A Gaffe That Draws Blood

I have to concede, I am really quite pleased that John McCain started running his mouth about the Anbar Awakening. Before he did, the Conventional Wisdom on the Surge was so firmly established as to appear immovable. Everybody knows, the Surge worked. The fact that there is very little evidence to support that assertion really never came up. And if anyone tried to bring it up, they were scoffed at (as Obama was in the USA Today editorial above). Now that McCain has brought to the fore the fact that the Anbar Awakening, one of the most critical elements of our recent success in Iraq, was unrelated to the Surge, we can start to revisit the Conventional Wisdom.

What I think we'll find is that the real root cause for the turnaround in violence in Iraq had less to do with the additional 20,000 troops than with a change in tactics of which the Anbar Awakening was one element. The dramatic rise of David Petraeus marked the military's final grudging acceptance of the need to engage in actual counterinsurgency operations. After several disastrous years fighting the insurgency, it dawned on the Pentagon that their only real successes came where officers like Petraeus and H.R. McMaster eschewed the major operations that were up to that point the mainstay of the Iraq occupation and adopted classic counterinsurgency tactics. Hell, Petraeus wrote the book on the topic. Petraeus's ascension and this shift in tactics is what made the Anbar Awakening and the later success of the Surge possible.

This is a fairly important distinction, for a couple of reasons. First, is its obvious political impact. McCain has staked much on the fact that he supported the Surge when few others did, and the apparent success of the Surge is supposed to justify any number of prior errors of judgment with respect to Iraq (note how the USA Today article asks Obama to admit he was wrong about the surge, but it doesn't ask McCain to admit he was wrong about invading). If the Surge was not the answer, what does McCain have left to hang his hat on? Even if McCain did back counterinsurgency tactics, and it's not clear he did, that wouldn't be a terribly unique position. This humble blogger criticized the major ops approach to fighting the insurgency as far back as 2003, called for the implementation of counterinsurgency tactics in early 2004, and praised the military's movement in that direction in late 2005. Where was McCain all that time? I could have used his help back then.

Aside from the 2008 election, this debate has other long-term implications. Crediting the Surge for all that has gone right serves the right-wing's ever-popular Green Lantern Theory of Foreign Policy. According to the Green Lantern Theory ("GLT") any military failure is caused by a lack of willpower, and any military objective is achievable given a sufficient reserve of willpower. A corollary to the GLT is that any domestic criticism of either the decision to engage in a military conflict or the conduct of such conflict is a direct attack on the one resource necessary to win such a conflict (willpower) and thereby equivalent to treason. Proponents of the GLT have long scorned concepts such as nationbuilding, the exercise military restraint, respect for local culture, winning of hearts and minds, and, indeed, just about every other element of a traditional counterinsurgency operation. Not only are such things considered to be pointless, but they might weaken our resolve and are therefore deemed harmful to the cause.

Pinning all success in Iraq to the Surge is a perfect narrative fit for the GLT. Just when everyone else wanted to discuss withdrawal, George W. Bush rode the rescue with bulging reserves of willpower and not only refused to withdraw, he upped the ante as a tangible demonstration of his generous endowment of resolve. And lo, victory was achieved. If this is the narrative that comes out of the Iraq war, we will all live to regret it. The United States and Iraq alike paid a painful and bloody price to learn the lessons that the GLT proponents hope to obscure in a haze of Surge-o-philia.

In truth what we learned this time around are a lot of the lessons we should have learned from Vietnam. Indeed, Robert McNamara basically did learn those lessons. It is no coincidence that so did David Petraeus and H.R. McMaster. Petraeus wrote a doctoral thesis at Princeton titled "The American Military and the Lessons of Vietnam." McMaster also wrote a doctoral thesis on the mistakes of the American military in Vietnam. The lessons were there to be learned, but few among conservative policymakers and the Pentagon brass did, enamored of the GLT as they are. Will we walk away from Iraq with the public and policymakers learning all the same wrong lessons so that the next time around we will, at terrible cost, have to rediscover the right ones all over again? I surely hope not. And I hope that McCain's gaffe will open the door to a more robust public dialogue on this topic.

Too Big to Be Privatized

There has been buzz for the past several days that the federal government would move to bail out Fannie Mae and Freddie Mac, and now appears the rumors have proven correct. This follows not so long after the bailout of Bear Stearns. I don't know enough about the banking market to say whether the government has made the right moves with respect to these bailouts, but it strikes me as odd that any private entity should be considered "too big to fail". It seems there two potential routes around this: either ensure that no single firm in a given market obtains enough market share to make its collapse catastrophic, or simply put the critical functions under public control. The former option is problematic in that a) it would require a far more robust (and I mean FAR more) and aggressive type of antitrust regulation than we currently have, and b) it is easy to imagine that, even with a larger number of firms, intense competition might lead the firms to adopt similar approaches such that numerous firms would teeter on the edge of collapse at the same time, and a bailout would be required anyway. The latter option is problematic for the obvious reason that markets are generally more efficient than government management. But this system where private companies are free to reap really impressive profits (as the investment banks have), but the public ultimately bears the downside risk seems untenable.

This problem has always been at the foundation of my opposition to any sort of privatization of social security. In fact, it's worse for social security than for the banking system, because with social security you've got two levels risk to deal with--the institutional and individual. Because even if whatever private institutions we hand the system over to don't fail, if a significant number of individuals managed their risk poorly and get cleaned out, I find it inconceivable that the government wouldn't step in to rescue them. That is, after all, the entire point of the program. It's social security. And once that happens, of course we'd expect everyone else to try to shoot the moon with their investments, because what's the downside? This is the sort of risk we don't want to be distributed. It only works when the risk is pooled. Look for similar problems with some sort of hybridized public/private health insurance. Once we've made a social decision that some service is necessary, for whatever reason (economic stability, national security, moral obligation), handing it over to private entities will necessarily create serious problems with risk management and moral hazard.

I'm not necessarily arguing that, for example, our entire banking system or health care system should be government run. But I do think that in terms of structuring the mix of government and private management of such critical functions we need to try to identify key breaking points and either put them under direct government control or develop some clever system to ensure that private entities approach these functions with the right set of incentives.

Update (7/14): Sebastian Mallaby appears to have a similar take on the issue to mine.

Public Service Announcement

It's been quite some time since I've done a public service announcement, but I just randomly happened upon this, and people ought to know. I haven't really heard anything about it, but I figure you can't go too far wrong with Joss Whedon and Nathan Fillion. Here's the story. The first act is out on Tuesday.

Policy Outcomes

It may not always be immediately obvious what the consequences of screwing up telecom policy will be, but here's an illustration. To be honest, I'm not sure that broadband penetration is a terribly meaningful statistic at this point. There are some outliers in difficult to reach locations who still have no access to broadband, but as a general matter, broadband in some form or another is available to those who want it, at least in those in the countries towards the top of these charts. The more meaningful statistic is the average throughput. Japan, Korea, and France have all passed the threshold where IPTV is practical. In fact, just based on those bandwidth numbers I ran a search for IPTV in France and came up with this. Broadband in the United States, by contrast, is five times slower than Korea or France, and ten times slower than Japan. The real kicker is that we pay more for that privilege than consumers in those other countries. We must be paying extra for our wonderful customer service... The other key point is that around the time of the dot.com boom, the United States was the clear global leader in Internet and broadband service. Japan and Korea, in particular, were late to the game and got to where they are now almost entirely as a result of aggressive regulatory policy. Our steady decline is similarly tied to our moronic telecom policies. Rambling on about the power of the free market (as an alternative to regulation) doesn't get you too far when you're dealing with non-competitive markets, and at some point that starts to show.

