...]

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Director of Massachusetts Highway Safety Division Has Extensive Record of Car Accidents

It sounds like something from a bad libertarian parody of government. But it turns out that the Director of the Massachusetts state highway safety agency has a long record of traffic accidents and moving violations. She apparently got the job through political connections, even though she had no relevant expert qualifications for the job. But perhaps her appointment could be justified on “takes a thief to catch a thief” grounds:

Her driving record includes seven ­accidents, four speeding violations, two failures to stop for a police officer, one failure to stay in her lane, one driving without registration or license in possession, and one driving without wearing a seat belt….

There are 34 entries on her driving record, dating back to 1982.

Yet Sheila Burgess is director of the Massachusetts Highway Safety Division. Her mission is to reduce accidents by promoting good driving practices…..

Burgess’s most recent crash occurred on Aug. 24, as she was driving a state vehicle during work hours. At 1:16 on a sunny summer afternoon, her car veered off the road in the Blue Hills Reservation in Milton and slammed into a rock outcropping, a State Police report says.

Burgess was appointed to her $87,000-a-year position in July 2007, without any background in public safety, transportation, or government administration. Her experience was in Democratic Party politics. For almost two decades as a paid consultant and congressional aide, she had raised money and ­advised candidates for public office, including — according to her resume — Lieutenant Governor Timothy Murray, who had taken office six months earlier as part of the new Patrick administration….

A spokesman for Governor Deval Patrick and Murray said late Friday that Burgess was hired, in part, based on the recommendation of US Representative James McGovern, for whom Burgess once worked as a

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A Too Big to Fail Parking Lot at Yankee Stadium?

Manhattan Institute scholar Nicole Gelinas has an interesting column about a massive financially dubious parking lot at Yankee Stadium, which Bronx Borough President Ruben Diaz, Jr. claims requires a government bailout to prevent a local financial crisis:

If the Zuccotti kids want to protest Wall Street bailouts, they should go occupy the Yankees’ luxury parking garages in The Bronx. Borough President Ruben Diaz Jr. wants to give the garages’ private investors a fat-cat rescue at the expense of Gotham’s Main Street mice.

Four years ago, the Yankees wanted a souped-up parking “system” for their new ballpark, and Mayor Bloomberg obliged. City Hall helped a previously unknown outfit, the Bronx Parking Development Co., borrow $238 million to build and run a $300 million parking paradise on city land under a long-term lease. (The state supplied the balance of the cash.)

ut the mayor didn’t put the city’s credit on the line. Instead, the city’s Industrial Development Agency — which is not guaranteed by city taxpayers — sold the debt to bondholders.

No one ever said so outright, but bondholders were plainly supposed to assume that, because Bronx Parking’s board is stacked with city officials and city officials talked up the bonds, that the city was there should the deal run into trouble.

It sure didn’t make sense on the merits. The old parking lots generated $7 million a year, but the new lots were supposed to pay twice that in annual debt costs. And Bronx Parking can’t just raise prices to fill the gap. Not many folks will pay $35 to park when there’s a new Metro North station right there.

Reality has caught up. Last week, Bronx Parking made its payment to bondholders only by tapping an emergency fund. The firm must make two more payments by next October —

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More Evidence of the Repressive Nature of the New Egyptian Government

In a recent post, I cited evidence suggesting that the new Egyptian government is degenerating into a military dictatorship at least as bad as the Mubarak regime that was overthrown earlier this year. Jeff Jacoby compiles some additional relevant points:

[T]he “spirit of Tahrir Square’’ has ushered in neither liberal democracy nor a rebirth of tolerance for Egypt’s ancient but beleaguered Christian minority.

One of the country’s leading liberal reformers, Ayman Nour, said Monday that with the latest bloodshed, the military has lost whatever goodwill it accrued last spring. The ruling Supreme Council of the Armed Forces almost surely doesn’t care. In the eight months since Mubarak’s ouster, the military has tried and convicted some 12,000 Egyptian civilians in military tribunals, often after using torture to extract confessions. The country’s hated emergency laws, which allow suspects to be detained without charge, not only remain in force, but have been expanded to cover offenses as vague as “spreading rumors’’ or “blocking traffic.’’ And just as Mubarak did, the generals insist that government repression is all that stands between Egypt and social chaos.

As for Egypt’s Coptic Christians, their plight has gone from bad to worse. Post-Mubarak Egypt has seen “an explosion of violence against the Coptic Christian community,’’ the international news channel France 24 was reporting as far back as May. “Anger has flared up into deadly riots, and houses, shops, and churches have been set ablaze.’’

With Islamist hardliners growing increasingly influential, hate crimes against Christians routinely go unpunished. Copts, who represent a tenth of Egypt’s population, are subjected to appalling humiliations.

As Jacoby notes, the violence against the Coptic minority appears to enjoy substantial public support. That reality reinforces my longstanding concern that prospects for liberal democracy in Egypt are undercut by the intolerant nature of majority [...]

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Egypt Sliding into Military Dictatorship

When the revolution that eventually overthrew Egyptian dictator Hosni Mubarak began, I warned that the end result could easily be a government as bad or worse than Mubarak’s was. In a revolutionary situation, liberal democratic forces often get outmaneuvered by more ruthless and better-organized opponents – even if majority public opinion would prefer a liberal regime. In Egypt, I pointed out, the establishment of a repressive regime is made more likely by the fact that public opinion is in may ways extremely illiberal. Unfortunately, this fear has so far been justified by events. As Thanassis Cambanis explains in the Atlantic, the new Egyptian government is well on its way to becoming a military dictatorship in some ways more repressive than Mubarak’s regime:

It’s hard to escape the feeling that Egypt’s January 25 Revolution is being eaten alive. It’s too soon to write it off, and too soon to predict that a full-fledged military dictatorship will rule the country for the foreseeable future; but that grisly outcome now is a solid possibility, perhaps as likely an outcome as a liberal, civilian Egypt or an authoritarian republic.

Eight months after a euphoric wave of people power stunned Egypt’s complacent and abusive elite, it’s possible to see the clear outlines of the players competing to take over from Mubarak and his circle, and to assess the likely outcomes. The scorecard is distasteful. The uprising — it can’t yet be fairly termed a revolution — forced the regime to jettison its CEO, Hosni Mubarak, in order to preserve its own prerogatives.

In the last two months, that regime has made clear how strong it feels. In September, in quick succession the military extended the hated state of emergency for another year, effectively rendering any notion of rule of law in Egypt meaningless;

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The Debt Deal and Divided Government

The debt deal passed today does not go as far in cutting spending as I would like. But it does nonetheless enact substantial cuts without any tax increases, with a significant likelihood of more cuts in the future. If the bipartisan commission created by the new legislation fails to come up with a spending cut plan or Congress fails to enact the plan, there will be additional automatic cuts in both civilian and military spending.

If nothing else, the deal provides additional evidence in support of the proposition that divided government reduces the growth of the state, and makes deregulation and spending cuts more likely. Certainly, it is inconceivable that any such deal would have been made had the Democrats retained control of Congress in 2010. One can argue that the Republicans would have enacted bigger cuts had they controlled the Senate and the White House as well as the House of Representatives. But it should not be forgotten that the GOP presided over massive increases in spending and regulation when they controlled all three under George W. Bush. The government-restraining effects of divided government are demonstrated not only by the last decade, but by previous historical experience.

The evidence on the effects of divided government undercuts Democrats’ claims that they can be trusted to get spending under control on their own. But it should also give pause to conservatives who believe that our fiscal problems will be solved if only the GOP can make a clean sweep in 2012. [...]

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