Presidential Party is a Bad Predictor of Economic Success

There is, you might have heard, a meek debate happening around the 2016 election. Some people think we should put more emphasis on economic policies. Others think we should stay the course. Before I offer my take on that, I would like to submit that economic policy is not an especially obvious source of economic growth.

The graph below shows the per capita GDP growth of all the quarters since July 1948. I start presidential terms in the third quarter of their term, the idea being that is the first full annual budget they administer. The horizontal axis is the percent of quarters that are below the quarter in question. The vertical axis is the percent growth.

demgop-growth

The graph is a surprisingly good test of your willingness to read a graph in a partisan way. It shows that there is not a large differences, on whole, between Democrats and Republicans. It also shows there is a measurable advantage on average to voting democratic, especially around a recession. If you, for example, so a chasm between them, you might want to consider the ways you twist information to support a Democratic worldview. Likewise, if you cannot see the clear advantage of voting Democratic, you should consider that you are very partisan.

To grasp the data here, imagine that electing a president in 2016 was merely having the new president draw, at random, a quarter from a previous president in their party to have that growth again. This is obviously a gross misrepresentation of Presidential power, but it gives a sense of what this kind of backwards-looking analysis says. For virtually every draw our Republican president would make, the Democrat would have a better chance of doing at least as well. (There are some exceptions around the 95th percentile.)

So, if the Democrats drew their 50th percentile quarter, the GOP would only have a 37% chance of beating them on a draw, which makes them the superior choice on average. If the GOP drew there 50th percentile as well, growth would only be fifth of a percent lower. So while the Democrats do nominally better, the difference over most of the distribution is quite small, averaging to a third of percent. For the median earner, this is about $8.25 a month

One place that this simple exercise suggests a stronger Democratic advantage is around recessions—the very left of the graph. The Democrats have fewer quarters with very deep decreases in per capita GDP. At the widest gap, there is nearly a percent difference in income contraction. This is approximately $25 a month difference. Still not an incredible sum, but more noticeable. This seems to validate expansionist policies, a Keynesian glut of spending, in a recession. I suspect that this accounts for a fairly large part of the finding that Democrats do better than republicans. Make of that what you will.

This is not an unexpected finding for a few minutes with Excel. Let’s take a widely cited 2004 study by Achen and Bartels (PDF). (Bartels is the author of Unequal Democracy, which makes use of these findings.) Their study implies* a higher difference between Republicans and Democrats, at about half a percent. For the median earner, that is $11.75 a month.

Tomorrow’s post will make use of this observation that the difference in growth between parties is small, but for now let us draw a simple conclusion. The Republicans and Democrats have surprisingly little effect on overall growth on average. One way to explain this difference by pointing out that treating Reagan and Bush or Clinton and Carter as cut from the same cloth is a bit silly; I am inclined to agree. I think it is reasonable to say that if all you care about is average income growth, you can detect a slight advantage to voting Democratic. But it is easily overwhelmed by policy details and simple economic luck.




*Table 5 gives values for election and non election year income growth. (This is a slightly different metric than the one I chose, but comparable enough.) Using a weighted average, it appears there is just shy of half of a percent difference between democrats and republicans. The authors do not report this number in their study. You might note that they draw the conclusion that voters are very bad at factoring this small difference and credits the ways both parties tend to have higher growth in election years. I am inclined to say that voters are very bad about caring about 12 dollars a month when it arrives so abstractly, but at any rate, I’m not really here to disagree with the original study.

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Clinton’s Mistake was Student Loan Debt

Allow me to put forward a hypothesis that will be very controversial: Sanders supporters were, by and large, held together by his promise of free college education.

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I suggest this because, despite being billed as a populist, he was something of a niche candidate. Educated millennials made up the bulk of his support. (You get zero points for showing he had support elsewhere; there are approximately a zillion articles from the primaries about the correlation between age and support for Sanders.) It is hard to point at too many specific programs Sanders supported—one of the reasons this blog criticized him was that he was consistently vague. Yeah, I want “less income inequality”, but Sanders stump speeches offered few details on how we were going to get that. One of his few concrete ideas was a plan to tackle student loan debt.