A Bear Market for Ideas

Early in his primary campaign, Barack Obama indicated that if his Republican opponent opted into the public financing system for the general election, he would follow suit. In a highly publicized decision last week, Obama decided to forgo public financing. In a column for the Atlantic, Reihan Salam uses Obama's decision as point of entry to a general condemnation of campaign finance regulation. I've written on this topic before (here, as well as several other occasions), and don't want to rehash everything I've said previously, but I do think Salam's column merits a response. Salam cites examples like Stewart Mott contributing massive amounts of money to Eugene McCarthy as laudable examples of civic participation. I have a number of objections to this line of thinking. For one it strikes me as a terrible subversion of the one person, one vote principle. For another, it seems inconceivable that massive contributions would not alter the behavior of politicians (Salam's attempt to brush this off as a "theory" in the same sense that the Loch Ness Monster is a theory is cute, if not perhaps the mark of someone engaging in an honest discussion). But my previous posts on this topic cover those objections pretty well. Instead I'd like to consider a basic premise of Salam's column and of the campaign finance discussion in general: the money is somehow fundamental to (or even indistinguishable from) political speech.

The basic point of raising all of this money is to pay for television advertising. This is no secret, and Salam's absurd vision of candidates launching nationwide chains of day-care providers aside, this assertion is unlikely to elicit much objection. I think it is critically important to frame the debate in this manner. To refer to the money as being for political speech makes it sound considerably grander than it really is. It is really money to bankroll TV ads. To be sure, TV ads can be a form of political speech. But they make up a very narrow category, and one with some rather noteworthy characteristics. Think about the most important and memorable political TV ads. Like this one. Or this one. Or this. And this. And this. (As an aside, I would have included the Clinton 3 A.M. ad, but it has apparently, and remarkably, vanished from the internet now that Hillary has dropped out.) When we talk about campaign finance, we are not discussing political speech writ large, we're discussing a very narrow subcategory of political speech that consists almost entirely of non-substantive, emotionally manipulative, and often misleading, but objectively speaking highly-effective, advertising. This sort of political speech is representative of the "marketplace of ideas" only in the same sense that Stephen Colbert has decided that global warming is real because the success of Al Gore's movie indicates that the market has spoken.

Certainly the Obama model of fundraising, garning small contributions from a huge base of donors, is an improvement over the traditional big donor approach. Some of the concern over influence is abated when the contributor base is more diffuse. But the sums of money involved have only increased in this cycle (in fact, more money has already been raised than was spent in total in 2004), and that itself represents a loss for the civic dialogue. A debate conducted via TV advertising is an impoverished debate. Even Barack Obama's message is necessarily infantilized by translation to ad format. As Matt Yglesias noted of Obama's first general election ad, the message boils down to: "My mom is white! And I'm from America!" If this is our marketplace of ideas, it's pretty clearly a bear market.

I recognize that TV advertising is an important tool for candidates. It's one of the only ways for them to directly reach a mass audience to answer attacks and spread their message. The Obama ad, for example, is probably quite necessary given the breadth of the campaign of misinformation that has already been waged against him. It's a tricky problem, and I don't plan to offer any easy solutions here. But I do think we need to be clear about what we're discussing, and in the discussion of campaign finance regulation I think we can do without any grandstanding about the cherished role of political speech. The sort of political speech we cherish is not the sort that gets funded by this money.

Update (6/23): This amusing Slate video on cookie-cutter political ads seems rather appropriate to this discussion.

A Positive Story from the Blogosphere

I don't have much of point to make with this post, I just think it is a really interesting story demonstrating the meritocratic impact of the internet and blogging. I'm referring to the meteoric rise of Nate Silver as a respected name in election-year journalism. Silver began as an unknown, posting on DailyKos under the name poblano. Before the voting began poblano penned diaries on a broad variety of primary-related topics. He gained a reputation on the site as a thoughtful and insightful Obama-backer. But it wasn't until late January, after several states were in the bag and super Tuesday loomed large that poblano's brilliance as a number-cruncher really emerged.

A pair of super Tuesday previews (initial diary, updated diary) drew huge amounts of attention, and deservedly so. poblano's previews included polling numbers, but greatly exceeded the depth of analysis offered anywhere in the commercial press, incorporating endorsements, fund-raising, and in-state campaign presence. While some of the delegate spreads were off, poblano correctly called the winner in every state (he considered AL, CT, and MO to be toss-ups). Super Tuesday itself provided a wealth of voting data to be mined, and poblano was soon off to the races, dissecting the results and turning them into projections for the general election. Again, the analysis found here was hands down better than anything I encountered in the commercial press.

Having gained considerable notoriety among political bloggers during January and February, in early March poblano moved off DailyKos to his own website, FiveThirtyEight. There he continued providing projections of the primaries and general election, and he also did something professional political writers never do: hold pollsters accountable. In May, poblano crushed the professional pollsters with his projections for Indiana and North Carolina, identified himself as baseball statistician Nate Silver, and finally began to garner attention outside the sphere of political blogs. Not only will Silver likely be a mainstay of election coverage for the rest of the year (and following election years), but I suspect that he has an awful lot of professional analysts reconsidering their methodologies and approaches to political projection. Oh, and, by the way, the projections for Obama at FiveThirtyEight are looking awfully nice these days.

Resistance is Futile

Tim Wu on the state of the wireless market:

Who would have guessed that Apple—onetime victim of IBM and Microsoft—would today be an agent and symbol of industry consolidation? I don't know that it's fair to say this is Apple's fault. A telephone monopoly has been the norm for most of American telecommunication history, except for what may turn out to have been a brief experimental period from 1984 through 2012 or so. Like the short British experiment with republican government under Oliver Cromwell, it may be that telephone monopolies in America are a national tradition. In this larger story, the iPhone matters just as one of the last nails in the coffin of Bell's would-be competitors.

Brutal, but true. AT&T and Verizon cleaned house in the FCC's recent 700 MHz auction and appear to be scooping up spectrum and independent carriers faster than they can consume them. Sprint has been driven, in its desperation, into a last ditch joint effort with Clearwire, Comcast, Time Warner, Google, and Intel to offer an alternative data network -- a high stakes gamble that faces numerous business and technological obstacles. T-Mobile, the only other nationwide wireless carrier seems content to slowly sink into irrelevance. If the Sprint gambit fails, AT&T and Verizon will stand alone atop the wireless market. And even if it succeeds, the three viable national wireless networks will, by no coincidence, be under the control of the same four entities that have established total dominance over wireline voice, video, and data service in the United States: AT&T, Verizon, Comcast, and Time Warner. Either way, the mass extinction of competition in the American telecom marketplace is all but complete. To make matters worse, on the wireline side Comcast and Time Warner have few (if any) overlapping markets, and the same is true of AT&T and Verizon. To the extent that consumers prefer quadruple play offers (voice, video, data, and wireless), a proposition all the major carriers are betting heavily on, the vast majority of consumers will have only two options, if that. What has befallen the telecom market over the past 10 years is a disaster.

While we can only hope that help will be on the way once Democrats (hopefully) take over the White House and the FCC, it may be too little too late. To undo what has been done would require drastic measures. It would mean breaking up these big four, forcing some open access regime on them, or (best of all) forcing a separation of their physical network assets from their content and service delivery businesses. Any of these options would entail a major battle fought simultaneously on political, legal, and regulatory planes that, in all likelihood, would take the better part of a decade to play out. I doubt even an enlightened Democratic government would have the stomach for that. The only real alternative will be for the FCC to increasingly re-regulate these businesses. When the market cannot enforce discipline on providers of necessary services, regulators have to step in and assume the task. Net neutrality will only be the beginning...

Back from the Dead: Obama and Political Process

As a first step to reviving this dormant blog, I'm going to cobble together various thoughts from discussions in email and elsewhere over the past half year or so. These thoughts are perhaps less novel and certainly less timely now with the primaries concluded than they were when they initially occurred to me, but I think they're still worth discussing.

Back when the Democratic primary was still hotly contested between Barack Obama, Hillary Clinton, and John Edwards (who, let's not forget, was the clear favorite among the netroots), Obama was not infrequently attacked as a "process" candidate. This charge was advanced derisively, with suggestions that such focus on process was a sign of vanity with little appeal beyond upper-middle class young white professionals who don't care about Real Issues. Typically it was accompanied with comparisons to other such vanity candidates like Bill Bradley, Paul Tsongas, and Eugene McCarthy.

