Six weeks ago I discussed -- as a dispassionate political scientist -- why the field of political science was good and truly f**ked when it came to Congress. Yesterday, Dave Weigel blogged about this at more length. The depressing parts version:
Attacking government-funded social science is popular, especially on the right. Last week, Texas Republican Rep. Ted Poe and Kentucky Republican Sen. Rand Paul introduced a bill that would change the American Community Survey, sent annually to a random selection of 3.2 million people, from mandatory to optional. If Americans didn’t want to fill it out, even if that would render it mostly useless as data, the private sector would do just fine.
When I asked Poe to explain how that information would be collected without the Community Survey, he said, “There are other ways to get the same information about the dynamics of business, and where to locate a business. You can do it through polling. You don’t have to force people to participate.”
Social scientists don’t agree, but it’s difficult for them to justify their own funding in a time of severe government cutbacks....
The new attempts to claw away at research have gone on for months, and the academics haven’t put up a compelling defense beyond one event on the Hill and the yeoman blogging of some professors like John Sides. “Going forward,” Sides wrote after Coburn’s win, “a coordinated lobbying effort is needed not only to roll back the restrictions on political science but to defend the NSF’s core mission as a promoter of scientific research in the public good, broadly defined.”
So far that lobbying effort doesn’t exist. Instead, Republicans are able to challenge NSF funding in order to pursue long-term political goals without too many people noticing.
To understand further why this will be so difficult, let's go to the video clip of the week, which right now is probably the revenge fantasy of every political scientist out there. Via the Military Times, this is General Ray Odierno chewing out House Representative Duncan Hunter (R-Calif.), with the bemused permission of Armed Services Committee Chair Buck McKeon. The chewing out part starts at around 3:30.
Now, watching that clip, it's hard not to conclude that Hunter was taken to the woodshed by Odierno for being an ignorant jackass. That's certainly the conclusion that Gawker, Mediaite, and others came to in promoting the clip.
Now, here's a fun exercise -- what if Odierno had been an irate political scientist rather than a four-star general? I guarantee you that the exchange would have been framed and interpreted differently. Because of the high public respect for the military, when Odierno goes off, people will listen. Not so with academics. Instead of "General smacks down House representative," the headline would have looked more like "Snotty academic preens at elected official."
In fact, we don't need to imagine. Remember this little exchange between House Rep. Don Young (R-Alaska) and historian Douglas Brinkley from about 18 months ago?
Now, Don Young has all the charisma and grace of a three-month old carton of milk. He's far more insulting and contemptuous of Brinkley in that clip than Duncan Hunter was in trying to walk away from Odierno. The overall effect, however, is different. First, Young's chairman, Doc Hastings, protected Young in a way that McKeon did not protect Hunter, thereby preventing Brinkley from going on a rant.
Second, however, as bad as Young looks in that video, Brinkley doesn't look that much better. He comes off too much like a preening, stuffed-shirt academic.
Unfortunately, that's an occupational hazard. We're trained in graduate school to eviscerate counterarguments and the people who make them. It might be the one sector in the world where Aaron Sorkin-rules of debate hold up. But it only works because everyone in the seminar room or lecture hall understands the context of the debate. That rarely happens when the public peeks in at a YouTube clip of a congressional hearing.
Are there some political scientists who could pull off an Odierno-level smackdown? I suppose it's possible, but I confess to being dubious about its likelihood (suggestions welcomed in the comments section please).
Now, as a political scientist, I should warn you that viral-video-friendly exchanges like the ones linked above rarely shift public opinion. They are one way to frame the stupidity of a particular Congressional jihad, however. And as much as I might fantasize about a Beth Simmons or a Scott Sagan sticking it to Tom Coburn, I'm not confident that it will ever happen.
Am I missing anything? Please tell me I'm missing something...
UPDATE: I received a call in the last hour from Representative Duncan Hunter's deputy chief of staff, who lodged a polite protest over the descriptive term "ignorant jackass," referencing this Politico story. Which is fair enough, but this exchange suggests two things:
1) The staffer didn't read the blog post carefully, because I was using that term to describe how the video made Hunter look -- not whether that depiction was accurate or not.
2) Maybe political scientists blogging/writing for the press actually do have an effect on member of Congress.
Your humble blogger will be making his first visit to South Korea in less than twenty-four hours, and is very excited about that prospect. Blogging will therefore be on the lighter side for the next few days.
Talk amongst yourselv-- wait, then again, maybe you shouldn't do that.
Before I explain what I mean, let's have some disclosure. I blog at the foreign affairs portal in the United States. I'm a member of the Council on Foreign Relations. I've done the occasional consulting gig. I'm on reasonably good terms with foreign policy wonks from across the spectrum. Occasionally I get invited to swanky DC events and interview Tiger Moms. The point is, relative to a lot of people reading this paragraph, I'm pretty damn insider-y.
I bring all of this up because I probably have a higher tolerance for inside-the-Beltway bulls**t... and yet after reading this and this, I had to suppress my desire to vomit on my computer screen. The first link merely confirms the epistemic closure that pervades much of the right wing in Washington, DC. The latter is, on the other hand, the most incestuous thing ever written about anything, ever, in the history of mankind. Really, compared to those stories, the George W. Bush library ceremony seems... tame.
Combined, the two stories either function as a damning indictment on the state of DC insideriness... or I'm overreacting to the standard offal that comprises much of political journalism. I'm honestly not sure. Contrary to a lot of outside-the-beltway folk, I've come to see a utility for rent-seeking and back-scratching in politics. It functions as a necessary lubricant to get useful legislation passed. One could argue that part of the problem with Washington as it currently functions is that there's not enough earmarking, vote-buying, or other cross-cutting political exchanges.
At the same time, the revulsion I felt after reading these essays was quite real. I could barely finish Allen's Politico story, it was that insipid. These are the kind of essays that cause even a jaded foreign policy hand like myself to mutter "you'll be the first ones up against the wall when the Revolution comes" after reading Politico. Sure, much of this behavior is baked into the cake that is American political science... but I still ponder about the future of the Republic.
So I'll leave this as something for readers to ponder while I'm in the ROK -- over the next week there's going to be some serious foreign policy questions being debated: whether to react to Syria's chemical weapons use, or what to do about inter-Korean tensions, for example. Will this conversation be taking place in a policy universe that is just too damn small?
What do you think?
Yesterday an amendment to the continuing resolution funding the U.S. government, sponsored by Senator Tom Coburn of Oklahoma, was passed by a voice vote in the Senate. Its purpose?
To prohibit the use of funds to carry out the functions of the Political Science Program in the Division of Social and Economic Sciences of the Directorate for Social, Behavioral, and Economic Sciences of the National Science Foundation, except for research projects that the Director of the National Science Foundation certifies as promoting national security or the economic interests of the United States.
Now, from a pure material interest perspective, this should make me happy. I've never received a dime in NSF funding, and I'm sitting on a pretty good grant for the next 5-10 years, so from a strictly relative gains perspective, I acquire more influece in the discipline. Furthermore, the national security exemption means that whatever scraps the NSF throws to political science will go to my preferred subfields like international relations and comparative politics.
The thing is, though, that I love political science. I want to see more quality research being done, and the NSF cutoff pushes things in the opposite direction. So I'm not happy.
If I'm displeased, however, then I think it's safe to say that the American Political Science Association is galactically pissed off at this outcome:
Adoption of this amendment is a gross intrusion into the widely-respected, independent scholarly agenda setting process at NSF that has supported our world-class national science enterprise for over sixty years.
The amendment creates an exceptionally dangerous slippery slope. While political science research is most immediately affected, at risk is any and all research in any and all disciplines funded by the NSF. The amendment makes all scientific research vulnerable to the whims of political pressure.
Adoption of this amendment demonstrates a serious misunderstanding of the breadth and importance of political science research for the national interest and its integral place on the nation's interdisciplinary scientific research agenda.
Singling out any one field of science is short-sighted and misguided, and poses a serious threat to the independence and integrity of the National Science Foundation.
And shackling political science within the national science agenda is a remarkable embarrassment for the world's exemplary democracy.
I've blogged at length in the past on the substantive reasons why a cutoff of NSF funds for political science is really, really, stupid. Another post on that question won't change things. And I vented my frustration at the willful ignorance of Senator Coburn yesterday, so there's no reason to go there now. Yesterday, however, there was rollicking debate on Twitter about the need for political scientists to, well, be better at politics. Folks such as Phil Arena, Jay Ulfelder, William Winecoff, and Jacob Levy observed that APSA's tactical response to Coburn's folly -- encouraging APSA members to email Congress and so forth -- was pretty lame. Only if we used the Dark Arts of political science knowledge could we somehow stymie the Senator from Oklahoma.
Here's the thing, though -- while I'm no expert in American politics, I think I know enough of the Dark Arts to know that we could have the best arguments in the world and still recognize that political science is good and truly f**ked.
From a straight interest group perspective political scientists don't matter. At all. The NSF funding for political science is a $13 million appropriation spread out geographically. There is no concentrated interest in a particular congressional district or state to motivate a member of Congress to fight for this issue with as much ardor as Tom Coburn or Jeff Flake.
Now, one could argue that if you believe in epistemic communities -- i.e., the power of collective expertise -- to influence uninformed members of Congress, then maybe political scientists could function as Weberian activists and educate members about the inherent value of political science. The thing is, as I've argued previously, politicians and pundits do not think of politics as a scientific enterprise. Maybe a few pundits developed a new appreciaion for statistics following the 2012 election, but that's not quite the same thing. So an epistemic community of political scientists won't cut it. Hell, all social scientists would be unlikely to persuade the Senate -- remember, this is a body that was copacetic with a Senator blocking a Nobel Prize winning economist from sitting on the Federal Reserve Board of Governors. Maybe we could logroll with all the natural and physical sciences too, but if the past decade of climate change policy has proven anything, it's that this won't work terribly well.
