Home > World Events > Is the tide turning?

Is the tide turning?

February 22nd, 2013

It’s easy to overestimate the significance of a single electoral cycle (look at the Repubs after 2010), but there really does seem to have been a big shift in US political debate. Of course, that’s from a position where centrists like (first-term) Obama were occupying the positions held by moderate Republicans 25 years ago. It’s reasonable to feel a bit ambivalent about ‘victories’ like repealing the most regressive bits of the wholly regressive Bush tax cuts. A couple of links of interest (a few weeks old, but I’m running behind on most things)

* The Hoover Institution’s Policy Review is ceasing publication, and its final issue includes a piece by longtime editor Tod Lingren who concedes defeat, at least for the moment, to what he calls Left 3.0. This is his name for the self-described “Democratic wing of the Democratic party” which has, in his view, absorbed and tamed the radical left, defeated the Clintonite New Democrats, and dominated the Republicans. Lingren is surprisingly sympathetic, essentially implying that the only thing wrong with Left 3.0 is that too much egalitarianism is bad for economic growth

* Michael Lind gives chapter and verse supporting a view that I advanced a while ago, that US politics is best understood by treating “Southern White” as an ethnicity. There’s an interesting comparison to the now-disappeared nativist movements among Northeastern Yankees in response to Irish and other European immigrants

If US politics does shift to the left, what effects will that have elsewhere? Even the most liberal Democrats would be centrist at best in most countries, and their most radical goals (single-payer health care, a progressive income tax, parental leave and so on) would be uncontroversial in most places, so there won’t be much direct effect. On the other hand, in Australia and other English speaking countries, a large slab of the right wing gets its talking points from the US Republican bubble, via the Murdoch press, and look to an idealised version of the US as a free-market model. If the Repubs are discredited at home, that will create some problems for their followers abroad.

Categories: World Events Tags:
  1. Jim Rose
    February 22nd, 2013 at 19:23 | #1

    David Bernstein at http://www.volokh.com/2013/02/18/republican-party-doing-surprisingly-well-from-at-least-one-perspective/ listed these blows that should have marked the GOP already for oblivion:
    1. Crime is no longer be an important political issue;
    2. No soviet union to demonise
    3. A Republican president so botched foreign wars that the Democrats have a public opinion advantage on foreign policy;
    4. A Republican president presided over the beginning of a great recession
    5. The GOP want to cut Medicare spending and privatise Social Security
    6. African Americans, Asian American and Hispanic are a much larger share of all voters and vote overwhelmingly Democratic;
    7. The evangelical wave of the 80s has waned.

    The GOP controls 30 governorships, the House, has a chance at taking the Senate in 2014 and can’t be written off for 2016. Parties rarely hold the white house for 12 years.

    The GOP has consistently won close to half or more of the American electorate except when Perot was running. The last democratic presidential landslide was LBJ.

  2. David Allen
    February 22nd, 2013 at 19:33 | #2

    Any shift to the left will be solely caused by moving the political labels to the right until Genghis Khan is a socialist.

  3. Ikonoclast
    February 22nd, 2013 at 20:42 | #3

    @David Allen

    Absolutely correct. It’s pure fantasy to continue to believe any meaningful change can happen within the current oligarchic capitalist system. The one party totalitarian state and crony capitalism of China is no answer either. There are no politically hopeful developments anywhere in the world and we continue to rush towards environmental catastrophe. The prognosis for the collective patient (homo sapiens) is not good.

  4. Katz
    February 22nd, 2013 at 20:43 | #4

    Lingren’s asides about the political and cultural disunity of the Right are more informative than his arguments about the alleged dominance of the alleged Left.

    After all, the only substantive advantage that he recognises as being enjoyed by the Left 3.0 is an efficient electoral machine. There is no reason why the Repubs can’t have an even better competitor by 2014.

  5. TerjeP
    February 22nd, 2013 at 21:08 | #5

    There is a civil war raging within the Republican Party. A lot may change as and when that war is finished. Of course it depends on which faction wins.

  6. Sancho
    February 22nd, 2013 at 21:09 | #6

    On the other hand, in Australia and other English speaking countries, a large slab of the right wing gets its talking points from the US Republican bubble

    It’s become quite fashionable for garden-variety conservatives to label themselves “libertarian” and simply repeat the worst Tea Party memes, while seeming comically unaware of the contradiction in demanding absolute freedom from the authority of elected government while asserting the absolute authority of the monarchy and Vatican.