In response, I first must concede that I believe these critics are correct: Obama is a process candidate. While some conservatives have looked to Obama's liberal policy positions and scoffed at his supposed post-partisanness, Obama's post-partisan approach is a matter of process, not policy. Post-partisanship has to do with refocusing the process on substantive issues rather than the partisan circus we've seen the past 10-15 years, with having amicable disagreements, treating everyone with civility and decency instead of demonizing political opponents, with having a willingness to critically analyze issues without viewing them solely as an opportunity to score political points, with prioritizing competence over patronage and loyalty in government bureaucracy, with not letting elections be dominated by hot-button bullshit issues (e.g. Terry Schiavo) instead of the actual and quite serious issues facing our nation. This is really the defining attribute of Obama's campaign, particularly in comparison to his Democratic opponents with whom he had relatively few policy differences. So, yes, Obama is a process candidate.

I must strenuously disagree, however, with the position that Obama's process-focus is a matter of vanity, or is in any respect a political weakness. John Edwards thought that the Democrats needed to move left and take more populist positions in order to win. Hillary Clinton initially seemed to think we needed to move back towards her husband's centrist approach (i.e. the Democratic Leadership Council position). Later she seemed to adopt the Edwards populist angle, and later still she decided the Democrats needed be more ... white. The reality is that Democrats don't need to do any of that. What Democrats desperately need to do is fight back against the political circus and force people to look at real substantive issues. This is what Obama's post-partisanship is meant to achieve.

Along with criticism that he was too process-oriented, one of the chief netroots complaints about Obama was that he is insufficiently harsh on Republicans. He failed to call them out for being the repugnant, evil, spiteful people that, in the eyes of the netroots, they so obviously were. Obama failed to demonize the opposing party. What Obama understands that the netroots failed to grasp is that this road leads to tribal politics. That's the Republican way, the grand political circus. Everyone will retreat to their old familiar identity groups and fling flaming dog poop at each other and we'll rehash the same election we had in 2000 and 2004. In a year where the fundamentals so strongly favor Democrats, we might even win with that approach. But as a long-term strategy, it is a loser.

Bitterly divisive partisan politics is a game that Republican will always ultimately win. It's the game they've chosen and written the rules for, and they did so because it best fits the philosophy of their party and the memes they're trying to sell. It demeans politics, belittles the political process, and sows cynicism and distrust of politicians and government alike. For Democrats to fight back on the same terms concedes a decisive advantage to the Republicans right up front. For Democrats to succeed people need to believe in government, and for that to happen they need to first believe in the political process.

In order to break out of the long downward spiral of hyper-partisan politics it will be imperative to get some people to vote on issues rather identity. This is a difficult task, because it so easy for people to flee to the comfort of their identity groups. But the upside is we don't need a lot of them. All it would take would be to flip 10-15% of voters who've gone Republican in the last two election cycles to win a landslide victory. And here's the real key: these voters already agree with Democrats on all the major policy questions. A large majority of Americans favor universal health care (including a majority of Republicans!). A large majority of Americans believe the government needs to take serious action on climate change. A large majority of Americans want our troops out of Iraq within a year. A large majority of Americans agree that we should have diplomatic meetings with Iran without preconditions. Let me say this again: Democrats do not need to change their policy positions to go after independent and Republican voters. They already agree with us! The only key to victory is to figure out how to bust people loose from identity politics.

If Democrats can only break off a chunk of the Bush voters and get them to vote on issues instead of identity, they will win big. Hillary Clinton could never have succeeded in this task because she is a creature of hyper-partisan politics. Her political career was born of it, the hard feminist core of her support was built on it, and she personally revels in it. Her pitch to the primary voters was that we should support her because she could play this game better than anyone. And John Edwards, having failed with a more moderate, centrist approach in 2004, embraced identity politics himself this time around, pulling together an odd alliance of white working-class union voters and the most vociferous leftists of the netroots. But the fiery rhetoric and demonization of others required to win these groups was self-limiting, and Edwards consequently had no success extending his appeal beyond these identity groups. Neither of them could have avoided the trap of hyper-partisanship. Neither of them could have significantly altered the playing field. Either probably could have won, given the overall dynamics of this election, but neither would have been a game-changer.

But Obama did something different. Obama has built a campaign around rejecting the circus. His campaign is constructed from the ground up precisely to be a game-changer. He properly understood that concern over the political process is not a vanity issue; it is the difference between continued frustration for Democrats and clear political dominance. Obama treats all Americans with dignity and respect. He discounts no one and tries to engage everyone. He wants voters to believe that under his administration the government will take into account all of their views, positions, and beliefs and negotiate them in a reasonable and sensible manner. He recognizes that people don't always need to win every argument as long as they feel the system is fair and that their voice is heard. His campaign is built around these basic values.

It remains to be seen whether this will be enough to break the cycle. I think the approach is right, and Obama personally has demonstrated a level of wisdom, charisma, and leadership that leads me to believe he can really pull this off. But I don't underestimate the difficulty of the task. The Republicans wouldn't have invested so much in this approach if it didn't work so goddamned well. But if Obama prevails, this could be an incredibly meaningful victory, and a breath of fresh air that we all, at this point, desperately need.

Update (6/12): just for added emphasis, check out this Obama quote that they've put at the top of their anti-smear page: "What you won't hear from this campaign or this party is the kind of politics that uses religion as a wedge, or patriotism as a bludgeon -- that sees our opponents not as competitors to challenge, but enemies to demonize. Because we may call ourselves Democrats and Republicans, but we are Americans first. We are always Americans first."

The Battle for the Bottleneck

Since Peter and Henry each independently forwarded this Wall Street Journal article on cell phones to me, I thought I should respond here. First off, it is a truly excellent article, and I agree completely with Walter Mossberg, the author. He does a fine job laying out the key issues in an easy-to-understand manner. With respect to the upcoming wireless spectrum auction there, the odds of open handset rule going through went up this week when Verizon bailed on its attempt to sue the Commission over it.

Since Mossberg did such a good job discussing the state of the market, I thought I might discuss why I think the market is like this. The short version is this: while the Internet revolution has created a profusion of telecommunications that a short time ago would have been unimaginable, at the same time it has threatened to make telecom providers more irrelevant than they have been since their inception and so they fight it tooth and nail. And now for the (really) long version:

The problem with the Internet viewed from the perspective of the telecoms is that it is an end-to-end network, meaning everything interesting happens at the endpoints and they're stuck in the middle. The stuff in the middle is designed to be transparent and fungible (particularly in the case that some of it is vaporized by a nuclear bomb). This is very different from what we had before the Internet. Previously any goods or services traveling down the phone line into someone's home or office were controlled by the phone company, be it phone service, long distance service, voice mail, video, advanced data services, etc. Even if you just wanted to communicate data between you two office sites, the phone company would set this up then charge you out the wazoo. It was a good business, and they made a profit for each additional application they could develop and provide to consumers over their lines.

But when the Internet comes along, even though the number of applications now skyrockets and the benefits people gain from their telecommunications links grow immeasurably, the telecom companies are no longer in control, and are therefore no longer profiting directly from the provision of services. Whatever the telecom companies were charging people an arm and a leg for can now be done on the Internet for peanuts. So to the extent that telecom providers did provide unique services, now anyone who can pipe in an Internet connection over any medium can eat their lunch. You don't have to rely on the phone company for voice communications or cable for video anymore. And many applications the phone companies hadn't implemented yet or hadn't even dreamed of are now out there being heavily used for free. It seems like it should be their shining hour, but it's really more of a let-down. Sure they are still selling and making money on the basic connectivity that underlies all of the Internet, and in record volume, but they'll be selling that in any case. It's the add-ons, the profits coming from provision of actual commercial services to end-users they want. So while openness is what has made the Internet great for us users, there has been a very consistent effort on the part of telecom companies to maintain control where they haven't yet lost it, or to regain control where it has been lost.