Another gambit would be to move public opinion on this issue to the point where Congress had no choice but to accede to the masses ... except the masses likely support the cuts. A mass public that believes the foreign aid budget is a thousand times larger than it actually is likely believes that cutting NSF funding of political science goes a long way toward tackling the deficit. Furthermore, as Brendan Nyhan and Jason Reifler's research shows, it's next to impossible to correct that misperception.
There are three other ways for political scientists to alter the status quo -- but each of them has issues:
1) A political scientist needs to come up with a killer scientific breakthrough that really advances knowledge in the field in an unambiguous manner. We're talking something Nobel-worthy. Oh, wait, Elinor Ostrom already did that, and it didn't matter. Never mind...
2) A political scientist needs to develop a predictive model that's so powerful that it yields substantial profit -- to the point where the political scientists can afford to set up an endowment that substitutes for NSF funding. The thing is, there already are political scientists who have thrived in the private sector -- but I'm not seeing enough cabbage being earned to create endowments.
3) Finally, maybe a trained political scientist could just run for the Senate, get elected, and apply the necessary counterweight to Coburn et al ... except that one of Coburn's co-sponsors is Arizona freshman Senator Jeff Flake, who has -- wait for it -- an M.A. in political science.
Am I missing anything, or is political science good and truly f**ked?
UPDATE: OK, there's one other possibility that could theoretically shift the status quo. Suppose a rival great power -- say, a country that rhymes with "Dinah" -- were to suddenly throw around huge research $$$ to develop a comparative advantage in poli sci. Say that the money was so good that it started to attract the cream of the political science crop. That might spur Congress to freak out about the existence of a political science gap.
So, any political scientists sitting on fat research offers from China -- now is the time to accept them.
Over at the Guardian, Ed Pilkington notes a rather curious silence from a powerful American interest group:
The National Rifle Association is so tied up fighting new gun restrictions in the wake of the Newtown shooting that it has failed so far to mount its expected lobbying blitz against a new international arms control control treaty.
With just a few weeks to go until the world's first Arms Trade Treaty (ATT) is put to a final vote at a UN conference in New York campaigners have voiced surprise at the NRA's relative silence on the issue. Until the Newtown tragedy, in which 20 young children died in their classrooms on 14 December, the UN's attempt to contain the loosely regulated international trade in weapons had been one of the gun lobby's biggest targets....
[A]head of the final ATT conference, which opens on 18 March, the NRA has been notable by its absence. Though the organisation continues to vow that it will do all in its power to prevent the arms trade coming into effect – arguing that it is a "ticking time-bomb" and "the most serious threat to American gun owners in decades" – it has not been applying the same strong-arm tactics as it did in 2012.
So what's up? Pilkington suggests that the NRA is so distracted fighting against domestic gun control measures that it's taken its eye off the ball of this treaty -- particlarly since, according to the American Bar Association, there's nothing in the ATT to infringe on Second Amendment rights.
That might be true, but let me suggest an alternative hypothesis based on LaPierre's own rhetoric. The standard NRA defense against gun control has been concern about a Leviathan stripping citizens of their right to bear arms. Based on LaPierre's recent Daily Caller essay, however, I think they've switched arguments. The concern is no longer about creeping totalitarianism; it's creeping anarchy:
Hurricanes. Tornadoes. Riots. Terrorists. Gangs. Lone criminals. These are perils we are sure to face—not just maybe. It’s not paranoia to buy a gun. It’s survival. It’s responsible behavior, and it’s time we encourage law-abiding Americans to do just that....
Responsible Americans realize that the world as we know it has changed. We, the American people, clearly see the daunting forces we will undoubtedly face: terrorists, crime, drug gangs, the possibility of Euro-style debt riots, civil unrest or natural disaster.
Gun owners are not buying firearms because they anticipate a confrontation with the government. Rather, we anticipate confrontations where the government isn’t there—or simply doesn’t show up in time.
To preserve the inalienable, individual human right to keep and bear arms—to withstand the siege that is coming—the NRA is building a four-year communications and resistance movement (emphasis added).
They say "communications and resistance movement," I say "doomsday preppers."
I'm hardly the only one to notice this kind of doomsday prepper rhetoric from LaPierre. What's interesting is that the NRA's allies in Congress are talking the same way. Gail Collins offers up the following Lindsey Graham quote:
The senator from South Carolina wanted to know what people were supposed to do with a lousy two-shell shotgun “in an environment where the law and order has broken down, whether it’s a hurricane, national disaster, earthquake, terrorist attack, cyberattack where the power goes down and the dam’s broken and chemicals have been released into the air and law enforcement is really not able to respond and people take advantage of that lawless environment.”
Do you think Graham spends a lot of time watching old episodes of “Doomsday Preppers?” Does he worry about zombies? That definitely would require a lot of firepower (emphasis added).
I don't know if Graham worries about zombies, but I've given this matter some thought, and I do wonder if there's a fusion of various apocalyptic fears going on in some political quarters.
To get back to the Arms Trade Treaty, since Newtown the NRA appears to have shifted tactics in its arguments about the necessity to bear arms. But the fear of state collapse is a very different logic from a fear of an overpowering state. If you believe that governments will simply crumble at the first sign of a threat, then you're not gonna bother lobbying against some silly international treaty. It's not like the ATT will make a difference when the s**t hits the fan. Rather, groups like the NRA should be more concerned with declining gun ownership rates in the United States.
In the argot of international relations theory, a leader or organization that finds itself trapped by its political rhetoric is suffering from "blowback." In an irony of ironies, I wonder if the NRA's shift in rhetoric has hamstrung its lobbying efforts on the Arms Trade Treaty.
About six months ago, when the world's major central banks all started pursuing aggressive strategies of quantitative easing, I blogged that, "the international bitching and moaning about QE3 seems much less than the 'currency war' rhetoric that QE2 triggered."
With Japan's decision to unleash the monetary taps, the "currency war" meme has cropped up again, but in an odd way. To be honest, I'm reading a lot more essays that smack down the "currency war" claim than are making it. For recent and salient smackdowns, see Felix Salmon, Mario Draghi, Gavyn Davies, Philipp Hildebrand, Matthew Yglesias, and Paola Subacchi.
So this raises an awkward question -- who is claiming that there's a currency war and why? Is there a lobby that's agitating for an end to certain policies and using the guise of a "currency war" to try to make it happen? Who are these shadowy groups?
As near as I can determine, there are three interest groups with the motivated interest in doing this:
1) The Bundesbank. One can think of the eurozone crisis as one long, inexorable weakening of the Bundesbank's grip on European monetary policy. Bundesbank president Jens Weidemann set off the latest round of currency war puffery in a speech in which he bemoaned the "increased politicisation of exchange rates" and warned that central bank indepenence was eroding. Now I'm not a German-speaker, but it's possible that when Weidemann says central bank independence is "eroding" he means, "I don't have a veto over eurozone monetary policy like I used to and Draghi won't return my calls."
2) The bond funds. Bondholders aren't big fans of inflating currencies, which is the designed effect of this collective round of quantitative easing. Or, to put it more pithily, it's not a currency war unless someone at PIMCO is hyping it!! In this case, Mohammed El-Erian:
[T]here is a lot of scholarship demonstrating why such beggar-thy-neighbor approaches result in bad collective outcomes. Indeed, multilateral agreements are in place to minimize this risk, including at the International Monetary Fund and the World Trade Organization.
Yet, when push comes to shove, country after country is being dragged into abetting a potentially harmful outcome for the global economy as a whole. Worse, this process has not yet registered seriously on the multilateral policy agenda.
El-Erian needs to read the Financial Times a bit more often. The problem isn't that this isn't on the "multilateral policy agenda" -- it's that these global governance structures are less stressed about it than El-Erian:
The world’s largest developed nations reaffirmed their commitment not to target exchange rates in a statement on Tuesday aimed at addressing concerns over a fresh round of global currency wars.
In a move widely seen as an attempt to defuse tensions over recent rapid moves in the currency market, the Group of Seven countries -- comprising the US, the UK, France, Germany, Italy, Canada, and Japan -- said they would “consult closely” on any action in foreign exchange markets.
"We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates,” the ministers and governors said.
This doesn't sound like the G-7 is all that troubled -- or, to put it more bluntly, not as troubled as El-Erian wants them to be.
3) The developing world. While the G-7 seems pretty copacetic with the combined quantitative easing, the G-20 is another matter.
The words “currency wars” are too blunt for a G20 communique, but that is what the world’s finance ministers will talk about when they meet in Moscow this week.
A new round of monetary easing in advanced economies is pushing down their currencies and prompting howls of protest from the developing world.
Indeed, the most cogent critiques of the developed world's combined QE strategy comes from officials and op-ed writers focused on the less developed world. And to be sure, the combined effect of developed country actions on the monetary front can create some policy problems in the developing world.
Again, though, what's striking isn't the vocal complaints about currency wars in 2013 but the relative absence of them compared to, say, the fall of 2010 after QE2. Which suggests that while there might be some mild grumbling among the advanced developing countries, they prefer the status quo to policies that cause the OECD economies to contract in size.
So, to sum up: when you read about someone voicing "grave concern" about currency wars, see if they are based in A) an export-dependent developing economy; B) a bond fund; or C) the German central bank. If they are, you can safely tune them out. It's when people outside those places start carping that I'll start getting concerned about a currency war.
