The Power and the Money

The trillion dollar coin

The trillion-dollar coin ideas seems completely irresponsible on its face. Here you have a law that lets the U.S. Treasury mint commemorative platinum coins with whatever face value that it wants. So let’s have the Treasury mint a coin with “One Trillion Dollars” stamped on it and use that to finance the federal government if Congress refuses to raise the debt limit.

Uh … okay? That seems inflationary and rather banana-republic like. Crazy, actually.

But weirdly, it’s not crazy. There are two ways that the government can use the trillion-dollar coin to get around the debt limit without affecting inflation at all. One involves the active cooperation of the Federal Reserve; the other does not.

Here’s how it works. Start with the fact that the Federal Reserve (the “Fed”) has a balance sheet. Cash in circulation and bank deposits held at the Federal Reserve are liabilities of the Fed. Why is cash a liability? Well, at some point in the past the Fed printed it up and used it to purchase assets or reduce other liability accounts. So in accounting terms, it’s a liability.

More intuitively, cash is to the Fed what writing an IOU is to me. If I write an IOU and give it to you, it’s a liability. The IOU isn’t enforceable, though. (Well, unless you’re my brother and I’m 12 years old, in which case, yeah, it is.) So it’s a liability I don’t have to pay off unless I choose to. And if I do, say, sell an asset of mine to somebody in return for that IOU, I just throw the IOU in trash. A IOU to someone that I wrote isn’t an asset to me; what, I owe resources to myself?

So let’s start with the Fed’s balance sheet from September 30, 2021:

STEP ZERO:

ASSETS		LIABILITIES
U.S. Treasury securities	5,431,056	2,197,401	Currency in circulation
Federal agency debt securities	2,347	1,702,347	Repo agreements
Mortgage-backed securities	2,494,684	4,524,350	Deposits from banks
Mark-to-market adjustment	338,797	27,447	Treasury accounts
Loans	105,509	45,866	Other liabilities and capital
Foreign exchange	26,421
Other assets	35,704
Gold	11,041
Coins and treasury currency	50,853
TOTAL	8,496,412	8,496,412

On the liability side, we have the federal government’s deposit account. The federal government basically uses the Fed as its bank. (It would be so damn much easier to teach this to undergraduates if the United States would just call its central bank “The Central Bank of the United States” instead of the “Federal Reserve.”) Look at the two bold-faced categories. The Fed’s biggest asset is debt issued by the federal government: $5.4 trillion worth. It also holds reserves of coins and what is called “treasury currency”: i.e., old-fashioned dollar bills issued by the U.S. Treasury instead of the  Federal Reserve. The Fed is legally obligated to accept these when the U.S. government deposits them in its accounts at the Fed.

In other words, if the Treasury minted up a trillion-dollar coin, it could then go down to the Federal Reserve and deposit said coin into it’s deposit account. The balance sheet of the Federal Reserve would then look like this:

STEP ONE: Deposit the trillion-dollar coin

ASSETS		LIABILITIES
U.S. Treasury securities	5,431,056	2,197,401	Currency in circulation
Federal agency debt securities	2,347	1,702,347	Repo agreements
Mortgage-backed securities	2,494,684	4,524,350	Deposits from banks
Mark-to-market adjustment	338,797	1,027,447	Treasury accounts
Loans	105,509	45,864	Other liabilities and capital
Foreign exchange	26,421
Other assets	35,704
Gold	11,041
Coins and treasury currency	1,050,853
TOTAL	9,496,412	9,496,410

STEP TWO: Spend the money in the Treasury’s account

The federal government now has a trillion dollars deposited at the Fed, and the Fed has a trillion-dollar coin sitting in a vault somewhere. The federal government, of course, now wants to spend the money sitting in its deposit account. So it will! Presumably its spending will wind up in the checking accounts of recipients (although some will likely end up as cash in circulation) so for simplicity’s sake I’ve moved the liabilities from the Treasury’s account at the Fed to the deposit accounts that banks keep at the Federal Reserve.

ASSETS		LIABILITIES
U.S. Treasury securities	5,431,056	2,197,401	Currency in circulation
Federal agency debt securities	2,347	1,702,347	Repo agreements
Mortgage-backed securities	2,494,684	5,524,350	Deposits from banks
Mark-to-market adjustment	338,797	27,447	Treasury accounts
Loans	105,509	45,864	Other liabilities and capital
Foreign exchange	26,421
Other assets	35,704
Gold	11,041
Coins and treasury currency	1,050,853
TOTAL	9,496,412	9,496,410

Isn’t that inflationary?

Well, by itself, no. And not just because (as we’ve discovered over the past 13 years) printing money isn’t always inflationary.

STEP THREE: Fed open-market operations counteract increases in the monetary base

The move will not be inflationary because the Federal Reserve can simply sell its holdings of Treasury securities. People will buy those holdings for cash. I’ve assumed here that they will buy those holdings using deposit accounts at various banks, which will ultimately lead those banks to hold fewer deposits at the Fed, but it could show up as a reduction in any of the Fed’s liabilities.

And voila! We are back more-or-less where we started. 

ASSETS		LIABILITIES
U.S. Treasury securities	4,431,056	2,197,401	Currency in circulation
Federal agency debt securities	2,347	1,702,347	Repo agreements
Mortgage-backed securities	2,494,684	4,524,350	Deposits from banks
Mark-to-market adjustment	338,797	27,447	Treasury accounts
Loans	105,509	45,864	Other liabilities and capital
Foreign exchange	26,421
Other Federal Reserve assets	35,704
Gold	11,041
Coins and treasury currency	1,050,853
TOTAL	8,496,412	8,496,410

But now all the Argentines reading this are screaming. We’ve discovered is a way to subvert the independence of the Federal Reserve and force it to finance federal spending by printing money! Isn’t that a problem?

STEP FOUR: Replace the coin with new debt

Well, I can understand that we might not want to set a precedent here. Congress can get it’s act together after-the-fact, abolish the debt ceiling, ban the minting of new trillion-dollar coins, and issue one trillion in federal debt to make up for the coin-based spending. It can then order the Treasury to hand over the newly issued trillion-dollars in debt to the Fed in return for the coin, which can then be melted down (or, preferably, demonetized and put in the American History Museum at the Smithsonian).

ASSETS		LIABILITIES
U.S. Treasury securities	5,431,056	2,197,401	Currency in circulation
Federal agency debt securities	2,347	1,702,347	Repo agreements
Mortgage-backed securities	2,494,684	4,524,350	Deposits from banks
Mark-to-market adjustment	338,797	27,447	Treasury accounts
Loans	105,509	45,864	Other liabilities and capital
Foreign exchange	26,421
Other Federal Reserve assets	35,704
Gold	11,041
Coins and treasury currency	50,853
TOTAL	8,496,412	8,496,410

There is an alternate path that solves the inflation worries, although it sets an even spookier precedent. If the Federal Reserve agrees, we could just jump straight to Step 3, except instead of selling Treasury securities on the open market the Fed sells $1,000,000,000,000 worth of federal debt back to the U.S. government in exchange for the trillion-dollar coin. Poof, $1 trillion in debt is wiped out and the U.S. government finds itself back below the debt limit, with no worries about money creation.

What are the counterarguments? Well, it would set a lousy precedent, but as we explained above, Congress can easily close the loophole if it wanted to.

Minting a trillion-dollar coin does represent yet another transfer of authority from the legislature to the executive, but the United States has had a dysfunctional legislature (at least on some things) for quite a long time—and playing chicken with the debt ceiling represents a particularly dangerous kind of legislative dysfunction. 

(Senatus delenda est. Senatus delendus est.)

The real worry is that Congress won’t do anything and we will wind up paying off more and more of the federal debt with trillion-dollar coins. That seems unlikely to me, but I think everything about the present-day U.S. Congress — particularly the Senate’s advanced state of decay — would have seemed unlikely to me back in 1990.

I suspect that it won’t come to this. I fear, however, that it will come to what I consider a more dangerous route: the Biden administration simply declares that the debt ceiling violates the sentence in the 14th Amendment that reads, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

The legal argument is that Congress authorized the issuance of debt when it passed the budget, so the debt ceiling therefore questions the validity of the debt. I am not a lawyer, but I don’t find that convincing. The last thing the country needs is more executive aggrandizement.

Unless the alternative is chaos.

Dammit.

Make Canada Greater: What would change if New York joined Confederation?

I am reading “Divided We Fall” by David French. He may be the first thoroughly mainstream commentator to seriously posit that the American federation may break up under the weight of our political differences. Cheery reading for another happy election day, or not.

Even a mutual breakup of the United States would be a tragedy, but not because of American exceptionalism or any such thing. No, any collapse of a political union is a tragedy. It means that differing peoples could not share a fate or manage a common endeavor. It means shrinking horizons and cramped futures. Even when divorce is better than the realistic alternatives, it is still a tragedy. 

But there is one way that the American federation could break up and avoid such a tragedy! Instead of retreating into smaller polities, blue American states that wanted out (or were being thrown out) could replace one expansive continental dream with another. They could link their fate with their better-governed neighbors to the north!

Such a move would also be amazing validation of the Great White North—for Canadians to reject it would show a lack of confidence and a fear of dreaming big. Canadians should have confidence and dream big! (Yes, I thought Maximum Canada was a great read, why do you ask?)

One Canadian certainly has no fear of success: the Prime Minister invited American states to join as new provinces!

But enough with the blather. Let’s say something happened to crack the American federation. What would a switch entail in practical terms? In order to get my mind off the damn election (and grading exams) I decided to take a preposterous idea seriously. What would happen if New York State became the Province of New York?

The name

Well, first, NYS would not need to rename itself. Canadian law can handle a province that calls itself a “state” as easily as the U.S. constitution handles states that call themselves “commonwealths.” But let’s call the new jurisdiction “New York Province” anyway, just to make things easier.

Integrating the judicial systems

The biggest issue isn’t the one you’d think. (Although I’m getting there.) The biggest issue is that under current Canadian law, state criminal law will be replaced by the Canadian federal criminal code. The transition would be tough. State judicial elections would go out the window. I think you could continue to elect the Attorney General, but her authority would shrink considerably. You could probably continue to have elections for sheriff, but it would also be a departure from Canadian norms. The Canadians would also have to decide how much leeway to give New York in its civil codes. If they mandate that New York conform to the Canadian system, then civil courts will lose much of their power and many trials that were previously decided by juries will switch to judges.

Integrating the two systems would be a major headache for judges and lawyers. I have no idea how long it would take them to adapt. One year? Two? Ten? Canada would have to agree to long phase-in period during which the New York court system would be linked to Canada’s but not integrated into it. During this time every lawyer in New York State will have to effectively retrain. Law schools would also have to revamp their curricula.

Alternatively, the Canadians could work out an exception for the new province(s). Conceptually, such an exception would be relatively easy to implement and administer. (Australia and the United States do it and New York allows certain municipalities to create their own criminal offenses.) It would be a departure for Canada but it would not mean that the federal criminal code would cease to apply to New York. Rather, it would mean that New Yorkers were subject to two (or three) separate criminal codes, much as they are today.

