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If democracy fails in the United States . . .

will it survive anywhere else?

Many people (including me) are worried about the failure of democracy here.  But what happens in the rest of the world if democracy fails here, with the leading countries outside Europe authoritarian or leaning authoritarian, and European democracy looking a bit frayed around the edges?  And if authoritarianism is ascendant around the world, what would be the chance of a democratic restoration here?  This is above my pay grade, but I’m not optimistic . . . thoughts?

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Does the United States Have a Progressive Future?

Spoiler alert:  maybe.

The surprising success of Bernie Sanders’ 2016 presidential bid, widespread protests against Trump, and the election of a number of highly progressive candidates in the 2018 midterms all seem to suggest a progressive turning point in American politics.  At the very least, the intellectual stranglehold of right-wing economic ideas on our political discourse seems to have been broken.  Progressive proposals for Medicare for All, a higher minimum wage, higher taxes on the wealthy, free college, child support, and the Green New Deal are all generating enthusiasm among Democrats and getting a more respectful hearing in mainstream political circles than would have seemed possible even 5 years ago.

I agree that greater interest in progressive policy ideas among journalists, political leaders, and the policy elite is an important political development, but it is a common mistake to read too much into short-term swings in public opinion or the results of a single election.  So it is useful to step back and ask what we know about the path to a progressive future in the United States.

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Is Progressive Idealism Self-Defeating?

Like many liberals, I am encouraged by the new energy of progressives and the growing political support for progressive causes.  But I also share the common worry that the idealism of progressives is in danger of becoming self-defeating (see, e.g., Judis and Edsall for two recent discussions).  That’s a problem, because the stakes are high and we don’t have much room for error.

As I see it, progressive idealism today has two manifestations, one political, one economic.  Political idealism manifests itself in a reluctance to acknowledge the scale of the political challenges progressives face, the scorched-earth opposition that awaits us, and the need to find potential allies among the not-so-progressive and to design policies and arguments that can win them over.

On the economic side, idealism makes progressives reluctant to take policy design seriously.  For example, there is a big gap between progressives and economists (including progressive economists) on carbon pricing and other aspects of climate policy.  There is also a gap on fiscal and budgetary policy, and on many other issues.  To some extent, this simply reflects the unavoidable fact that non-economists always find economics counter-intuitive – if they didn’t, we wouldn’t need economists.  But the problem today goes beyond this.  There is a strong tendency to rely on moralistic thinking, to assume that every wrong has an easy remedy and that good intentions can solve any problem.  This goes along with a resistance to thinking about tradeoffs, costs, and market-oriented solutions like carbon pricing, and a tendency to favor command-and-control policies and to ignore fiscal constraints.  I suspect that we have right-wing economists and politicians to thank for this state of affairs, but whatever its cause the rejection of careful economic thinking on the left is real.

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What Is Up With Empirical Economics?

Tyler Cowen today flags a paper by Currie, Kleven, and Zwiers on changing practices in economics, and highlights the following:

Panel A illustrates a virtually linear rise in the fraction of papers, in both the NBER and top-five series, which make explicit reference to identification. This fraction has risen from around 4 percent to 50 percent of papers.

This caught my eye, because Matt Yglesias at Vox recently highlighted a study claiming to show large educational benefits from air filtering in schools:

This paper identifies the achievement impact of installing air filters in classrooms for the first time. To do so, I leverage a unique setting arising from the largest gas leak in United States history, whereby the offending gas company installed air filters in every classroom, office and common area for all schools within five miles of the leak (but not beyond). This variation allows me to compare student achievement in schools receiving air filters relative to those that did not using a spatial regression discontinuity design. I find substantial improvements in student achievement: air filter exposure led to a 0.20 standard deviation increase in mathematics and English scores, with test score improvements persisting into the following year. Air testing conducted inside schools during the leak (but before air filters were installed) showed no presence of natural gas pollutants, implying that the effectiveness of air filters came from removing common air pollutants and so these results should extend to other settings. The results indicate that air filter installation is a highly cost-effective policy to raise student achievement and, given that underprivileged students attend schools in highly polluted areas, one that can reduce the pervasive test score gaps that plague public education.

Kevin Drumm was quick to spot the problem in the paper (click through to see the data).

Then Andrew Gelman weighed in:

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For MLK Day: Letter From a Birmingham Jail

There is no better way to honor Dr. King than to read his Letter From a Birmingham Jail.  It is full of moral insight, deeply moving, and an astonishing piece of political advocacy.  Here are the opening paragraphs:

While confined here in the Birmingham city jail, I came across your recent statement calling my present activities “unwise and untimely.” Seldom do I pause to answer criticism of my work and ideas. If I sought to answer all the criticisms that cross my desk, my secretaries would have little time for anything other than such correspondence in the course of the day, and I would have no time for constructive work. But since I feel that you are men of genuine good will and that your criticisms are sincerely set forth, I want to try to answer your statement in what I hope will be patient and reasonable terms.

I think I should indicate why I am here in Birmingham, since you have been influenced by the view which argues against “outsiders coming in.” I have the honor of serving as president of the Southern Christian Leadership Conference, an organization operating in every southern state, with headquarters in Atlanta, Georgia. We have some eighty five affiliated organizations across the South, and one of them is the Alabama Christian Movement for Human Rights. Frequently we share staff, educational and financial resources with our affiliates. Several months ago the affiliate here in Birmingham asked us to be on call to engage in a nonviolent direct action program if such were deemed necessary. We readily consented, and when the hour came we lived up to our promise. So I, along with several members of my staff, am here because I was invited here. I am here because I have organizational ties here.