Am I missing anything?
Despite the fact that the administration appears to have the votes to confirm Chuck Hagel as Secretary of Defense, activist groups like the Emergency Committee for Israel (ECI) continue to pound away
at a brick wall at Hagel's dovishness towards Iran. In essence, ECI's ads and rhetoric argue forcefully that both Hagel and Obama are not fully committed to defending Israel by revving up for an attack on Iran now.
Don't take my word for it, though -- here's one of ECI's ads:
Now, as I've blogged before, this kind of interest group campaign is a waste of money if the goal is a partisan effort to weaken Obama and bolster the GOP. What if the effort is sincere, however? In other words, if groups like ECI care only about eliminating the Iranian threat as soon as possible, is this their best expenditure of resources?
Based on Sheera Frakel's McClatchy story from yesterday, I'd say the answer is no. Clearly, the greatest threat to a softening Western posture towards Iran comes from... dare I say it... Israel itself!!!
Israeli intelligence officials now estimate that Iran won’t be able to build a nuclear weapon before 2015 or 2016, pushing back by several years previous assessments of Iran’s nuclear ambitions.
Intelligence briefings given to McClatchy over the last two months have confirmed that various officials across Israel’s military and political echelons now think it’s unrealistic that Iran could develop a nuclear weapons arsenal before 2015. Others pushed the date back even further, to the winter of 2016.
"Previous assessments were built on a set of data that has since shifted," said one Israeli intelligence officer, who spoke to McClatchy only on the condition that he not be identified. He said that in addition to a series of "mishaps" that interrupted work at Iran’s nuclear facilities, Iranian officials appeared to have slowed the program on their own.
Oh. My. God. We already knew that there was a fifth column of Israelis who were pooh-poohing the notion of a pre-emptive strike on Iran. Now, with this intelligence walkback, the credibility of the Israeli national security establishment has taken a pretty serious hit.
If ECI and like-minded groups really think that Iran poses an existential threat and that the time to act is now, then I think they're targeting their resources at the wrong country. Trying to convert Rand Paul to their point of view isn't enough, and opposing Hagel is fruitless at this point. No, only a full-throated ECI campaign in Israel itself will be sufficient to prevent Jerusalem from falling into the appeasement camp. And if they fail to redirect their activities, then I have no choice but to conclude that ECI has gone soft on Iran as well.
Am I missing anything?
Since moving to Foreign Policy, this blog has primarily been devoted to world politics, global political economy, and American foreign policy. I don't know if I've ever blogged about gun control and gun violence (though I confess I've been enjoying my Twitter exchanges with Second Amendment absolutists immensely).
Now if that peroration seems like a windup for a big "we must do something about guns" post, you're going to be disappointed. Sure, from what I read, there's a clear correlation between gun ownership and crime, but it's far from clear that most of the policies on the table will do a whole hell of a lot to put a dent into that correlation.
However, with the Obama administration gearing up for an ambitious set of policy proposals, and with the gun lobby gearing up to fight those proposals, I do have one useful policy suggestion. If the White House is smart, they will take, verbatim, Kevin Drum's suggested policy proposals for eliminating lead from our nation's homes and topsoil.
Now, if you think that sentence was a massive non sequitur, I'd encourage you to read Drum's outstanding Mother Jones essay on the surprisingly robust connection between lead poisoning and violent crime, as well as his follow-up blog posts. Despite understandable and initial skepticism, even skeptics seem persuaded by the causal link. [Where's the international relations hook?--ed. This hypothesis holds when using cross-national evidence as well.] If the goal is to reduce violent, horrific crimes, then reducing lead exposure is a crucial part of the solution.
The brilliant thing about adding this to the menu of policy proposals is that I suspect it would actually amass broad-based support. Environmentalists will like it for obvious reasons, as will advocates of urban politics. Parents will love it because they know lead is bad for you. Policy wonks will love it because, well, the social science seems pretty rock-solid. The best part, however, is that groups like the NRA would likely support it as well -- because it makes them seem reasonable. In the wake of Sandy Hook, an awful lot of commentators have been saying things like "it's not just about guns," with a reference to meantal health or violence in the culture. The causal evidence linking lead poisoning to gun violence and violent crime would appear to be far stronger than the stuff on popular culture. So it would be smart politics for the NRA to endorse those measures.
It's pretty rare nowadays to come up with a policy solution that doesn't run into some partisan divide -- but this lead poisoning issue would seem to be the exception. I hope both the Obama administration and Congress exploit the opportunity.
There are a lot of concerns rumbling around the wonkosphere that the United States is headed for a "fiscal cliff" at the end of this year. Unless Congress acts, all $300 billion of the Bush tax cuts will expire, the $200 billion Obama payroll tax cut will expire, and $100 billion in spending will be automatically cut as per the debt deal from the summer of 2010. Now, unless you reject Macroeconomics 101, you know that $600 billion in fiscal retrenchment in this economy practically guarantees a double-dip recession.
Of course, Congress could change this if it acted in bipartisan fashion. HA HA HA HA HA HA HA HA HA!!! I kid, of course. Except I don't -- any politial action to avert the fiscal cliff really would require some kind of bipartisan compromise.
Earlier this week Josh Marshall posted an intriguing hypothesis about how the Democrats are thinking about this situation:
For years and years now, the Democrats have been a much more fiscally responsible party than the Republicans. (Here, fiscally responsible means that they try to pay for the federal programs they support, not fiscally responsible in the way Republicans define it, where social spending programs are “fiscally irresponsible” even if they’re paid for.)
Republicans, by contrast, have intentionally drawn up big deficits with massive tax cuts, so that popular programs they don’t really like will eventually have to be cut. This is more or less the central organizing principle of the conservative movement, and the main way the conservative movement exerts control over the GOP. It’s no coincidence that when Republicans came back to power in 2011, they made deficits a huge legislative priority, and insisted on reducing them by cutting social programs alone.
The Democrats’ counter-strategy is a bit more subtle, but has essentially been to find ways to make it very uncomfortable for Republicans to maintain such a rigid anti-tax orthodoxy — to ultimately force Republicans to break their anti-tax pledges and badly splinter their party. That’s what the Buffett Rule is about; that why Dems insist they won’t dismantle the so-called “sequester” — big cuts to defense and even to Medicare — unless Republicans agree to tackle deficits in a balanced way, i.e. by supporting significant new tax revenues.
The results have been mixed. They’ve won a small number of GOP votes here and there, and vulnerable members are nowadays more likely to trash or dismiss Grover Norquist in the press than they were last year. But at a very high level within the Democratic Party, there’s a recognition that breaking the GOP on taxes is an absolutely crucial strategic imperative for defending safety net programs over the long term. Getting the revenue in a passive way is a second best option.
Now, if Marshall is correct, what's interesting is that the Democrats have a powerful ally in this push to get the GOP to shift away from their anti-tax orthodoxy -- Wall Street:
Now that the US is facing the possibility of another budgetary showdown with potentially even higher stakes – the so-called “fiscal cliff” at the end of this year – Wall Street lobbyists are preparing an aggressive campaign to stop the political brinksmanship.
"The experience of last year taught everybody to be ... focused on it earlier and not assume that this is business as usual,” said one bank lobbyist based in Washington. “People who had relied on government to respond eventually were surprised when it didn’t.”...
Different business sectors are preparing for the looming fiscal cliff with varying degrees of urgency. Among the most aggressive in pushing for a deal are defence contractors who would bear the brunt of the planned cuts to the Pentagon budget. Medical providers would also be hit hard by the automatic cuts. Companies that pay large dividends – such as utilities – would be slammed if the tax rate on dividends rise as scheduled from 15 per cent to more than 40 per cent.
But financial services companies also have a huge amount at stake. The question is how to influence the political process that remains gridlocked ahead of the November election....
Then there are tactical considerations. Though one bank lobbyist partly blamed a faction of congressional Republicans for last August’s debt ceiling showdown, saying they were “willing to go off the cliff with all flags flying”, it is unclear whether it is in Wall Street’s interest to take on some of their traditional allies on Capitol Hill by pushing them to accept higher revenues or tax increases in any deficit reduction deal, as Democrats are demanding.
The fiscal cliff is still a long way off in political time, but is the strategy having any effect? Sort of. We're starting to see gravitas Republicans -- real ones, too, not just MSNBC media darlings -- calling for compromise. Calls that are annoying Grover Norquist.
And look -- here's a real live GOP Senator speaking tax heresy!
[Senator Lindsay] Graham says the debt crisis is so severe that the tax pledge — which says no tax loopholes can be eliminated unless every dollar raised by closing loopholes goes to tax cuts -- has got to go
"When you eliminate a deduction, it's okay with me to use some of that money to get us out of debt. That's where I disagree with the pledge," said Graham....
Graham said eliminating some deductions should free up money to lower tax rates — but also to pay down U.S. debt.
"I just think that makes a lot of sense. And if I'm willing to do that as a Republican, I've crossed a rubicon," said Graham.
This puts Graham at odds with his party's leadership.
And look! Real, actual negotiations in the Senate are taking place! So, does this mean the Democrat/Wall Street strategy is paying dividends? Will Tom Friedman and David Brooks soon be able to wax poetic about "statesmanlike" politicians cutting a Grand Bargain?
No, not really.
Jeb Bush is not an elected official any more. Lindsey Graham is, but he likes to talk iconoclasm every once in a while, so I'm not sure how much weight it carries (if it was Jim DeMint uttering these words, I'd be more convinced). And let's look a little closer at the New York Times story on the Senate negotiations, shall we?