At the start of this thing the big telecom companies didn't even want to deal with home consumers; for them data services were things to be sold to corporate customers at outrageous prices that no home user would contemplate paying. So when PC ownership took off and it became apparent that there was a market for online services, other companies got involved. The initial generations of modems were built to work over the phone lines by converting their digital signals into analog beeping and squawking (converted back to a digital signal by the modem at the other end of the line) so that they only needed a normal voice line to operate. Phone company participation was not required. The initial big corporate providers of dial-up online services (Microsoft, America Online, Prodigy) ignored the Internet and each built their own walled garden, each providing their own proprietary services to customers. In this sense they adopted the same model as the telecoms. Everything that passed down that line was to be provided by them, and they'd get paid for it. Of course, the fact that dial-up modems require no significant physical infrastructure (all you need is an office with a bunch of voice lines and some computers) meant that the barrier to entry to the online services business was very low. So small shops opened all over the place. They, of course, didn't have the infrastructure to create a bunch of proprietary content and services the way the big guys did, but there was this Internet thing they could hook people up to for pretty low costs that had a lot of content on it. It didn't take consumers long to figure out that there was a whole hell of a lot more interesting stuff outside the walled gardens than inside them (in large part because the users went out and created it themselves). So the walled garden model was soundly defeated (although it took AOL the better part of a decade to admit it).

So we all got onto the Internet and the phone companies had lost control over content and services and so had the ISP's. Everything was free and open and we went crazy with entrepreneurship and had the dot-com bubble. But while that was happening, we were also developing technologically. The networks were trying to keep up with our demand for faster connections to get all the cool new stuff on the Internet (which is to say mostly online gaming, pirated MP3's, and porn). So we moved from dial-up to DSL and cable modems. This is an important transition, because, unlike dial-up modems, DSL and cable modems require physical infrastructure in the telecom networks. There needs to be actual equipment sitting in the local office of the phone or cable company for them to work. All of the sudden the phone companies had a way to take back control over everything. But wait, luckily for us Congress was out ahead of the game and had made arrangements for this in the 1996 Telecom Act. That sounds sarcastic, but isn't; Congress had achieved a remarkably balanced and well-designed compromise. The Act required, among other things, that the regional phone companies play nice with competitors and rent out the equipment needed to make a DSL network function, so that competitors could get at the same customers the regional phone companies served. Problem solved, competitive pressure will prevent the phone companies from reestablishing control over the Internet and abusing their market power.

Sadly it didn't work out that way. The phone companies didn't like this part of the '96 Act (big shock), so they launched an intense campaign of lobbying, foot-dragging, and lawsuits that lasted until a few years ago when Bush's FCC appointees decided to use the Telecom Act for toilet paper and the Supreme Court cheered them on. Internet access is no longer considered a common carrier service and is not subject to open access requirements. Now instead of thousands of ISP's in direct competition with each other, Verizon and AT&T and Comcast and Time Warner basically own the consumer side of the Internet in the US. And, to varying degrees, they may be able to start rebuilding their walled gardens and capitalizing off of all the wonderful services people enjoy on the Internet, and turning our wonderful network into something a little less wonderful. This is what the fight over net neutrality is about.

One of the interesting battles in net neutrality is just how far it reaches into a provider's infrastructure. The case for net neutrality is most clear when it comes of an ISP's actual Internet service, where they're blocking a service or web site they don't want you to access. But there are other ways for an ISP to go about this. Consider cable. The cable companies set up their networks so that only a small part of their pipe is allocated for Internet service. The vast majority of it is carrying video. If they wanted they could scrap a few cable TV channels and expand the datastream to their cable modem subscribers. Now let's say that on-demand TV becomes a very popular service. Comcast has two ways to go about this. They could provide on-demand video pretty easily over the Internet, except they probably don't have enough bandwidth on their Internet service to handle it. So they would need to eliminate some video channels and expand their bandwidth first. But if they did that, anyone could sell on-demand video to their customers over the Internet, and Comcast would get nothing for it. They would have to compete for every customer, and the wouldn't have any real competitive advantage over other video providers. Alternatively, Comcast could keep their Internet service throttled down, and develop a proprietary on-Demand system that would occupy the same bandwidth but run independently of their Internet service. Now they have no competitors and get to tariff users for every use. Oh, happy day for Comcast.

All of this brings us, finally, to the mobile wireless market. There are three key points to notice. First, for technological reasons data services took quite some time to arrive in the mobile wireless market. So they got to sit by and watch all this other stuff happen. Second, like DSL and cable, wireless Internet service requires special equipment, meaning the wireless service provider is necessarily also the Internet service provider and has total control over the network. Third, the cast of the characters is fairly similar (AT&T and Verizon, again, plus a couple other big national companies). So what you have are companies that have learned that what they want, more than anything, is control and the ability to tariff users for every bloody thing they do on the network, and who technically have the capability in this market to make it happen. They have fought bitterly to maintain this control and will continue to. These are concentrated markets, so the threat of competition isn't that great, and clearly the fear of loss of control their users is much greater than their fear of competitive harm. And the big wireless companies are all moving in lock-step on this anyway, so there is no real competitive impetus to stop fucking with customers and actually give us what we want. This is the sort of thing that happens in concentrated markets…

On some level they know they'll eventually have to let their users onto the Internet for real (the iPhone is a concession to that reality, although AT&T saw to it that they get their pound of flesh from iPhone users anyway). But the longer they can keep customers off the Internet, or only let them on some borked up version of the Internet, the better. I mean if people can download ring-tones for free, who's going to pay their provider $3 a pop for them? If you can buy MP3's for your phone from iTunes for a buck, why would you pay Verizon twice as much for their proprietary music-to-phone system? Now they can sell you GPS-based mapping, sports scores, online games, SMS, emails with pictures from the camera phone, and every other damned thing you'd get for free on the Internet. If they provided good Internet service or allowed phones with WiFi capability onto the network, this would all come crashing down.

In the end, the simple reality is that the communications market is deeply dysfunctional. It's highly concentrated, has many components that are or were natural monopolies, and is littered with regulatory detritus from past battles with abusive monopolists (too many of which didn't come out the right way for the good guys). These are markets that desperately need oversight and consumer protections. Frankly, a lot of the physical infrastructure would probably be better off in the public sector. The Internet is an incredible economic engine and allows for so much innovation and competition, it's sad to let these crotchety bastards be the gatekeepers. The analogy to superhighways isn't that far off. It doesn't have to be like this. In other countries (generally where regulators have forced open access on the phone companies) people regularly pay about the same we do for Internet service that is ten times faster, they have mobile phones that can do WiFi and are interchangeable among providers, and they have no real issue over net neutrality because Internet providers don't have enough market power to abuse it. I'll be very curious to see what happens if the Democrats take over at the FCC in a couple years...

What if the government subsidized the employment of displaced workers?

I was contemplating where I disagreed with the previous post when the following idea occurred to me. It could probably use a more rigorous development, but I think it’s at least interesting.

I'm kind of uncomfortable with the concept of government run retraining programs.

One major problem is figuring out what to train people to do. Do those being retrained get to choose what they are trained for?

If so, what will stop them from seeking training in a field for which they are unsuited, or one in which the demand for workers is little stronger than the field they just left?

If not, then it seems that the government would have to specify what fields show sufficient demand to bear an influx of newly trained workers, and then place workers in training programs that are best suited to their skills and abilities. I dislike this idea both because of its impact on the self determination of the workers, and because it would have a distortionary effect on the economy (as the training programs would act as subsidies for the selected industries by increasing labor supply and hence reducing labor costs).

Another issue is that an artificial training program might be a very ineffective way to train workers.

Even in many fields where formal education is routinely required, I suspect that the majority of learning tends to take place in the field, after placement. I think that this would be even truer of blue collar workers than others. So something along the lines of an internship/apprenticeship might be most efficient.

Yet having the government take industry partners and place workers in artificial internships, again, is not to my taste. It seems too likely to result in inefficient placements.

Instead, think briefly about the relationship between an industry with a growing demand for labor and an unemployed person. It’s likely that the unemployed person would gladly accept a position at a reduced wage in exchange for the opportunity to master the trade. Likewise, the firm would like to obtain another trained employee so long as they could make up the cost of training through the production of the worker. So both parties stand to benefit by working together on this. But there is a problem.

In a way the problem is akin that of intellectual property.

If I develop a new product or manufacturing technique I do so at some cost. If a competitor is allowed to use the fruits of my development and produce the same product or use the same technique they will be able to sell the output profitably at a price such as would require me, with my sunk cost, to take a loss. So, without a patent to protect my innovation, I have little incentive to develop it in the first place.