  7. Sancho
    February 22nd, 2013 at 21:10 | #7

    @Sancho
    I need to work on some basic HTML, clearly.

  8. Patrickb
    February 22nd, 2013 at 21:32 | #8

    TerjeP :
    There is a civil war raging within the Republican Party. A lot may change as and when that war is finished. Of course it depends on which faction wins.

    And I’d speculate that if the ‘tea party’ faction manages to claw back their lost momentum, well a 3 term Democratic While House is on the cards. The GOP needs a Nixon, a pragmatic guy who talks tough but actually avoids confrontation.

  9. Jordan
  10. TerjeP
    February 23rd, 2013 at 05:52 | #10

    I think Nixon was a terrible president.

  11. Newtownian
    February 23rd, 2013 at 07:25 | #11

    @TerjeP

    TerjeP :There is a civil war raging within the Republican Party. A lot may change as and when that war is finished. Of course it depends on which faction wins.

    Any good links to substantiate this? Say to a good review. There are always dissenters and froth and bubble in a system that size – so a random search isnt going to be informative beyond telling you what you want to hear (a possible exception exception is Chomsky whose views are familiar and so provide a kind of astigmatic telescope to look at the US with – a bit like the way you can understand how the catholic church isnt changing by reading the Pope’s pronouncements.).

    Conversely I hate to say it but I’m not convinced Obama offers much alternative either. Even though he appeals as a smart decent man he doesnt seem to have clear alternatives beyond more Clinton like policies which if I’ve read my history right set up the economic mess of the present just as much as George Bush’s idiocies. I use as a touch stone here that their Fed Reserve and economic gurus still seem to be Goldman Tweedle Dums v. Tweedle Dees.

  12. hc
    February 23rd, 2013 at 07:31 | #12

    @ Sancho

    “It’s become quite fashionable for garden-variety conservatives to label themselves “libertarian” and simply repeat the worst Tea Party memes, while seeming comically unaware of the contradiction in demanding absolute freedom from the authority of elected government while asserting the absolute authority of the monarchy and Vatican.”

    Sums it up beautifully. Libertarianism is a word with the nice connotation of “liberty” but the looney right that make so much noise are better described as loonitarians – wilfully ignorant about evidence that shows the stupidity of thei views.

  13. Ron E Joggles
    February 23rd, 2013 at 07:47 | #13

    Ikonoclast “There are no politically hopeful developments anywhere in the world and we continue to rush towards environmental catastrophe.”
    – But you’re only saying this because it’s true!

    “The prognosis for the collective patient (homo sapiens) is not good.”
    – The patient is our poor unappreciated planet; the disease organism is the vast teeming plague of humans.

  14. J-D
    February 23rd, 2013 at 08:30 | #14

    @Jim Rose Since the era of competition between the Republican Party and the Democratic Party began, there have been twelve instances of Presidential elections where one of them has contested a Presidential election after having held the Presidency for the preceding eight years. Of those, the incumbent party has won five (1868, 1904, 1928, 1940, and 1988)–all by large margins–and lost seven (1860, 1920, 1960, 1968, 1976, 2000, and 2008)–in 1960, 1976, and 2000 only narrowly. There’s no evidence of a statistical pattern.

  15. TerjeP
    February 23rd, 2013 at 08:31 | #15

    Here is a small taste of the civil war I’m referring to in which a prominent conservative takes on libertarians.

    http://m.facebook.com/l.php?u=http%3A%2F%2Fvideo.foxbusiness.com%2Fv%2F2181705492001%2F&h=CAQH5B9lG&enc=AZMpitljC7M0NuD9KC8hR5r-Ommn-t2RC9E7fuiePa93QQ3ucqBJQAIcfKHdAWvYs9rz-9SfrVF3xGVdiKfnc3MGWurQtkiKLCh7iMfAS3807D0pY8YvJtcxjtD0aPQNr0SbMfUuxACMj_MgDAMXn5Wv&s=1

    The libertarians may ultimately fail in their attempted takeover of the Republican Party but you do now have prominent figures like Rand Paul who want to cut military expenditure, legalise pot and discard with federal bureaucracies. If Rand Paul gets the nomination for presidential candidate in 2016 then the GOP will have been transformed. The left will still hate it for a raft of reasons but it won’t be the same party.