But more basically, I am in Birmingham because injustice is here . . .

Read the rest here.

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State Capacity and Liberalism

 State Capacity and Liberalism

Tyler Cowen has a post up on State Capacity Libertarianism.  I’m not so interested in the “libertarian” part of his argument, which is mostly aimed at persuading libertarians to accept some role for government beyond enforcing contracts and protecting property rights.  But liberals (as in progressives) have good reason to think hard about state capacity.  A few thoughts on liberalism and state capacity:

Recognition of limited state capacity should affect how liberals set policy priorities and rank policy tools:

Many promising active labor market policies and economic development policies require a degree of state capacity that we currently lack.

A federal jobs guarantee would require a big increase in state capacity.  I’m not a fan in general, but any effort to implement a jobs guarantee would have to start slowly and concentrate on building capacity.

Carbon taxes require less state capacity than regulation, which requires less state capacity than direct government ownership of power plants.

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The Art of Conservative Persuasion, Don Boudreaux Edition:

Being an economist can be frustrating.  Most people do not understand how markets work, and economists spend a good deal of time arguing against bad policy ideas that appeal to non-economists, and for good ideas that do not appeal to common-sense.  This can sometimes feel like pushing rocks uphill.  Plus it can lead people to suspect that you are carrying water for the corporate rich, which is unpleasant.
But what is it like to be an extreme right-wing economist?  If Don Boudreaux is any indication, it’s frustrating!  Boudreaux’s hero, Friedrich Hayek, understood the importance of reaching out to his intellectual opponents.  At least at times Hayek attributed good motives to socialists.  Boudreaux has pioneered a new approach:  insult the people you disagree with.
This is a hoot:

Okay, so what I’m about to do is a bit unfair to protectionists; indeed, it is pure consumption for me: I’m going to poke fun at Warren Platts (once a frequent protectionist commenter here at Cafe Hayek and still a commenter at EconLog). The reason that what I’m going to do here is unfair to protectionists is that, although even the most-able protectionist is armed intellectually only with the equivalent of a nerf gun, these nerf-gun-toting protectionists possess far more fire power than Mr. Platts brings to the battle between protectionists and free traders.

Still, I confess to having no patience with persistent protectionists such as Mr. Platts. It’s not a crime to be ignorant and misinformed, but it’s vile to cling stubbornly to one’s ignorance and misinformation in order to justify state predation against innocent people – which is what protectionism is. And so I here gleefully expose a true howler – one that must be read to be believed – that Mr. Platts deposited on this recent EconLog post by Pierre Lemieux.

Gee, I wonder why Platts doesn’t post at cafehayek anymore!  As they say, read the whole thing (for the details of Platts’ “clueless nitwittery”) . . .

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Fair and Balanced? Tyler Cowen on Wolff on Wealth Taxes.

Here is the abstract of a new paper by Edward Wolff:

The paper analyzes the fiscal effects of a Swiss-type tax on household wealth, with a $120,000 exemption and marginal tax rates running from 0.05 to 0.3 percent on $2,400,000 or more of wealth. It also considers a wealth tax proposed by Senator Elizabeth Warren with a $50,000,000 exemption, a two percent tax on wealth above that and a one percent surcharge on wealth above $1,000,000,000. Based on the 2016 Survey of Consumer Finances, the Swiss tax would yield $189.3 billion and the Warren tax $303.4 billion. Only 0.07 percent of households would pay the Warren tax, compared to 44.3 percent for the Swiss tax. The Swiss tax would have a very small effect on income inequality, lowering the post-tax Gini coefficient by 0.004 Gini points. The effect of the Swiss tax and Warren tax on wealth inequality is miniscule, lowering the Gini coefficient by at most 0.0005 Gini points.

Here is how Tyler Cowen linked to the paper today on Marginal Revolution:

The effect of the Swiss tax and Warren tax on wealth inequality is miniscule, lowering the Gini coefficient by at most 0.0005 Gini points.

I don’t have a strong opinion on the Warren wealth tax proposal, other than wondering whether it makes sense to push for a tax that may well be found unconstitutional.  But one could certainly approve of the tax as a source of revenue even if its effect on overall equality is small, no?

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Do we need a World War II style mobilization to decarbonize the United States Economy?

The American Prospect has a new issue out on climate change, and I highly recommend the article by Jeffrey Sachs.

Sachs does an excellent job explaining why we do not need a World War II style mobilization to decarbonize the United States economy.  We can achieve a high level of decarbonization by 2050 at a modest aggregate cost (Sachs guesses 1 to 2% of output) by replacing existing power plants, vehicles, furnaces, etc. with green technologies at the end of their useful lives, using the resources that would have been used for this purpose anyway.

Sachs also explains very clearly how accelerating the timetable for a clean energy transition will greatly increase the cost and economic disruption for small gains and is probably not justifiable.  This point does not seem to be widely understood.  Here is Sachs:

Consider, for example, the challenge of decarbonizing the U.S. fleet of some 200 million light-duty vehicles. Suppose, as an illustration, that cars last for 20 years, and that ten million vehicles are currently retired each year and replaced with ten million newly produced vehicles. The industry’s production capacity is geared to ten million sales per year. In order to shift the U.S. automobile fleet to electric vehicles, the industry must be retooled.

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