Suppose we can give each member of congress a score, from 0 to 100 (0 meaning 'extremely left-wing', 100 meaning 'extremely right-wing'), so that for every piece of legislation that comes before them, there exists a threshold wherein the probability that everyone with a score under the threshold votes one way, while everyone with a score over the threshold votes the other way, is very high indeed. Suppose further that there is perfect polarization between the two major parties (every Republican's score is greater than every Democrat's score, every Republican's score is closer to the typical Republican's score than to any Democrat's score, and every Democrat's score is closer to the typical Democrat's score than to any Republican's score).
In the house of representatives, the effective decision rule is majoritarian--that is, a piece of legislation is approved if and only if a majority of representatives vote for it. The fate of a bill, then, stands or falls with the vote of the median representative: if the median representative votes 'yea', then either everyone to his left or everyone to his right, with very high probability, votes 'yea', constituting a majority in favor of the bill. Similarly, if the median representative votes 'nay', then there is, with very a high probability, no majority in favor of the bill. In effect, one representative makes the decisions for the house. The bigger the majority party's majority, the more the favorable approved legislation is to the party's typical member.
In the senate, the effective decision rule (these days) is supermajoritarian--that is, a piece of legislation is approved if and only if 3/5ths of senators vote for it. The fate of a bill, then, stands or falls with the vote of both the 60th most left-wing senator and the 60th most right-wing senator. Unless the majority party enjoys a supermajority, approved legislation is most favorable to the centrists in both parties.
If one party is more polarized than the other, then approved legislation will be biased in favor of the more polarized party, other things being equal.
During 2009-2010, the Democrats enjoyed a large majority in the house, and a bare supermajority in the senate. They also held the white house. Due to polarization, one-party control leads to greater legislative output. The house's output, in light of its large but not extreme majority, was left/center-left. The senate's output, in light of its bare supermajority, was center/center-left. And the president, having to appeal not only to his party's base (extreme left/left), but also to Democratic-leaning independents (center/center-left), was left/center-left. Overall, then, the government was center-left, or slightly left of that, with lots of output.
During 2011-present, the Republicans enjoy a large majority in the house, while the Democrats cling to a bare majority in the senate. Democrats continue to hold the white house. Due to polarization, two-party control leads to lesser legislative output. The house's output, in light of its large majority, has been right/center-right. The senate's output, in light of the Democrat's bare majority, was centrist. Again, the president was left/center-left. Overall, then, the government was roughly centrist, with little output.
Intrade predicts that Republicans will control both houses of congress in 2013, though probably without a supermajority in the senate. Hence, if Obama is re-elected, we will probably see a slight shift to the right, with little output. If, on the other hand, the Republicans take the white house, we should expect a much bigger rightward shift, and much more output.
From a historical perspective, the DW-NOMINATE system, devised by political scientists, shows that this basic model is plausible, and that the Republicans have become more polarized than the Democrats over the last few decades. This biases these results even more in favor of Republicans. The choice, then, is between a center/center-right government, and a right/center-right government. From a global perspective, the US is significantly to the right of most developed countries. Therefore, the choice is, in some ways, between a center-right government and a right-wing government.
Note that none of these terms are defined with respect to issues--purely with respect to patterns in voting behavior. So, if you're someone who thinks anarcho-capitalism is a moderate position, then redefine the terms I used above appropriately. Another way of saying it, then, is that we're likely to be looking at a choice between a moderate Republican government (in the old sense), and a fairly hardcore Republican government (in the current sense). Take your pick.
Showing posts with label politics. Show all posts
Showing posts with label politics. Show all posts
Saturday, February 11, 2012
Friday, February 10, 2012
Must employer-provided health insurance plans cover birth control?
Some people believe they must. Other people disagree. Two questions occur to me in connection with this debate: First, what does birth control have to do with health insurance? Second, what do employers have to do with their employees' health insurance?
Insurance is supposed to prepare the insured for unpredictable, expensive scenarios. Needing to purchase birth control pills is a perfectly routine event. The pill isn't very pricey, either. Why, then, do people buy them with their health insurance instead of just reaching for their purse? It's not like car insurance plans cover fuel expenses.
What's more, your employer has no say over what your car insurance plan covers. Why, then, does it have a say over what your health insurance plan covers? What's so special about health insurance?