  16. Jim Rose
    February 23rd, 2013 at 09:51 | #16

    @J-D Thanks for looking that information up. I think you should look more deeply at what it says.

    The last time a democrat was re-elected to a third term was 1940. Clinton and Obama were was the first democrats to be re-elected to the white house since 1940

    Bush 41 is the only republican since the 1920s and the end of the third party system to win a third term. between 1896 and 1932 the democrats were the southern racists and an urban catholic rump. they won the white house mostly when the republicans were divided.

    Correlation is not causation. Voters switch because of the accumulated baggage of the incumbent party brand and the challenger is defter at anticipating the median voter.

    Schumpeter’s theory of democratic participation is voters have the ability to replace political leaders at regular elections.

    Citizens have sufficient knowledge and sophistication to vote out leaders who perform poorly, vote in minimally competent replacements, and prevent serious misalignments between government actions and public opinion and at little cost in time or distraction from private pursuits.

  17. Jim Rose
    February 23rd, 2013 at 11:08 | #17

    as Hayek observed, the economist is asked more often to give advice on questions of public policy and yet his advice is usually ignored almost from the moment it is uttered.

    Karp Popper put up as the role for the social scientist in Prediction and Prophecy in the Social Sciences is to trace the unintended social repercussions of intentional human actions.

    He went on the argue that the rest of advice from social sciences is what we cannot do. For example, we cannot, without increasing .productivity, raise the real income of the working population.

    Popper concluded that the role of science in social life is the modest one of helping us to understand even the more remote consequences of possible actions; in other words, to choose our actions more wisely

  18. Jim Rose
    February 23rd, 2013 at 11:09 | #18

    Oops, wrong blog, sorry

  19. February 23rd, 2013 at 11:21 | #19

    Without the “butterfly ballot”, let alone the removal of people with overly black names from the electoral roll in Florida, the Democrats would have held the presidency in 2000 and all that data on failure to get re-elected would look totally different. The fact that the Republicans nearly won a third term in 1976 after Watergate makes equally clear that having been in for two terms is not that much of a disadvantage.

    If unemployment is below 6% by then I’d bet on a Democrat in a landslide. Indeed the only reason I don’t have money on a Democrat win right now is that I’d rather be investing my dough for four years.

  20. February 23rd, 2013 at 11:28 | #20

    BTW, I don’t entirely agree with this section “Even the most liberal Democrats would be centrist at best in most countries”. It’s true on economic issues, but not always across the board. The fact that Obama is to the left of Gillard on same-sex marriage is the most obvious example.

    More importantly, from my view, the 15-20 most liberal Democrat senators, and presumably a much larger numbers of members of the house, espouse positions on climate change hardly anyone in the ALP would utter. That shows no sign of being translated into meaningful action, so possibly it is a quibble with no significance, but I see this position stated a lot, and I think it deserves to be questioned.

  21. Fran Barlow
    February 23rd, 2013 at 12:23 | #21

    @Stephen Luntz

    Yes, it’s always a bit of a mix. Certainly in major policy areas like health, welfare, IR, fiscal policy, education, law and order the comment stands.

    There are however, no advocates from the majors for recreational drug liberalisation whereas in the US a number of states have moved in this direction. Some states have gay marriage.

    You’re pretty much barred from disavowing god or guns there of course. IIRC there are death penalties in 27 states of the union and they don’t seem bothered by racially differentiated contact with the justice system including on death row, nor the fact that their often private prisons are bursting at the seams.

    In Arizona it is proposed that health professionals deny medical service to the undocumented and report them to La Migra. In Alaska a senator has proposed a bounty on sea otters on the basis that they threaten fishing and crustacean exploitation. The NRA wants gun storage in every room in every building. In some schools it is proposed that creationism be given equal time with science.

    So yes, the politics of the US is out there and mad, for the most part with only minimal concessions to human reason here and there in some more “liberal” states.

  22. TerjeP
    February 23rd, 2013 at 13:15 | #22

    I could be mistaken Fran but I don’t think drug liberalisation was a platform position of either major US party. The states that liberalised generally did it through direct initative not party power. Obama could do a lot if he believed in ending the war on drugs but he shows no sign of being at all liberal on this issue.

  23. John Brookes
    February 23rd, 2013 at 13:20 | #23

    @TerjeP

    Lets hope its the anti-slavery faction…

  24. Ikonoclast
    February 23rd, 2013 at 14:38 | #24

    @Ron E Joggles

    That’s another way of looking at it. Humans do seem to be a plague species rapidly destroying the biosphere.

