Saturday, December 13, 2003

The Draft European Constitution 


lgf: The Draft European Constitution

Friday, December 12, 2003

Elections Inc 

Considering the agent-principal problem. One example of this problem happens in companies; the principals (shareholders) hire the agents (management) to do what's best for the shareholders. But management might be tempted into doing things that are against their wishes, such as increasing their own salaries or perks, or empire-building by buying other firms at the sacrifice of share-price.

Is the problem with a democracy any different? The people (principals) hire politicians (agents) to do what's best for the people. But politicians are tempted to do things against our best interests, such as increasing their own salaries or perks, or empire-building through legacies built on pork. More importantly, politicians might impose their beliefs on the people about how society should be organized or reorganized. The most egregious examples of this would be dictatorship, where politicians become very unresponsive to the priorities of the people. The purpose of liberal democracy, with its elections and free speech and due process, can be seen as attempts to limit the worst extremes of the agent-principal problem. But it's a very blunt tool.

There is a long debate in democracies regarding the paradox of a government of and by the people in a society where most of us don't believe the people are informed enough to rule themselves. Indeed that's why we have indirect democracy, and such paternalism is behind McCain-Feingold restrictions on free speech, recently held up by the Court. Traditionally, it's been considered beyond the pale in a democratic society to suggest that the people are so ignorant that exposing them to advertising invalidates their expressed choices. However, as we see in McCain-Feingold this idea is gaining currency. In fact, whatever the uncomfortable implications, the notion that voters are too ignorant to rule themselves is, unfortunately, hard to dispute. Political conventional wisdom has it that money matters for campaigns, even though a dispassionate and informed electorate should be immune to political ads. A majority of Americans believe nobody should pay taxes greater than 30%, yet a majority of americans also believe taxes should not be cut (top rates today are well past 50%, including state and local taxes). Liberals and Conservatives alike complain that Americans simply don't grasp the facts; they do not understand the percent of taxes paid by the rich, or the impact of minimum wages or free trade, etc. etc.

In theory the corporate agent-principal problem stems from the fact that it is costly to monitor agents. In political terms, indeed for the average citizen it is too much work to understand the issues and to follow the policy minutiae. After a long day's work who wants to sit down with a well-worn copy of John Stuart Mill, then discuss whether HR110 has a chance of getting through committee? The principals aren't invested enough to care enough to monitor their agents. Now in business this happens as well; small shareholders don't read through financial documents. But the big shareholders do, and they basically figure out what a share is worth. The small shareholders then basically freeload on that analysis, figuring that if the big guys said Ebay's worth $55 then it must be about right. And when it comes time to vote on company policy, small shareholders tend to abdicate their votes figuring, again, that the big shareholders know what's best. So again they freeload on the analysis and good judgement of large shareholders.

Converting all the players into a political situation, you've got a citizenry which can't be bothered to inform itself representing small shareholders. Then the media can be seen as the financial analysts; their goal in life is to represent the truth as they understand it, and they are relatively disinterested referees, and they're a force for good as long as new media can enter the idea market. That leaves the large shareholders. In corporate governance they're the kingmakers. They're the ones who actually vote. They use the financial press, but generally give things a long, hard analysis of their own before casting their votes. They are sophisticated consumers of information, not easily swayed, and trial-and-error has shown that leaving corporate governance in the hands of the largest shareholders is the way to best ensure that shareholder interests are represented by management. The tricky part here is that the political equivalence of large shareholders would be interest groups. From political parties to moveon.org to the NRA, it is interest groups which invest the resources to truly understand what's happening. They have closer relationships with politicans than even the press; I would bet money that NRA or NAACP know which strings to pull to get things done in Washington, moreso than the punditry at the Journal or Times. On this interest-group-as-large-shareholder metaphor, the purpose of interest groups is to bundle votes. However, in a system where we disallow the outright sale and possession of votes (i.e. NRA cannot "hand-over" 20 million votes), yet where people can be influenced only by advertising and media (both buyable, in the short and long term, only with money), does this lead to the conclusion that the best way to run our democracy is to minimize votes and maximize money? If we open it up to a free-for-all where unions, companies, NAACP and NRA, moveon.org and Cato can all have a voice in proportion to the money they raise, will we end up giving far more of a voice to people than they have today?

In economics, policies' second- or third- degree of causation frequently ends up being the exact opposite of the original intention. Similarly, could it be that, by increasing the role of money in politics, we'll have a democracy which is actually more responsive to the will of the people?

Bush Poker 

Poker is a good metaphor for Bush's presidency. The man likes to gamble; he gambled on Afghanistan, then Iraq, he made his tax cuts larger and larger, intervened in Senate races. The man loves risks.

Bush as gambler puts into context recent wholesale adoption of traditional Democratic values. Specifically, seen out of context the Rx plan and Ridge's musings about immigrant amnesty seem strange, especially the latter, coming from the presumed anti-immigrant party. So what's going on here? One possibility, admittedly, is simply pandering to the Democrat's base. However, there's another intriguing possibility: Is Bush vandalizing social programs so we'll turn against them?

To be fair, this conclusion requires a few assumptions. First, let's assume that Bush is fundamentally a small-government conservative. While there is some disagreement here, consider that at least part of Bush's tax cuts could've been parcelled out to South Dakotan Indians or Palm Beach seniors. Now a true small-government type would be tempted to tilt at the two programs which eat up nearly half of our Federal budget: Social Security and Medicare. So Bush, Rove and team must be burning the midnight oil hatching nefarious plans to reign in those programs. Now let's make a second assumption, that today many Americans see Social Security and Medicare as basically fair and affordable. Perhaps this is why these two programs have been considered the "Third Rails" of politics.