Republican leaders remain largely on the sideline. Senator Jon Kyl of Arizona, the No. 2 Republican, applauded what he called “grass roots” negotiations, but conceded that neither he nor other party leaders had been directly involved, aside from efforts to stave off automatic defense cuts. Still, even he is making conciliatory comments on raising taxes, the issue that has kept Republican leaders from the table.
And this is on the Senate side -- what really matters is whether the House GOP caucus will agree to any of this.
In some ways, the next six months will be an excellent test of the roles that money and ideology play in current American party politics. If money is the honey, then a deal will be cut, and well before December. As the myriad articles suggest, what freaked out business wasn't just the rank partisanship during the last debt deebacle, it was how close things got to a breakdown. They don't want to see that happen again.
If ideology is what counts, however, then the House GOP won't budge, if at all, until the last minute. They don't want to see taxes go up, but I'm not sure that they would be willing to make a compromise that would permanently eliminate tax deductions in order to preserve the status quo in income tax rates.
What do you think?
While Occupy Wall Street has been garnering many headlines with outrage about the financial sector, the Bank of International Settlements just released a paper that's likely to have more actual impact on said financial sector. The paper is an effort to estimate the costs and benefits from requiring global systemically important banks (G-SIB's) to increase their capital buffers. From the executive summary:
[R]aising capital requirements on the top 30 potential G-SIBs by 1 percentage point over eight years leads to only a modest slowdown in growth. GDP falls to a level 0.06% below its baseline forecast, followed by a recovery. This represents an additional drag on growth of less than 0.01 percentage points per year during the phase-in period. The primary driver of this macroeconomic impact is an increase of lending spreads of 5-6 basis points. Soon after implementation is complete, growth is forecast to be somewhat faster than trend until GDP returns to its baseline. The aggregate figures conceal significant differences across countries, which reflect differences in the role of G-SIBs in the domestic financial system and in current levels of bank capital buffers. International spillovers are also important, and in some countries are likely to be the dominant source of macroeconomic effects.
The overall results are robust to variations in key assumptions. Using a longer list of banks, scaling by assets rather than lending, shortening the implementation period, or limiting the ability of authorities to offset slower growth with monetary or macroprudential policy were all found to increase the growth impact, but not markedly.
What will be the effect of the full package of the Basel Committee's proposals for stronger capital requirements - the set of buffers that will be required of all banks under Basel III, combined with the additional buffers to be carried by G-SIBs? The impact of the Basel III proposals, using the end-2009 global capital levels as a starting point, was calculated by the MAG [Macroeconomic Assessment Group] in 2010. On top of this, we assume for illustrative purposes that the top 30 G-SIBs will need to raise their capital ratios by an additional 2 percentage points, and that both parts of the reform are implemented over eight years. Adding together these two components, we find that the impact is again quite small, with GDP at the point of peak impact forecast to have fallen 0.34% relative to its baseline level. Roughly 0.04 percentage points are subtracted from annual growth during this period, while lending spreads rise by around 31 basis points. As before, different assumptions lead to different effects, with faster implementation or a weaker monetary policy response increasing the impact on GDP.
The benefits of the G-SIB framework relate primarily to the reduction in the exposure of the financial system to systemic crises that can have long-lasting effects on the economy. The LEI estimated the benefits of Basel III by multiplying the degree to which it reduces the annual probability of a systemic crisis, by an estimate of the overall cost of a typical crisis in terms of lost output. Drawing on the [Basel Committee Long-term Economic Impact Study's] results, the MAG estimated that raising capital ratios on G-SIBs could produce an annual benefit in the order of 0.5% of GDP, while the Basel III and G-SIB proposals combined contribute an annual benefit of up to 2.5% of GDP - many times the costs of the reforms in terms of temporarily slower annual growth.
Let me just translate how the BIS would put this to a lay audience:
Hey, you know how Jaime Dimon and all the other bankers who contribute to the Institute for International Finance, American Bankers Association, and Financial Services Forum keep saying that raising their capital requirement is "anti-American" and will lead to catastrophic economic consequences? Yeah, well, they don't know what the f**k they're talking about. Raising their capital requirements causes a extremely small dip in expected growth -- and by small we mean less than one tenth of one percent of GDP. This is massively outweighed by preventing the expected lost output that would result from recessions triggered by another financial crisis.
Now, it's not terribly surprising that global regulators will say that they're right and the banks are wrong. One would expect that the interest group power of Wall Street, however, would have the upper hand. What is surprising, as the Wall Street Journal's Sara Schaefer Munoz notes, is that the banks seem to be losing their battle with regulators:
The tug-of-war between banks and regulators over post-crisis financial rules has so far moved in the watchdogs' favor with banks largely failing to upend the tougher proposals in the U.S. and Europe....
Even before Monday's report, regulators didn't seem responsive to the industry's arguments. In the U.S., lawmakers have already determined that the country's big banks must hold more capital, but haven't yet specified how much.
The Dodd-Frank financial overhaul law, enacted more than a year ago, mandated many new restrictions on banks but left it to regulatory agencies to write the rules. Wall Street and the financial industry have spent millions of dollars lobbying to shape the rules, with little success so far.
They lost in their efforts to block new limits on the fees they can charge merchants when consumers use debit cards. Regulators are expected to vote Tuesday to issue a proposed "Volcker Rule," a part of the Dodd-Frank law designed to curtail trading activities at bank. Now they appear likely to fail in their efforts to block or water down a rule requiring them to hold extra capital.
In 2010, securities and investment firms spent a record $101.6 million on lobbying, up from $92.3 million in 2009, according to the Center for Responsive Politics. Through early October 2011, the firms had shelled out $49.5 million.
There are plenty of ways in which large banks can continue to fight the suggested rules, particularly on the implementation side. Still, this is not how open economy politics traditionally works. Traditionally, bank preferences are communicated to national governments, which then get expressed in BIS/Basle Committee meetings. This certainly happened in the actual Basel III negotiations. This kind of back and forth, in which regulators appear to trump the arguments of the financial sector, is highly unusual.
I confidently predict that this post will not generate the kind of comments that, say, an Occupy Wall Street post has in the past week. That's kind of a tragedy, because this ongoing tug of war between the BIS and IIF will likely have more far-reaching consequences than anything those protestors achieve.
Yesterday Rush Limbaugh asked a former U.S. serviceman who called into his show a totally-hypothetical-and-not-in-any-way-designed-to-impugn-the-patriotism-of-the-sitting-president-kind of question:
Are you aware of any military contingency plans for a president who might not be your prototypical pro-America president? Are there contingency plans to deal with a president who may not believe that the United States is the solution to the world's problems?
Marc Ambinder provides both a succinct ("No.") and a more detailed answer. Now, some readers might take umbrage at the partisanship of Limbaugh's question, but I think it dovetails nicely with some recent research interests of my own. In particular: what would happen if the president was under threat of turning into a zombie?
Let's break this down into two phases: A) a president who's been bitten but is still clearly human; and B) an undead POTUS.
The first situation could distort the government's initial policy responses. After all, the actors with the most immediate stake in sabotaging any attack on zombies are those who have been bitten by zombies, and the human relatives of zombies. By definition, the moment humans are bitten, they will inevitably become zombies. This fact can dramatically alter their preferences. This change of mind occurs in many zombie films. In George Romero's Land of the Dead (2005), the character of Cholo has the most militant anti-zombie attitude at the outset of the film. After he is bitten, however, he decides that he wants to "see how the other half lives." In Peter Jackson's Dead Alive (2002), as well as Romero's Dawn of the Dead (1978) and Survival of the Dead (2010), family members keep their undead relatives hidden from security and paramilitary forces.
Clearly, soon-to-be-ghouls and their relatives can hamper policy implementation. One would expect a soon-to-be POTUS to order research efforts on finding a cure rather than focusing on prevention, for example.
If the situation is unclear when the president is infected, all hell breaks lose once he becomes a member of the differently animated. The law here is extremely murky. From Ambinder:
The Presidential Succession Act of 1947 spells out a procedure. Let's look at 3 USC 19, subsection "E." We're dealing with a situation where there is no President, no Vice President, no Speaker of the House and no President Pro Tempore. The law then appoints the Secretary of State as President until either the end of the current president's term in office OR someone higher in the chain of command suddenly re-appears or recovers from injuries and is able to discharge the powers of office. (The Secretary of Defense is sixth in line, after the Secretary of the Treasury.)
This seems clear: If it's not clear, after some sort of decapitation attack, whether the President, the Vice President or the two Congressional successors are alive, or if they're all alive but disabled, then the Cabinet secretaries become acting President -- until and unless a "prior entitled individual" is able to act.
Let's say that the POTUS, the VPOTUS, the Speaker and the President Pro Tempore are all injured; only the Vice President recovers. As soon as that person is eligible, he or she can "bump" the Acting President aside whenever he wants....
The problem is that, in a catastrophic emergency, the people who need to know who is in charge might not have the resources to find this out immediately. These people are, in particular, the Secret Service, and the folks who execute lawful orders from the National Command Authority (which is another name for the commander in chief's executive powers).
Well, then what the hell happens if a president is bitten by a zombie, dies, and then becomes a zombie? It seems to me that the Presidential Succession Act of 1947 doesn't cover this contingency.
There is also the question of the conflicting bureaucratic imperatives that some organizations, like the Secret Service, would face in this scenario. For example, in Brian Keene's The Rising, the U.S. government falls apart almost immediately. A key trigger was the Secret Service's difficulties altering their In divining bureaucratic preferences, where you stand depends on who you eat. standard operating procedures. After the president turned into a zombie, he started devouring the secretary of state. As a result, "one Secret Service agent drew his weapon on the undead Commander-in-Chief, and a second agent immediately shot the first."
