Assorted

How Teacher Turnover Harms Student Achievement


The Economics of Crime: Lessons for and from Latin America


Andrew Leigh's blog

Why is Peter Orszag leaving?

Mr. Orszag, you may recall, was the administration’s main proponent of “bending the curve” on health care expenditures. Frustrated that House Democrats wouldn’t accept some painful cost-cutting measures in the new health care law, Mr. Orszag pushed for and won a controversial provision to create something called the Independent Payment Advisory Board. This is an outside commission of 15 appointees who will, beginning in 2014, identify cuts to Medicare if the plan exceeds a preset rate for growth. Congress then has to either approve the cuts or propose an alternative.

The significance of this new advisory board goes well beyond the immediate question of how to rein in Medicare costs. Mr. Orszag, who declined to be interviewed, has said that the board represented, for Congress, the “single-biggest yielding of power to an independent entity since the creation of the Federal Reserve.” In other words, the Medicare Board isn’t only a means of cutting government spending; it is a means, too, of wresting the constitutional responsibility for budgeting away from powerful committee chairmen.

The Medicare Board may be the most striking example of this strategy, but it is hardly the only one. Mr. Orszag also helped broker the creation of an 18-member debt commission that will offer specific alternatives for re-ordering the federal budget. The administration has also proposed a bill — known in the punchy language of Washington as “expedited rescission authority” — that would effectively give the president the power to strike out spending items after the budget has been approved.

-Budget Chief tried to tilt power to Executive Branch

Book Recommendation- for Predictioneers

The Predictioneer’s Game: Using the Logic of Brazen Self-Interest to See and Shape the Future

Political institutions and human development

Political institutions and human development - does democracy fulfil its 'constructive' and 'instrumental' role ?

Summary: Institutions are a major field of interest in the study of development processes. The authors contribute to this discussion concentrating our research on political institutions and their effect on the non-income dimensions of human development. First, they elaborate a theoretical argument why and under what conditions democracies compared to autocratic political systems might perform better with regards to the provision of public goods. Due to higher redistributive concerns matched to the needs of the population democracies should show a higher level of human development. In the following they analyze whether our theoretical expectations are supported by empirical facts. The authors perform a static panel analysis over the period of 1970 to 2003. The model confirms that living in a democratic system positively affects human development measured by life expectancy and literacy rates even controlling for GDP. By analyzing interaction effects they find that the performance of democracy is rather independent of the circumstances. However, democracy leads to more redistribution in favor of health provision in more unequal societies.

Obama's benchmarks

When voters look at your Administration two years from now, in the off-year election, how will they know whether you’re succeeding?

I think there are a couple of benchmarks we’ve set for ourselves during the course of this campaign. On [domestic] policy, have we helped this economy recover from what is the worst financial crisis since the Great Depression? Have we instituted financial regulations and rules of the road that assure this kind of crisis doesn’t occur again? Have we created jobs that pay well and allow families to support themselves? Have we made significant progress on reducing the cost of health care and expanding coverage? Have we begun what will probably be a decade-long project to shift America to a new energy economy? Have we begun what may be an even longer project of revitalizing our public-school systems so we can compete in the 21st century? That’s on the domestic front.

On foreign policy, have we closed down Guantánamo in a responsible way, put a clear end to torture and restored a balance between the demands of our security and our Constitution? Have we rebuilt alliances around the world effectively? Have I drawn down U.S. troops out of Iraq, and have we strengthened our approach in Afghanistan — not just militarily but also diplomatically and in terms of development? And have we been able to reinvigorate international institutions to deal with transnational threats, like climate change, that we can’t solve on our own?

And outside of specific policy measures, two years from now, I want the American people to be able to say, “Government’s not perfect; there are some things Obama does that get on my nerves. But you know what? I feel like the government’s working for me. I feel like it’s accountable. I feel like it’s transparent. I feel that I am well informed about what government actions are being taken. I feel that this is a President and an Administration that admits when it makes mistakes and adapts itself to new information, that believes in making decisions based on facts and on science as opposed to what is politically expedient.” Those are some of the intangibles that I hope people two years from now can claim.