Similarly if I train an employee, I do so at some cost. If I am to retain that employee at a net benefit to my firm, I must therefore compensate the employee less than one which we had hired fully trained (i.e. with no training cost). But if the employee achieves the status of fully trained before I have recovered the full cost of her training, another firm will be able to entice her away by offering her compensation equal to her productivity, while I could not do so without suffering a loss. So unless I can monopolize her labor, I have little incentive to offer her training.

My desire to monopolize her labor is equivalent to an innovator’s desire to monopolize the use of their innovation through the use of a patent. But employees have rights that innovations do not. I cannot simply apply to the government to secure my right to exclusive use of this employee. Rather I must contract with her in order to ensure that she will stay with my firm. Of course, she would have little incentive to accept the contract after her training is complete, so we would have to agree to it before her training began. But here a couple of problems arise.

There is asymmetrical information.

The employer does not really know how productive the employee will be after training, so they will make an offer that would be appropriate for the average employee. But highly able workers will recognize that the contract would not benefit them as much as it should. So they would tend to refuse the offer. This would bring down the average productivity of the workers accepting the contract. So the employers would have to readjust the contract to account for the new, lower, average productivity. This would begin to push the next tier of most productive workers out of the contract, etc. And the spiral would continue until the market broke down.

Even without asymmetrical information there would still be a moral hazard problem. Provided with long-term contracts the workers would have less incentive to exert themselves in the service of their employers. Again this would lead the employers to make lower offers, in effect pushing the hardest working employees away from the contracts.

Between these two problems it seems unlikely that such arrangements would come about. In some industries, where an intensive amount of expert attention is required during the training process these problems may be fatal to in-job training. If the employer cannot break even over the duration of the training process, even if they provide zero compensation, then there is little to be done. But in some other cases there may be a solution. Now we return to my opening question.

What if the government subsidized the employment of displaced workers?

In the above scenario, it was not true that no training took place. Training could and would take place if the firm could extract sufficient benefit from the worker’s labor during the training process to break even prior to the worker becoming sufficiently trained to be attractive to other employers. By subsidizing the work of untrained workers (e.g. for some fixed period of time paying them some quantity per hour worked in addition to the compensation offered by the firm) and thereby reducing the compensation the firm must offer to retain the services of the employee, the government could increase the quantity of training that a firm could viably provide without loss, and thus give workers the opportunity to overcome larger experience barriers. Of course such a program would require monitoring to ensure that the employees were only being subsidized for skilled labor in which they were inexperienced and that the industry retained a sufficient proportion of the trainees to justify the subsidy. But I think that this monitoring would be much easier than hand picking industries and developing government implemented training programs. And I believe the outcomes would be much better.

The Role of Work

Andrew Sullivan pointed out this fascinating article on the psychological impacts of employment (and unemployment). I take issue with many of the conclusions the author, Arthur C. Brooks, draws from the data he presents, but the data is worth taking a look at. In particular I'm drawn to the studies on the devastating impact of unemployment, as in the case of the Marienthal villagers or the University of Chicago survey that found that even a brief bout of unemployment drastically increased the tendency of respondents to feel hopeless or worthless.

Brooks concludes his survey of the data by stating that the only thing we need to do is "protect the free market so that people can find and choose the types of employment that suit each of us best." I find this conclusion difficult to reconcile with the data on unemployment. The implications of that data suggest to me that employers have a devastating non-economic advantage to wield over employees, and that normal market churn can have significant psychological externalities that aren't generally considered in economic models.

One need not be a bleeding-heart sympathizer with the poor or the unemployed to be concerned with such issues. Witness the current political dialogue on topics such as economic globalization, outsourcing, and immigration. I would suggest that the rising populist positions on all of these issues share two traits: they are motivated by fear of unemployment and all its consequent harms, and they are deleterious to the overall health of our economy. Note also that these issues tend to span across the usual political divides. You can find vehement opposition to immigration on the right, fierce opponents of globalization on the left, and distaste for outsourcing on every side. People have a tremendous fear of losing their jobs, a fear that viewed in purely economic terms may seem irrational, but taking into account the additional psychological effects perhaps it is not so irrational after all (although I guess you could conclude that the psychological impact is itself irrational).

Brooks points out that remedies such as welfare do little to address the psychological harm of unemployment. He also notes that making jobs more secure comes at a price. Brooks argues that more secure jobs tend to be less meaningful. I don't see the data for that, and I'm not sure it's right although I can see where he's coming from. In any case, certainly there is an economic price to be paid for making it more difficult for employers to adjust their workforce (European economies demonstrate this).

These considerations about welfare and job security seem to drive Brooks's conclusion that nothing should be done other than to support the market. And certainly, the market may provide enough of a remedy for some of the unemployed, particularly the highly skilled and well-educated. However, that does not address the whole of the topic. Particularly where globalization and outsourcing are concerned and where we see massive shifts in the market, people may find that skillsets in which they had invested a great deal of time, effort, and money are no longer needed, not just by their previous employer, but by any domestic employer. There is room here for the government to be involved in retraining and job placement for displaced workers. If we know that job churn is necessary and healthy for the economy, but that the impact on individuals of this churn can be severe, that seems the most sensible route to pursue. Not only can this have direct impacts on the social welfare of those affected, but the existence of such a safety net may also help reduce the fear that drives the dialogue on economic policy in the wrong direction. There is an obvious connection between this suggestion and our past discussions of Rawlsian fairness and political compromise (as seen here), but I'll leave that as an exercise for readers...

Islam Isn't the Problem

Well, I haven't been posting as much as I'd like lately. I just haven't crossed that much that sparked my interest lately. But I think this is important (and it ties in to my previous post as well). This global Gallup poll of Muslims is significant, as its title says, in framing the war on terror. Gallup found that Muslims in the Middle East actually have a lower tolerance for attacks on civilian targets than do average (non-Muslim) Americans. The poll found only a weak link between religiosity and political extremism among Muslims. Gallup notes that while those who found the 9/11 attacks to be wrong often seated those beliefs in religious sentiment, those who thought the attacks justified relied on political rather than religious justifications. The summary of poll concludes that "the difference between those who condone terrorist acts and all others is about politics, not piety."

These are important findings, not only in countering the rhetoric of the more jingoistic right wingers, but also in countering certain middle ground positions (i.e. Andrew Sullivan) that reject the more extreme policies that arise from such rhetoric while still embracing the framing of Islam as the root source of our problems. This conflict is and always has been about political differences. The pollsters find that the Muslims who sympathize with extremism tend to be those who believe that the West does not reciprocate their concerns and is unlikely to ever act on them, creating a siege mentality. This is not a new idea, at least on this blog, but solid data is always a welcome addition to the argument. We cannot hope to end this conflict without at the least understanding the motivations of our adversaries.

Understanding Al Qaeda

One of the key battlegrounds in developing a strategy against Al Qaeda and its affiliates is the matter of defining who Al Qaeda is and what Al Qaeda seeks to achieve. From the early days after 9/11 the Bush administration sought to cast Al Qaeda as part of a epic struggle between cultures. And in order to build a properly ominous threat to justify military adventures and belligerent policies and cultural attitudes the administration's allies have sought to play up Al Qaeda's aspirations of conquest and the creation of a new Caliphate.

The reality, however, is that Al Qaeda has no such aspirations, and the only way Al Qaeda can be a player in an epic clash of civilizations is when we make them one through our own actions and rhetoric. This was one of the key points made by Larry Wright (author of the seminal work on Al Qaeda, The Looming Tower) when he spoke at the Miller Center last year. According to Wright, Al Qaeda has virtually no policy platform or objectives. What drives young men to Al Qaeda is not a desire to accomplish any particular end, but a deeply seated sense of cultural humiliation by the West. This is the same factor that creates rioting and violence in response to perceived Western insults against Islam like the Mohammed comic, or the Koran in the toilet story. Al Qaeda holds out no promises of accomplishment or conquest, it promises recruits one thing: the opportunity to die as martyrs fighting the West.