I think the lesson to draw here for Rush and others is that in divining both bureaucratic and presidential preferences, where you stand depends on who you eat.
I hereby applaud Rush for being brave enough to highlight this troublesome question during a week when nothing else is going on in the world.
Last week I received the following news release from the National Research Council:
A new report from the National Research Council recommends that the U.S. intelligence community adopt methods, theories, and findings from the behavioral and social sciences as a way to improve its analyses. To that end, the Director of National Intelligence (DNI) should lead a new initiative to make these approaches part of the intelligence community’s analytical work, hiring and training, and collaborations.
The report, which was requested by the Office of the Director of National Intelligence, urges the intelligence community to routinely evaluate the performance of its analytical methods. One important step in that direction is to attach whenever possible numeric probabilities with uncertainty estimates for the events that analysts assess and forecast. Without explicit quantifiers, analysts cannot communicate their conclusions clearly or evaluate the accuracy of their analyses over time. Policymakers need to know how confident analysts are and how well they understand the limits to their knowledge, the report emphasizes. It recommends many specific steps that DNI can implement as part of analysts’ everyday work.
"The social and behavioral sciences have long studied topics central to analysts’ work, such as how people evaluate evidence and collaborate on difficult tasks,” said Baruch Fischhoff, chair of the committee that wrote the report and professor of social and decision sciences and of engineering and public policy at
Carnegie Mellon University, . “That research has had some impact on that work. Our report shows how the community can take full advantage of that research – and of its dedicated analysts – by adopting an evidence-based approach to its own analytical methods. We envision a community engaged in continual learning, both absorbing scientific research into the analytical process and evaluating its own performance." Pittsburgh
Now, this all sounds good to this social scientist's ears, but there's one little thing nagging at me. A quick glance at the "Committee on Behavioral and Social Science Research to Improve Intelligence Analysis for National Security" reveals the following membership: four psychology professors, three political scientists, three business professors, and a public policy professor.
Now, no offense, but is it really shocking that a group of social and behavioral scientists conclude that their work should be embraced more by the intelligence community?
None of this is to say that I disagree with the report's findings. I concur that the intelligence community should “ensure that the intelligence community (IC) applies the principles, evidentiary standards, and findings of the behavioral and social sciences.” And I wholeheartedly agree that there should be more "exchange of expertise between the IC and academic research environments." (Based on this survey, by the way, a fair percentage of IR scholars already do paid or unpaid work for the government).
The tools of social sciences are not magic bullets, but they're actually quite useful, and I want analysts to rely on every tool in their cognitive arsenal. To use a baseball metaphor, think of this report as suggesting that sabermetrics would be a useful complement to traditional scouting as a way of analyzing talent..
The thing is, as much as I might want to be viewed as a thoroughly detached and dispassionate expert on these questions, I fear that the rest of the world will view this an exercise in interest group lobbying. The report would have been more persuasive if more "old-school" intelligence analysts had signed off on the report (though Thomas Fingar was one of the signatories).
Hmmm.... this is interesting:
Nations on the front lines of the old Cold War divide made clear here Saturday that they want the Senate to ratify the new U.S.-Russia nuclear treaty, and said that Republican concerns about their well-being were misplaced.
In an unannounced group appearance at the end of an administration background briefing on Afghanistan, six European foreign ministers took the stage with a message for Congress.
"Don't stop START before it's started," Bulgarian Foreign Minister Nickolay Mladenov said.
Conservative Republican senators have said the New Strategic Arms Reduction Treaty, or New START, signed early last year, needs more work and have rejected the administration's hopes of bringing it to a vote in the lame duck session before the end of the year.
The ministers insisted that Obama administration officials, some of whom stood at the back of the room as they spoke, did not put them up to the appeal. All are here participating in the NATO summit.
"I'm the one who initiated this initiative," Danish Foreign Minister Lene Espersen said. The idea, she said, was to "at least make the Republican Party [aware] of how important this is."
In addition to being her country's foreign minister, Espersen said with some indignation, "I'm also the chairman of the Conservative Party of Denmark. Nobody can ever accuse me of being soft on security."
"We're all conservatives," Hungarian Foreign Minister Janos Martonyi added.
Two major Jewish groups came out Friday in favor of ratification of the START treaty.
Both the Anti-Defamation League (ADL) and the National Jewish Democratic Council (NJDC) cited the importance of passage of the U.S.-Russian nuclear arms reduction treaty in order to maintain American-Russian cooperation in pressuring Iran to curtail its nuclear program.
"We are deeply concerned that failure to ratify the New START treaty will have national security consequences far beyond the subject of the treaty itself," the ADL said in a letter sent to every senator Friday.
"The U.S. diplomatic strategy to prevent Iran from developing nuclear weapons requires a U.S.-Russia relationship of trust and cooperation," ADL continued. "The severe damage that could be inflicted on that relationship by failing to ratify the treaty would inevitably hamper effective American international leadership to stop the Iranian nuclear weapons program."
The National Jewish Democratic Council, meantime, issued a statement Friday urging citizens to call Senate Minority Whip Jon Kyl (R-Ariz.) and tell "him to put politics aside, and join the broad bipartisan consensus behind START."
Will this have any effect on START's ratification chances? Earlier this week Fred Kaplan observed that passage might still be a possibility:
If Kyl thinks that the treaty will get ratified anyway—or that, if it doesn't get ratified, he will lose all the extra money for nuclear modernization—then maybe he'll jump onboard. That way he could preserve his standing as a security hawk and, perhaps more important, an effective power broker.
Of course, he and his colleagues in the Republican leadership might think it's more important to deny Obama any victory, to make him seem ineffective and thus erode his chances of re-election in 2012 (the GOP's No. 1 priority, according to Senate minority leader Mitch McConnell). If that's what ends up happening, at least Obama will know the name of the game for the next two years—and, maybe, figure out how to play it.
The first couple of stories suggest that maybe, just maybe, the GOP would pay a price for out-and-out obstructionism -- and let's be blunt, that's really what Kyl's behavior is at this point. Sure, pissing off France or South Korea comes with few downsides for U.S. Senators, but Poland and other former Warsaw Pact countries are another kettle of fish. If
neoconservatives Jews Eastern Europeans powerful interest groups within the GOP have bigger fish to fry than relations with Russia, then they will make life somewhat more difficult to Republican Senators. Just how much more difficult remains to be seen, however.
Tom Brokaw has acquired sufficient gravitas such that, when he clears his throat in a meaningful way, he gets his own New York Times op-ed essay.
This morning, Brokaw cleared his throat about why the ongoing conflicts in Afghanistan in Iraq aren't being talked about during this election campaign season.
[W]hy aren’t the wars and their human and economic consequences front and center in this campaign, right up there with jobs and taxes?
The answer is very likely that the vast majority of Americans wake up every day worrying, with good reason, about their economic security, but they can opt out of the call to arms. Unless they are enlisted in the armed services -- or have a family member who has stepped forward -- nothing much is asked of them in the war effort.
The all-volunteer uniformed services now represent less than 1 percent of the American population, but they’re carrying 100 percent of the battle…
No decision is more important than committing a nation to war. It is, as politicians like to say, about our blood and treasure. Surely blood and treasure are worthy of more attention than they’ve been getting in this campaign.
It's true that Iraq was a much bigger issue during the 2002 and 2006 midterms. Is Brokaw right that the lack of a draft is deflecting the issue? Sort of.
Brokaw has half a point in saying that the all-volunteer force blunts the incentive to have a public debate on this Very Important Topic. There's a better reason to explain the silence, however: There's not much daylight between the two parties on this issue.
In 2008, the Bush administration began the drawdown phase in Iraq. In 2009, the Obama administration anted up for 30,000 more troops in Afghanistan. Neither war is popular with the U.S. electorate.
Given these political facts, why would either party bring up these conflicts? Democrats can't rail against wars being prosecuted by a Democratic president. Not even nutjob ultra-conservative hacks can credibly claim that Obama has been a "Kenyan anti-colonialist" on the military front. Democrats can't really run on a "see, we told you that Obama isn't a war wimp!" message either. The GOP has little incentive to call for doubling down in these conflicts and can't really pivot towards a "pro-peace" position either. [I suspect the Islamophobia issue is cropping up on the GOP campaign trail because it's a stalking horse for "getting tough" with the United States' enemies. Even here, however, it's not like Democrats have created all that much daylight between them and the party of opposition.]
If neither party has an incentive to bring up these wars during the campaign, the only way it becomes an issue is if a powerful interest group and/or social movement raises it. Here's here the all-volunteer force comes into play. Perhaps some returning veterans want to bring up the war as an issue for policy debate -- but the returning veterans do not appear to be alienated en masse. There is also no U.S. equivalent of the Union of the Committees of Soldiers' Mothers of Russia -- not that the Russian version was all that effective. All one finds on this terrain are the Cindy Sheehans of the world, and her credibility has been eroding as of late.
Brokaw is right that matters of blood and treasure should be debated. But a debate requires politicians to have divergent views to debate about -- and right now, that doesn't exist between the major parties.
The Troubled Assets Relief Program expired yesterday. I've blogged about how this program was both cost-effective and a pretty significant policy achievement. This appears to be the expert assessment as well. The Wall Street Journal's Deborah Solomon and Naftali Bendavid explain:
It will ultimately cost far less than the initial $700 billion price tag that stunned a nation. Major banks are profitable and can raise capital. Credit spreads -- a key measurement of risk -- are down to pre-crisis levels.