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The President-elect on his goals and agenda in a time of crisis

Interesting Assorted

Year of the Potato report

The President-elect on his goals and agenda in a time of crisis


Google Flu Trends

The Rabbi and the Norse King

Julian Zelizer Answers Your Political-History Questions

Can you explain to a nonacademic why political science and economics are considered different areas of study?

Survey of Literature on Boards of Directors

Prowling the Ponzi Archives

New Age Politics

The changing relationship between internet and politics?

Open for Questions: Participation, from campaigning to governing

Advice of the Day

Robert Lawrence;

Congress should put their mouths where their money is. They should make binding commitments to ensure higher US oil prices and thereby sufficient demand for fuel-efficient cars and trucks in the future.

Mankiw;

My advice to Team Obama: Do not be intellectually bound by the textbook Keynesian model. Be prepared to recognize that the world is vastly more complicated than the one we describe in ec 10. In particular, empirical studies that do not impose the restrictions of Keynesian theory suggest that you might get more bang for the buck with tax cuts than spending hikes.

Anwar Ibrahim on Riz Khan

Lecure of the Day- On Religion and Rational Control

Bradley Lecture by Harvey C. Mansfield;

Rational control is the subjection of society to reason as opposed to superstition, prejudice, or tradition, with the aim of getting us to behave better. Alexis de Tocqueville says this idea or practice began with the French monarchy; a more recent example is Nudge: Improving Decisions about Health, Wealth, and Happiness, by Cass R. Sunstein and Richard H. Thaler. Tocqueville thinks that rational control leads to 'mild despotism' of the kind he describes in Democracy in America, and he proposes an understanding of religion that would oppose it and provide an alternative that is more favorable to political liberty.

Download the podcast.

Related;
Who's the Man?

State of State Finances

Gov. Jon Corzine of New Jersey found $600 million in cuts this June, only to borrow $3.9 billion for school construction projects, with another bond issue of $750 million for transportation projects underway. Gov. Arnold Schwarzenegger made $5 billion in cuts to fill in the state's $15.2 billion gap but wants to make up the rest by levying a sales-tax hike.

Part of what makes budget cutting so painful is that the main cost drivers, such as pensions and school aid, are often budgetary third rails, wrapped up in court orders and government mandates and guarded by unions. That is what makes the plea for federal assistance so appealing--it's a politically cheap way to avoid the hardest reforms.

-Who's Next In Line For A Bailout?

In the fiscal-political calculation, government survival strategies emerge. Cut some programs but create new ones and call them "economic stimulus." Cut to maxi mize public outcry as a justification for future tax increases. With this crisis, governments are facing a hard budget constraint: There's not much room or political support to increase taxation, municipalities' borrowing capacity is reduced and reserve funds are drying up.

-Crisis may finally force fiscal restraint

Fiscal Space and Infrastructure

Creating Sustainable Fiscal Space for Infrastructure: The Case of Tanzania

Summary: A common dilemma facing governments around the world is how to meet the sizeable fiscal costs of providing and maintaining infrastructure networks. Over the past decade, developed and developing countries have looked to fiscal rules, budgetary reforms, tax policy and administration measures, public-private partnerships and other innovative financial instruments to raise additional finance for infrastructure investment. This paper looks at the range of options for raising the financing to meet Tanzania's infrastructure needs. It begins with a brief survey of the evidence on the relationship between infrastructure, public investment, and economic growth, and then goes on to consider the case for additional infrastructure investment in Tanzania. The second part of the paper looks at five broad options for mobilizing additional resources to meet Tanzania's infrastructure needs: (i) direct private investment and PPPs, (ii) expenditure reprioritization and efficiency, (iii) domestic revenue mobilization, (iv) external grants and concessional financing, and (v) sovereign borrowing on domestic or international credit markets. The paper concludes with some general recommendations on what combination of the above approaches might be suitable for Tanzania.