A review on Slate last week of Raymond Ibrahim's Al Qaeda Reader confirms Wright's account. The reviewer, Reza Aslan writes:

While these writings provide readers with page after page of, for example, arcane legal debates over the moral permissibility of suicide bombing, they do not really get to the heart of what it is that al-Qaida wants, if it wants anything at all. Al-Qaida's nominal aspirations—the creation of a worldwide caliphate, the destruction of Israel, the banishing of foreigners from Islamic lands—are hardly mentioned in the book. It seems the president of the United States talks more about al-Qaida's goals than al-Qaida itself does. Rarely, if ever, do Bin Laden and Zawahiri discuss any specific social or political policy.

What al-Qaida does lay out, however, are grievances—many, many grievances. There is the usual litany of complaints about the suffering of Palestinians, the tyranny of Arab regimes, and the American occupation of Iraq. But again, legitimate as these complaints may be, there is in these writings an almost total lack of interest in providing any specific solution or policy to address them. Indeed, al-Qaida's many grievances against the West are so heterogeneous, so mind-bogglingly unfocused, that they must be recognized less as grievances per se, than as popular causes to rally around. There are protests about the United Nations' rejection of Zimbabwe's elections, the Bush administration's unwillingness to sign up to the International Criminal Court, and America's role in global warming. (To quote Bin Laden: "You have destroyed nature with your industrial waste and gases, more than any other country. Despite this, you refuse to sign the Kyoto agreement so that you can secure the profit of your greedy companies and industries.") Zawahiri's many complaints include the mistreatment of prisoners at Guantanamo and Abu Ghraib, which he calls "a historical embarrassment to America and its values," as well as the United Kingdom's anti-terrorism laws, which "contradict the most basic principles of fair trial." There is even a screed against America's campaign-finance laws, which, according to Bin Laden, currently favor "the rich and wealthy, who hold sway in their political parties, and fund their election campaigns with their gifts."

Most Americans would agree with many of these complaints. And that's precisely the point. These are not real grievances for al-Qaida (it does not bear mentioning that Bin Laden is probably not very concerned with campaign finance reform). They are a means of weaving local and global resentments into a single anti-American narrative, the overarching aim of which is to form a collective identity across borders and nationalities, and to convince the world that it is locked in a cosmic contest between the forces of Truth and Falsehood, Belief and Unbelief, Good and Evil, Us and Them.

In this regard, al-Qaida has been spectacularly successful, thanks in no small part to the assistance of the divisive "Clash of Civilizations" mentality of our own politicians. In fact, far from debunking al-Qaida's twisted vision of a world divided in two, the Bush administration has legitimized it through its own morally reductive "us vs. them" rhetoric.

Ultimately Aslan came to the same conclusion Wright did:

Because, if we are truly locked in an ideological war, as the president keeps reminding us, then our greatest weapons are our words. And thus far, instead of fighting this war on our terms, we have been fighting it on al-Qaida's.

Keep this in mind next time some talking head tries to sell you on Al Qaeda's quest for a new Caliphate. Far from thwarting Al Qaeda, these pundits, through their rhetoric, are giving Al Qaeda exactly what it wants.

I'm Back (with some Comm'r Copps Content)

Sorry for the lengthy absence. Certain other events were occupying my time... Posts here will probably continue to be infrequent for the foreseeable future, but there shouldn't be any more month-long gaps.

Anyway, having helped build his broadband policy arsenal last year, I'm always happy to point out when FCC Commissioner Michael Copps goes on the broadband policy warpath as he did this past week at the YearlyKos convention. Slashdot coverage here. Matthew Yglesias discusses it here (and the happy former Copps intern in the comments section isn't me). I have to disagree with Yglesias's comment that Copps is not a good speaker. He may not be the most captivating speaker, but he writes some very good speeches and delivers them effectively. I won't argue the point about his jokes, however. It is nice to see that media and telecom issues have a big following at YearlyKos. It's important stuff, although, as Yglesias notes, somewhat obscure. Let's hope that after the 2008 election Copps will have the power to do more than climb up on a soapbox about these issues.

As a random aside, I also wanted to link to an interesting column on Slate, co-written by UVA professor Jim Ryan, on Clarence Thomas's sincerity as an originalist. Both Scalia and Thomas have struck me as less principled and more political of late...

Another Round of Net Neutrality

The Bush administration has fired its latest salvo on net neutrality, with an in-depth report by the FTC (actual report here). Their conclusion: let's wait and see. It's a 170 page report and covers a lot of ground. I can hardly respond to everything in it, but I would like to make a few comments.

First, the FTC does a solid job of covering the arguments in favor of net neutrality (pages 56-64). They didn't make any effort to soft-peddle the substantive arguments or build the strawman positions many net neutrality critics are so fond of. Most significantly they covered the concern that prioritization of ISP-provided content and other specially licensed preferred content would tend to recreate the walled gardens of the pre-Internet America Online and Prodigy days. They discussed the problem that lack of competition in the last mile makes the market an unreliable regulator of ISP behavior. Also they noted the argument that increasing bandwidth (say to 100 Mb/s) could make the issue of congestion largely disappear (and concerns over net neutrality with it).

The report also summarizes arguments against net neutraity (pages 64-69). Most of them are, I think, pretty weak. They raise the usual point about the necessity of non-neutrality to deal with small numbers of users sucking down large amounts of network resources for filesharing and the like. This really has little to do with net neutrality. Net neutrality is about ISP's throttling the content end of the connection, not the user end. Even under most proposed neutrality regimes ISP's would be free to throttle users (within the terms of their service agreements) when users abuse the network. They also raise the point that different types of data (web pages versus VOIP versus streaming video) may need different service levels. This again, as I pointed out in my last net neutrality post, is not prohibited by net neutrality. It's ok to give VOIP traffic higher priority than web traffic, as long as no particular VOIP provider is preferenced over another.

The net neutrality opponents argue that net neutrality is necessary to allow service providers to capture enough revenue to fund the buildout of faster networks needed for advanced services. This seems facially plausible, but breaks down on further analysis. First, if what the ISP's want is a metering system, so that the users of advanced services bear more of the cost, there is nothing to stop them from simply offering those capabilities directly to end users for a price. Already some providers offer multiple tiers of internet service. Additionally, the net neutrality model doesn't appear to be one well suited to driving growth in network capacity. Non-neutrality revenue is built on bandwidth scarcity. If bandwidth isn't scarce, no content provider pays an ISP for preferred service. I find it hard to believe that if ISP's start to have significant new revenue streams coming in predicated on the scarcity of their network resources, they would turn around and invest that income in expanding their network resources and thereby undercut their new revenue model. In a non-neutral market it pays to under-supply bandwidth.

Finally, perhaps the most critical topic of discussion is the state of competition in broadband internet service (starts on page 98). If internet service was truly a competitive market, there would be no need for net neutrality regulation, as consumer demand could sufficiently regulate the market to prevent abuse by ISP's.

The report starts off by noting how much broadband prices have fallen and how much speed has increased in the last six or seven years. Certainly it's true that this has happened, but it needs to be put into perspective. This is, of course, a business built on technology that is improving at remarkable rates. Look at how much PC's have advanced in the past decade, how much faster the processors are, how much more RAM they have, how much more harddrive capacity, how much better video processing, and how much prices have fallen. By comparison, the rate of change in broadband internet service is glacial. Or you could compare cost and speed improvements in broadband service in the US with broadband services in Japan or Korea or France, where, on a price/performance basis, we've been left in the dust. Yes, the market is improving, but it would be an appalling failure if it didn't, and the rate at which it is improving does not bode well for the state of competition in the broadband market.

