Month: January 2014

The Repubs won’t Douthat (crosspost from Crooked Timber)

John Quiggin11 Comments

Ross Douthat is something of a punchline at Crooked Timber . But, as I’ve argued here, he’s just about the last member of the once-numerous class of committed Republican intellectuals, all the rest having either defected to the left (Bartlett, Frum, Lind, Ornstein, Sullivan and many others) or descended into hackery (Reynolds, Brooks, the whole of the AEI/Heritage/CEI thinktank network[^1]). And, every now and then he writes something that raises important issues, at the cost of pointing up how hopeless his own program for Republican reform has become.

In this piece responding to the election of Bill De Blasio, Douthat tries to make a case that the Democratic Party won’t be able to take even the minimal steps needed to address the problem growing inequality (in both outcomes and opportunity). He starts with the obvious point that Obama came to office with a tax policy that could not possibly make a serious dent in the problem (repealing the Bush tax cuts for those with incomes over $250k) and proceeded to weaken it still further.

By itself this is pretty unimpressive. The fact that Obama is not a wild-eyed socialist, or even a traditional US liberal, but rather a moderate conservative may be a revelation in some Republican circles, but it is scarcely news to the rest of us.

Douthat’s more substantive claim is that the weakness of Obama’s tax policy is not a reflection of Obama’s own preferences but is dictated by the demands of the Democratic Party base. In Douthat’s telling, the base is dominated by socially liberal high-income earners who are absolutely resistant to any increase the taxes they pay.

This is a caricature, but most caricatures have some validity. As I’ve argued here, most people in the top 20 per cent of the income distribution, but outside the top 1 per cent, have done reasonably well in terms of income growth over the past thirty years, but have not, unlike the 1 per cent, been able to insulate themselves from the degradation of public services and the consequences of growing inequality.

Although only a minority of this group votes for the Democrats, their wealth and propensity to vote make them an important constituency. To have a plausible chance of political success, the Democrats need to convince at least some of this group that the benefits of living in a better society outweigh the costs of higher taxes.

But it’s important not to overstate this. Even if a more progressive tax program cost the Democrats some votes at the top of the income distribution, they could more than offset that by attracting middle and working class voters away from the Republicans, or simply by motivating them to vote.

It’s true, as Douthat says, that there is plenty of resistance to this program within the Democratic Party. But the once-overwhelming dominance of Wall Street and its advocates has been greatly weakened, notably because the financial lobby overwhelmingly supported Romney and shared his contempt for ‘the 47 per cent’. Unlike the situation in 2008, Wall Street is now clearly aligned with the Repubs.

And this is where the failure of Douthat’s own program (and the weaker versions proposed by other ‘reformers’ such as Levin and Ponnuru) becomes obvious. Douthat wants the Republican party to beat the Dems to the punch by offering an economic program that appeals to middle and working class voters. It’s patently obvious, however, that there is zero support for this program in any of the leading factions of the Republican Party, either among the leadership or in the activist base. There isn’t a single program benefitting the working class, from Social Security to the Earned Income Tax Credit to unemployment benefits to food stamps that can command the support of more than a handful of Republicans in Congress, and those few are likely to be driven out before long.

It seems clear, reading between the lines, that Douthat has already recognised this. As the NYT official Republican columnist, he faces some pretty big costs if he jumps ship (not to mention his tribal affiliation with conservative Catholicism). Still, I can’t see how he can go on pretending much longer.

[^1]: Some of these were always hacks, but we didn’t notice so much back in the day.

Be careful what you wish for

John Quiggin155 Comments

So, Kevin Donnelly, newly installed as Pyne’s curriculum advisor wants more religion in Australian public schools. Donnelly bases his arguments on the claim that “Australia is a predominantly Christian country“. More generally, his argument is that we need to inculcate a commitment to the”institutions, values and way of life” of the Australian majority.

Before making arguments like this, Donnelly might want to take a look at the 2011 census data which shows that barely 50 per cent of those aged under 25 stated a Christian religious affiliation. In a dicussion of this last year, we found a combination of demographic effects and switching, which implied that Christians will probably be a minority of the population by the 2020s, as they already are in the UK.