Business ownership

In some industries, American companies operating in the state that weren’t locally owned would be required to pull out and sell their assets in that state to a Canadian company. (Canada would of course now include New York and any other states that made the switch.) These industries are pretty broad, including transportation, airlines, railways, shipping, publishing, financial services and telecommunications.

Telecoms and airways are pretty straightforward. U.S.-owned airlines would need to divest their operations for point-to-point flights between New York and other parts of Canada. Ditto, telecoms companies would need to sell or spin off their New York operations. Canada has been pretty liberal with allowing foreign ownership of transportation companies, so there shouldn’t be major problems for trucking or railroads. Some retail chains might want to spin off their New York operations, but that won’t be that difficult.

Some banks with equity of $8 billion or more and large demutualized insurance companies would need to be restructured. Canadian law requires that no person may own more than 20 percent of any class of voting shares or 30 percent of any class of non-voting shares. In addition, a majority of the board of directors and the CEO of every bank or federal insurance company would need to be Canadian residents.

Publishing is a weird one. Existing operations would only need to sell their operations to Canadian buyers if they intended to acquire an existing Canadian company. But it’s equally likely that you’d have big New York publishing houses would not qualify for Canadian subsidies or be able to acquire smaller Canadian competitors. It would probably get weird very quickly, but there shouldn’t be any constitutional problems. The Canadian government could continue to protect small Canadian operations against large New York-based Canadian operations. Of course, how long that would last once the New York representatives from the federal branch of the Working Families Party entered the Canadian parliament is a different question …

Unions

New York employers are going to be unpleasantly surprised. Most New Yorkers are going to love it. Of course, a lot depends on what the politicians in Albany do with their liberation from the strictures of American labor law.

Gun laws

There may be some disquiet in parts of upstate (as there is in rural Canada) but most New Yorkers are going to love this as well.

Fiscal federalism

Canada channels significantly fewer resources through its federal government than does the United States. Gross federal spending in New York (sans interest payments and direct purchases of goods and services) came to 13.2% of state GDP; the equivalent number for Ontario was only 10.9%. (The high level of direct purchases in Ontario is due to the fact that the federal government is based in Ottawa.)

Let’s take each category in turn. For retirement spending, the transition would be smooth. Canada could take over Social Security payments for existing retirees without much problem while transitioning younger workers into the Canada Pension Plan and Old Age Security.

For other transfers (not including medical care) the Canadian federation is about as generous as the United States, giving a bit more directly to individuals and a bit less to the governments of rich provinces like Ontario. (The whole thing is actually distorted by Alberta’s oil money, but let’s leave that for now.) On the margin, New York Province will receive a bit less non-health federal aid than New York State.

Federal spending and taxation as a % of jurisdictional GDP

	Retire-ment	Medical care	Revenue sharing	Individual transfers	Goods and services	Total spending	Gross federal taxation	Surplus to Feds
Ontario	5.1%	1.7%	1.8%	2.2%	4.0%	14.8%	(18.2%)	(3.4%)
NY State	4.6%	4.7%	2.5%	1.5%	1.4%	14.7%	(16.3%)	(1.6%)
NY Province	4.6%	1.1%	1.6%	2.2%	1.4%	10.9%	(18.2%)	(7.2%)

But health care … oh boy. A back-of-the-envelope calculation (using 2014 numbers, so at the beginning of Obamacare) shows that public and private entities in New York state spent about 8.4% of GDP on covered medical services. That’s more than most Canadian provinces, since health care is more expensive in the USA, but not prohibitively so: the Province of Ontario spent 7.1% of GDP in 2014.

New York is going to have a problem under the Canada Health Act. Medicare and Medicaid transfers from the U.S. federal government will dry up, and here (somewhat perversely) the United States is way more generous than the Canadian confederation. New York will lose Medicare and Medicaid money worth 4.7% of GDP. The Canadian Health Transfer (CHT) would come to only 1.1% under the current formula, blowing giant holes in the New York provincial budget. New York State currently spends about 2.0% on Medicaid, but adding the Canadian Health Transfer to that leaves a minimum budget hole of 5.3% of GDP (8.4% covered spending that will need to be made free – 2.0% existing spending – 1.1% CHT.)

And that figure of 5.3% is a minimum since Medicare and Medicaid are (again, perversely, I know) more generous than Canadian health care, even though they require co-pays. (More generous for the minority of people that they cover, that is.) You can’t tell seniors that they are going to be worse off now that they are Canadian, can you? That would be thoroughly un-Canadian!

New York Province could fill the hole with a VAT rate of 12% on top of existing sales taxes, or a tripling of state income taxes, or some combination thereof. That’s not an impossible thing. In this world where the U.S. peacefully divorces passing some version of Medicare-for-all should be popular. But it would be very expensive. Add to that the fact that the province would be passing upwards of 7% of GDP to Ottawa and becoming Canadian looks like a bad deal, even with all the benefits from being part of a big continental federation. 

Only there is here the outline of win-win deal for everyone involved, which is simply that New York Province is going to be a huge net payer into the Canadian federal budget.

The Canadian federal government could sign a Medicare Accession Grant Agreement (MAGA) with New York Province that would kick back, say, half the cost of establishing single-payer system. New York would get a federal tax point transfer worth 4.2% of GDP, and the Canadian taxpayers would still come out ahead with a net transfer of 3.0% of New York’s GDP. Win-win for everyone!

TLDR: Joining confederation would be a headache and New York would lose some fiscal revenue from the federal government. But if Ottawa is willing to be flexible it could be a win-win for everyone involved. 

I leave the effect on Canadian politics as an exercise for the readers ...

Trump’s executive orders are not unconstitutional but they are a sign that the Constitution is breaking

Did Donald Trump just repeal Article 1 of the constitution on Saturday? After looking at the details, I published a hot take on Twitter that seems to be standing up to the test of time. So my short answer: no.

Longer answer: No, but it’s worrying.

Longest answer:

The president’s executive order postpones payroll tax collection until next year under Section 7508A of the Internal Revenue Code, which allows for tax collections to be postponed for the victims of natural disasters. But since this is Trump, there are several problems. Section 3101 of the IRC puts payroll taxes on individuals, who get relief. But employers are still responsible for collecting the tax under Section 3102(b).

So why would businesses would want to stop collecting the tax? After all, there’s a big chance that they’ll be responsible for the uncollected sums come January 2021. And the uncollected funds will go to their employees, not to them. They’d have to claw back that money somehow, or take a double hit, paying out today’s payroll taxes to employees in the form of wages and then paying them again to the federal government.

In other words, it’s a mess! But it’s not an unconstitutional mess.

The unemployment insurance is a different wrinkle. What the President aims to do here is redirect $44 billion of the $70 billion in FEMA’s Disaster Relief Fund to the Federal Additional Unemployment Compensation Program. It’s not clear that he can do this, but I suspect that the courts will allow it. After all, a pandemic certainly qualifies as a natural disaster. Paying it through unemployment insurance is, well, unorthodox, but SCOTUS has been pretty lenient so far with this sort of thing.

That won’t last long. Here’s a back-of-the-envelope calculation. In June, the Feds spent $80.4 billion on unemployment insurance for roughly 17.6 million unemployed people. So, figuring that outlays go down by 33% 50% (from $600 to $400 $300, with the states picking up $100) and the number of unemployed falls another 10%, then the DRF will be exhausted on September 5th September 16th.

Of course, there’s another problem, which is that the states have to kick in roughly $15 billion in order to enable the feds to spend that $44 billion. The President is talking about waiving that, but there he really doesn’t seem to have any statutory authority, no matter how tenuous.

In other words, it’s a bad policy (why cut benefits at all?) that relies on a benign hurricane season (good luck with that) and dumps us right back into the soup next month. But it’s not clearly unconstitutional. This is not the John Yoo strategy, not yet.

Still, it’s worrisome. First, it’s worrisome that the executive felt no need to compromise with the legislature. Second, it’s worrisome that they’d break a bunch of norms to get leverage in negotiations. It adds more weight to Juan Linz’s argument about the dangers of a presidential system. (President Obama’s DACA and DAPA orders can be interpreted in the same light.) And third, it’s worrisome that Congress is looking increasingly unable to check the president.

The failure modes are piling up.

A thought on a partisan Supreme Court

I am not as worried about the prospect of a conservative Supreme Court for the same reasons as most progressives.

Now, I think that lessening the protections of Roe v. Wade will be a disaster for poor women living in red states. I also think that decisions weakening worker rights and collective bargaining will be bad for people in the lower half of the income distribution. And I think that weakening the ability of regulatory agencies to do their jobs will worsen life for many while providing few benefits: the Administrative Procedures Act of 1946 plus the Regulatory Flexibility Act of 1980 and Congressional Review Act of 1996 provide plenty of checks on their power.

And a new conservative court is going to make it harder to get an abortion, harder to join a union, and harder to regulate the economy. 

That said, political action can cancel out adverse judicial decisions in all of the above. The only way a conservative SCOTUS could block a political counterreaction would be take us all the way back to Lochner v. New York. And that seems unlikely.

But it looks like a conservative SCOTUS will play hardball on gerrymandering and voting rights. They have already shown it. And they will play hardball on executive action. John Roberts will try to limit any outright partisan favoritism, but just wait until RBG leaves the court with a Republican president in office. 

A partisan Supreme Court willing to put its finger on the election scales, well, that is a threat. I am not sure that it is a threat the Founders ever considered, but there are a lot of political developments that they did not consider. Hell, they thought they had designed a system that would prevent political parties and then they themselves went right out and built the Federalists and Republicans. 

The “good” thing about the Kavanaugh hearings, I suppose, is that SCOTUS decisions will now be watched closely by the public. But I view a Court that is both biased towards property and against voting rights with trepidation. 

So, what changes to prevent a purely partisan SCOTUS? Well, there is a proposal for staggered terms. There are also some more off-the-wall reform proposals. Mine would stick with life terms, but with a Congressional supermajority requirement and a clause automatically appointing a caretaker Justice chosen by a professional panel of Congress cannot agree. But none are likely to happen with our clunky amendment procedure. I fear that they will not happen before we see a far more serious breakdown.

When Trump goes Noo Yawk, heads roll and things get real

Normally, President Trump displays this weirdly constrained body language, with his torso rigid and his arms making stiff chopping motions. Well, maybe I shouldn’t say “weird.” Just weird for a native New Yorker, certainly for a white guy from the outer boroughs of Trump’s age. (Or most non-white guys of any age.)

But then came this clip.

In it, Trump looks almost normal. The open arms at the start and the brief three-finger salute at second 11. He could be from Bay Ridge. You know, normal. ☺

I post this not because the President looks almost normal, but because anyone from the five boroughs or Long Island could and should have known immediately that Comey’s days were numbered. Trump could not keep up his act.