The White House now projects TARP will lose at most $50 billion, down from $105 billion projected earlier this year. Privately, Treasury Department officials say the U.S. may not lose a dime, and could ultimately make money depending on how some investments fare, in particular American International Group Inc. and General Motors Corp. In a $14 trillion economy, $50 billion is less than 1% of economic output.
"The incredible irony here is that TARP probably succeeded wildly beyond anybody's imagination," said Alan Blinder, a Princeton University economist who co-authored a paper crediting the administration's economic policies with preventing a second Great Depression. "Suppose the original TARP bill had been to spend $50 billion to avert a catastrophe. Would anyone have blinked?"
Or consider the Financial Times story by Tom Braithwaite:
[A]ll of the consequences have to be judged against late 2008 and early 2009 when fear stalked the markets and nationalisation of the biggest US banks looked a possibility.
Making a play on a famous MasterCard commercial, Mr [Lee] Sachs outlines what the country got in return for its investments in the banks. “Dividends? Five per cent. Equity warrants? Two per cent. The economy not turning into the second Great Depression? Priceless.”
Despite this fact, however, TARP is ridiculously unpopular with the American people.
Oddly enough, this might be a very good thing, for two reasons. First, the likelihood that the latest financial reform bill will prevent a future financial crisis is exactly nil. There will be moments down the road when the financial sector will come crying to Washington.
TARP's biggest problem, however, was that it badly exacerbated the moral hazard problem. If banks know that they are insured against catastrophe, this gives them an incentive to act in a more risk-loving manner to maximize profits -- thereby increasing the probability of a catastrophe. While this might be a good thing in some sectors of the economy, finance is not one of them.
TARP's political unpopularity, however, could help to eliminate the moral hazard problem. As Solomon and Bendavid observe:
Perhaps the biggest fallout from TARP is that it precludes another TARP. Should the financial sector run into trouble, the chances of another government bailout are essentially nil. For many on Capitol Hill and beyond, the end of bailouts is a good thing. But some worry TARP's legacy could be a more devastating financial crisis down the road.
"The greatest consequence of the TARP may be that the government has lost some of its ability to respond to financial crises," concluded the Congressional Oversight Panel, which oversees TARP and has been one of its biggest critics.
Now, truth be told, I'm not sure this is entirely accurate. Sure, rescue packages are unpopular now -- but let the Dow Jones Industrial Average fall 800 points and politicians might react differently. If, however, the political perception is that no more bailouts from D.C. will be forthcoming, then it might condition financial players to act in a more prudential manner.
In other words, the Tea Party activists on the right and the netroots activists on the left might be the political lobbies that do the most to preserve the integrity of the U.S. financial system.
I'll be spending the rest of the day savoring this irony. I welcome commenters trying to burst my cognitive bubble, however.
Earlier today, we were given a tour of the Green Line and the physical barrier that separates Isreal proper from the West Bank (note -- the Green Line and the location of the barrier are not the same thing, which is a source of furious and intractable debate some mild contestation among the interested parties.)
We were driven to an overlook that contrasted a small Israeli settlement with the Palestinian city of Qalqilya. The settlement looks like a leafy exurb in the middle of a lot of brown, dilapidated neighborhoods. In case you were wondering, the material incentive for settlement housing is that it's 40 percent cheaper than living in Tel Aviv, the climate is more temperate, and it's still close to the city.
Our tour guide was a former IDF brigadier general, and without getting into specifics let's just say that he knew an awful lot about the West Bank. He gave us a brief lecture explaining the humanitarian issues that arose with the creation of the barrier, the security gains that came from it, the economic disparity between the Palestinian cities and the settlements, and so forth.
As he was talking, a second tour group showed up and the other tour guide started talking, also in English. I sidled up to the edge of that group to listen. The second guide's spiel was rather different. He talked about the dangers of disengaging from the West Bank, because of the possibility of a takeover by either Hamas of Hezbollah. Instability in Iraq and Jordan were also mentioned as possibilities.
Now this was a curious statement, given that Hezbollah is Shiite and based in Lebanon -- they have a tacit alliance with Hamas, but would be unlikely to find hospitable ground in the West Bank under any contingency.
It turns out that this tour was run by -- wait for it -- AIPAC. The guide was shepherding a group of Hispanic politicians around the country.
Take from this what you will.
The Financial Times has been working overtime to discussing an emergent trend: multinational CEOs in Europe and the United States ripping into China.
In some ways, this started earlier this year. There was Google's complaint, of course. And, as TNR's James Mann noted, "Both the American Chamber of Commerce in Beijing and the European Chamber of Commerce in China have issued reports in recent months conceding that the business climate for foreign companies there has steadily worsened."
Things have been heating up in July, however. First, as Guy Dinmore and Jamil Anderlini report, GE CEO Jeffrey Immelt ripped into China while in Europe:
He warned that the world’s largest manufacturing company was exploring better prospects elsewhere in resource-rich countries, which did not want to be “colonised” by Chinese investors. “I really worry about China,” Mr Immelt told an audience of top Italian executives in Rome, accusing the Chinese government of becoming increasingly protectionist. “I am not sure that in the end they want any of us to win, or any of us to be successful."....
“China and India remain important for GE but I am thinking about what is next,” he said, mentioning what he called “most interesting resource-rich countries” in the Middle East, Africa, Latin America plus Indonesia. “They don’t all want to be colonised by the Chinese. They want to develop themselves,” he said. The comments echo a rising chorus of complaints from foreign business groups in China about the regulatory environment they face.
Gideon Rachman notes that Immelt is hardly alone in his complaints:
[W]hen Google, Goldman Sachs, and GE all run into difficulties simultaneously, it seems clear that a bigger trend is at work. Privately, senior US officials have been worrying for some time that Chinese trade and economic policy is taking a more nationalist direction that is penalising US companies. They worry that, after 30 years of strong economic growth, China believes it can now afford to take a less welcoming attitude to foreign investment, and instead concentrate on promoting national champions.
What's interesting is that European firms are now joining in the chorus of complaints. Furthermore, as Jamil Anderlini notes, they're not doing it in private dinners -- they're blasting the Chinese leadership publicly and directly:
Two of Germany’s most prominent industrialists have attacked the business and investment climate in China during a meeting with Wen Jiabao, the Chinese premier.
The criticism from the businessmen, the chief executives of Siemens and BASF, came against a backdrop of rising discontent among foreign businesses operating in China.
The German executives’ comments were all the more striking as they were made directly to the Chinese premier, and in public, as part of Angela Merkel’s four-day state visit to the country.
Jürgen Hambrecht, chief executive of BASF, the chemical producer, hit out at restrictions on foreign business and complained of foreign companies being forced to transfer business and technological know-how to Chinese companies in exchange for market access.
“That does not exactly correspond to our views of a partnership,” Mr Hambrecht told Mr Wen at the weekend meeting in the western Chinese city of Xi’an.
Addressing government procurement practices, a recent area of complaint by foreign executives and governments, Peter Loescher, chief executive of Siemens, the industrial conglomerate, said foreign companies operating in China “expect to find equal conditions in the fields of public tenders”.
Mr Loescher, who is also chairman of the Asia-Pacific Committee of German Business, called on Beijing rapidly to remove trade and investment restrictions in sectors such as automobiles and financial services.
BASF and Siemens had combined sales in greater China of more than €9bn ($11.6bn) last year and employ more than 36,000 people in the area.
Mr Wen responded to the criticism by telling Mr Hambrecht to calm down, insisting that China remained open to foreign investment and did not discriminate against foreign companies. “Currently there is an allegation that China’s investment environment is worsening. I think it is untrue,” Mr Wen said.
Alan Beattie and the ubiquitous Mr. Anderlini provide some general context for the latest venting:
The risk-reward calculation between staying quiet and speaking up has shifted towards the latter. With China employing policies including ignoring intellectual property rights, forced technology transfer and government procurement skewed towards domestic companies, some foreign businesses feel they are being pushed out of the country. “We are feeling less and less welcome in China, which is why you are seeing more people speaking out and reconsidering their futures in China,” says John Neuffer of the US Information Technology Industry Council.
Business leaders say Beijing’s appetite for more liberalisation of foreign investment has waned after a rapid burst of reform around China’s accession to the World Trade Organisation in 2001. So even when current policies only represent a standstill, they feel like going backwards.
At best, current policies are moving very slowly towards liberalization. The good news is that China is seeking to join the WTO's Government Procurement Agreement, which liberalizes trade among participating countries for government-commissioned projects. The bad news is that China's latest offer is
half-assed tokenism underwhelming in terms of what's on offer, and likely to be rejected by the US and EU.
So, why is China suddenly so hostile towards western multinationals? The simple realpolitik answer is that China is simply more powerful than it used to be, and its flexing its muscles now because it has them. In the Wall Street Journal, David Wessel offered a revealing anecdote that suggests President Obama shares this quasi-relative gains view:
Mr. Obama, who took office in an economy far worse and far more hostile to trade than the one Mr. Clinton inherited, appears less convinced of the virtues of free trade per se. He loves exports, easily sold as creating jobs. But he seems to view world trade like a basketball game: He wants to win, and doesn't like feeling that others are taking advantage of his team. He needles aides who worked in the Clinton administration that they let China into the WTO with a better hand than the one he has to play. Aides counter that China would be even more of a threat if not bound by WTO rules. He is unpersuaded....
Mr. Obama's trade strategy is becoming clearer. In international forums, as he did at the Copenhagen climate-change talks, he is arguing that China is posing as a developing country even though it has grown up and needs to be treated like the economic powerhouse it is. At home, he knows—no matter what his economists tell him—that neither voters nor Democrats in Congress will be convinced that free trade is good for them. So he is styling himself as a tough bargainer, who can beat other countries at their own game.
