Tag Archives: Politics

Interesting Thoughts on the Federal Deficit

From the smart folks at the Roosevelt Institute, including Nobel prize winner Joe Stiglitz.

Summary: 1) there are smart and there are less smart ways to reduce the deficit; and 2) it’s not clear that the deficit is as terrible as some are making it out to be.

US: Religiously Diverse, Tolerant and Turning Liberal

As I pointed out in a previous post, Robert Putnam has a new book out describing the current status of religion in America, based on a large survey he conducted. I recently heard Putnam give a lecture about his new book. One of his key theses is that America is highly religious, but extremely diverse and tolerant.

Putnam’s survey, like others in the field, reveals that most Americans describe themselves as religious and many go to church regularly. The numbers in America are significantly higher than in other developed countries. This religiosity is spread across a wide diversity of faiths and denominations. Interestingly, although the vast majority claims to be religious, there is a strong polarity in how seriously they take their religion. When asked whether they said grace regularly, sometimes, or never, the responses were 44%, 10% and 46%, respectively. In other words, people either practice hard or not at all, with very little in the middle. This matches the polarization of politics that is tied to religion.

However, unlike the political polarization, in which the two sides seem to hate each other, when it comes to religion America is highly tolerant despite its polarization. When asked whether they had positive views of other faiths, most Americans said yes. The most popular faiths: Judaism, Catholicism and mainline Protestantism. Only 13% of Putnam’s respondents said that their faith was the only path to heaven, and 80% said there was some truth in all religion.

Why such tolerance? Putnam, who thinks like a sociologist despite being a political scientist, provides a social explanation: diversity breeds tolerance. With all the different faiths in America, and more geographic mobility than in the past, we are all more likely to know, and like, someone of a different faith.  Putnam supports this with data showing that more people change religions now than ever before, and pointing out that the majority of marriages are now interfaith, at 51%, compared to 25% a century ago. Putnam calls this the “Aunt Susan” phenomenon. We all know someone, perhaps our aunt by marriage, who is of a different faith, but who is totally awesome. How can Aunt Susan not go to heaven just because she is Methodist rather than Catholic?

An additional reason for the tolerance, which Putnam didn’t point out but I will, is that while Americans are broadly religious, they are also somewhat shallow about it. In other words, and despite the data on saying grace mentioned above, many Americans don’t take the teachings of their faith that seriously. For example, not only do 87% of Americans believe people of another faith can go to heaven, but 54% of evangelical Protestants believe that non-Christians can go to heaven. This means that 54% of evangelical Protestants are rejecting (or don’t understand) a basic tenet of their faith. Catholics, at 22% of the country, should alone swamp the 13% figure, but they clearly don’t. In other words, Americans’ willingness to ignore (or ignorance of) some of the key teachings of their faiths allow them to be more tolerant of other faiths.

Religion and Politics is a New Mix

I recently went to hear a lecture by Robert Putnam, a Harvard professor who is best known as the author of Bowling Alone, a book about the decay of civil institutions in America. Putnam has a new book out, called American Grace, about religion in America and its intersection with politics, and his lecture was a summary of that book. The book is based on both historical study and a large survey of US citizens, and has two main theses:

  1. The mix of religion and politics in America is new and massively polarizing
  2. American religion is so diverse and tolerant, especially among the younger generation, that the above polarization will likely moderate over time

This post is about Putnam’s first thesis; I will add another post soon summarizing his second thesis.

Putnam started his lecture by describing the rise of the religious right and how this is a new development in America. Of course the founding fathers were – mostly – deeply religious men; that’s how people rolled 250 years ago. But historically you could not correlate a person’s religious belief with their political beliefs. There were devout Christians who were liberal and secularists who were conservative. The Democratic and Republican parties each contained a mix of religious beliefs and commitments.

Things began to change in the 1960’s, with the rise of hippies and free love and drugs and rock & roll (all the stuff my parents dug, man). In reaction to this libertine environment, conservative people moved toward more bedrock values, generally in the form of evangelical Christianity. These people got more serious about their religion and then certain church leaders (eg. Jerry Falwell) saw an opportunity to turn that movement into political power. As the religious right gained power there was something of a backlash, and non-evangelicals moved further toward secularism.

Thus you have significant movement to the poles – the religious right and secularism – without any growth in the center. And now you have, according to Putnam, significant correlation between religion and politics. Putnam says the best way to understand how someone will vote is to ask about their church-going, or vice versa. This plays right into the polarization that we are seeing in modern American politics. Of course, Putnam’s theory of religious trends is not the only explanation for the rise of the religious right and political polarization. There were also geographic, economic and racial trends at work. But religion clearly played a role, and this is Putnam’s bailiwick, so I give his theories some weight.