I guess it gives you something to look for if you’re worried that the President is about to do something rash. The minute you can imagine Victor Rasuk playing him in a film, then something bad is about to happen. 

The 25th amendment and some social science fiction

The 25th amendment has been getting a lot of attention lately. Most of that attention is undeserved, unless you expect President Trump to suffer a debilitating stroke. The amendment was written to avoid, in the words of Doug Muir, “The nightmare scenario in 1964 was what if that bullet had hit an inch higher, leaving JFK a vegetable instead of killing him.” So that is what it addresses.

But there was also the example of Woodrow Wilson. What if you had a cabinet of loyalists, refusing to admit that the President is incapitated? Therefore, the amendment allows Congress to appoint “such other body” besides the Cabinet to determine if the President can do their job. 

In a future world where the norms have frayed and apathy reigns supreme, that clause looks like it might be dangerous. Have an administration that wants to prevent its work from ever being undone? Have Congress appoint an oligarchic grand council. (Or empower the Joint Chiefs or whatever.) The council, along with the Vice-president, can temporarily remove the president if he or she threatened to do something that the Council disapproved of. Of course, they could not permanently remove the president unless two-thirds of Congress went along, but the threat might be enough. They could certainly get the president out for a few weeks at a time. Of course, the Vice-president is supposed to take over as Acting President, but presumably the council could move against the Veep in turn if he or she did not cooperate. 

In that way a regime could perpetuate itself. The threat might not even have to be used: presidents would know that they are figureheads. If you want a science fiction scenario where America preserves the forms of democracy but loses the content, the 25th amendment looks like a possible mechanism, no? 

In reality, this could never happen. You would have an outcry, the Veep would not cooperate, the President would declare that he or she is fine, take back office and do whatever it is that the Grand Council was trying to stop them from doing.  And the public outcry would be enormous. So there is nothing at all to worry about.

What can we learn from Huey Long?

Back during the Obama administration, critics always used to say that there was too much “uncertainty.” Business executives being fragile flowers and all, they could not be expected to make tough decisions without absolute 100% certainty about everything.

That argument made no sense back then. After all, the Obama administration was well inside American norms during 2009-10 … and hamstrung afterwards. You can make a case that the DAPA order pushed executive action too far, but that’s really not what people were complaining about. Anyway, investment steadily rose during the Obama administration while the cost-of-capital remained low, meaning that the whole premise of the argument that “uncertainty” mattered was based on nothing.

The Trump administration, however, has brought the whole argument over “uncertainty” roaring back! Here we are, a month in, and you’ve got political uncertainty galore. Will Obamacare survive? Will the administration survive? Will it lash out? What norms will be broken? How can you trust a government that lies with such ease about everything? How bad will corruption get? Will we have a trade war? A real war? Civil unrest? Impeachment? WHO KNOWS! RUN FOR THE HILLS! CASH UNDER THE MATRESSES!!!

Or maybe let’s take a deep breath and ask if there is anything that history can tell us. Turns out that there is! In the 1930s, Huey Long ran a very Trumpian administration in Louisiana. Governor Long was, in fact, the model for an American dictator in It Can’t Happen Here. (A novel I recommend, by the way. Free at the link.)

The picture, yes, is of Texas, not Louisiana. I was just in Austin and will be returning fairly often. I’ve only been to Louisiana once, in 2004, when I stopped outside Baton Rouge on my way to Boston from Mexico City. (I also drove through New Orleans in 1996, on my way from Florida to California.) The place seemed crazy, but then again I was idiotic enough to decide to stop into a biker bar outside the city. I’m fairly certain that my Army Reserve ID was the only thing that kept me from severe physical harm.

But I digress. Let’s return to Huey Long. His regime really was that wild, wilder than any 2004 biker bar. In 1928, he won election. He then trampled over what little civil service there was in Louisiana, firing opponents and forcing state employees to donate to his campaigns. He passed out jobs to active legislators. (Really. He did that.) He imposed taxes on political opponents. In fact, he threatened to impose taxes that business people considered tantamount to expropriation. In return, they had to negotiate with him. When one opponent complained by saying, “Maybe you’ve heard of this book. It’s the Constitution of the State of Louisiana,” Long replied, “I’m the Constitution around here now.”

It got wilder. In 1930, he won a Senate seat but postponed taking it while remaining as governor. He then installed a puppet, Oscar Allen, who won in a massively fraudulent election. Allen was such a puppet that Long’s brother said, “A leaf once blew in to Allen’s office and fell on his desk. Allen signed it.” The legislature, meanwhile, turned into a Soviet rubber-stamp: the governor’s bills passed in minutes. He passed a newspaper tax he called the “tax on lying.” On 1934, he strengthened the Bureau of Criminal Identification, an agency empowered to make warrantless arrests throughout Louisiana. In 1935, the opposition was reduced to organizing a paramilitary to seize the Baton Rouge courthouse, prompting Senator Long to declare martial law. To cap it off, he established a state printing board that could effectively shut down any newspaper in the state.

Finally, Carl Weiss shot him on September 10, 1935.

So talk about uncertainty! That was American uncertainty. If uncertainty matters, we should see it in Louisiana under Long.

So Gabriel Mathy (American University) and Nicolas Ziebarth (Auburn) went looking to see what uncertainty did to the Louisiana economy under Long! In a forthcoming paper for the Journal of Economic History, they constructed uncertainty measures for Louisiana and found … nothing. All the uncertainty had remarkably little economic impact.

That should not make you complacent about the future of the Trump administration. Quite the opposite, in fact. First, the result may be specific to the southern United States. One of the best parts of a great paper is where they look for border effects with Mississippi. Mississippi didn’t get a Huey Long, but maybe markets thought that it might: the craziness was already priced in. If that’s the explanation, then the U.S. may be in a for sudden crash.

But that seems unlikely. (The paper uses multiple methods, all pointing the same direction.) What’s more likely is that you can’t trust the markets to discipline the a truly-erratic administration until it is too late. If you want to make sure that the Trump administration doesn’t wreck American governance  then you’ve got to act yourself and act politically.

Go see and join the debate at this post.

What is power in the United States?

Power is the ability to get people to obey of their own volition. In liberal democracies, executive officials are obeyed because their underlings believe that the only legitimate course of action is to obey them. In the background, there is the fear that disobedience will have negative institutionalized consequences. That is, the civil service or judicial branch will cause you to lose your job or your freedom because you disobeyed a legal order.

There are countries in which presidential orders might be viewed as presidential suggestions. There is a head of government, but there is no internalized pressure to obey. Those presidencies are weak. 

But the same logic applies to the judiciary in strong liberal democracies with strong executive branches. 

Courts do have real power over the executive branch, as long as executive officials believe that court orders are legitimate things that need to be obeyed over other orders because it is the right thing to do. In fact, courts have real power as long as executive officials believe that other executive officials believe that they need to be obeyed over other orders because it is the right thing to do. After all, you might not believe that the court order is legitimate, but if other officials do then your particular ass is grass when those officials enforce the subsequent contempt order.

In other words, Andrew Jackson might have been right in his time and place, but he was not expressing a general principle.

We are seeing that stress-tested. I worry that these stories of USCIS officials denying court orders are getting insufficient play. If officials do not obey court orders over other orders because that is what the Constitution says that they should do, then America is in for a world of trouble.

“God bless Donald Trump to make good decisions”

On the phone yesterday, my boy said this to me, verbatim: “God bless Donald Trump to make good decisions and God bless bad guys to not be bad guys and do good things instead.” I am fairly sure that he is reciting the nightly prayer in which my wonderful wife leads both our kids.

Our little girl always yells “Donald Trump!” whenever she sees his picture in a newspaper or magazine that I’m reading. Such is the presence of our Head of State in American lives ... and one reason I am dismayed at the identity of the particular individual serving that role for the United States. 

But to return to the prayer cited by my boy: what is a good decision from the point of view of the current president? There seem to be three potential versions of the Trump presidency, thus far.

1. President Trump is a wrecking ball who will self-destruct.
2. President Trump has a plan (whether instinctual or thought-out) that will allow him to be more successful (in a purely political sense) than his opponents understand. The threat is to American governance, but not American democracy.
3. President Trump is executing (whether instinctually or with a plan) an authoritarian playbook. Be afraid. 

Which is correct?

It is hard to keep a detached attitude about the internet and politics

First, neo-Nazis organized by the internet booked a bunch of tables at an Italian restaurant around the corner from my house. They gave each other Hitler salutes, including, bizarrely, Tila Tequila. This upset the neighborhood, as you might imagine.

Then, yesterday, my wife found herself delayed while driving our kids back from a swimming pool by police called out because a man with a gun fired shots inside a pizzeria a few blocks away from our house and next to my favorite D.C. bookstore. The shooter had been inspired by a bizarre internet lie that Hillary Clinton had been running a child prostitution ring out of the place. 

That would be disturbing enough, but it seems that the national security adviser to-be believes the pizza-pedophile story, as does his son. (Links go to tweets by Gen. Michael Flynn and Michael Flynn, Jr. No hearsay.) 

This is not normal. This is certainly not normal from people close to the President-elect of the United States, or the President-elect himself. 

This morning, an email correspondent reminded me that in February 2010, in a post about potential failure modes for American political institutions, I had written the following: “The U.S. population might become apathetic and gullible to the point of civic dysfunction.” But I followed up with:

“That said, I see two problems, one potential and unlikely, one with us right now. The potential and (IMHO) unlikely one is that the internet and cable news will somehow interact with America’s ideological cleavages to produce a dysfunctional electorate. I really have my doubts that there is anything to worry about here, but I can of course be convinced otherwise by a good argument.” 

The 2016 election and its aftermath appears to be providing such a good argument. 

The comparisons with 1933 are not reassuring

I do not think that the coming years will be as bad as this link implies. But Hans-Joachim Voth is a sober economic historian. He does not rant. I am not even sure that he is a liberal, by the American definition. But it is a spooky piece.