Clinton treated it as a non-issue.

Sure, she said a few applause lines when Sanders put the pressure on her in the primary…but they were unconvincing. And she dropped talk of it once she was campaigning for the general. Part of the reason was that Sanders’ plan was wishful thinking covered with some vague gesturing; his preferred examples in the Germanic world send far fewer people to college and the programs are subsidies for the upper-middle class. He tended to dodge these questions by pointing out that Congress could raise taxes enough to cover everyone, but without really grappling with the underlying dynamics*. Clinton correctly avoided promising something that would be difficult and costly to deliver until she had to. But part of the problem was that the Clinton campaign underestimated how much that issue was contributing to Sanders’ appeal and what that would mean in November. For that matter, I did too.

I would caution against reasoning from the case I’ve laid out here that Sanders would have won if the Democrats had just run him. Clinton got more votes in the primary, and those were her most reliable supporters in the general. Sanders could have brought in the millennials, but its not clear that older democrats would not have just sat this one out instead. It’s possible Sanders would have won, but it is by far the less obvious conclusion.

The easier lesson is forward looking. Whoever runs in 2020—and for that matter, 2018—must have a real plan to address student debt. There is going to be a very delicate balance to strike. Older democrats are correct that the flashiest proposals are unworkable and must be made unfair to work. Younger democrats are right that the status quo is untenable.

Getting both to the polls is the only option for democrats.

 

*Paying for all tuition would require increasing the federal budget by about 9%. This sounds modest, but in absolute terms that would be about 353 billion dollars a year. Making it free would likely increase the number of applicants, meaning some kind of rationing would be necessary even if we held numbers at current levels; Universities would have every incentive to enroll as many people as possible to get more Federal funds. That’s also a noticeable tax hike that would affect whatever market Sanders chose; he chose the famously elastic investment market but assumed no elasticity. Sanders tended to treat these points like distractions rather than very real issues that impacted how fair workable his program was.

Bill Nye the Science Guy Takes on Abortion…and Gets it Wrong

In 2014, Bill Nye and Ken Ham debated about…the role of evolution in modern society? I don’t really know; it was a deliberately vague topic. And I surprised a lot of friends by judging that, from a purely rhetorical standpoint, I thought Ham had debated better. This wasn’t to say he changed my mind—I saw the gaping holes in his arguments. I just felt that Nye didn’t really understand them and failed to close the deal while Ham exploited that fact expertly. I felt the same way watching this (old) video of Nye talking about abortion:

Okay, let’s take the key chunks of this.

Sperm get accepted by ova a lot. But that’s not all you need. You have to attach to the uterine wall, the inside of the womb. But if you’re going to hold that as a standard, that is, if you’re going to say that when an egg is fertilized it therefore has the same rights as an idividual, who are you going to sue? Who are you going to imprison? Every woman who has had a fertilized egg pass through them?

Say it with me: The anti-choice and pro-choice positions are not scientifically falsifiable.

The argument that life begins at conception has nothing to do with the uterine wall and everything to do with souls. Because from a scientific standpoint the concept of a soul is meaningless*, science is necessarily silent on the issue. When Nye points to implantation as a necessary ingredient for viability, he is nominally correct. But non-implantation is not, under this schema, murder. It is an act of God, akin to an 8-year-old child dying of heart defect. God works in mysterious ways. Nye is not answering the thornier question of purposeful abortion, nor could he use science to answer it.

I am a vehemently pro-choice atheist. I believe that every woman should be allowed to choose an abortion, especially during the first two trimesters. I also do not believe in any God or Gods or the soul. I therefore untroubled by the theological question of abortion, and indeed all theological questions. I have reasons—non-scientific ones!—for why I don’t think abortion is the same as murder. They obviously do not persuade everyone.