An interesting side note: Putnam says that according to his research, if a person’s politics and religion don’t match, they are more likely to change their religion than their politics. In other words, conservative people move to more conservative churches and liberals move to more liberal churches or to none at all. Given that religion controls your soul whereas politics affects your pocketbook, this is surprising, but the surveys say what the surveys say. Another, less interesting, side note: the waves of religion and backlashes toward secularism described by Putnam could make for a classic dialectic, with their thesis and antithesis, but there is no synthesis. Instead, the movement trends apart rather than together. This is further proof of my pet theory that Hegel was an idiot.

Here is a photo of someone bowling, possibly alone:

Nixon bowls, possibly alone

Red States Living on Federal Money

Here is a new article with data showing a direct correlation between how GOP leaning a state is and how much federal money it sucks down. This follows up on my posts on this very topic.

Increase in National Debt by President

Increase in national debt...by president

Humans Might Actually Like Taxes

The Wall Street Journal recently ran an article by Jonah Lehrer asking whether humans might not be as averse to paying taxes as our political discussion currently assumes. He describes a study by scientists at Caltech which showed that people dislike inequality. Study participants were put into scanners, and the pleasure areas of their brains lit up more when money was given to others than when money was given to them. This was especially true of those who had started the study “rich,” which was determined by random assignment. Following this study to its logical conclusion, perhaps people who are well off might not be as unhappy as politicians seem to think about paying higher taxes to help the less fortunate.

However, Lehrer points out that the random assignment of riches skews the study. Other studies have shown that this altruism effect is less powerful when the rich feel that their wealth is earned. When we bring this back to politics and tax rates it opens a whole can of worms. What is “earned” in a society where massive advantages (not just wealth) are passed down through the generations? I won’t open that can of worms here, but point you to this post from last year on some of the challenges of “earning” wealth for the lower classes.

Sarah Palin Gets Schooled on Economics

Alan Blinder wrote a column in Monday’s Wall Street Journal defending the Federal Reserve’s new quantitative easing (QE) policy. This policy has come under attack from many directions, including foreign ministers (worried about declines in the dollar) and Republicans (worried about inflation). In the latter camp was Sarah Palin, who criticized the policy, and then got her facts wrong about inflation, and then misquoted the Journal to defend herself.

Blinder is an economics professor at Princeton, and he takes a professor’s approach to the issue, explaining that the current bout of QE is pretty much the same as what the Fed normally does (printing money to buy short term Treasury bills), except that this time the Fed is buying long term securities. Blinder also notes that inflation is currently below the Fed’s target rate of 1.5-2%, so we have a ways to go before inflation becomes a problem, and the Fed can unwind this policy well before inflation gets out of hand.

Now some economists tend liberal, and some tend conservative, and Blinder is on the liberal site of the line, although not nearly as liberal as Paul Krugman. Yes, he also defends Keynes in the same column, and points out that the Republican phrase “job killing spending” is ridiculous. But Blinder is also a highly respected economist and co-author of one of the standard introductory texts, which I used in college. So if I had to choose who to believe on the likely effects of a Federal Reserve policy, I would choose Alan Blinder over Sarah Palin every time.

Deficit Reduction: Suck it up, People!

The bipartisan deficit panel has come out with its first set of recommendations, and everyone is hopping mad. Lefties say the cuts in spending are unacceptable, and conservatives are adamant that tax revenues never go up again. Good! I have no opinion about the specific recommendations made by the panel chairmen, but I know that if both sides are pissed off then the panel must be doing something right.

Listen people…this deficit is serious business. It will bite us in the ass if we don’t fix it, and fixing it is going to require some pain on everyone’s part. We’ve been living for too long with this fantasy that government could increase spending while cutting taxes. Now the party is over, and the hung over cleanup has to begin. Headaches? Nausea? Yes, exactly.

So liberals, accept the fact that spending will be cut, and not just military spending. I hate it too, but Social Security has to be on the table. Increasing the retirement age by two years over the next 65 years? That’s really not so bad. Tying other benefits to inflation? Also not unreasonable. We need a safety net, of course, but we need to be smart about it.

And conservatives, you too are in for some pain. Face facts: spending cuts alone won’t balance the budget. We need to increase taxes. You like to claim that any tax increase will kill the economy, but the facts don’t bear that out. This chart shows that in Germany tax revenues are 40% of GDP, far more than America’s 28%. And yet Germany’s economy is doing fine, kicking our ass in exports, despite having to absorb East Germany. This chart shows that marginal tax rates for individuals are lower than ever. In fact, during America’s economic heyday, in the 50s and 60s, top marginal rates were in the 70%-90% range, far higher than today’s 35%, and yet there was still plenty of investment, of people working hard, of entrepreneurs starting businesses. All the arguments the right uses against raising taxes are belied by that glorious period of American business. Speaking of that great Happy Days era, the chart below shows that the share of taxes paid by the wealthiest citizens back then was significantly higher than it is now. Again, showing that higher taxes do not necessarily stifle economic growth.