Believe it or not, many economists say that we have the tax code to thank for these curiosities of the US health care system. The story begins with World War II. One of the ways in which the US government financed the war effort was by printing a lot of US currency, causing excessive inflation. The government responded with wage controls, among other measures, legally preventing wages from giving way to inflationary pressures. Of course, the laws of supply and demand cannot be legislated away. Employers responded to the inflationary pressures by offering workers benefits besides wages, most commonly health insurance, simply because doing so was legal.
As wage controls were relaxed, however, congress began to recognize employer-provided health insurance as a form of income, thus subjecting it to taxation. By that point, though, labor unions had become staunch defenders of the tax-free status of employer-provided health insurance, discouraging congress from closing the loophole. Ever since, employer-provided health insurance has been tax deductible. Sound like intelligent design to you?
Why does the tax-free status of employer-provided health insurance matter? Suppose you wish to buy birth control pills. If you decide to buy them with your employer-provided health insurance, then you will pay for them with pre-tax dollars, effectively rendering them less expensive. If, on the other hand, you decide to pay for them out of pocket, then you will pay for them with post-tax dollars, effectively rendering them more expensive. Note that this does not work if you purchase your own health insurance plan. Health insurance is only tax deductible if it is provided by your employer. This explains not only why most people receive their health insurance from their employer, but also why cheap, routine medical expenses tend to be covered under health insurance plans.
For these reasons, a perfectly straightforward policy issue (whether every woman should have financial access to birth control) is, in the context of our distorted health care financing system, transformed into a mystifying debate about the complex relationship between your health insurance provider, your employer, your government, and you.
So, what's my proposal to resolve this controversy? Reform the tax code. Only then will we be able to meaningfully debate the proper role of government. Also, everyone needs to take a pill. A chill pill, that is...
Insurance is supposed to prepare the insured for unpredictable, expensive scenarios. Needing to purchase birth control pills is a perfectly routine event. The pill isn't very pricey, either. Why, then, do people buy them with their health insurance instead of just reaching for their purse? It's not like car insurance plans cover fuel expenses.
What's more, your employer has no say over what your car insurance plan covers. Why, then, does it have a say over what your health insurance plan covers? What's so special about health insurance?
Believe it or not, many economists say that we have the tax code to thank for these curiosities of the US health care system. The story begins with World War II. One of the ways in which the US government financed the war effort was by printing a lot of US currency, causing excessive inflation. The government responded with wage controls, among other measures, legally preventing wages from giving way to inflationary pressures. Of course, the laws of supply and demand cannot be legislated away. Employers responded to the inflationary pressures by offering workers benefits besides wages, most commonly health insurance, simply because doing so was legal.
As wage controls were relaxed, however, congress began to recognize employer-provided health insurance as a form of income, thus subjecting it to taxation. By that point, though, labor unions had become staunch defenders of the tax-free status of employer-provided health insurance, discouraging congress from closing the loophole. Ever since, employer-provided health insurance has been tax deductible. Sound like intelligent design to you?
Why does the tax-free status of employer-provided health insurance matter? Suppose you wish to buy birth control pills. If you decide to buy them with your employer-provided health insurance, then you will pay for them with pre-tax dollars, effectively rendering them less expensive. If, on the other hand, you decide to pay for them out of pocket, then you will pay for them with post-tax dollars, effectively rendering them more expensive. Note that this does not work if you purchase your own health insurance plan. Health insurance is only tax deductible if it is provided by your employer. This explains not only why most people receive their health insurance from their employer, but also why cheap, routine medical expenses tend to be covered under health insurance plans.
For these reasons, a perfectly straightforward policy issue (whether every woman should have financial access to birth control) is, in the context of our distorted health care financing system, transformed into a mystifying debate about the complex relationship between your health insurance provider, your employer, your government, and you.
So, what's my proposal to resolve this controversy? Reform the tax code. Only then will we be able to meaningfully debate the proper role of government. Also, everyone needs to take a pill. A chill pill, that is...
Monday, February 6, 2012
The perils of preferential hiring
Suppose you're hiring. You're also a racist douche. In particular, you believe that (other things being equal) a white employee would be more productive on the job than a black employee. As a result, you're willing to pay more for white employees than for equally qualified black employees. Your preference for white employees not only expands the demand for white labor, but also contracts the demand for black labor. This raises the price of white labor, while lowering the price of black labor. Consequently, your non-racist competitors substitute towards black labor in order to reduce their labor costs. If your belief is wrong (which it is--you're a racist douche, remember), then your competitors can sell the very same stuff as you for lower prices, without sacrificing quantity or quality. Unless consumers boycott your competitors for employing black people, they will drive you out of business. Only if your belief is correct, or if the the market for your goods or services is non-competitive, will this fail to occur. Free, competitive markets, in due course, put arbitrarily prejudiced employers out of business.