To see this problem in a different way, Nye makes a comment later in the video about sexual education. He is correct that abstinence only education does worse at preventing teenagers from having sex than full sexual education—and that is why I support it. And it is true that a lot of people have convinced themselves of the opposite. But the truth is that if you accept the fact that abstinence only prevents teenage sexual activity, you still have to deal with the dilemma that creates for those who believe sex before marriage is immoral. Communities must either prepare their children to sin or increase the number of their children who sin. It is the weirdest formulation of the Trolley Problem I have ever encountered. I agree with Nye, not only because of the scientific evidence, but because I don’t believe there is anything inherently wrong with teenagers having sex.

There are probably a small number of people who would change their views if they better understood the science underlying some of these value judgments. Further, on principle, I support correcting the scientific record. Finally, insofar as Nye’s points address some of the badly worded bills, I am with him. But I think it is deeply misinformed to think that the main issue is scientific illiteracy rather than a metaphysical disagreement.

But Nye has never shown much understanding of philosophy.




*Not non-existent. Meaningless. There is no way to check for the presence of metaphysical objects by physical means, so you cannot credibly point to material science to comment on them. If you could, they would be physical!

No, Really, We Should Be Covering the Alt-Right

I am seeing calls, mostly in Facebook statuses and comments that I will not link, to stop covering the Alt-right. The Alt-right is the marriage of White Supremecist, White Nationalist, Anti-Feminist, and other far right groups into a loose alliance of reactionaries. Its numbers remain modest, but Steve Bannon, who gleefully platformed the alt-right as Editor in Chief of Brietbart, is headed to the White House. It comes as no surprise that there is push back against the coverage these developments are receiving.

And you know what, I kind of get the impulse. Every time there is a news story about them, more people learn about them. And if 2016 has taught us anything, it is that people are more comfortable with misogyny and white supremacy than is comfortable. When we put alt-right leadership in the news, we are giving them a chance to recruit—and they no it. The impulse to bury the story seems like an open/shut case.

It’s not.

For fun* I’ve been following the misogynist wings of the Alt-right since before they really embraced that label. This is part of the reason I am so insistent that alt-right is not merely Nazism or White Supremacy with new branding. There is a large, vocal constituency who passionately believes that feminism is the number one enemy of Western civilization. Make no mistake, one of their biggest concerns is progressive white women destroying the traditional ban on miscegenation, but it part of a larger, fundamentally anti-feminist agenda.

They firmly believe that “the media” is part of a feminist conspiracy—and yes, “the Jews” get credit too. Members of the so-called “manosphere” have argued for years their ideas would be more popular if not for the progressive conspiracy against them. They recruit by saying that feminists deny them a platform and that they are fighting for free speech. The truth was that the combination of their noxious views and small following meant they were not worthy of careful coverage. Alas, they have recruited themselves into being large enough by misunderstanding.

An active campaign to deny them a platform, especially a successful one, would be writing their recruitment pitch for them. While I am a staunch defender of the premise that organizations have every right to refuse to platform anyone whose views do not align with their mission, you have to admit that the Alt-right has a point about coverage. That radical, right-wing groups are organizing and that their sympathizers are headed to the White House is newsworthy. I support the conversation happening at flagship news organizations about how best to cover people who support legalizing rape and the holocaust redux without giving them undo sympathy. (This blog, for example, advocates using “alt-right” to describe the collective of allied radical conservative groups who self-identify with the term, but identifying the constituent groups and ideologies when talking about them individually.) Nonetheless, the mission of news organizations is to responsibly inform, and they must responsibly inform us that there is a growing neo-fascist threat.

The better path is for us to respond by organizing back. There are lot more people firmly committed to feminism, anti-racism, and multiculturalism than there are people involved in the alt-right. When legitimate news outlets tell your neighbors that neo-Nazis, misogynists, and the KKK are organizing in record numbers, it gives you the space to pitch opposition. If they hide it, it gives the Alt-right the chance to claim they are the persecuted ones to your neighbors.

Coverage of the Alt-right is the surest way to vet it—and find it wanting.