  25. Ernestine Gross
    February 23rd, 2013 at 15:26 | #25

    And, finally, the EU’s version of a financial transactions tax (Tobin tax) is a topic in the USA:

    http://www.nytimes.com/2013/02/22/business/a-tax-that-could-change-the-trading-game.html?pagewanted=1&_r=0&nl=todaysheadlines&emc=edit_th_20130222

    PS to Ikonoclast and those who have a strong negative reaction to the words ‘general equilibrium’. Tobin arrived at this financial transactions tax within the context of a general equilibrium model. There is a distinction between analytical models and beliefs.

  26. Chris Warren
    February 23rd, 2013 at 15:35 | #26

    @Ernestine Gross

    There is a distinction between analytical models and beliefs.

    There is a distinction between analytical models and reality.

    See this recent paper.

    http://research.chicagobooth.edu/igm/usmpf/download2.aspx

    You can see how pointless equation (3) is, if you substitute equation (5).

    Unless I have misunderstood something equation (3) is not consistent with equation (6).

    So how do you model stimulus?

  27. David C
    February 23rd, 2013 at 16:19 | #27

    I think Nixon was a terrible president.

    He created the EPA.

  28. J-D
    February 23rd, 2013 at 16:27 | #28

    @Jim Rose
    I think you should look more deeply. I said that the evidence wasn’t there for a statistical pattern. It isn’t. I presented my data in a manner designed to show patterns if there were any. You present yours in a manner designed to avoid making the patterns clear.

    You say, correctly, that the Democrats have not won a third consecutive term in the Presidency since 1940 as if that’s a long period of time. But for a proper analysis on this topic it isn’t. So far there have been only two occasions since 1940 when the Democrats have sought to win a third consecutive term in the Presidency (1968 and 2000). Yes, they failed both times, but failing two attempts is hardly sufficient indication of intrinsic difficulty.

    You also say, again correctly, that the Republicans have only once (in 1988) won a third consecutive term in the Presidency since the 1920s, as if that is a long period of time, but once again it isn’t for this purpose. Since the 1920s there have been only four occasions (1960, 1976, 1988, and 2008) when the Republicans have sought to win a third consecutive term in the Presidency, and from those four attempts they have one success and three failures, again hardly a sufficient indication of intrinsic difficulty.

    You may be able to find other reasons, theoretical and/or empirical, for concluding that winning the Presidency is harder for the incumbent party than for the challenging one, but simple enumeration of the track record is insufficient.

  29. Will
    February 23rd, 2013 at 19:21 | #29

    @J-D

    Don’t worry about him J-D. He is wilfully biased, and views absolutely every issue you can possibly think of in a “right = good, left = bad” paradigm. [Sarcasm] Yes, the evil left were responsible for Southern slavery as well, gee golly gosh [roll eyes, end sarcasm]. BTW Obama won by a landslide (320-208 electoral votes and ~4m votes), the largest since Reagan IIRC.

  30. Ernestine Gross
    February 23rd, 2013 at 22:07 | #30

    @Chris Warren

    The paper you link to is totally unrelated to the subject of my post. I suppose I should have written ‘there is a distinction between analytical general equilibrium models and the belief of ‘general equilibrium’.

    Setting this aside, I had a brief look at the paper you linked to. To the best of my knowledge the authors apply what is known in accounting as ratio analysis (sustainable growth of a company) to an otherwise unspecified macro-economy. You’ll have to address your question to macro-economists. IMHO exercises in rewriting accounting equations are not helpful in solving (ie reducing) the existing problems. But who knows, maybe the last economic rationalist needs to be shown the problem in a language or in a framework familiar to him or her. If the paper achieves that then this is a good thing.

    On the other hand, a Tobin type financial transactions tax is directed at a major cause of the GFC. I linked to an article on this topic. Another major component is the wealth distribution and taxation.

    The term ‘austerity’ means different things to Euro country economists to what it seems to mean to US economists. It seems to be pretty obvious that the US is not going to get out of its mess by ‘stimulus’ (ie giving more fiat money to the financial institutions in exchange for their private debt money denominated in the fiat money currency unit – which they call monetary policy – and increasing the budget deficit forever to keep a growing proportion of their population from starving). A Tobin type tax would introduce a little bit of austerity to the beneficiaries of the financial institutions and help a little bit in reducing the government deficit while keeping expenditure for economic purposes (eg the welfare of the population) constant.