The other key point on competition is the matter of new entrants to cover the "last mile". Opponents of net neutrality argue that the cable/phone company duopoly is being challenge by other service providers using satellite, broadband over powerlines (BPL), or wireless systems. Each of these technologies, unfortunately, faces crucial barriers. Satellite is cursed with poor latency. As fast as the speed of light is, bouncing a signal off a satellite down to a receiving station, then back up to the satellite and back down to the user takes time, enough time to make satellite unusable for most interactive advanced services. BPL simply doesn't appear to be making the cut in terms of cost of deployment and performance level to entice many power companies to want to try rolling it out. It simply isn't going to have the cost/performance ratio to make it competitive with cable or DSL any time in the near future (if ever). For wireless the challenge is spectrum. Wireless will be highly competitive in the market for internet service at speeds of 10 Mb/s or less. But it does not appear that there is enough spectrum for widespread use at speeds much greater than that. As people become more accustomed to high speed cable/DSL/fiber service they will find wireless insufficient for standard residential use (and for most uses that implicate net neutrality concerns). Cable and DSL can provide speeds in the 30 Mb/s range (although no US providers offer this at present), and fiber will go up to 100 Mb/s. I'm afraid we are going to be stuck with a duopoly for some time. The market is not going to bail us out of this mess (although it could if federal regulators forced the cable and phone companies to open up their last mile networks to other competitors).

Liberalism, the State, and Free Markets

I promised last week to eventually to get to the discussion of Rorty and Rawls. For various reasons, I've decided I'd rather not. But if anyone wants to read the discussion on their own, it goes something like this: Yglesias, Linker, Yglesias, Linker, Sullivan, Douthat.

Also, before getting to my main topic, and because it tangentially relates to that topic, I'd like to throw this in. Christopher Hayes has a column on the merits of bureaucracy and the fine people who inhabit our federal bureaucracy. If you look into the details of the DoJ scandal, it's hard to be as dismissive as Hayes about the lasting impact of the Bush administration on the bureaucracy, but he makes good points nonetheless. An excerpt:

It's slander with a long pedigree--Cicero called the bureaucrat "the most despicable" of men, "petty, dull, almost witless...a holder of little authority in which he delights, as a boy delights in possessing a vicious dog"--but in the last forty years, conservatives have converted this casual contempt into an ideological fixture. Since as far back as the Goldwater campaign, the American right has generally found that "the government" is too abstract an entity for most people to actively loathe. It's far more effective to demonize the people who execute its daily functions. Bureaucrats are to conservatives what the bourgeoisie was to Marx: an oppressive class of joyless knaves. Milton Friedman quipped that "hell hath no fury like a bureaucrat scorned"; Ronald Reagan said in 1966 that "the best minds are not in government" because if any were, "business would hire them away"; and George Wallace expressed his desire to "take those bearded bureaucrats" in Washington who were in the process of desegregating the South, "and throw them in the Potomac."

But a funny thing has happened over the past six years. At a time when the press failed to check a reactionary Administration, when the opposition party all too often chose timidity, it was the lowly and anonymous bureaucrats, clad in rumpled suits, ID badges dangling from their necks, who, in their own quiet, behind-the-scenes way, took to the ramparts to defend the integrity of the American system of government.

...

But the moral of the Comey story specifically, and of the failures of the Bush Administration more broadly, is the sublime value of bureaucracy. Not only is governance of any kind impossible without it; so too are the checks and balances of a constitutional republic. Red tape is what binds those in power to the mast of the law, what stands in the way of government by whim. That's why an Administration hostile to any checks and balances has sought to reconstitute the federal civil service as just another lever in its machine.

So, anyway, on to the main course. Harvard economist Dani Rodrik has a blog post excerpting from a lengthy article by Stephen Holmes in the American Prospect (from a few years back) on the views of classic liberals on the role of government. The basic gist of the excerpts is that the liberal ideals of individual rights and free markets are tied inextricably to the existence of a strong state to protect them. It very much reminds me of my previous discussion with Henry on libertarian paternalism and Rawls where I wrote:

This, in fact, has always been my biggest objection to libertarian theory. I simply cannot see how a libertarian state could ever remain so for any appreciable length of time. The initial structure of the government will not bind it in libertarian form, even if you had a constitution without amendment procedures. It was not a constitutional amendment that allowed the development of the administrative state in the US, but judicial interpretation. And it wasn't just uppity judges responsible for that (although I'm not sure it would be significant to my argument even if it were), but intense political pressure placed on them by political branches motivated by quite serious concerns about social stability and unrest (and rising socialist sentiment). Whether it's a Great Depression and populist outrage or rent-seeking businesses and other economically powerful interests, a state will always be subject to pressures (of varying intensities) to do non-libertarian things. The state will always have the power to do those things; it is inherent in being a state. That power cannot be ignored, and there is no structural way to make it go away. It just sits there begging to be used.

I have a strong suspicion that some of the policies necessary to keep those pressures at bay (to the greatest degree possible) are themselves non-libertarian (e.g. some level of redistributive tax policy and regulation of finances and political speech, etc.). In the end, I tend to believe that our rights (which may or may not be limited only to life, liberty, and property) are likely best protected by a state that overtly recognizes the threat of instability and subversion of state power and is structured to best address that threat, even if that structure is not a strictly libertarian one. The state may need to be more powerful and far reaching than a night watchman state in order to be a stable, free-standing system. What good is the night watchman if it ends up being overthrown by communists or turning into a plutocracy?

Tying in to the Hayes column: a robust state can be less prone to abuse and authoritarianism than a more easily captured minimal state.

One of the fundamental premises of Rawls's political liberalism is that the point of a liberal state is to create a platform for social cooperation that is the prerequisite for everyone to share in the benefits of, among other things, free markets. Libertarians suppose that you can rip away the institutions that result from this political compromise while still gaining the benefits they are meant to provide. This seems to miss something fundamental about human nature and social interaction.

Political compromise is necessary to create stable institutions, and stable institutions are necessary to enforce the rules of the market (e.g. to protect property rights, enforce contracts, settle disputes, and police fraud). Institutions that are not broadly considered legitimate will, as Rawls argues, be subject to instability, as each faction that even briefly manages to achieve power will attempt to tear down illegitimate institutions and replace them with institutions of their own preference.

So it becomes important to try to determine how people assess legitimacy. Rawls suggests fairness as a crucial benchmark. That seems to have a lot of merit. We've had Boys Weekend discussions on the topic before, noting psychological studies to the effect that people are willing to sacrifice their own benefit in order to enforce a system of fairness, even when there will be no opportunity for direct reciprocity. (I thought it interesting to see recently that humans are not alone in this behavior.) This suggests that even if a libertarian institution is quantitatively superior to some non-libertarian institution it might still be regarded as less legitimate if it produces outcomes that are perceived to be unfair.

Returning then to Dani Rodrik. Rodrik's main specialty is economic globalization. He argues that globalization promoters have been shooting themselves in the foot by ignoring populist complaints about trade unfairness, countering these arguments only with statements of the quantifiable benefits of more trade. Economists too often ignore procedural fairness in favor of simple economic gain. Regular people tend towards the opposite. Rodrik argues that domestic political perceptions of the globalization process are the key to further progress on trade. In other words, to create the social platform for cooperation necessary for global markets to expand we will require a more robust social safety net to remedy distributional unfairness and create perceived legitimacy for the whole endeavor. Otherwise the social compromise on which economic globalism is built collapses into a morass of protectionism. The market can only go as far as the state can carry it.

UPDATE (6/25): Rodrik posted again today with further evidence for his thesis on globalization. He cites a recent academic paper studying a survey of people from 18 countries that found an inverse relationship between the size of the state (measured by percentage of GDP) and preferences for protectionism. Rodrik quotes from the paper:

Our results provide microeconomic evidence consistent with the long-standing argument that the state and the market are in fact complementary. Openness and globalization can introduce uncertainty into peoples’ lives, and this additional risk can lead some people to oppose trade. Government expenditure can help to reduce this risk, and thus shore up support for open markets. It would seem that the ‘grand bargain’ that was embedded liberalism is politically effective.

Lessig Takes on the Political Process

After spending the past decade redefining the academic landscape on intellectual property rights and driving forward the debate on law and technology, Larry Lessig has decided to move on to something new. His new project: to figure out why our political process doesn't work and try to fix it.