Since around 30 per cent of young people attend private schools most of which state a Christian affilation, it’s a safe bet that the majority of public school students are non-Christian. Certainly, “no religion” is the biggest single denomination for the under 25 age group. So, if you accept Donnelly’s “majority rule” argument, there’s a strong case for saying there should be more explicit atheism in public schools.

More generally, Christians should think carefully before lining up for this kind of culture war. Australia has been mercifully free of the kind of “new atheism” represented by people like Richard Dawkins and Sam Harris. Atheists, agnostics and the religiously indifferent have been happy to live and let live, without feeling the need to engage in denunciation of religion. But if Christian activists like Abbott and Donnelly want to use their current bare majority to impose their religous views on the rest of us, they ought to expect the same when they become a minority, as is virtually inevitable.

Religion is currently favored in all sorts of ways in Australia, from tax deductions and exemptions to publicly funded chaplaincy programs. There hasn’t been much fuss about this, but if the right chooses to engage in a religious culture war, all that will change.

Philadelphia Story (crosspost from Crooked Timber)

John Quiggin26 Comments

I’m on the way back from bitterly cold Philadelphia at the moment after attending the meetings of the American Economic Association (and a bunch of related societies). I was at a very interesting session on long-run discounting, which had a panel of six with (as is common) one woman[^1]. Looking around the room, I realised that the panel was actually balanced (inside econometric joke) when compared with the audience, which was about 90 per cent male.

I don’t think that the academic economics profession is quite as male-dominated as that. Some casual discussions suggested a couple of hypotheses:

(i) There were some parallel sessions on gender issues for which the audience was mostly female (not surprising, but kind of ambivalent)

(ii) Men were more likely to attend the sessions while female colleagues were more likely to be on the hiring teams. For those unfamiliar with this exercise, a large part of academic conferences consists of academics sitting in hotel rooms for days on end while a string of recent PhDs give a 15 minute pitch on a piece of research (their ‘job market paper’) followed by a ritual Q&A (a plausible but depressing story)

I get the impression that academic philosophy is even worse than economics, but that most other disciplines are better. Any thoughts?

Austerity in Australia, 1980s style

John Quiggin50 Comments

The Sydney Morning Herald has an editorial praising the expenditure cuts introduced by the Hawke-Keating government in 1986 and 1987, and suggesting that Abbott should copy this example. Apparently, according to the Oz, Hawke and Keating themselves have endorsed this view (I haven’t gone behind the paywall for the full article).

This argument carries a great deal of force, because, as we know, the Hawke-Keating cuts restored the budget to surplus, leading to Keating’s famous declaration that the 1988-89 Budget was “the one that brings home the bacon”. Leading scholars like Alesina and Ardagna have pointed to this exercise as one of the great success stories of “expansionary austerity”.

What’s that you say? The economy fell in a heap in 1989, leading to a decade of deficits and fifteen years of high unemployment? To quote another Keating aphorism, that was “the recession we had to have”. I guess we are about due for another.

Time for Turnbull …

John Quiggin56 Comments

… to speak up in defence of climate science, or give up any pretense of being better than the rest.

If there is one prominent figure on the right of Australian politics[1] who could plausibly claim to be both sane (on issues such as climate change) and honest, it’s Turnbull. He has stood up in the past, notably against Abbott, but has said nothing (AFAICT). Until relatively recently, he could reasonably claim that the government’s policy was based on acceptance of mainstream climate science, and that, even if he disagreed with Direct Action, he was bound by the principle of cabinet solidarity. But a string of events, culminating in Maurice Newman’s latest idiocy have made this position untenable. If Turnbull remains silent, he is tacitly accepting denialism as the view of the government of which he is part.

It’s possible that speaking up could cost him his ministerial view. But, as Tony Abbott observed recently, that might be a liberating experience. And, unlike the GMH workers to whom Abbott was referring, it’s not as if Malcolm needs the money.

fn1. Two former leaders of the Liberal Party, Malcolm Fraser and John Hewson, have taken a strong stand on climate change. But Fraser has quit the party, and Hewson was threatened with expulsion over this and similar remarks.