The Vetting Process

The questionnaire includes 63 requests for personal and professional records, some covering applicants’ spouses and grown children as well, that are forcing job-seekers to rummage from basements to attics, in shoe boxes, diaries and computer archives to document both their achievements and missteps.

Only the smallest details are excluded; traffic tickets carrying fines of less than $50 need not be reported, the application says. Applicants are asked whether they or anyone in their family owns a gun. They must include any e-mail that might embarrass the president-elect, along with any blog posts and links to their Facebook pages.

The application also asks applicants to “please list all aliases or ‘handles’ you have used to communicate on the Internet.”

The vetting process for executive branch jobs has been onerous for decades, with each incoming administration erecting new barriers in an effort to avoid the mistakes of the past, or the controversies of the present. It is typically updated to reflect technological change (there was no Facebook the last time a new president came to town).

But Mr. Obama has elevated the vetting even beyond what might have been expected, especially when it comes to applicants’ family members, in a reflection of his campaign rhetoric against lobbying and the back-scratching, self-serving ways of Washington.

“President-elect Obama made a commitment to change the way Washington does business, and the vetting process exemplifies that,” said Stephanie Cutter, chief spokeswoman for the Obama transition office.

-For a Washington Job, Be Prepared to Tell All

Here's the questionaire

Quote of the Day

...even if the laws of arithmetic are ignored during campaigns, they provide a real constraint when making actual policy

-Mankiw

Assorted on transition

Official Transition Blog- Change.gov

Presidential Transition Resources Website

GAO transition site

IBM- Presidential Transition site

Council for Excellence in Government transition site

A Survivor's Guide for Presidential Nominees

GSA's Role in Presidential Transition

Lost in Transition

Getting It Done: A Guide for Government Executives

Memo to President Elect -Darrell West, The Brookings Institution

In the weeks ahead, you face several important tasks. You must:

* unify the country
* staff your administration
* identify your priorities
* address immediate and crucial policy challenges, and
* fix our political system.

All these imperatives require leadership, coalition-building, implementation and communications.

Memo to the POTUS-elect from Mankiw

Pay attention to the government’s budget constraint. The nation faces a long-term imbalance between government spending and tax revenue. The fundamental problem is that the federal government has promised the elderly more benefits than the tax system can support. This fiscal imbalance will become acute as more baby boomers retire and start collecting Social Security and Medicare.

Yet during the campaign, you promised that you would cut taxes for 95 percent of Americans, that you would vastly expand health insurance coverage, and that you would never cut Social Security benefits or raise the retirement age. You will almost surely have to renege on some of these promises. As your economic team will often remind you, even if the laws of arithmetic are ignored during campaigns, they provide a real constraint when making actual policy.

The World we live in

Quote of the Day;

The People order, spur, nudge, encourage, politicians to go out and play with the market. The Politicians do. They fiddle, tweak, castrate, pick wings off, etc….and eventually things go terribly wrong. A catastrophe ensues. The People get very angry. They shout and tell the Politicians to fix the mess. "It's your job to fix this!". The Politicians in turn, like three-year olds charged to put grandmas set of crystal glasses back into the cupboard, go busily about their business, hauling over-sized delicate objects above their heads, struggling to hang on to several heavy and mis-shaped precious items. This is the world we live in.