  31. Jim Rose
    February 24th, 2013 at 08:12 | #31

    Will :
    @J-D
    Don’t worry about him J-D. He is wilfully biased, and views absolutely every issue you can possibly think of in a “right = good, left = bad” paradigm. [Sarcasm] … BTW Obama won by a landslide (320-208 electoral votes and ~4m votes), the largest since Reagan IIRC.

    Firstly, Obama won by 10 million votes in 2008. Clinton won by 8 million votes in 1996; and 4.8 million in 1992. Clinton won by larger Electoral College margins (370 & 379) than Obama. Bush 41 by 7 million votes in 1988 and with 426 electoral collage votes

    Secondly, incumbency is an advantage in congress but not for the follow-up nominee to a two-term president. Too much baggage.

    as in the Schumpeterian model, the nominee after a two-term president is punished for the errors of his party in office. Brand name capital has its rewards, but brands are there to attract punishment for transgressions by you and your compatriots too.

    Political brands grow in importance with rising incomes and thus the rising cost of time and of both paying detailed attention to politics and voting other than expressively.

    Not surprisingly, after two-terms, the nominee tries to present himself as a fresh face and distance himself from the outgoing president’s past through mild product differentiation

    Finally, it is good to see you have agreed with me in rejecting the “right = bad, left = good” paradigm. Posts that label people as lackeys, hacks or deniers are examples of that paradigm.

    I have frequently posted on this blog how it is an error to assume that your opponents are ignorant or steeped in moral turpitude, preferable both. People mostly disagree about the consequences of competing ways of achieving common goals.

  32. Jim Rose
    February 24th, 2013 at 08:13 | #32

    @Will Firstly, Obama won by 10 million votes in 2008. Clinton won by 8 million votes in 1996; and 4.8 million in 1992. Clinton won by larger Electoral College margins (370 & 379) than Obama. Bush 41 by 7 million votes in 1988 and with 426 electoral collage votes

    Secondly, incumbency is an advantage in congress but not for the follow-up nominee to a two-term president. Too much baggage.

    as in the Schumpeterian model, the nominee after a two-term president is punished for the errors of his party in office. Brand name capital has its rewards, but brands are there to attract punishment for transgressions by you and your compatriots too.

    Political brands grow in importance with rising incomes and thus the rising cost of time and of both paying detailed attention to politics and voting other than expressively.

    Not surprisingly, after two-terms, the nominee tries to present himself as a fresh face and distance himself from the outgoing president’s past through mild product differentiation

    Finally, it is good to see you have agreed with me in rejecting the “right = bad, left = good” paradigm. Posts that label people as lackeys, hacks or deniers are examples of that paradigm.

    I have frequently posted on this blog how it is an error to assume that your opponents are ignorant or steeped in moral turpitude, preferable both. People mostly disagree about the consequences of competing ways of achieving common goals.

  33. Chris Warren
    February 24th, 2013 at 09:33 | #33

    @Ernestine Gross

    Huh?

    If your claim:

    There is a distinction between analytical models and beliefs.

    was “totally unrelated to your post”,

    why? why? why? did you include it.

    Given that you did include it - renders void any subsequent claim that issues concerning analytical models are “totally unrelated”.

    I don’t have any issue with Tobin Tax.

    Given that the current economic post-Keynsian mafia (Mankiw, Golub, and Delong etc) parade their arithmetic as economics even to the point of shear arrogance in the case of Mankiw who holds:

    4. Your math courses are one long IQ test. We use math courses to figure out who is really smart.

    [gregmankiw.blogspot.com.au/2006/09/why-aspiring-economists-need-math.html]

    Consequently it is amusing to me to see such crazy “maths” produced supposedly modelling Keynesian stimulus. I just laugh, until someone makes sense of equations (3), (5), (6) as cited above.

    A Tobin tax may be the only option now. But which economist has come out and said so?

  34. Fran Barlow
    February 24th, 2013 at 10:30 | #34

    David C:

    {Nixon} created the EPA.