Excerpted below:

Here is my attempt to think through the troubling parallels with 1933, between the “Seizure of Power” by Hitler and the surprise election of Trump. Of course, Trump is no Hitler, and history doesn’t repeat itself — at least not 1:1. With that in mind, this is my small checklist of things that look, broadly speaking, similar - and those that do not:

Similarities:

• A broad groundswell of dissatisfaction with the status quo, and especially the politicians seen to be responsible for it.
• Related to this, a message by the strongman that combines nationalism, xenophobia, and a sense that one’s own country has been headed in the wrong direction for some time. Let’s make America great again? Deutschland erwache (Germany, wake up — meaning a rebirth of Germany as a strong and proud nation once more). Your own country is amazing, ueber alles, but it has recently fallen into an abyss. And part of what has gone wrong is that the wrong people have been let in — Jews in the case of Germany, Latinos in the case of the US. 
• A growing sense of economic despair — easy to rationalize in Depression Germany, harder to explain in the US in 2016, where things are mostly going well (though some distress is clearly evident in the rust belt).
• Voters who are more enthused about “teaching a lesson” than what the candidate they voted for actually stands for. Germans in 1932 didn’t go through a checklist of policy items that the Nazis supported, from war to genocide, and liking every point, ticked the box for the Führer; they mostly had enough of austerity, misery, the politics of gridlock and seeming ineffectiveness of democratic leaders. Related to this, a surprising willingness to tolerate crassness and a complete lack of tact and etiquette from the leader in question... If you had told me that anyone can insult women the way Trump did, on the record, and have ANY chance to be elected, I would have laughed six months ago. The Hitler movement, of course, outdid any of this in terms of public declarations about what they would do once in power, what to think of their opponents, etc.
• A lackadaisical disregard for the finer details and a belief in the “triumph of the will”. Neither Hitler nor Trump care(d) about details, and sweating over the fine print of proposals is not their thing (a big difference with Stalin, who made a very effective bureaucrat-in-chief).  Watching the debates, it is very hard to believe anyone took Trump seriously as a man to lead political decision-making. But then, who would ever think that a foaming-at-the-mouth Austrian with a funny moustache could be taken seriously by anyone?
• Neither got a majority of the vote. Hitler maxed out at 44% in the semi-free election of March 33; Trump failed to win 50% of the vote.
• A right-wing elite that thinks they can control the populist strongman. Here, the Republican leadership sounds awfully like former Vice Chancellor von Papen and friends. They famously thought of Hitler as the “drummer” — a populist whose appeal was useful to them but could be controlled easily. 
• A democracy where significant parts of the population have given up on central elements of their constitution - not quite the “democracy without democrats” that historians write about in the case of Weimar, but one in which one of the oldest democracies on earth is basically governed by people (who were in turn elected by many of the people) who think the constitution is a joke, checks and balances are for woozies and elected representatives on average deserve no respect.
• A center-left elite that largely fails to take the threat seriously. German newspapers in late December 1932 were congratulating themselves that the Nazi menace was receding, and that Hitler would never become Chancellor. Enter the “big data” political forecaster-quacks here, and an elite discourse that underestimated Trump from the first day of his candidacy until the 8th of November.
• A great willingness to use military force to further one’s ends, and not only as a last resort.
• A stock market that seems to like what it sees...
• A willingness to use infrastructure (and deficit) spending to get the economy going again.
• A rejection of internationalist organizations and multilateral solutions for world-wide problems - the League of Nations in the case of Hitler, the climate change accords in the case of Trump. 
• A willingness to visit violence on the opponent. Ok, this is a bit of a stretch. The Nazis organized street fighters, the storm troopers, who not only beat up Communists and democrats, but committed murder — murder, condoned in some cases directly by the Nazi leaders — like the infamous Potempa murdersof 1932. Trump did not condone anything like that, or organize systematic violence, but... those comments about Hillary Clinton’s security detail do sound awfully like an invitation to political murder.
• A very loose sense of economic reality. Hitler clearly had no coherent economic program, other than spending on roads and arms and worrying about the consequences later. If there was any sense in Nazi policies, it was accidental or the result of right-wing elite input. Trump’s economic policies so far are equally farcical... ok, perhaps not on the scale of Feder money (the idea that bills should lose their value within a pre-specified period).

Differences:

• While Trump’s rhetoric against Latinos is pretty amazing, he doesn’t think of them as all-powerful puppet masters controlling the US today. Whatever went wrong in the US recently, according to Trump, is not directly driven by Latinos themselves; their presence is a symptom, not a cause of what he and his supporters think is a malaise
• German fascism had, if anything, a more progressive image of women. While there was a big policy push to get them out of the workforce, and back to children and the kitchen — there was also a celebration of “Germanic” heroines like the test pilot Hannah Reitsch, or the filmmaker Leni Riefenstahl.
• No belief in “Lebensraum” — there is no potty theory leading Trump to push for territorial expansion. 
• A conciliatory start. Hitler and friends did not begin their reign by trying to suddenly sound moderate and generous towards their internal opponents (though they did go easy in terms of foreign policy aggression until Germany was stronger militarily...)
• Hitler was very eloquent and a highly talented public speaker. Nobody can accuse Trump of either...
• The right-wing elite in Weimar supported Hitler (in the end); in the US, they mostly opposed Trump. We’ll see where the opportunists jump once the inauguration has taken place.
• No aftermath of military defeat that affected voting intentions and everyday politics, as did WW I and reparations. No hyperinflation that destroyed a good part of the wealth of the middle class (ht/ Laurence Copeland).
• No business empire to take care of in the case of Hitler; while he liked money and rewarded the tax inspector who left him alone over unpaid income tax for “Mein Kampf”, there was no secondary business agenda there that might interfere with political aims.

So what does it all mean? Some kind of autocracy is coming. Something somewhere between Putin and Berlusconi, if we are lucky; something worse if we are unlucky. The thing that gets me the most is the almost pathological unwillingness on the left to believe what the candidate has been saying... Hitler’s program was available in print, and Donald Trump is not an empty slate that deserves “an open mind.” Both have an agenda, and unbelievable, even unimaginable as they seemed just shortly before, they both probably mean every word. In the face of a political elite that is fast flip-flopping to the winning side, a spineless media, and a large silent majority of people who don’t give a fig about their democracy, I don’t put too much trust in institutions, the checks and balances of the U.S. constitution, or civic society stopping even the worst excesses.

How bad could this get? Gratuitous wars in, say, the Middle East (Iran), the Far East (Korea), or Latin America (Cuba)? Possible, but perhaps not that likely. The professional input from the Pentagon will limit what can happen, to some extent — but as we saw with GWB, only to some extent. Protectionism? It's a wild card; if Trump is energetic and focused, the US withdraws from the WTO and repeals NAFTA, this can start to look amazingly ugly quite quickly. A brutal rift within NATO that de facto abandons the Baltic Republics to a resurgent Russia? Not likely, but suddenly a possibility. Deportation of illegal immigrants and the wall? Don't rule that out at all; deportations rates have varied a lot, and were actually up under Obama; there is something awkward about tolerating a large number of people who are breaking the law in one's country, and while the social consequences of suddenly righting this are very ugly, there are many fascets to this argument. A lot of pressure on the media to fall into line? For sure. And a Supreme Court that can roll back decades of social progress, down to Roe vs Wade; very likely. Hugely expanded powers for snooping and incarcerating people suspected of terrorism, including US citizens; again, quite likely. An attack on affirmative action and the like? Possible. All of this is suddenly within reach as possibly acceptable policies, and the greatest hope is that “they don't mean it” and that implementation will not be very vigorous. I hope I am wrong, but to me it looks like the world in four years time will not look like a place you imagined possible 6 months ago.

Strange phrasing in an article about Calexit

Okay, “Calexit” is strange phrasing by itself. But that’s not what I’m talking about.

The New York Times ran a story on a fringy California secession movement given newfound momentum by the election result. California secession, whatever, terrible stupid immoral idea. And predictable bloviation, considering the election outcome. No cause for a blog post.

But what I noticed was the way the Times discussed the secession process. They actually laid out how it would work. “California cannot, of course, just pick up and leave. Even if the state wanted to, an exit would require two-thirds approval of both the House and Senate in Washington, along with the blessing of 38 state legislatures — a feat analysts say is implausible.”

Something seemed ominous in actually laying that process out. Not about the prospect of a divorce, but about the state of mind of the people interviewed by the author. 

Could American parties become symmetric?

 One of the worst things about American politics over the past 30 years has been asymmetric polarization, where the GOP has moved far and fast to the right whereas the Democratic Party has stayed where it ever was, absent its southern conservative wing. 

I have long feared that the Democratic Party might go the same way as the GOP. This fear encountered two kinds of pushback:

1. It will not happen. The old Will Rogers joke will continue to hold: “I’m not a member of any organized political party; I’m a Democrat.”
2. It will happen, but it’s a good thing! We need a Democratic Party stripped of its Liebermans and its Manchins and all those other squishes; the only way to fight fire is with fire.

Today Matt Yglesias made a brief for argument number (2). (To be fair, he did not say whether it would be a good thing or not.) He is arguing that younger voters want a more ideologically coherent Democratic Party. At some point, someone without the downsides of Bernie Sanders (like, say, Senator Elizabeth Warren) will give it to them.

Given the structure of the American constitution, I am torn. I can easily imagine how two ideologically coherent parties could wreck the country, even if they both had the best intentions. On the other hand, as a middle-aged guy from Brooklyn, I completely understand the logic of an eye for an eye; time to stop getting rolled and (more importantly) time to stop letting the conservative side shift the Overton Window. 

At the end of the day, though, having close Republican friends and relatives, my instinct is that it is a bad thing for the Democrats to imitate the GOP. If you want to become a national consensus party (like Canada’s Liberals) then mushy is what you want. 

But I do not think that will happen. I think we are headed towards two ideologically homogenous parties, and I do not think that will be a good thing for the country. Why am I wrong?

Belated sign of Senate functionality!

 Three months ago, I fretted that the Democrats were unwilling to compromise with the GOP over a human-trafficking bill. The issue was over a provision preventing funds collected under the bill from being spent on abortions for the victims. Given that the U.S. Congress has regularly prevented federal funds from being used for abortions, I thought that this was crazy base-servicing. I also thought that if the Democrats kept this up, refusing to compromise on ideological grounds, it would mean bad things for the Republic.

In comments, I got some pushback.

1. McDevite said that the Democratic stance (as I presented it) was not as crazy as similar Republican base-servicing.
2. Logan (who is paid to know this stuff!) explained that the issue was not the prohibition of federal funds, which is a standard thing, but the fact that the prohibition would be permanent.
3. George pointed out that the funds in question were from fines imposed on criminal organizations, not tax monies.
4. Finally, co-blogger Doug Muir added that the GOP has a terrible terrible record as far as anything having to do with international development is concerned.

First my response; then what happened.

My response:

1. McDevite: true but irrelevant. I worried that this was a sign that the Democratic Party was heading in the direction of the GOP: an ideologically-driven party run by the true believers, rather than pragmatists. I do not think that the Democrats have arrived at that point.
2. Logan: I understand the logic. I do not understand why that is worth killling the bill over, considering as the prohibitions are not going anywhere. You are right that I am more sympathetic to that issue than I am to a fight over spending on abortions, but the truth is that the bill as it stood allowed the federal government to pay for abortions used to terminate pregnancies that were the result of rape.
3. George: That is interesting! Tell me more! Which federally-run (but not funded) programs are we talking about?
4. Doug: agreed, but as with McDevite’s comment I do not see the relevance.

What happened:

George seems to have gotten it right! The two parties compromised by stating that fines would only be used to provide legal services to the victims, whereas health services would come from a separate pot of tax money. The tax money would not fund abortion, but anti-abortion restrictions would not be explicitly extended to non-tax money. Implicitly, of course, the bill would prevent the non-tax money from being spent on abortion because it would prevent them from being spent on any health services. 