Obama could be right, but on one key dimension his bargaining hand will actually be stronger than those of past presidents. China, by continuing to alienate and frustrate western multinational corporations, is also effectively weakening the strongest pro-China lobbies in both Washington and Brussels. As Rachman notes:
Were it not for the power of big business, the relationship between the US and China might have gone sour years ago. There are forces on both sides of the Pacific – Chinese nationalists, American trade unionists, the military establishments of both countries – that would be happy with a more adversarial relationship. For the past generation it has been US multinationals that have made the counter-argument – that a stronger and more prosperous China could be good for America.
So it is ominous, not just for business but for international politics, that corporate America is showing increasing signs of disillusionment with China....
In the past, American business has acted as the single biggest constraint on an anti-Chinese backlash in the US. If companies such as GE, Google and Goldman Sachs qualify their support for China or refuse to speak up, the protectionist bandwagon will gather speed.
The Chinese government, of course, is not stupid. China’s growing confidence in dealing with the US, and the world in general, is still matched by a cautious desire to avoid conflict. At strategic moments, the Chinese government is likely to make tactical concessions – whether on Google or the currency – in an effort to head off a damaging conflict with the US. But with American business and the American public increasingly restive, the risks of miscalculation are growing.
And here I must dissent from Rachman. In some ways, I do think the Chinese government has been pretty stupid over the past year in executing its "Pissing Off As Many Countries As Possible" strategy. China rankled the Europeans over its climate change diplomacy at Copenhagen. For all of Beijing's bluster, it failed to alter U.S. policies on Tibet and Taiwan. It backed down on the Google controversy. It overestimated the power that comes with holding U.S. debt. It alienated South Korea and Japan over its handling of the Cheonan incident, leading to joint naval exercises with the United States -- exactly what China didn't want. It's growing more isolated within the G-20. And, increasingly, no one trusts its economic data.
This doesn't sound like a government that has executed a brilliant grand strategy. It sounds like a country that's benefiting from important structural trends, while frittering away its geopolitical advantages. Alienating key supporters in the country's primary export markets -- and even if Chinese consumption is rising, exports still matter an awful lot to the Chinese economy -- seems counterproductive to China's long-term strategic and economic interests.
Developing.... in a very interesting way.
Alexander F. Yuan-Pool/Getty Images
A revolt among big donors on Wall Street is hurting fundraising for the Democrats' two congressional campaign committees, with contributions from the world's financial capital down 65 percent from two years ago.
The drop in support comes from many of the same bankers, hedge fund executives and financial services chief executives who are most upset about the financial regulatory reform bill that House Democrats passed last week with almost no Republican support. The Senate expects to take up the measure this month.
This fundraising free fall from the New York area has left Democrats with diminished resources to defend their House and Senate majorities in November's midterm elections. Although the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee have seen just a 16 percent drop in overall donations compared with this stage of the 2008 campaign, party leaders are concerned about the loss of big-dollar donors.
And now Politico:
With the financial reform bill likely to hit President Barack Obama’s desk in coming weeks, Wall Street's top political players are warning Democrats to brace themselves for the next phase of the fight: the fundraising blowback.
Democrats who backed the bill are finding big banks far less eager to host fundraisers and provide campaign cash heading into the tightly contested midterm elections this fall, insiders say.
Some banks, in fact, have discussed not attending or hosting fundraisers at all for the next few months. Goldman Sachs is already staying away from all fundraisers, according to two sources. The company would not comment.
“I think at least in the short term there is going to be a great deal of frustration with people who were beating the hell out of us — then turning around and asking for money,” said a senior executive of a Wall Street bank.
Based on these stories,
when if the Democrats get hammered come November, expect a lot of pixels and ink spilled on the awesome power of the financial sector to get what it wants in Washington. And don't believe a word of it.
This is the lobbying equivalent of a good but struggling baseball club calling a team meeting right before they play the worst ballclub in the league. That is to say, sports managers often save their rousing speeches before a game they're pretty likely to win, so they can claim that their motivation was what led their team to victory.
As Charlie Cook notes, the Democrats are heading into a Category 5 political disaster come November. This has nothing to do with FinReg, and everything to do with a struggling economy, an ecological disaster in the Gulf, fired-up conservatives, and disaffected liberals. Wall Street antipathy is really the least of their problems.
I'm laying this marker down now -- unless we see some shocking upsets among the New York delegation (the real target of Wall Street's ire), analysts who proclaim the awesome political power of financial sector will be doing so with sloppy facts and sloppy argumentation.
In recent years, I've seen some very... let's say exaggerated arguments about the power of political lobbies in Washington. They do possess political influence, but much of that influence rests on the perception that they can make or break electoral fortunes. In Wall Street's case, however, they're pushing on a door that was already wide open.
Which is not surprising. Powerful interests tend to apportion their money to candidates they think will win. Indeed, to use a term of art, Wall Street's political preferences appear to be -- dare I say it -- pro-cyclical.
Analysts are trying to decipher the content and implications of the Senate's financial regulation bill. Noam Scheiber and James Pethokoukis have surprisingly similar takes, in that the bill doesn't directly address the "too big to fail" problem, though Scheiber thinks it does address the problem indirectly.
Wall Street has an enduring PR problem. Yes, big banks are unpopular. But it has gotten so bad that they may not be able to so easily counter their image issues with campaign cash. Getting Wall Street money now has a stigma attached to it like oil and tobacco money. Candidates like Meg Whitman in California and John Kasich are getting hammered for their Wall Street ties. The industry’s continued unpopularity will no doubt spawn further attempts to tax, regulate and restrict the sector.
If the public stays this outraged for this lomg, then Pethokoukis is right. The political problems of finance are becoming so great that we could be talking about a shift in social norms with regard to what is considered "honorable" work.
Of course, paradoxically, this could serve to increase the salaraies of those still willing to go into finance. As Adam Smith pointed out in Wealth of Nations:
[T]he wages of labour vary with... the honourableness or dishonourableness of the employment.... Honour makes a great part of the reward of all honourable professions. In point of pecuniary gain, all things considered, they are generally under-recompensed, as I shall endeavour to show by and by. Disgrace has the contrary effect. The trade of a butcher is a brutal and an odious business; but it is in most places more profitable than the greater part of common trades. The most detestable of all employments, that of public executioner, is, in proportion to the quantity of work done, better paid than any common trade whatever.
Question to readers: Will the social stigma against Big Finance persist or fade as the economy bounces back?
Last week it was financial regulation evolving in ways that seem contrary to Wall Street's interests.
This week, Secretary of Defense Robert Gates have a speech at the Eisenhower museum that fires a warning shot across the bow of defense contractors and the U.S. military:
The attacks of September 11th, 2001, opened a gusher of defense spending that nearly doubled the base budget over the last decade, not counting supplemental appropriations for the wars in Iraq and Afghanistan. Which brings us to the situation we face and the choices we have today – as a defense department and as a country. Given America’s difficult economic circumstances and parlous fiscal condition, military spending on things large and small can and should expect closer, harsher scrutiny. The gusher has been turned off, and will stay off for a good period of time....
To be sure, changing the way we operate and achieving substantial savings will mean overcoming steep institutional and political challenges – many lying outside the five walls of the Pentagon. For example, in this year’s budget submission the Department has asked to end funding for an unnecessary alternative engine for the new Joint Strike Fighter and for more C-17 cargo planes. Study on top of study has shown that an extra fighter engine achieves marginal potential savings but heavy upfront costs – nearly $3 billion worth. Multiple studies also show that the military has ample air-lift capacity to meet all current and feasible future needs. The leadership of the Air Force is clear: they do not need and cannot afford more C-17s. Correspondingly, the Air Force, Marine Corps, and Navy do not want the second F-35 engine. Yet, as we speak, a battle is underway to keep the Congress from putting both of these programs back in the budget – at an unnecessary potential cost to the taxpayers of billions of dollars over the next few years. I have strongly recommended a presidential veto if either program is included in next year’s defense budget legislation....
Therefore, as the Defense Department begins the process of preparing next’s years Fiscal Year 2012 budget request, I am directing the military services, the joint staff, the major functional and regional commands, and the civilian side of the Pentagon to take a hard, unsparing look at how they operate – in substance and style alike. The goal is to cut our overhead costs and to transfer those savings to force structure and modernization within the programmed budget. In other words, to convert sufficient “tail” to “tooth” to provide the equivalent of the roughly two to three percent real growth – resources needed to sustain our combat power at a time of war and make investments to prepare for an uncertain future. Simply taking a few percent off the top of everything on a one-time basis will not do. These savings must stem from root-and-branch changes that can be sustained and added to over time.
What is required going forward is not more study. Nor do we need more legislation. It is not a great mystery what needs to change. What it takes is the political will and willingness, as Eisenhower possessed, to make hard choices – choices that will displease powerful people both inside the Pentagon and out.
Now, just because Gates is advocating some cutbacks in procurement and overhead doesn't mean that will happen. And the invocation of "political will" triggers Drezner's First Law of Politics: asking politicians to 'exercise political will' means asking them to stop acting like politicians. So nothing of consequence might come from Gates' cri de coeur.
Still, if nothing else, the past month has seen frontal assaults on the most powerful, politically connected interests in the United States. For a political scientist, these are very interesting times.
I think it's safe to say that the financial regulation bill has not evolved the way that Simon Johnson predicted last year. Johnson's thesis was pretty simple -- because of the structural dependence of politicians on financial capital, neither the executive nor the legislative branches would be willing to regulate that sector.