    True but in addition to all the very well known extremely nasty things for which he was responsible — he really does fit the description attributed to him of ‘war criminal’ — he also laid down the architecture for the massive Federal subsidies to corn, which policy created an unusually negative publice balance of benefits — harming even the notional recipients, as well as wrecking the land, changing the beef industry, indirectly fueling obesity, agricultural dumping in Latin America, distorting energy policy, disrupting sugar markets and much else. Pretty much everyone lost outside of a handful of large agribusinesses, the fast food industry, and the Repugs politically through their influence on mid-western states and thei ability to get massive financial support from the said handful of beneficiaries.

  35. Ernestine Gross
    February 24th, 2013 at 10:36 | #35

    @Chris Warren

    You are being difficult.

    It is you who seemed to consider the paper you linked to as an ‘analytical model’, not I. It is you who, accidentally or deliberately first ignored the context of my reference on ‘analytical models’. I provided the context explicitly and you continue ignoring it. So it is deliberate.

    Please address your question to the authors of the paper you linked to. I am not interested in such papers.

    Apparently you don’t know James Tobin is a Nobel laureate economist and you don’t bother reading the article I linked to. From this article you could deduce that Euro economists not only know about the Tobin tax but aren’t much, if at all, influenced by the authors you list.

  36. Bowman Walton
    February 24th, 2013 at 11:05 | #36

    On the OP, no, it is too late and too lazy to understand Southern white voters as an ethnic group. True, they often vote Republican, from an illiberal palette of moral values (cf Jonathan Haidt’s Righteous Mind, and Marc Hauser’s Moral Mind), and in some opposition to a perceived threat from Southern black voters. However, it would be more prudent today to use the new analytical tools at our disposal to understand the complex “psychography” of these diverse electorates than to try to force them all into the mold of an “ethnic group.” This will be particularly wise if the Republican Party metamorphoses into a post-conservative party of libertarians better able to compete outside the South for the votes of independents and able to flip some liberals to their side. Just as Nixon’s Southern Strategy was played out over a long game, so the broadening of Democratic appeal in the old Confederacy requires more than the usual tactical thinking of the election cycle.

  37. Tony Lynch
    February 24th, 2013 at 12:13 | #37

    It’s interesting to see the “a turn to the Left” is in no way in tension with neo-conservative “security” policies. There was a time under Bush when Krugman’s “Conscience of a Liberal” did seem to find such a tension, but hey! those days are gone…

  38. Chris Warren
    February 24th, 2013 at 12:19 | #38

    @Ernestine Gross

    OK probably best to clear up that issue….

    If the series of equations (1) – (6) cannot be categorised as an “analytical model” why not?

    It seems to me that this is something that most would view as an “analytical model” – at least for the purposes of general discussion.

    Are you saying that your claim:

    There is a distinction between analytical models and beliefs.

    is restricted to a context that is being ignored? I assumed it was a general statement.

    My link was only illustration, and I am sure that if the same mathematics was used in any models you want to propose – the result would be the same.

    The GFC is not a mathematical catastrophe – it is a catastrophe in “political” economy.

  39. J-D
    February 24th, 2013 at 15:26 | #39

    @Jim Rose
    In 40 Presidential election contests between the Republican Party and the Democratic Party, there have been 24 where the party of the incumbent President has renominated the incumbent, and 16 where it has nominated somebody else.

    Of the 24 instances of the incumbent President running for re-election, 17 have been successful and 7 unsuccessful.

    Of the 16 instances where the incumbent President was not nominated for re-election, the incumbent’s party’s candidate has been successful in 7 and unsuccessful in 9.

    So the conclusion the track record supports is that the incumbent party’s chances are significantly improved by renominating the incumbent, if possible, but that this factor can fairly easily be outweighed by others. A bookmaker handicapping on that record alone would have to conclude that the odds of the Democrats retaining the Presidency in 2016 are significantly poorer than in 2012, but not drastically poorer. Putting it another way, it’s reasonable to suppose that the Democratic candidate in 2016 will metaphorically be carrying more weight than Obama in 2012, but not enough to be written off this early.

  40. Ernestine Gross
    February 24th, 2013 at 17:08 | #40

    @Chris Warren

    1. Equations 1 to 6 do not feature in any analytical economic model to which the Tobin tax paper belongs.

    2. The topic of this thread is: “Is the tide turning?”. The purpose of my post was to link to a NYT article in which the Euro-country financial transactions tax (Tobin type tax) is presented to the US audience. IMHO this event belongs to the topic of this thread.

    Discuss your linked paper with whomever you want; I am not interested.