In Lessig's most reknowned case, Eldred v. Ashcroft, he argued to the Supreme Court that it made no sense for Congress to retroactively extend the duration of copyrights for works already in existence. You can't provide incentives, he argued, for someone to do something they've already done. He was, of course, absolutely right, but the Supreme Court decided it was Congress's call to make, not theirs. So now Lessig has turned his attention back to Congress, to figure out why it would create policy so obviously wrong. Lessig writes:

The answer is a kind of corruption of the political process. Or better, a "corruption" of the political process. I don't mean corruption in the simple sense of bribery. I mean "corruption" in the sense that the system is so queered by the influence of money that it can't even get an issue as simple and clear as term extension right. Politicians are starved for the resources concentrated interests can provide. In the US, listening to money is the only way to secure reelection. And so an economy of influence bends public policy away from sense, always to dollars.

More recently Lessig has been one of the key advocates for net neutrality, where much the same forces are at work. He notes that "our government can't understand basic facts when strong interests have an interest in its misunderstanding." So Lessig has decided to dedicate his next decade to trying to crack this problem.

Obviously it's a big problem, and, as Lessig acknowledges, he's hardly the first person to take it on. But I'm excited to see him try. While Lessig has largely won the battle on copyrights and technology as far as the academic debate goes, his work there has had few tangible results in our legal framework. This seems the obvious next step. If he can accomplish half as much in his new endeavor as he did in law and technology, it will be a great win for us all. I wish him the best of luck.

The Symbiotic Relationship Between Wannabe Terrorists and the Bush Administration

Security guru Bruce Schneier has an exceedingly well-sourced blog post (also a Wired article) on how the Bush administration has trumped up various post-9/11 terrorist plots in service of security programs that had nothing to do with the apprehension of the plotters. He argues, in effect, that the aspiring terrorists and the administration have a shared interest in terrifying Americans. In reality these terrorist threats were not so terribly terrifying, and all were thwarted through old-fashioned police work, the sort that the Bush administration has worked tirelessly to convince us is no longer adequate in the post-9/11 era. Schneier's no nonsense approach to security, as evidenced in this post, illustrates just how vulnerable Republicans should be on security in 2008, if the Democrats have the good sense to call them on it. Anyone who wants to formulate a sensible, reality-based security policy should spend some time on his site. It's full of gems like this one.

Another Bad Day for AG Gonzales (Or "The RNC Ate My Homework")

I had been wondering what had happened to the congressional investigation into the RNC email accounts that had begun in the midst of the US. Attorney purge. Yesterday, the House Committee on Oversight and Government Reform released this interim report (pdf). Some of the highlights:

• The Committee concluded that considerably more White House officials had received RNC email accounts than the White House had previously disclosed. White House spokesperson Dana Perino initially reported that there were only a "handful" of these accounts, and later clarified that there may have been as many as 50. The Oversight Committee found that there were at least 88.
• Karl Rove made extensive use of his RNC account, sending or receiving 140,216 emails. He and others used these accounts for official purposes, in violation of White House policy--and, more importantly, in violation of the Presidential Records Act, which requires the President to "take all such steps as may be necessary to assure that the activities, deliberations, decisions, and policies that reflect the performance of his constitutional, statutory, or other official or ceremonial duties are adequately documented and that such records are maintained as Presidential records." 44 U.S.C. § 2203(a).
• Susan Ralston, former special assistant to the President, was deposed on May 10, 2007. She testified (pdf) that the White House Counsel's Office (at that time run by none other than Alberto Gonzales) received RNC emails as part of its investigations into the Energy Task Force in 2001 and the leak of Valerie Plame's identity. According to the Oversight Committee, "if her testimony is accurate, former White House Counsel Gonzales may have been aware in 2001 that Mr. Rove was using RNC e-mail accounts for official communications. Yet is was not until six years later that the White House" instructed the RNC to preserve the emails in accordance with the Presidential Records Act.

Could this be the end for the Attorney General, or another miraculous display of his survival skills? Stay tuned ...

A Memorial

For my Grandpa Martin.

From Kanakakee's The Daily Journal:


Grandpa's passing was the lead story in the Daily Journal last Monday. They also ran this obituary, and in today's paper the following column by senior editor Phil Angelo:

A life well lived

"Shakey" Martin had been in politics so long that most people in Kankakee County never learned how he got his nickname.

Back in 1939, Martin was a star guard on the Bradley High School basketball team that became the first team from any Kankakee County school to make it to state. He made the buzzer-beater shot, too, that won the sectionals.

Martin's class went 33-2 as juniors and 32-3 as seniors. Martin would dribble the ball up, weaving and bobbing like a penguin scrambling through a jagged ice field, it was said.

So teammates Lavern Hahs, Bob Martin, Harvey Hackley and Joe Dominick took to calling him "Shakey."

The name stuck.

"Shakey," 84, died last Sunday.

He was, by turns, a great athlete, a successful businessman, a community leader, and an elected Democrat who was never afraid to march against the grain -- if he thought he was right.

Shakey was an easy person to cover because he did a couple of things rare in Kankakee County politics. He would stand up and speak his mind. Piles of Journal clips, over and over, quote him on many issues. You never had much doubt where he stood.

And he would call over at The Daily Journal and say he was stopping in. Loaded with documents, he would make his point, communicating with the reporters, and through the reporters, with the public.

Some politicians, sad to say, show up only to complain. Not Shakey. He showed up with ideas.

He represented, too, a viewpoint not often seen in politics these days. He was a conservative Democrat, devoted to making sure that no county dollar was wasted. He always did his research before making up his mind. Once he decided what was fair, he stuck by it. Two decisions, from 1976, tell you a lot about his political philosophy.

In November of that year, he cast the only county board vote, Democrat or Republican, against giving a raise to the county board chairman. One month later, he was one of only four votes to give larger raises to county employees.

"Can you honestly say, without knowing what these people make, that we are paying them fairly?" Shakey said. Yet Shakey, too, would not spend dollars he though the government didn't have. He was on the BBCHS school board at a time when the teachers struck, seeking money Shakey thought the board couldn't afford to spend.

Winning a popularity contest always came second, in his mind, to doing what was right. In 1976, he took an unsuccessful stab at running for state representative. His positions, listed at the time in a Journal story: for gun control; against legalized gambling; for capital punishment; and against the ERA. Try finding a Democrat who would vote that way today.

Funneling tax dollars needlessly was never a Shakey priority. He once praised then coroner Wes Wiseman when Wiseman offered to cut his own pay (the measure failed) and called pay for top administrators in the county health department "ridiculous."

Yet it's a measure of his courage and integrity that when Kankakee County Democrats were in the rare majority for them from 1998 to 2000, Shakey was the county board chairman. In recent years, too, he led the fight on the county board against the giant landfills for Chicago trash.

All told, Martin spent 34 years on the Kankakee County Board. He spent four years as Bourbonnais Township assessor and three terms on the Bradley-Bourbonnais Community High School Board.

For more than 40 years, he was the co-owner of Skelgas. He had returned from World War II as an Army veteran, taking up the family coal delivery business.

The lifetime Bradleyan was a joiner by nature. He helped found the Bradley Lions Club in 1949 and was the club's oldest charter member at a recent celebration. At age 80, he was still chairman of the Lions golf outing. He was the greeter at Bradley St. Joe's Catholic Church and president, at times, of both the St. Joe Holy Name and the St. Joe parish board.

He was a member of the Elks, the Knights of Columbus, the Moose, the American Legion and the VFW. He golfed, played bridge and would dance with his wife at the Moose Lodge. He was always ready with a handshake and a smile, completely unafraid to take his turn when it was time for him to volunteer.

He raised money for the Red Cross, the March of Dimes and the United Way. He was a great father, and excelled at what is a tougher role in today's world, being a great stepfather, too.

It's hard to imagine anyone who lived a fuller life, or anyone who was more tightly wound into the fabric of his community than Shakey was.

Professionally, he'll be missed.

Personally, he'll be missed, too.

It is fashionable these days to attack and degrade politicians, elected officials, and public servants, and more broadly the whole endeavor of politics, as corrupt, dirty, or meaningless. But Grandpa Martin and my dad will always stand as proud examples to me of how ennobling and fulfilling public service should be. America is what it is because all across this nation innumerable men and women of good will see it as worthwhile to do their part. I do not sit by quietly when I see their efforts and their sacrifices demeaned. Grandpa was a man I admired greatly, and I'd like to think that in some respect we're continuing to carry on his tradition here. It would be hard to find a better role model. I'll miss him.