Johnson wasn't necesaarily wrong in making that prediction -- when in doubt, political scientists follow the money as well. Still, the regulation that is likely to emerge is clewarly stronger than expected. In The New Republic, Noam Scheiber has offers his explanation for why:
Basic political science tells us that, when Congress targets a complex industry with billions of dollars at stake, the legislation should weaken as it moves toward passage. The industry will plead its case with vehemence, while voters will be oblivious to the importance of subtle changes. “Words on the page are not that critical to the public,” one derivatives industry lawyer told me in March, conveying a general truism. But something unforeseen is happening as Congress wraps up its overhaul of Wall Street: Key elements of the bill are getting tougher—in some cases markedly so....
What explains the unexpected success? The financial-services industry had counted on public passion subsiding with time. As the derivatives lawyer told me a few weeks ago, “The current strategy you’re hearing is basically to keep Republicans together till cooler heads prevail.” But cooler heads aren’t prevailing. As the bailed-out banks have surged back to profitability while unemployment hovers near 10 percent, the public has, if anything, grown crankier. By holding the line on a tougher reform package, the White House has been able to ride the anger rather than get trampled by it. In a moment of rising public frustration, the populist argument gains force the longer the debate continues.
So does this contradict basic political science? Yes and no. The outcome is still consistent with political science odels -- just not the ones that focus on interest groups. Any Americanist will tell you that interest group politics matters a lot. If public opinion is pretty unified around a high-profile issue, however, then there are hard political constraints that block the ability of lobbyists to do that voodoo that they do so well. And it's pretty clear that the public is thermonuclearly pissed at the financial sector.
Still, this is pretty surprising, because financial regulation is so friggin' arcane. Quick, what's a credit default swap? A collateralized debt obligation? Are they examples of derivatives or not? Sure, readers of this blog likely know the answers to those questions, but I guarantee you that 99% of registered voters do not know the answer. The fact that public pressure and attention is still mobilized on this issue is unusual.
I think it's tied into the one part of the story that Scheiber failed to mention -- the SEC indictment of Goldman Sachs. Whether what Goldman did or not was actually illegal is not the issue. There was a lot of reporting about what Goldman actually did -- and it seems like they weren't acting like just a couple of bookies. The indictment changed the political optics of financial regulation and dramatically reduced the utility of lobbying from the financial sector.
Finreg isn't law yet, and experts like Johnson might argue that their "capture" story works on other dimensions of the regulation. Still, I don't think this is a case where basic political science failed -- unless you think that poli sci should have predicted the SEC indictment.
What do you think?
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Yesterday The Lancet retracted a controversial 1998 study that linked a British vaccine for measles/mumps/rubella to the onset of autism. This comes on the heels of multiple scientific studies that have failed to replicate the 1998 study's results, as well as the revelation that the paper's lead author, Andrew Wakefield, had failed to disclose commercial conflicts of interest.
So, this should put an end to the whole debate then, right? Well, New York Times reporter Gardiner Harris gets some quotes that suggest otherwise.
the retraction may do little to tarnish Dr. Wakefield’s reputation among parents’ groups in the United States. Despite a wealth of scientific studies that have failed to find any link between vaccines and autism, the parents fervently believe that their children’s mental problems resulted from vaccinations....
Jim Moody, a director of SafeMinds, a parents’ group that advances the notion the vaccines cause autism, said the retraction would strengthen Dr. Wakefield’s credibility with many parents.
“Attacking scientists and attacking doctors is dangerous,” he said. “This is about suppressing research, and it will fuel the controversy by bringing it all up again.”
Unfortunately, Moody's statement does seem to evoke Drezner's Eleventh Commandment of Policy Wonks. Activists will argue that this is an example of Big Science suppressing counterintuitive research. And in a public battle between the Jenny McCarthy/Oprah media-industrial complex and a bunch of science nerds, I'm putting my money on Mustard Girl. And I'm not the only one.
In my prior research, I've seen this kind of dynamic play out in the debates over genetically modified foods, and we're still seeing it play out in the debate over climate change. Furthermore, because scientists are not perfect., it's becoming easier to point out flaws that don't necessarily compromise the basic science but do tarnish the image of scientists as neutral arbiters of fact.
To be fair, it's true that individual scientists aren't really completely neutral -- especially when it comes to politicized debates. The scientific method, on the other hand, is about as neutral as you can get. But that's not as sexy a sell to the public.
Question to readers: is there a way to make scientific consensus more acceptable to a public that doesn't want to hear the results?
I've received a bunch of e-mail queries asking me what I think of the Charles Freeman affair. One could argue that Freeman's actual policy positions got him into trouble. (When a letter to the Wall Street Journal on his behalf allows that "Chas has controversial political views, not all of which we share," it suggests that something is amiss). One could also argue pretty persuasively that the Israel Lobby flexed its muscle (as Freeman himself argues in his missive to FP's Laura Rozen).
In the wake of Freeman's withdrawal, I think everyone is vastly overestimating the influence of outside forces and underestimating the idiosyncracies of Freeman in trying to interpret what the hell happened. I don't mean his positions -- I mean his relative eagerness to get back into the game. Freeman's statements on the matter suggests that he was not all that eager to re-enter government life:
"As those who know me are well aware, I have greatly enjoyed life since retiring from government. Nothing was further from my mind than a return to public service. When Admiral Blair asked me to chair the NIC I responded that I understood he was “asking me to give my freedom of speech, my leisure, the greater part of my income, subject myself to the mental colonoscopy of a polygraph, and resume a daily commute to a job with long working hours and a daily ration of political abuse.” I added that I wondered “whether there wasn’t some sort of downside to this offer.”
Sometimes these statements are boilerplate, but I don't get that sense from Freeman.
To put it another way -- if Hillary Clinton had been in the same situation as Freeman, there's no way in hell that she withdraws her name.
Steve Walt claims that, "this incident reinforces my suspicion that the Democratic Party is in fact a party of wimps." He's got a point, but I'm not sure it's the one he intended to make. Freeman is just one of a longer list of policy wonks -- Wendy Sherman, Caroline Atkinson, Robert Gallucci, etc. -- who have either declined or changed their minds about high-ranking postings. While none of these other names were targeted by the Israel Lobby, they all found the opportunity costs of entering goverment service too onerous.
Question to readers: Has the vetting process in DC become too absurd, or are Obama's subcabinet candidates too thin-skinned?
Writing in the Financial Times, Jeffrey Sachs fires a warning shot across the bow of stimulus enthusiasts:
The US debate over the fiscal stimulus is remarkable in its neglect of the medium term – that is, the budgetary challenges over a period of five to 10 years. Neither the White House nor Congress has offered the public a scenario of how the proposed mega-deficits will affect the budget and government programmes beyond the next 12 to 24 months. Without a sound medium-term fiscal framework, the stimulus package can easily do more harm than good, since the prospect of trillion-dollar-plus deficits as far as the eye can see will weigh heavily on the confidence of consumers and businesses, and thereby undermine even the short-term benefits of the stimulus package....
The most obvious problem with the stimulus package is that it has been turned into a fiscal piñata – with a mad scramble for candy on the floor. We seem all too eager to rectify a generation of a nation saving too little by saving even less – this time through expanding government borrowing. First it was former US Federal Reserve chairman Alan Greenspan’s bubble, then Wall Street’s, and now – in the third act – it will be Washington’s....
Perhaps Mr Obama should reflect on the fact that the Clinton-era boom began in 1993 with tax rises and a congressional rejection of a fiscal stimulus package. This time, there is certainly a cyclical case for deficit- financed public spending, but accompanied by phased-in tax increases to provide proper financing of crucial government functions in the medium term.
Hmmm... Sachs makes some valid points here. Maybe we should take a moment or two to ponder this.
Hey, what's this Sam Dillon story in the New York Times saying?
The economic stimulus plan that Congress has scheduled for a vote on Wednesday would shower the nation’s school districts, child care centers and university campuses with $150 billion in new federal spending, a vast two-year investment that would more than double the Department of Education’s current budget.
The proposed emergency expenditures on nearly every realm of education, including school renovation, special education, Head Start and grants to needy college students, would amount to the largest increase in federal aid since Washington began to spend significantly on education after World War II.
You know, it's nay-sayers like Sachs that are keeping our country mired in recession. I can't believe his nitpicking is going to stand in the way of
my tasty slab of pork getting America going again.
Wal-Mart has pursued what would appear to be a self-contradictory political strategy. Clearly, Wal-Mart fears the prospect of unionization more than any other factor. Low wages, low benefits, and a generally supine workforce have been fundamental to its business model for decades. Wal-Mart clearly believes Democrats are more sympathetic to unions than Republicans. So one might think that the company would be doing everything in its power to help Republicans and hurt Democrats. That's certainly what it used to do. In the 2000 campaign cycle, its political action committee devoted 85 percent of its donations to candidates for federal office to Republicans; in 2004, the split was 78 percent to 22 percent. But with Democrats having resumed control of Congress, Wal-Mart has increasingly deployed corporate resources to help Democrats stay in power. So far in this cycle, according to the Center for Responsive Politics, Wal-Mart has basically split its $884,700 in donations equally between the two parties (52 percent to 48 percent in favor of the Republicans). The list of recipients includes long-standing friends of organized labor such as Rep. Charles Rangel of New York and Sen. Debbie Stabenow of Michigan.Um... to a political scientist, this is not rocket science. Powerful material interests will play both sides of the political fence if their preferred party is unlikely to win. This doesn't mean Democrats will suddenly propose "Wal-Mart Day" legislation or anything -- but campaign contributions are likely to help blunt legislation that could hurt the company in the future.
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.