Learn from the Master

I’m someone who admires President Clinton very much. Like all of us, he is not a perfect man. But I guess I was struck again and again with the 1993 budget deal, with what happened in Mexico with the way he worked to contain the Asian financial crisis. But on all sorts of things, he did the politically convenient thing. But when it was really important, I never saw him hesitate to do what he thought was the right thing. Probably the single moment I will remember with the greatest clarity was the night Secretary Rubin was sworn in as Secretary of the Treasury by Chance. We walked in and we told him that after Bob’s swearing in, we walked in and we told him that Mexico was going to default within 48 hours if the United States did not make an appropriate commitment. He asked how large a commitment. Bob turned to me. I said $25 billion. One of his aides said you mean, $25 million. Bob said, no. He means $25 billion. There was a certain silence in the room. Another very senior person on the White House staff remarked – remember, this is January 1995, so it’s two months after the President had lost badly the 1994 election. One of his most senior people remarked that if we send this $25 billion to Mexico and it doesn’t come back, there is no way you are going to be reelected. The president didn’t hesitate. He said – I’m going to clean up slightly what he said but the essence of it was – this is serious, this is why we’re here. We are going to do our best to make the right decisions. If we make the wrong decisions and we lose an election, that is how the process ought to work. So I just want to know two things. First, is there a substantial chance that something very serious will happen if we don’t do this? We said yes. Then he said, I realize there are no guarantees, there are no certainties, but is there a reasonable chance that is we are prepared to make a commitment that we will contain the situation. We said yes. He said, well, it’s pretty obvious what we should do. That launched us on something that had a fair number of ups and downs. If I look back at the calendar of those events and look at graphs of the market, it was basically pretty clear that the thing was going to work within about two-and-a-half months. But if I take my subjective experience of those two-and-a-half months, and I think about it, it feels more like two years. That was probably the single most dramatic of the episodes that I was involved in.

-Larry Summers

Rodrik of Harvard Business School?

Head of Research at Oxfam reviews Fixing Failed States;

In a manner analogous to the ‘growth diagnostics’ of the Harvard Business School, the authors argue that ‘the state-building agenda entails easing constraints on state institutions… Rather than adhering to a model that stipulates a priori both the institutions and the mechanisms for their creation, this approach encourages piecemeal, context-specific innovations.’ This ‘institutions diagnostics’ approach necessarily entails a lot of trial and error – a job for searchers, not planners, in William Easterly’s useful schema .

Robin Hanson's Contrarian world view

Food isn't about Nutrition
Clothes aren't about Comfort
Bedrooms aren't about Sleep
Marriage isn't about Romance
Talk isn't about Info
Laughter isn't about Jokes
Charity isn't about Helping
Church isn't about God
Art isn't about Insight
Medicine isn't about Health
Consulting isn't about Advice
School isn't about Learning
Research isn't about Progress
Politics isn't about Policy

Podcast of the Day- Dueling Tax Plans

Dueling Tax Plans: What Would McCain and Obama Do?
A conversation with the candidates' top economic advisers

Featured Speakers

* Austin Goolsbee, senior economic policy adviser, Obama ’08
* Douglas Holtz-Eakin, senior economic policy adviser, John McCain 2008

Analysis of the Candidates’ Tax Plans

* Len Burman, director, Tax Policy Center, and senior fellow, Urban Institute

Related;
On Dividend Taxes, It’s a Post-Partisan Race -Mankiw

BARACK OBAMA is often described as a post-partisan politician who transcends traditional ideological divides. Is it true? At least when it comes to one small but important aspect of tax policy — the treatment of corporate dividends — the answer appears to be yes. Without much fanfare or public notice, Senator Obama has embraced a central element of the Republican agenda.

Obama Economic Advisor Goes on Offense Against McCain

Report from the RNC Tax Policy Forum with Austan Goolsbee and John Taylor;

In Joel Slemrod's presentation, he asked how a non-economist could evaluate the potential effects of the candidates' proposals on the economy. (By the way, Joel's book Taxing Ourselves, A Citizen's Guide to the Debate over Taxes is by far the best popular guide to the topic.) He said that an imperfect but plausible approach is just to compare the records of the Clinton and Bush presidencies.

If McCain’s Tax Cuts Will Create Jobs, Why Haven’t Bush’s?

Will Trickle Down Policies Help "All Americans"?