Which also means that McDevite got it right: this was not a sign of crazy base world. Which is not to say that I do not worry about the Democrats going the way of the Republicans: I do. But this story, at least, ended creditably.

The Democratic party enters crazy base world

 I have long publicly worried that the Democratic party would follow the Republicans into being a hard-line ideological parliamentary-style organization. Note the verb worried; in general, America’s two parties are not symmetric in that regard. But that may be changing.

The recent failure of the Senate to pass an anti-human trafficking bill appears to me to be the fault of the Democrats. Short version: Democrats freaked out because the bill prevents any money from being used to pay for the victims’ abortions except in cases of rape or incest.

Problem: limting federal funds from financing abortion except in cases of rape or incest has been standard for 39 years. Meanwhile, the concern that many human trafficking victims need abortions can be dealt with by the fact that such unwanted pregnancies are by definition a result of rape. So WTF are the Democrats trying to do?

If, say, the Occupy movement of 2011-12 (above) had dragged the Democrats to the economic left in 2012, that maybe I could have supported. But the Occupy movement decided that it didn’t need anything so sensible as a platform, and so that passed. Instead now we get a bizarre wig-out over something that has been standard since I was, well, maybe a year or two older than in this picture from Long Beach, New York:

Unless somebody can explain this to me, I am disgusted at the Democratic Party. (Logan and Luke bait here.) This seems like the canary in the coal mine warning us that our remaining sane party is at risk of sinking into the swamp of crazy that has enveloped its counterpart. And if that happens ... well.

Juan Linz was wrong

 I think I need to spell it out more clearly: Juan Linz was wrong.

(1) There are very few instances of democratic collapse in Latin America which involved partisan gridlock. The only one which clearly fits the bill is the Brazilian coup of 1964 ... except for the fact that Brazil tried a parliamentary system in 1960-63, which did nothing to resolve the country’s underlying political conflicts. Three others fit if you squint hard: the Argentine coup of 1966, the Honduran coup of 2009, and the Chilean coup of 1973. The latter, however, also involves a President who was in open defiance of the Supreme Court as well as Congress.

This is a small subset of the democratic collapses in Latin America. 

(2) Now, Latin America is all presidential regimes, save the 19th-century Brazilian Empire and that brief early-Sixties experiment. But Africa has a mix of presidential and parliamentary systems. And on that continent, both systems are equally-likely to break down.

(3) Postwar Europe has not had a lot of democratic collapses, but there have been a few close calls. They do not fit the Linz formula. Perhaps the coups in Czechoslovakia and Hungary should not count, because they both involved the Soviet Union ... but they nonetheless occurred in parliamentary systems. The collapse of the Fourth French Republic was not a coup per se but it was certainly a constitutional breakdown ... and the Fourth French Republic was a parliamentary system. The 1982 putschists in Spain launched their assault on a parliamentary government. Finally, the 1960, 1971, 1980, and 1997 coups in Turkey overthrew prime ministers, not elected presidents.

The U.S. may go into a crisis. We may develop a political culture most unsuited to our constitutional structure. Jonathan Chait explores that idea here. But if that causes us to go into crisis, it won’t be because of our constitution per se.

Failure modes of the United States, combined

 For some reason has been in the archives since July 2010. It is not finished, but I’m lifting it out anyway: 

A silly series of recent alternate history novels included as one its postulates the idea that the Great Depression might have started on the watch of an ostensibly left-wing Socialist Party president. Despite that, that President would be small-c conservative about fighting the Depression, for most of the same reasons why ostensibly left-wing governments in Europe have been small-c conservative about fighting the Great Recession. Moreover, the conservative opposition in Congress would succeed in blocking whatever actions he tried to take. The electorate, of course, would blame the situation on the Socialists. As a result, a really conservative Democrat would take office in 1933 and the Depression would continue to worsen.

They are really silly novels. I do not recommend them. But watching the recent Republican success in blocking the extension of unemployment benefits and (AFAICT) escaping all blame for the decision certainly reminded me of the fictional scenario. The fact that I have close family members whose benefits are about to run out drives the point home. One political party has done something both unpopular and economically unsound; public apathy means the incumbent party gets the blame.

There a few things that should be worrying observers.

This bears on a pair of recent Vox posts: here and here. Note that we have a new category in the cloud to the left: “Failure modes of the United States.”

Is American democracy doomed?

Juan Linz has gotten a lot of well-deserved attention in the blogosphere recently. Linz wrote that presidential regimes tend to break down because of irreconciliable conflicts between the executive and the legislature.

Many observers, not least Matt Yglesias, have interpreted Linz as stating that the problem is that presidential system allow for gridlock between the executive and the legislature, especially when the parties are ideologically coherent and commited. Kind of like, uh, the modern United States. So are we doomed now that our parties have become European-style organizations?

Well, maybe. The cross-country data is mildly supportive of the presidentialism = bad hypotesis, but is by no means a slam-dunk. Moreover, while presidential regimes are more likely to break down there is really rather little evidence that the reason was gridlock between the executive and the legislature.

The closest parallel to the current American situation is Chile in the early 1970s — but it is not very close. In the 1969 election, the People’s Union (Unidad Popular) got 60 out of 150 seats in the lower house. The Christian Democrats got 57 and the National Party received 33.  The next year, Salvador Allende (the People’s Union candidate) won a plurality of the presidential vote, throwing the election to Congress, where he won with Christian Democratic support. (The Nixon Administration tried to prevent his election but failed.) Allende started a program of widespread nationalizations using existing legal authority under a 1932 law that allowed for the temporary requisition of basic goods when in the public interest. (The law also allowed the executive to put companies into temporary receivership should they be closed by a strike.) In October 1972, the Supreme Court ordered the President to obey lower-court orders overturning some of the nationalizations; Allende refused.

In March 1973, the opposition won the Congressional elections. The Christian Democrats aligned with the National Party to form the Democratic Confederation, which took 55.6% of the popular vote and 87 out of 150 seats. (The People’s Union got the rest.) Congress first attempted to amend the constitution, which failed. It then tried to impeach Allende, but could not get the requisite ⅔ majority. In May, the Supreme Court again reprimanded the President. At this point, Congress went on record asking for a coup. The coup happened on September 11, and its leaders proceeded to disband Congress and jail or “disappear” many of the legislators who had called on the military.

In short, the Chilean crisis was caused by a President who overstepped his authority and disobeyed the Supreme Court and resolved by a military that believed itself above the law. Suffice it to say that this does not characterize America’s current situation.

What about Argentina? Well, Argentina has had a lot of coups since the first one in 1930. In 1930, President Hipólito Yrigoyen’s party had comfortable majorities in both houses. The 1943 coup was against a dictatorship. The 1955 coup overthrew the elected Juan Perón — but Perón’s party controlled Congress by overwhelming margins. As in 1930, gridlock was not the issue. In 1962, the miltary overthrew President Arturo Frondizi: in that case, the prompt was Frondizi’s loss of several governorships to the Peronists in the ’62 elections. Again, gridlock was not the issue. The 1966 coup kinda sorta maybe if you squint could be gridlock-related — but really had more to do with President Arturo Illia’s confrontation with American oil companies. And 1976? That one was against President Isabel Perón’s supposed inability to defeat Communist guerrillas. Her coalition controlled Congress; once again, gridlock was not the issue.

What about Brazil? Well, the Revolution of 1930 took down an oligarchical government with an extremely limited electorate. Not really comparable. The 1964 coup knocked out a left-wing government with American support. It is true that Congress did not support President João Goulart. It is also true, however, that for his first three years Goulart presided over a parliamentary system in which power resided with Prime Minister Tancredo Neves. In 1963, a referendum restored President Goulart’s executive power: the result was paralysis. In that sense, the ’64 democratic breakdown is consistent with the hypothesis that presidentialism causes gridlock causes democratic failure. The problem is that the parliamentary system tried beforehand was doing no better at resolving the country’s political conflicts.

Colombia? Well, the 1953 coup happened after President Laureano Gómez seized dictatorial power. Gómez, in turn, won the 1950 election because the opposition boycotted it. Again, gridlock not the problem.

Let’s turn then to Mexico. Uh … no, let’s not. The 1910 revolution got started against a dictatorship. Porfirio Díaz government was many things, but gridlocked was not one of them. (In fact, Congressional votes were all unanimous after 1893.)

I could go on around the other countries of the Western Hemisphere, but the pattern is similar. Divided government is not the cause of most democratic breakdowns in Latin America. Chile 1973 is the closest, but that is one event, with little resemblance to the government-by-crisis currently affecting the United States.

So breathe easy America! We will get through this. How, you ask? Well, if the GOP keeps this up, it will lose a lot of elections, even with our gerrymandered House of Representatives ... and there is a lot of ruin in the United States. The worst-case scenario on the debt ceiling is pretty bad, and I would certainly a 5-10% fall in GDP and the corresponding human suffering a failure of the United States. But in the unlikely event that the Republicans take us there, they will not be in a position to take us there again.

Failure modes of the United States, part 6, continued

Political science is hard!

There has been some recent blogobuzz about the work of Juan Linz, who argued that presidential systems were more prone to breakdowns than parliamentary ones. Breakdown, of course, meant a military coup.

Problem is, Linz’s arguments aren’t airtight in theory or in practice. They strongly hinge on the idea that the constitution’s problem-solving mechanisms are illegitimate. Perhaps that is true in the United States; perhaps if it is not. If President Obama is forced to choose between breaking the law by omission or breaking it by commission, we might have a test of this proposition.

(Omission is letting the U.S. start to default on payments in the next few weeks; commission is authorizing a Treasury auction in contravention of the debt ceiling. Both are in fact illegal.)

In addition, Linz provides no prediction as to whether a strong presidency would be better or worse for stability. A strong presidency (as in Colombia) avoids some of the problems of legislative-executive conflicts; but it increases the problems of getting stuck with a hard-to-remove problematic executive. (This very problem caused the Honduran coup.) A weak president, on the other hand, lessens the winner-take-all problem. (Scott Mainwaring and Matthew Shugart, currently at Notre Dame and UC-Davis, suggested that two decades ago.)

Jim Robinson and Ragnar Torvik have a more developed model that takes into account the fact that many parliamentary systems outside Latin America switched to presidential ones. I like that paper. Thing is, Robinson-Torvik reduces the choice of system to an epiphenomenon ... and predicts that presidentialism will be preferred in societies that are (a) polarized with respect to preferences for public goods; (b) highly divided ideologically; and (c) have a low government budget. If they are right, then a parliamentary system for such a society might be better in some theoretical sense ... but it is also a Nirvana fantasy.

Empirically, there are some problems with Linz. First, Latin America has no parliamentary regimes. That makes intra-regional comparisons difficult. The parliamentary governments of the West Indies have seen three democratic breakdowns (Grenada, Guyana and Suriname). That is a relatively low rate compared to the mainland, but the islands are different from the mainland are different on a whole host of variables, not least their judicial links with the United Kingdom and the willingness of the United States to intervene.