  41. John Quiggin
    February 24th, 2013 at 17:51 | #41

    “This will be particularly wise if the Republican Party metamorphoses into a post-conservative party of libertarians better able to compete outside the South for the votes of independents and able to flip some liberals to their side. ”

    Sure, if the Republicans weren’t a coalition of white Southerners and pro-rich voters, then by deffinition white Southerners wouldn’t vote for them en bloc and they wouldn’t be a politically distinct group. But until that happens (I see no sign of it), treating white Southerners as an ethnic block vote makes perfect sense.

  42. Jim Rose
    February 25th, 2013 at 05:38 | #42

    Ernestine Gross, Sweden led the way with Tobin taxes in 1986: a 0.5% tax on the purchase or sale of an equity security. See http://en.wikipedia.org/wiki/Tobin_tax#Sweden.27s_experience_in_implementing_Tobin_taxes_in_the_form_of_general_financial_transaction_taxes

    The revenues from the Tobin tax on fixed-income securities were initially expected to be 1,500 million Swedish kronor per year.

    The actual revenues collected did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million. A lesson never learned by Tobin tax advocates.

    As taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting the revenues from the equity transactions tax. what an absolute bummer!

    During the first week of the tax, the volume of bond trading fell by 85%; futures trading fell by 98%; and the options trading market disappeared. Trading for over 50% of Swedish equities moved to London by 1990.

    A true Robin Hood tax: the Tobin tax robbed from the Swedish capital gains taxman and gave to the British stamp duty taxman.

    p.s. I am sure that with the City of London as a global financial centre, the British are cheering on efforts of other EU members to sabotage their own financial markets with a Tobin tax.

  43. Bowman Walton
    February 25th, 2013 at 07:22 | #43

    @John Quiggin
    Thinking of the metropolitan vote in Southern states (including Texas, the indispensible keystone of GOP strategy) I would already bet that ten years of Obama style microtargeted GOTV would beat ten more years of Romney style “ethnic bloc” appeals to whites that rely on the not too reliable GOTV of the preachers. This is not just about the technology; it’s also about actually having the intellectual and political capital to say something adaptive to microtargeted voters. The GOP in its current form has neither, while as we have seen Democrats can at the very least reduce evangelical turnout for its candidates by stressing the sin and greed of plutocrats. If the national party learns something on the ground about that region, Democrats may even find some further opportunities. Alas, another tide will turn if the plutocrats decide that the Southern preachers’ flaky GOTV is no longer worth the nationwide electoral cost of their alienating social stances– as younger Republican strategists already have. Either way, viewing much of the country thtough a hated stereotype defeats much of the point of electoral analysis and seems a gift to the GOP.

  44. February 25th, 2013 at 10:27 | #44

    @Ernestine Gross

    As a related issue to the dislike of ‘general equilibrium’ you brought up, I think the problematic definition of Post Keynesian is an interesting issue.

    Post Keynesians do not have a universally accepted theory or model amongst the economists being classified undered this school, i.e. the difference between Davidson, Tobin or Minsky. A lot of them seems to be classified as Post Keynesians by other economists simply due to their perception of the role of the government. Some people who follows economics debate who likes Post Keynesians and dislike Neo and New Keynesian sometimes based on their policy advice rather than the model they use (Tobin Tax is a great example of this). Needless to say, a lot of economists who uses ‘general equilibrium’ model or neoclassical synthesis models oppose the Tobin tax while a lot of economists using other models supports the Tobin Tax. In my opinion, the like or dislike and the classification of Post Keynesian or non-Post Keynesian is sometimes more political than the difference in theory and modelling.

  45. Ernestine Gross
    February 25th, 2013 at 13:00 | #45

    @Jim Rose

    1. The Swedish experience is of limited relevance. As you correctly copied from the wiki site, the tax revenue was less than anticipated but still strictly positive at all times. On the other hand the high leverage financial transactions (derivatives) “disappeared”. Given that derivative markets are a major factor in the GFC, I suppose you consider this a positive. So far, all good. The limitation of the experience lies in the details of the institutional arrangements, ie the details of the EU tax laws as compared to those in Sweden.

    2. Under the EU system, a Euro member financial institution who wishes to transact in the City of London can avoid the financial transactions tax only if it becomes an exclusively UK institution and transacts exclusively with non-Euro partners. There is no tax in the primary market for equity (ie new issues) but there is a tax on secondary market transactions.