There will be plenty of unpleasantness to go around; Democrats and Republicans will each get their share. Our legislators need to get off their high horses, stay away from the cameras and microphones and acknowledge that their pet causes are secondary to the national cause. But as either Mark Shields or David Brooks (I still can’t tell their voices apart on radio) said on the PBS NewsHour, our politicians won’t make this happen until the public forces them to. Our culture needs to accept the need for hard choices, and then push our politicians to make them.

German Economy Is Kicking Ass

Following up on my prior post about the European economic model, the Wall Street Journal reported Saturday that the German economy is expected to grow 3.5% this year, its best performance since reunification. Moreover, much of this growth is coming from internal demand, balancing the economy away from its already strong export base. In other words, the high wage, high tax rate German economy has already recovered from the global recession and is starting to kick our ass.

Public Pensions Bankrupting San Francisco

The SF Weekly has published two long articles in the past year about how poorly run San Francisco is and how our elected officials have essentially mortgaged the city in order to provide generous pensions to public employees. If you are a San Francisco resident, these articles are essential reading. And even if you live elsewhere, you should still read them, or at least the one about the public pensions, because the financial problems we have here are sadly common in cities and states across the country.

Before I get to summarizing the articles, let me first state how unbelievably, pathetically lame it is that the San Francisco Chronicle, a big newspaper with lots of resources, didn’t produce either of these articles, getting scooped instead by a free weekly. Of course, the Chronicle is in such thrall to SF’s power structure that the only truth we should expect it to speak is that Mayor Newsom’s wife is pretty.

The first article, published last December, focuses on why nothing works in San Francisco. As the article notes, SF has a massive budget deficit, a bus system that can’t run on time and an ever-burgeoning homeless problem. “I have never heard anyone, even among liberals, say, ‘If only [our city] could be run like San Francisco,'” says urbanologist Joel Kotkin.”

The problem, according to SF Weekly: no accountability. Nobody in SF government ever loses their job, no matter how badly they perform. Committees are formed, ballot initiatives are offered, bonds are issued, but nothing ever gets done, and the same folks are kept in their administrative posts year after year. San Francisco’s deep liberalism comes into play here; any initiative that supports education, or the homeless, or other traditional liberal causes, becomes nearly sacrosanct. Criticism, or even investigation into effectiveness, is shrilly attacked. The city’s liberalism also gives unions tremendous power here, so any city department with union employees will likely have high wages and accountability issues.

Speaking of SF’s strong unions, SF Weekly’s second article, from just two weeks ago, is on exactly that topic. It discusses the massive growth of San Francisco pension and benefits obligations to its public employees. Retirement costs for city employees grew 66,733 percent over the last decade. Benefits this year (not salaries, just benefits) for current and retired city workers are budgeted for $993 million. That is in a city with only 815,000 citizens. This spending is projected to keep on growing, and the city has a $4 billion unfunded healthcare liability.

Why are these costs so high? As discussed above, general incompetence plays a role; you can’t expect mediocre managers to hold down costs. The city’s liberalism also factors in; voters continually approve ballot measures that improve benefits for city workers. A recent ballot proposition that would push some health care costs back onto city workers was soundly defeated. But a big chunk of the problem is structural, and here is where other cities are facing similar problems. Policies are set by politicians, politicians respond to money, and unions are very good at throwing their money around. Moreover, those policies are implemented by bureaucrats, who are also city employees, and who thus qualify for these same generous benefits.

Cities and states around the country are grappling with this problem, and the bottom line is that public employees are going to have to take a hit. They can’t keep earning as much as or more than private sector employees, have infinitely better benefits than private sector employees, and expect the gravy train to continue. As the Wall Street Journal noted recently, in Oakland the cost of just the police and fire departments make up 75% of the city budget.

Regular readers of Thoughtbasket are likely shocked to read a post that stands against unions, and that has me referencing the Journal in an approving way. Look, I support unions. My father and both my grandfathers were members of the IBEW. Union wages put a roof over my head as a kid, and union benefits paid for my medical expenses. But this is a time of austerity, and everybody has to tighten their belt. If public sector employees get to retire at 50 with 90% of their salary and gold-plated health benefits, then the rest of us are going to be working until we’re 90. Look at the chart below. San Francisco is paying 4 retired police officers a combined $1 million per year. Until they die. I’m sorry, but that is simply unsustainable.