Second, in Africa, neither system is more likely to survive. That poses a problem for the theory, at least in very poor countries. (Ditto very rich ones, where most of the democratic breakdowns have happened in parliamentary regimes: e.g., interwar Europe.)

Finally, a lot of the results are driven by the surprising fact that island states are less likely to experience democratic breakdown.

There may be a killer paper out there. If there is, I am not aware of it.

In other words, the U.S. has some constitutional problems. They may even cause political failure. But I am not sure that our current crisis of ingovernability is due to presidentialism per se.

Moreover, it would seem to me that a stronger executive would obviate the current crisis. This could not happen in Colombia or Brazil. Perhaps that is what (for better or worse) the current crisis will give us.

Failure modes of the United States, part 6?

From Carlos Yu, the five failure modes are:

1. There might be too many “veto points” in the Federal system to resolve new problems of government in a timely manner (discussed here, here, here, here, and here);
2. The military might not accept civilian authority;
3. The monetary and regulatory agencies might be too slow or too unwieldy to deal with unexpected changes in the global economic system (this failure mode actually occured in 1929-32, to catastrophic result);
4. The U.S. population might become apathetic and gullible to the point of civic dysfunction;
5. Enough states go dingo that the Federal system can’t deal.

Is there a sixth? Perhaps: the party system becomes dysfunctional.

In the U.S. House, the majority party has total control. It can effectively ignore the minority. With enough internal discipline, therefore, it takes only a majority of the majority to run the place.

Nothing strange in that: most parliamentary democracies run that way, certainly under the Westminster system.

But in the U.S., you have two additional wrinkles. First, gerrymandering means that the GOP controls the House despite losing the Congressional elections by 1.4 million votes, a margin of 1.1%. This result was driven by some ridiculous maps in a few states: in Pennsylvania the GOP got 72% of the seats with 49% of the two-party vote; in North Carolina they got 69% of the seats also with 49% of the two-party vote.

Nonetheless, this is still not a failure mode. It is just tough politics.

The second problem is worse, though. How does the GOP maintain a parliamentary level of unity? It is not because of strong centralized leadership! No, it is because the primary elections attract very small turnout, which on the Republican side (but oddly-enough, not the Democratic, for reasons I do not understand) tend to be very highly ideologically motivated. Thus, you get discipline for fear of getting primaried by someone to your right.

Still not a problem ... except those even-more-right-wing candidates do not face a competitive electoral environment at the House level. At the Senate level they do: thus the spate of statewide Tea Party losses in 2010. (Or on the other side, Joe Lieberman’s primary loss in 2006, where he came back to beat the new Democratic nominee in the general.)

So you get a small, increasingly safe, radical wing with an effective veto over the House of Representatives. End result? Government shutdown, as that wing demands the rather unprecedented strategy of holding hostages in order to get through its legislative priorities. Or worse yet, a default caused by hitting the debt ceiling.

Solutions? Well, there are a few as far as the government shutdown is concerned. GOP moderates (like Charlie Dent or Peter King) could cut a deal with Democrats to keep Boehner as Speaker even after he allowed the government to reopen or abolished the debt ceiling. Or they could bolt to sign a discharge petition to bring a continuing resolution or debt ceiling bill to the floor. Boehner could decide that he is a useful lightning rod for conservative ire. Or nothing happens for a couple of weeks and the GOP winds up in trouble in 2014. (The last link is very good, I think, at explaining the GOP strategy.)

But the debt ceiling is not like that. Mess that up, and you have catastrophe.

The President will soon have two illegal choices. He can run with random defaults on bondholders and other creditors. (After all, I work for you for two weeks and then get a paycheck, well, to all extents and purposes I am your creditor.) Or he can say screw the debt ceiling law, organize a Treasury auction, and procede apace.

His third choice is to cave to GOP demands, of course, while somehow forcing the Senate to go along. But that is a failure mode: it would effectively repeal Article 1, Section 7, of the Constitution because of a stupid law held over from the First World War.

Since both are illegal, he may well go with the second option. It will lead him to be impeached, but the Senate will ignore it.

And by forcing the President to choose between two illegal options, it will further transfer power to the executive branch. Carlos Yu: “While Obama will probably be circumspect about how much, it’s another precedent.”

Anyway, I think we will make it through this madness unscathed. Presumably the House will assert itself against the radical part of the GOP caucus. Hopefully the GOP will then pay a price in 2014, despite gerrymandering. Possibly we will reform the primary system to make things saner.

Or perhaps we will not. The party system will remain dysfunctional. Either the President will gain another power or we will continue to have government by confrontation until the GOP loses the House. Enough such precedents, and you have a failure mode.No?

POSTSCRIPT: After writing the above, I came across this piece by Stan Collender. It very cogently lays out the problem with the House GOP. Worth reading.

Finally, the world notices that no Senate is good Senate

This blog has panned the the Canadian senate, along with the Argentine, Brazilian, and Philippine ones. And we have not spared the American one, either! We blasted the American senate not only because of it has godawful stupid internal rules but because it is fundamentally undemocratic. In fact, we went so far as to calculate what the U.S. Senate would look like if you retained the 100-person membership but allocated Senators the way we did Representatives. Short result: California gets 10 senators. New York and Texas get six. Florida gets five. Ohio, Pennsylvania and Illinois get four, and you can click the link for the rest.

Given that, it is nice to see the New York Times finally catching up! Read the article. The Senate is fundamentally undemocratic and perverts our politics. Abolishing or reforming it is long overdue.

Unfortunately, the Senate is the one thing that the Constitution of the United States says cannot ever be reformed. It’s right there in Article 5: “[Amendments become part of the Constitution after ratification by ¾ths of the state legislatures or special state conventions] provided ... that no state, without its consent, shall be deprived of its equal suffrage in the Senate.”

Oh well.

Does gerrymandering matter now? A question for political scientists

There is a political science literature that gerrymandering, as an empirical matter, has had less effect on American politics than the pundits like to claim. There is little past evidence that gerrymandering leads to more polarization or less competitive elections. The U.S. Senate provides perhaps conclusive evidence about polarization: you cannot gerrymander state boundaries, but the Senate is just as polarized as the House. Politicians are polarized because the U.S. now has polarized ideological political parties.

Still, it is hard for me to reject the hypothesis that gerrymandering is very important. Why is that? Well, two things:

1. California: it moved to nonpartisan districting, and Democrats pulled out a two-thirds supermajority. Of course, there could be other explanations: nonpartisan primaries, continuing Mexican-American population growth and leftward shifts in public opinion. It certainly seems as though the new cleaner districts helped the Democrats pick up Congressional seats;
2. The GOP seems to have lost the overall Congressional popular vote, but maintained its majority.

I do not know, but it seems as though gerrymandering may have made a very large difference in this election. What does the literature say? Anyone?

Failure modes of the United States, part 4a

  “The U.S. population might become apathetic and gullible to the point of civic dysfunction.”

 
At first glance, polls like this recent one of self-proclaimed Republicans makes one wonder. (Is there an equivalent poll for Democrats?) The rhetoric at the Tea Parties has been a little, well, out to lunch, not to mention the deliberate use of, uh, falsehoods by major Republican personages, like Senator Grassley. Fox News, meanwhile, is a national disgrace, and every recently Keith Olbermann has drifted in a similar direction, to the point where my wife hates his show. (Jon Stewart recently reigned him in.)

But then you just need to sit and think about it for a moment. With just a little bit of historical perspective, the fear drops away. Consider the history of health-care-related rhetoric in the United States.  (Click the link.)  Pretty crazy stuff, no?  Then consider the stuff the New Left used to say, at much higher volume than the marginal and muted lefties of the Bush Administration era.  Yet the Republic survived. Meanwhile many people worry about the decline of civic participation, the 2008 election uptick notwithstanding. It is something to be worried about ... but when you think about what real high-participation elections were like back in 19th-century America, it isn’t something to inspire nostalgia.  Consider:

On the morning of November 2, 1859 — Election Day — George Kyle, a merchant with the Baltimore firm of Dinsmore & Kyle, left his house with a bundle of ballots tucked under his arm. Kyle was a Democrat.  As he neared the polls in the city’s 15th Ward, which was heavily dominated by the American Party, a ruffian tried to snatch his ballots. Kyle dodged and wheeled, and heard a cry; his brother, just behind him, had been struck. Next, someone clobbered Kyle, who drew a knife, but didn’t have a chance to use it. “I felt a pistol put to my head,” he said. Grazed by a bullet, he fell. When he rose, he drew his own pistol, hidden in his pocket.  He spied his brother lying in the street. Someone else fired a shot, hitting Kyle in the arm. A man carrying a musket rushed at him. Another threw a brick, knocking him off his feet.  George Kyle picked himself up and ran. He never did cast his vote.  Nor did his brother, who died of his wounds. The Democratic candidate for Congress ... lost to the American Party’s Henry Davis.  Three months later, when the House of Representatives convened hearings into the election ... Davis’s victory was upheld on the ground that any “man of ordinary courage” could have made his way to the polls.

Apathy has its charms.

That said, I see two problems, one potential and unlikely, one with us right now. The potential and (IMHO) unlikely one is that the internet and cable news will somehow interact with America’s ideological cleavages to produce a dysfunctional electorate. I really have my doubts that there is anything to worry about here, but I can of course be convinced otherwise by a good argument.

The other problem is that too many voters do not realize that America’s constitution has shifted over the past few decades. We now live in a world of parliamentary parties. Yet too many Americans persist in believing that the candidate matters in elections for the federal legislature.  Even Doug Muir believed this. (I doubt that he still does, but Doug doesn’t admit error much. Partially because he’s rarely wrong.) More discussion here.

I had a very worrying discussion along these lines with family members at my niece’s recent wedding. (No, not a long discussion. There was dancing! With my wife! And little kids, lot of! For her to play with! Which she liked! A lot! Erm, gulp.) Americans want to believe that the person matters more than the party, which is simply not true.  If it were, the GOP would not have been able to muster the quite odd unanimous party-line votes that it recently did in favor of defaulting on U.S. debts and removing all limits on Congressional spending. The WTF-moment those votes inspire clarifies itself and makes perfect sense when you realize that we live in a parliamentary republic these days.

There seems to me a large risk that the disjunct between voter perceptions of the political system we live under and the reality of that system could lead our government to go off the rails. Especially with the recent emergence of the Senate supermajority norm.  Will voter perceptions catch up? I mean, if even Doug Muir was reluctant to abandon the idea that the Senators from Maine were different, we might be in trouble.

(BTW, for the record, on the thread linked to above?  Faeelin right, me wrong.)

Thoughts?