Now what's Bush to do if he'd like to get rid of the two largest social programs in the country? Since both fulfill an important function (i.e. keeping seniors from poverty and disease), politically he can't just end them. So the only way to keep the functions but get it away from the clutching hands of big government is to privatize both. So far, so much conventional wisdom.

Now the conspiracy-inspiring question is: How do you de-fund a popular program widely seen as fair and affordable? Well, it's obvious; you make the program less fair and less affordable. Thus Bush expands Medicare, contemplates amnesty to 8-12 million social service-hungry immigrants, and now discussion about Mexican citizens receiving Social Security. "Talk about an incentive for illegal immigration," said GOP Rep. Ron Paul of Texas. "How many more would break the law to come to this country if promised U.S. government paychecks for life?" And that's the trap springing. You simultaneously take voters from Democrats, and spread 'round the notion that all these social programs are becoming giveaways to undeserving people. It's a gilded "welfare queens" strategy but more clever; convince people that Medicare and Social Security are both unaffordably expensive and are unfair transfers of their hard-earned money into the pockets of undeserving people, and in the meanwhile hoover up the votes of grateful beneficiaries, preferably those of your opponent's base.

In a sense this is a twist on the "strategic deficit" argument (that you create a deficit by cutting taxes, since that's the only way Congress will ever cut spending). Let's call it "strategic vandalization"; that is, you intentionally debase and bloat programs because that's the only way to turn people against them. And in the meanwhile, you look like you're trying to help the program, in the process scooping up the votes of your enemy's most loyal voters. It's a very clever strategy.

If this all sounds ridiculous, ask yourself what would be the most effective way for the Democrats to re-regulate business? They could chip away bit by bit at companies, fighting tooth-and-nail the whole way against scads of corporate money. Alternatively, they could turn pro-business and, say, loosen regulation. Call it "strategic Enronization". Of course this would have to be done carefully so as to avoid blame, so this must be done in a way which is invisible. Perhaps by appealing to the great potential of companies to provide cushy cubicles for America's handicapped lesbian welfare moms of color or, perhaps, justifying each bout of balance sheet deregulation with quotes from Deuteronomy and appeals to our lmost libertarian yearnings for an economic life free of control. Then, having fed an entire economy of corrupt businesses, when it all come to tears the Democrats would rush in to protect business from itself, perhaps nationalizing the worst offenders. It could be the New, New Deal. As a nice bonus they would have picked up billions of corporate donations which the Republicans have come to consider their birthright.

The key to strategic vandalization is that it must be kept quiet; the Republicans only win if they manage to make Medicare, Medicaid and Social Security both unfair and unaffordable (ditto for the Democrats if the shoe were on the other foot). If the electorate ever concludes it was intentional, the programs might stay at elevated levels and the Republicans would go back to the farm leagues. Now that's poker!

Strictly Interpreted 

Great article by Julian Sanchez on the First amendment case. Money quote:
Reason: "We must close the First Amendment loophole once and for all, and recognize that constitutional protection of 'free expression' should be reserved for copies of Hustler, as the Founders intended, not extended to such dangerous frivolities as the expression of political views. "

Thursday, December 11, 2003

Democrats Go Off the Cliff 

David Brooks basically sums it all up re: the roots of Bush-hating. Great article!Democrats Go Off the Cliff

If you blink you might miss the first amendment... 

I'm kind of in shock over yesterday's Supreme Court decision. It says that nobody can spend money advocating a political cause within 30 days of an election. I'm absolutely shocked. Truly. One of the absolutly fundamental rights protected in the Constitution is the right to criticize our government. The only possible way citizens can have a voice (unless they're Bloomberg or Soros) is by forming some sort of group and spending money; whether you purchase an ad, organize a rally or create a website, it takes money. According to this ruling that will now be illegal during the only time it really matters, right before an election. In fact, following the Court's logic, it is a very, very small step to outlawing all private political expression; just change "30 days before an election" to "2 years before an election" and you've eliminated all free speech by citizens! The next small step is to note that media outlets spend money criticizing or praising candidates, and poof! we're China. Think about it.

All these crazies screamng about the Patrio Act need to WAKE UP. Our democracy just took an unbelievably massive blow, (by the way, at the hands of the most liberal members of the Supreme Court; Stevens, Breyer, Ginsburg, Souter and O'Connor all voter for, the "rightwingers" voted against).

What kind of bastardized notion of freedom we have that a lapdance is free speech but criticizing your government is not? Is the next step civil disobedience? Will they actually prosecute me if I take out an ad in the Village Voice criticizing a candidate? Chilling.

Justice Scalia's Dissent:
"The first instinct of power is the retention of power, and, under a Constitution that requires periodic elections, that is best achieved by the suppression of election-time speech. We have witnessed merely the second scene of Act I of what promises to be a lengthy tragedy."

Justice Kennedy's Dissent:
...The First Amendment commands that Congress 'shall make no law ... abridging the freedom of speech.' The command cannot be read to allow Congress to provide for the imprisonment of those who attempt to establish new political parties and alter the civic discourse. ... The Court, upholding multiple laws that suppress both spontaneous and concerted speech, leaves us less free than before. Today's decision breaks faith with our tradition of robust and unfettered debate."

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