    3. You seem to have forgotten to mention the poll result from UK residents, mentioned in the wiki page; the great majority of the public is in favour. Lets wait and see how a democratically elected representative government decides.

  46. Ernestine Gross
    February 25th, 2013 at 13:07 | #46

    @Tom

    I agree, the Schools of Thought fights are a hindrance in so many ways. And, there is the distinction between macro-economic models, classified as ‘general equilibrium’, and those theoretical models where the distinction between micro- and macro is meaningless.

    I agree, the ‘fights’ often degenerate into pro- or anti- “government” (as if this would make sense).

  47. Jim Rose
    February 25th, 2013 at 16:08 | #47

    Ernestine Gross, public opinion is in favour of lots of silly and hateful things. don’t be selective.

    The theoretical literature on political representation focused on whether representatives should act as delegates or as trustees.

    Trustees are representatives who follow their own understanding of the best action to pursue as Edmund Burke wrote:
    “Parliament is not a congress of ambassadors from different and hostile interests; which interests each must maintain, as an agent and advocate, against other agents and advocates; but parliament is a deliberative assembly of one nation, with one interest, that of the whole; where, not local purposes, not local prejudices ought to guide, but the general good, resulting from the general reason of the whole.

    You choose a member indeed; but when you have chosen him, he is not a member of Bristol, but he is a member of parliament. … Our representative owes you, not his industry only, but his judgment; and he betrays instead of serving you if he sacrifices it to your opinion.”

    make up you mind? is the Tobin tax to raise billions in revenue, as promised, or to close
    down markets? Paul Hanson was a support of a Tobin tax, so mind your company.

  48. Ernestine Gross
    February 25th, 2013 at 16:23 | #48

    @Jim Rose

    1. You lost the economic argument in contemporary life. Trying to take refuge by quoting an 18th century Irish philosopher and parliamentarian doesn’t change anything.

    2. I don’t care whether or not the guitarist Paul Hanson is in favour of a Tobin-type tax or not.

    3. I don’t wish to know why you care about the guitarist Paul Hanson in the context of measure to improve the usefulness of financial markets for economic outcomes.

  49. Jim Rose
    February 26th, 2013 at 05:38 | #49

    Ernestine Gross , Is the Tobin tax designed to raise 35 billion euros in revenue, as promised by EU Tax Commissioner Algirdas Semeta, or is it designed to close down markets? You seem keen to avoid this either–or question about its impact on speculation.

    The $3.7 trillion-a-year Eurobond market came into being after JFK imposed an interest-equalization tax in 1963 to reduce investment in foreign securities by U.S. investors and to ease a so called balance of payments deficit.

    See http://www.bloomberg.com/news/2013-02-04/eurobond-50th-anniversary-shows-tobin-tax-risks-euro-credit.html

  50. Ernestine Gross
    February 26th, 2013 at 10:05 | #50

    @Jim Rose

    Warning: Do not complain if you feel hurt, embarassed or otherwise offended by anything I write in my response to your latest post adressed to me.

    A) You write: “Is the Tobin tax designed to raise 35 billion euros in revenue, as promised by EU Tax Commissioner Algirdas Semeta, or is it designed to close down markets? You seem keen to avoid this either–or question about its impact on speculation.”

    1. Error: I used the term Tobin-type tax, while you write Tobin tax. Update your alleged knowledge, please.

    2. I don’t answer stupid questions. Your question falls into this category. Think about it [hint: How many possible answers are to a problem that is representable by an open interval (0,1)? How many possible answers are to a problem that is representable by an open set {(x,y,z) element in a three dimensional Euclidean space}? What is the difference between an open set and a closed set? What is the difference between problems that can be represented by 1 variable, and those that are representable by 2 variables, 3 variables, n variables?].

    B) You write: “The $3.7 trillion-a-year Eurobond market came into being after JFK imposed an interest-equalization tax in 1963 to reduce investment in foreign securities by U.S. investors and to ease a so called balance of payments deficit.”

    Your paragraph is as relevant to the topic of my initial post as the information on the total amount I paid yesterday for blinds for one window, or, if you like, the current market price of a particular type of fish in Fiji.

    Your writing bores me to an extent that it is almost painful. So please find a communication partner who has a higher bordom threshold than I have.

Comment pages
1 2 11336
Comments are closed.