Failure modes of the United States, part 3

 Carlos Yu proposed five possible failure modes for the American system of governance. We have discussed the proliferation of veto points and the glorification of the military on this blog. Since we began, worry about veto points has gone mainstream.  The best (or at least most entertaining, while remaining intelligent) piece about America’s political dysfunction is by James Fallows; I highly recommend it. Meanwhile, nobody worries about a military coup ... although it is a little worrying that somebody as grounded as Mr. Fallows felt the need to discuss the possibility.

The third failure mode was, “The monetary and regulatory agencies might be too slow or too unwieldy to deal with unexpected changes in the global economic system.”  It would be hard to find any sign of that in the last year.  I sat through a number of seminars where all we did was try to figure out what was going on with the Fed’s balance sheet as it tried creative way after creative way to rescue the financial system.  The regulators fell down before the crash, but that was the fault of a bad administration following bad legislation and the general zeitgeist. I won’t go so far as to exculpate them, but it wasn’t like they were sitting down as the world crashed down.

That said, I would not discount the possibility of this failure mode. Consider that the Federal Reserve under Chairman Bernanke appears to have ruled out raising the target rate of inflation. He also seems to have ruled out further quantitative easing. (Which is, I think, trying to do the same thing without making an explicit announcement.) One can make a very good argument that this decision is going to prolong the Great Recession and ruin millions of lives.

OK, that isn’t a failure mode. Not yet, at least. But we have seen the movie before (in 1929-32) and in other times of trouble I could easily see it becoming one yet again. At the very least, it could worsen the effect of other political failings.  It certainly isn’t helping now.

Thoughts?

Failure modes of the United States, part 1a, a counterfactual

  Gah.  Still can’t sleep, but my concentration keeps coming in-and-out.  Here goes a short post on a random topic.

The story of how the Supreme Court tried to hold up much of the New Deal is well known.  Roosevelt tried to appoint six new justices, which thankfully failed, and the Supreme Court reversed itself.  In an earlier post, I argued that it would have made little difference had the Court stuck to its initial rulings.  All that would have happened would have been a constitutional amendment reading something like the following:

Congress shall have the power to legislate in all cases for the general interests of the union, and also in those in which the states are separately incompetent, or in which the harmony of the United States may be interrupted by the exercise of individual legislation.

A less poetic version listed an economic laundry list (wages, health and safety, etcetera) and then said:

The due process of law clauses of the fifth and fourteenth amendment shall be construed to impose no limitations upon legislation by Congress or the several states with respect to any of the subjects referred to in Section 1, except as to the methods or the procedure for the enforcement of such legislation.

Such amendments would have changed pretty much nothing.  The Gun-Free School Zones Act of 1990 would have been upheld, and that’s about it.  So not a very big change.

That said, there was another very different amendment in play at the same time, proposed by Senators Burton Wheeler (D-Montana) and Homer Bone (D-Washington).  It had a lot of support, and since Wheeler was one of the biggest opponents of FDR’s court-packing plans, it was probably the most likely amendment to pass.  (Or so I take away from Bruce Ackerman’s book.)  It read:

In case the Supreme Court renders any judgment holding any act of Congress or any provision of any such act unconstitutional, the question with respect to the constitutionality of such act or provision shall be promptly submitted to the Congress for its action at the earliest practical date that Congress is in session, but no action shall be taken by the Congress upon such question until an election shall have been held at which members of the House of Representatives are regularly by law to be chosen.  If such act or provision is re-enacted by two-thirds of each House of the Congress to which such members are elected at such election, such act or provision shall be deemed to be constitutional and effective from the date of such re-enactment.

That is a bit like Canada’s “notwithstanding” clause.  Congress would have been able to override the Supreme Court with a two-thirds vote.  Unlike Canada’s clause, which requires a notwithstanding declaration to be re-authorized every five years, a Congressional override would have been permanent.  It also would have required a Congressional re-vote, rather than merely authorizing one.  On the other-hand, two-thirds is a rather high bar to jump over. 

Unlike the more concrete economic amendments, which would have changed very little, it is not unreasonable to conclude that the Wheeler-Bone Amendment might have had very significant effects on American history.  The question is how significant, and in what direction.  Could a removal of a veto point create a failure mode?   

We have seen the future, and it is California

  I can’t really claim to having said it first, but it looks as though Richard Yeselson, Ezra Klein, and Kevin Drum all agree with me.  Political polarization plus a stupidly-designed legislature have broken the American government.  We have seen the future, and it is California.

I mean, when someone as patently irrational as Joe Lieberman controls a veto point, we have a problem.  Maybe not a failure mode, but a clear problem. 

As they say, “Destruction leads to a very rough road, but it also breeds creation.”  Problem is, it isn’t clear that we're headed towards destruction, per se, just a slow decline as the health system collapses, the fiscal pressures ratchet up, and the climate goes kablooie on us.  Eventually, we hit the end state, or whatever 2030’s version looks like.

Counterarguments?

Failure modes of the United States, part 1d

  I am superwhelmed at the moment, and so the backlog of posts (oil sands, other failure modes) piles up.  But I wanted to point out to readers that Brad Delong has cogently summed up the challenges facing the United States about which we've done nothing over the past two decades.  To paraphrase:

1. Medicare is gonna eat us alive, and we’ve known that for 20 years;
2. Private medical costs are gonna eat us alive, and avoidably kill a lot of people along the way, and we’ve known that for 20 years;
3. Congestion, global warming, and the need to play imperial policeman in the Arabian Gulf are gonna eat us alive, so we should start taxing coal and oil, and we’ve known that for 20 years;
4. As our relative power declines, other countries will eventually eat us alive, unless we do something to build an imperial exit strategy that leaves us secure, and we’ve known that for 20 years;
5. The deregulated financial system almost just ate us alive (and would’ve in fact eaten us alive without a willingness to throw money at the economy), and so needs to be re-regulated in a sensible way, and we’ve known that for about 20 months.

So here’s the question.  How much of the inaction is because the problems are hard to solve, and how much of the inaction is because the U.S. has a veto-filled political system?  Put another way, if the United States circa 1989 had somehow found itself with Canada’s constitution but the same distribution of political ideologies and interests that it actually has, would we have gotten more of a handle on these problems, or would we be punting just as much?

Failure modes of the United States, part 2

  Today a conservative commentator for Newsmax called for a coup: 

There is a remote, although gaining, possibility America’s military will intervene as a last resort to resolve the “Obama problem.” ... Imagine a bloodless coup to restore and defend the Constitution through an interim administration that would do the serious business of governing and defending the nation. Skilled, military-trained, nation-builders would replace accountability-challenged, radical-left commissars ... Military intervention is what Obama’s exponentially accelerating agenda for “fundamental change” toward a Marxist state is inviting upon America. A coup is not an ideal option, but Obama’s radical ideal is not acceptable or reversible. Unthinkable? Then think up an alternative, non-violent solution to the Obama problem. 

The failure of the military to accept civilian authority was the second of Carlos’s proposed failure modes.  So let’s ask: could it happen here?  We won’t be the first.  Back in 1993, then-Lieutenant Colonel Charles Dunlap published an essay titled “The Origins of the American Military Coup of 2012.” 

In the scenario, the U.S. increasingly turns to the military, first to aid with domestic law enforcement and then, increasingly, to provide other services when the civilians deadlock.  (It’s too bad that the author missed the possibility that a collapsing private health insurance system might cause the government to mobilize domestic Medcaps.)  The military gains the experience to cheaply carry out governmental functions by becoming “the de facto government in many” places abroad where regimes had collapsed or been removed.  Finally, Dunlap postulates that a combination of the end of conscription, the exclusion of ROTC from liberal campuses, long overseas deployments, and attempts to improve on-post service life cause the military to continue to become ever more distinct from American society.  In 2007, Congress unifies the armed forces.  In 2010, the U.S. is soundly defeated in the “Second Gulf War.”  Dunlap doesn’t list the events that finally provoke the coup (a dolchstoßlegende is hinted at) but that wasn’t of course his purpose. 

Another deliberately vague treatment of an American military coup is in Starfarers, by Poul Anderson.  The book implies that the postulated coup occurs long after the elected parts of the United States government have become hollow shells, with a presidential “Advisory Council” calling most of the shots.  Anderson’s coup leader uses the military to oust the current crop of advisors and take their place, leaving intact the titular offices of President and Congress.  (Which is quite similar to what our conservative friend fantasized about today:  “Having bonded with his twin teleprompters, the president would be detailed for ceremonial speech-making.”)

Needless to say, there is no sign of any of this happening in the United States.  Discussion below the fold.

There is a worrisome disconnect between the military and the civilian elite.  That disconnect, however, has a long tradition in American history.  There has always been a strong streak of antimilitarism among one portion of the American “elite,” particularly in the northeastern states.  Its brief eclipse in 1941-65 was the product of an odd set of circumstances. 

In addition, there has also always been a strong disinclination to make any sacrifices on behalf of the society among the nouveau riche of the United States.  Teddy Roosevelt may have tried, but he never managed to replace the knee-jerk economic libertarianism of the American wealthy with a European-style dedication to militarism and other “manly virtues,” as he called it.

The disconnects between the elite and the military is, in my opinion, mildly problematic for the nation.  Liberal antimilitarism and conservative libertarianism cause the children of the well-educated and the wealthy to be underrepresented inside military institutions.  That said, neither disconnect is anywhere near strong enough to make it likely that the military will disrespect civilian authority. 

Nor is the military sufficiently cohesive to really believe itself separate from the rest of the polity.  The experience of the Bush Administration has served, if anything, to make the officer corps less partisan.  In addition, the importance of the Reserves and National Guard to the Total Force system has kept the U.S. military fairly well-linked to the civilian world, even if not as well-linked to the richest or best-educated part of it as I would prefer. 

Finally, while there is an unhealthy degree of surface deference granted the military in our public discourse, I do not think that said deference runs particularly deep. 

In other words, there just isn't any there there to give the military the legitimacy it would need to act as an effective veto actor in the American polity.  Edward Luttwak said it well:

You would sit in the office of the Secretary of Defense, and the first place where you wouldn’t be obeyed would be inside your office. If they did follow orders inside the office, then people in the rest of the Pentagon wouldn’t. If everybody in the Pentagon followed orders, people out in the military bases wouldn’t. If they did, as well, American citizens would still not accept your legitimacy.

That could change, but it would be a slow process, and there are really no signs of American society moving in the direction laid out in Dunlap’s paper.  As it stands, it is unlikely in the extreme that the military would intervene even in the face of an economic or political catastrophe.  The Army won’t mobilize itself to squash rioting in a major city or prevent China from invading Taiwan, let alone to seize control of Congress in order to raise taxes and head off an inflationary spiral. 

Poul Anderson, in his own depressing way, laid out a scenario that differs from Dunlap’s in one significant way: in it, the U.S. had already failed, well before the coup, not because the military disobeyed orders but because an apathetic public allowed authority to leech away from its elected representatives.  That is a subset of Carlos’s fourth failure mode, which deserves more thought than I can currently muster. 