*My hobbies include things most people would consider torture, like mathematics and reading about online misogyny.

Argument of the Week: Twitter Twit Elect

Ladies and Gentlemen, the President Elect of the United States of America. Twitter ranting. Again.

The thing is. No. Just, no.

This argument is taking place so far down the rabbit hole to begin with that I can scarcely believe it. Remember, this is the President Elect, the guy who won the election. Saying that there were catastrophic levels of voter fraud. And saying that’s why we don’t need a recount. In the halcyon days of August 2016, I would have guessed that would win Argument of the Week by itself. But we’re not done.

On top of that, he is using a well-worn logical fallacy—appeal to ignorance. Appeal to ignorance is pointing to a lack of evidence to claim that something is true. Trump is furious with CNN because they have not proven to his satisfaction that voter fraud did not take place. Bear in mind, Trump is the one who advanced this claim without offering evidence or taking legal action. The burden of proof is on Donald Trump to prove his original claim, not on CNN (or anyone else) to definitively prove the converse. If that were all, I would concede that caution was in order saying that no fraud took place. But we’re still not done.

The thing is, CNN and others have provided ample evidence that there is little cause for concern. Both campaigns had poll watchers. NGOs from home and abroad have looked into it. Data analysts have found most of the irregularities consistent with demographics. Let’s be real here: it hurts Donny’s fee-fees that he lost the popular vote so he is clinging to a conspiracy theory.

If there is one thing I can say as I hand Trump his award it is this: At least he is giving us good examples of fallacies for the next four years.

How Many Jobs Did Trump (Pence) Actually Save?

Donald Trump is making America great again by handing companies trying to move abroad sacks of cash. Well, actually, Governor Pence did that, but don’t let the details about Federalism slow you down.

It is important to ask: how many jobs were actually saved? This is a tricky question because there are a lot of moving pieces, but I did some back-of-the-envelope calculations (which I will spare you from). I kept getting pretty close to zero, though the model I found pretty compelling made me think it might be positive. The reason for this is pretty straightforward.

The Carrier move would lower air conditioner prices in the United States. Consumers do not, as a rule, notice prices have dropped and say, “Well, I notice I’m paying less for an air conditioner! I might as well light the difference on fire! lol, money!” No, they spend it on other things they want. Every dollar of the difference is redirected to other purchases or savings. Those purchases, in turn, put other people to work. Trump and Pence have raised the price of air conditioners for all of us, meaning our work does not go as far. This is a weak net-negative for the economy—and therefore for jobs.

There is one wrinkle that distinguishes Indiana from the Federal Government, however. Indiana is running a surplus, meaning Indiana is probably creating value on net by cutting taxes for Carrier*. Taxes carry a dead weight—one broadly offset when government spending addresses legitimate market inefficiencies. But since Indiana is not spending that money, we might as well “spend” it on this job preservation program. Most supply-side studies suggest that a market-wide cut is better so that the market can apportion the gains where they are most efficient, but a specific cut may well be a small net gain for the state anyway.

That’s a lot of words to say that it turns out that the Indiana Democrats were right that spending the surplus would help workers. It just took the need for a cheap political stunt to convince Governor Pence of that.

The Federal Government and most of the many states do not have a surplus. Widening the deficits would not help workers because that tends to push the balance of trade towards a deeper deficit and hurts domestic production. It becomes an exercise in feeding the dog its own tail. Pence was able to do this for his boss precisely because he is not yet the Vice President of the United States. Guess what he won’t be able to do in January?

To review, all of the gains are lost to higher prices and invisible job loss elsewhere. There might be some small gains from decreasing Indiana’s surplus, but this is probably not the smartest way get those anyway. Finally, President Trump won’t have access to a surplus, so this is a one-off thing for a small number of jobs.

But, you know, keep cheering on this tax break.




*Whether or not this is a fair or wise way to cut down the surplus is an issue that takes me beyond the economic question I raised. But suffice it to say, I want a few million dollars for threatening to go abroad!