Suppose instead that black people tend to be less productive than white people (other things not necessarily being equal). The result is that blacks are not proportionally represented in different walks of life (e.g., underrepresented among business executives, overrepresented among manual laborers). Would we really want them to be better represented at the expense of these jobs being performed less productively? Or would it be better to first let competitive markets sort workers on the basis of productivity, and then enable blacks to share in the wealth? In other words, which is better: a bigger slice of a smaller pie, or a bigger slice of a bigger pie? (Derp.)
Alternatively, consider the possibility that blacks are underrepresented in certain walks of life, and overrepresented in others, because they have different preferences from whites. What good does it do black people, or the broader society, to forcibly interfere with their choices?
If underrepresentation is due to arbitrary discrimination, then this probably has more to do with the unintended consequences of government policies (e.g., the drug war) than with competitive labor markets. If it is due to bona fide differences in productivity, the best course for everyone involved is to let the market rip, but provide means by which the resulting prosperity may be broadly shared. If it is due to differences in preferences, then the government can only make things worse. Frankly, I do not know what else could be the cause.
We find, in none of these cases, a compelling rationale for the government making distinctions between races. Even if blacks happen to be disproportionately poor, or low-skilled, or whatever, the case for helping them economically is just as strong as the case for helping similar non-blacks economically. Don't get me wrong: slavery is the single worst thing this country has ever done. Racial segregation is certainly up there, too. But if there exist alternatives to preferential hiring policies that make literally everyone better off, victims of these past injustices and their descendants included, why should we settle for preferential hiring? Why shouldn't we try to do better?
Suppose instead that black people tend to be less productive than white people (other things not necessarily being equal). The result is that blacks are not proportionally represented in different walks of life (e.g., underrepresented among business executives, overrepresented among manual laborers). Would we really want them to be better represented at the expense of these jobs being performed less productively? Or would it be better to first let competitive markets sort workers on the basis of productivity, and then enable blacks to share in the wealth? In other words, which is better: a bigger slice of a smaller pie, or a bigger slice of a bigger pie? (Derp.)
Alternatively, consider the possibility that blacks are underrepresented in certain walks of life, and overrepresented in others, because they have different preferences from whites. What good does it do black people, or the broader society, to forcibly interfere with their choices?
If underrepresentation is due to arbitrary discrimination, then this probably has more to do with the unintended consequences of government policies (e.g., the drug war) than with competitive labor markets. If it is due to bona fide differences in productivity, the best course for everyone involved is to let the market rip, but provide means by which the resulting prosperity may be broadly shared. If it is due to differences in preferences, then the government can only make things worse. Frankly, I do not know what else could be the cause.
We find, in none of these cases, a compelling rationale for the government making distinctions between races. Even if blacks happen to be disproportionately poor, or low-skilled, or whatever, the case for helping them economically is just as strong as the case for helping similar non-blacks economically. Don't get me wrong: slavery is the single worst thing this country has ever done. Racial segregation is certainly up there, too. But if there exist alternatives to preferential hiring policies that make literally everyone better off, victims of these past injustices and their descendants included, why should we settle for preferential hiring? Why shouldn't we try to do better?
Tuesday, January 31, 2012
Predicting the Nevada Republican caucus
I could run a victory lap tonight, but I won't. Instead, I'll just issue my prediction for the Nevada caucus this Saturday:
1. Mitt Romney
2. Newt Gingrich
3. Ron Paul
4. Rick Santorum
And off to Nevada we go...
1. Mitt Romney
2. Newt Gingrich
3. Ron Paul
4. Rick Santorum
And off to Nevada we go...
Sunday, January 29, 2012
Announcing my bid for the US presidency
I hereby declare my entry into the 2024 US presidential contest. It is time for a change, America. Promise me your vote, and I will promise you a more perfect union. In posts to come, I will spell out my plan for cultivating a freer, fairer, and filthy rich U. S. of A., issue by issue, so that by 2024, you will know exactly where I stand. If you don't like what I have to offer, vote for the other guy. Just be warned that he touches many a kid, has illegitimate, dark-skinned children, and often feasts upon the broken dreams of discarded fetuses. Also, take note that God and me are like this (*crosses fingers tightly*). Seriously, love that guy.
First up: jobs, jobs, and more jobs...
First up: jobs, jobs, and more jobs...
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