Am I missing some set of circumstances in which the U.S. military could cease to respect civilian authority?  Is there another governmental institution (besides the judiciary, which we already discussed) that could potentially subvert the democratic system?  Am I wrong to be so sanguine about the effects of the relative disconnect between our civilian elite and the military? 

Many questions, few answers, thoughts desired.

Failure modes of the United States, part 1c

  Many legislatures around the world have veto points.  If a particular party needs to be included in every plausible governing coalition, then that party wields an effective veto over policy.  Those situations, however, are rare.  They are also contingent on voter preferences.  One key election, and the veto player’s influence is gone. 

The U.S. Congress possesses multiple veto points.  One is the committee chairperson, who possesses almost absolute veto control.  Another is the Senate filibuster.  Neither of these are particularly new, but it is plausible to argue that two developments have made them far more problematic.

First, U.S. parties are far more parliamentary than they used to be.  It is now very difficult to peel away opposition legislators than it used to be, particularly among the Republicans.  Second, the Senate filibuster has become routine, creating a de facto 60-vote supermajority.  Thus, the emergence of two new veto points:  the Senate minority party and swing senators.  I wouldn’t bet on swing senators lasting all that long.  Moderate Republicans are down to two women from Maine.  Moderate Democrats are more common, but I suspect that the Democratic leadership will eventually figure out ways to discipline its members that are at least as strong as the Republicans’. 

I suspect, but do not know, that the above development is the half-threat to the American system of government that Carlos thought he might be seeing.

There are multiple ways in which this could cause the Argentinization of the United States.  The current employer-based health care system, for example, is collapsing.  A failure to reform won’t cause any sort of immediate disaster.  But it might (perhaps) cause inequality to increase while saddling those businesses that try to maintain coverage with unsustainable costs.  Over the decades, that could become a slow-motion catastrophe.  Conversely, American public finance is unsustainable over the long-term.  But the definition of “crisis” keeps ratcheting up.  You can punt for a long tine, as debt piles up and public services ratchet down, but unless a miracle occurs you eventually run down the public sector and with it, long-term economic growth.  In that story, we have seen the future, and it is California.  Finally, financial reform already seems to have been quite watered down.  You can’t blame Congress for that, and it might not even be a problem … but there are reasons to believe that we’re setting the stage for another October 2008.  Not to mention Simon Johnson’s suspicion that the U.S. government has been captured by a financial elite.  More veto points, the harder it will be to free the Republic from that capture. 

And then there is global warming.  There is no world government, which means that there is a coordination problem among the big players.  A U.S. incapable of making big decisions probably means that nobody makes the big decisions.  I don’t know, maybe the European Union would decide to impose carbon tariffs, or some farsighted Brazilian leader could bring together a coalition of everybody-but-America, but that seems unlikely. 

To be honest, I’m not convinced that the combination of the filibuster and parliamentary parties necessarily spells paralysis.  Nor does federal paralysis necessarily spell Argentinization:  this country has a lot of things going for it that Argentina never did.  But the legislative provisions of the U.S. constitution are not functioning well right now.  The growing ability of a minority to block Congressional action seems to me to bring a much greater chance of political failure than the presidential veto or judicial review. 

Failure modes of the United States, part 1b

  Judicial veto points seem unlikely to bring down the United States.  The judiciary has neither blocked needed political action, nor imposed great costs upon American business.  Peter argued in comments that it is possible to imagine a world in which lawsuits block everything and make legislation impossible to implement, but that hasn’t happened anywhere else and really shows no sign of happening here. 

What about America’s most famous veto point:  the President?  It is hard to envision a scenario in which this feature, by itself, could bring down the political system.  Congress can override it, and the voters can toss the President out every four years.  One can imagine a disasterous Herbert Hoover type vetoing legislation as the country sank into crisis, but it's hard.  Most of his vetoes were innocuous.  He vetoed the Tariff Act of 1930, a counter-productive piece of legislation if ever there was one.  He also ixnayed the Emergency Relief and Construction Act of 1932, but a compromise measure sailed through.  Congress overturned his other big vetoes.  In short, Hoover wasn’t stopping an activist Congress from fighting the Depression.  I suppose that one could imagine a situation in which a do-nothing President manages to let a crisis burn enough to have an even worse President elected in his or her stead.  Harry Turtledove tried.  But it is a bit far-fetched.

Failure modes of the United States, part 1a

  So how might the American system fail?  A few weeks ago, Slate ran a somewhat hyperbolic and rather uninformative series about the topic.  My friend Carlos Yu proposed five much more reasonable possibilities.  With classes about to begin, and not a lot of time to write more serious posts, I propose to take them in turn.  His first failure mode was:

There might be too many “veto points” in the Federal system to resolve new problems of government in a timely manner.

A “veto point” is simply a place in the political decision-making process where an individual or collective actor has the ability to call a halt.  In the political science literature that I engage with professionally, the phrase has a positive connotation.  Veto points stop expropriation and predation and civil liberties violation and the like.  But they can also stop needed reforms.  Many a ship of state has run aground because a powerful player prevented a change of course.

One veto point that it is not a problem in the United States is the judiciary.  This was not always true.  See Scott, Dred.  In the early 1930s, it once again looked like the judicial veto might cause a crisis, as the Supreme Court overturned on much of the New Deal.  This could have been a problem ... even if you don't like the New Deal (and parts of it, like the NIRA, were kind of silly), judicial stonewalling might have produced a far worse political backlash.

Only it didn't.  In fact, the judiciary turned out to be a bit of wet firecracker on the crisis-inducing front.  First, FDR tried to pack the court.  That was a bad idea, and died in Congress.  But the President had more ammunition in store:  several constitutional amendments to alter the meaning of the commerce clause were percolating in Congress.  One proposal would have given Congress the power “to legislate in all cases for the general interests of the union, and also in those in which the states are separately incompetent, or in which the harmony of the United States may be interrupted by the exercise of individual legislation.”  Others were less sweeping, but all made the point.  Either the Supreme Court changed its interpretation of the Constitution, or Congress would change the Constitution.

In the face of a credible constitution change, the Court reversed itself in 1937 and permitted most remaining New Deal legislation to sail through.  And if it had stood fast?  Well, we would have gotten a fairly innocuous constitutional amendment.  The Supreme Court didn't use the Commerce Clause to limit Congressional legislation until 1995, and even then it was over a small issue.    

Today the judiciary also exercises a veto power over egregious attempts to roll back civil liberties or use legislation to alter the social changes of the last 40 years.  Many have argued that in that veto has worsened political divisions, by taking abortion policy out of the political arena.  That may be true, but it is also true that almost all the social changes of the last half-century are quite popular, with the partial exception of affirmative action.  The judiciary, by exercising a veto, in fact allows the Republican Party (and, increasingly, pro-life Democrats) to attract socially conservative voters without any fear that they might suffer the national electoral consequences that would follow success in enacting truly socially conservative legislation.

In short, judicial veto points no longer stop constructive economic legislation, although they would be employed to stop Bolivarian-style expropriations.  The judiciary will not veto the federal construction of high speed trains, a national VAT, any conceivable health care bill, or carbon legislation.  Nor does the judiciary's regular overturning of social legislation create frustrations that will end in mass civil disobedience, let alone mass violence.  (Although small-scale violence tragically does occur.) 

Rather, the ironic result of the judiciary's defense of social change is to shore up social conservatism as a political force.  This is interesting, but unlikely to lead to the demise of the United States.  If one really believed in Jack Bauer, then one might argue that the judicial veto on things like torture and summary imprisonment could cause the demise of the nation, but I'm not going to bother with that one.

In short, if vetosclerosis is going to cause the failure of the American experiment, the judiciary is unlikely to be the source of the problem. 

Thoughts?

Is America in decline?

  I don't mean as a world-bestraddling empire and all of that; I mean as a polity with a government capable of responding to the needs of its citizens. Here you can see a moderately-libertarian fellow worrying that the United States is headed the way of Argentina. In comments you can read the counterarguments proposed by my friend and colleague, Carlos. Or you can read this post on the same blog, which summarizes Carlos’s arguments.   

The above picture is of a beautiful woman in the most American part of America, the old stomping grounds of the Chase boys. Clearly not Buenos Aires. Could it become Buenos Aires, without the charm?  Could American political institutions cease working? Read the links, then read the below, and tell me what you think.

CARLOS FOR THE DEFENSE:  And to be fair, I should put up some indicators that I think would disconfirm my idea [that the U.S. is well within historical norms, and looks to muddle through quite well]. There might be too many “veto points” in the Federal system to resolve new problems of government in a timely manner. The military might not accept civilian authority. The monetary and regulatory agencies might be too slow or too unwieldy to deal with unexpected changes in the global economic system. The U.S. population might become apathetic and gullible to the point of civic dysfunction.

Out of those four indicators, I see maybe one-half (and it’s not the last one). I won’t count the experiences of the states, since the Federal system allows them a level of moral hazard that the U.S. as a whole doesn’t have.

Though that would be an additional failure mode: enough states go dingo that the Federal system can’t deal. That hasn’t happened since the 1850s.

Great Debate Attempt #2: Does America need an opposition party?

  This post is a follow-up to the discussion here. 

The modern Republican party has taken positions on both social and economic issues that are at variance with the median American voter.  For some time, the GOP was capable of wracking up legislative majorities despite that fact.  This feat was due to three factors, in reverse of order of (IMHO) importance:  (1) the memory of the Reagan years, when the GOP's conservatism did, in fact, reflect a change in the preferences of the median American voter, (2) the impact of 9-11 and the Bush Administration's skillful use of fear and war fever, and (3) the GOP's impressive internal discipline.  A great book on the latter topic is Off Center, although the authors turned out to be wrong about the durability of the GOP's majority. 

Today the GOP appears to be sliding towards regional irrelevance.  Laissez-faire economics has become less popular, for obvious reasons.  In addition, the low-marginal-tax doctrine has also become rather less popular ... and will, in fact, become unsustainable once the economy recovers.  Similarly, the declining quality of private health care has produced a groundswell for reform.  Finally, the GOP is falling behind the curve on “social issues.”  Why the scare quotes?  Simply because said issues are increasingly becoming non-issues, much as they were in 1960.  The society's mores have changed, and electoral preferences are changing with them.  Once that generational shift is complete, a party that hold the GOP's current stances will be SOL.

I don't want to ask whether the GOP can, in theory, offer a modernized conservatism with long-term appeal.  The answer to that question is yes.  Frex, a modern conservative party could, in theory, be constructed around gender-neutral pro-natalism, mandatory national service, free trade, “non-financial defined contribution” pension schemes, German-style health care, re-privatization of the financial system, and other things, some of which are laid out in insufficient but intriguing detail here. 

No, I want to ask if we, as patriotic Americans (or non-Americans who would like the United States to be well-governed, for whatever reason) should care whether the GOP can reform itself.  What would happen if the GOP became unelectable?  The answer is less obvious that it might appear.