Matthew Yglesias's Blog, page 2336

Counterinsurgency Is Constantly Succeeding Despite Lack of Visible Examples of Success

One of the paradoxes of the ever-popular "counterinsurgency" school of warfighting is that there are almost no examples of a country accomplishing anything useful via counterinsurgency warfare. Hence, there's always a premium on weird arguments that redefine failure as a kind of success. Hence perhaps the key text of the counterinsurgency narrative is Lewis Sorley's A Better War: The Unexamined Victories and Final Tragedy of America's Last Years in Vietnam arguing that contrary to appearances American military strategy in Vietnam was actually a smashing success. So I suppose it was inevitable that (via Spencer Ackerman) someone would eventually try to run the argument with regard to the Soviets in Afghanistan:

But was the Soviet strategy, which Goodson and Johnson blame the U.S. for following, really a failure? In "Follow the Bear," an essay published in February 2010 by Proceedings, four field-grade U.S. officers (three of whom served in Afghanistan) claim that the Soviets improved their tactics around 1986 and by the end were implementing many practices now found in FM 3-24. The authors assert that the Soviet end-game exceeded expectations, that the Soviets departed Afghanistan on their own terms, and that they left behind a friendly government that had the potential to last – and did in fact outlast the Soviet Union itself (I have cited "Follow the Bear" elsewhere). They conclude that "following the Bear" is a good idea.

Uh huh. You can read Spencer for a more detailed rebuttal, but I'll stick with "uh huh." At any rate, Vietnam is a unified country and its capital is Hanoi. The Union Jack does not fly over Malaysia or Kenya. And there was no stable Soviet satellite government installed in Afghanistan. It's just really, really, really hard to defeat a determined modern nationalist movement.

Bernanke Calls For Anemic Recovery

The key moment in Ben Bernanke's press conference was when he explained that the Fed wasn't doing more to ensure full employment because it's worried that additional action might cause inflation expectations to come unmoored and "if inflation expectations were to become unmoored the cost of that in terms of employment loss in the future would be quite signifiant." In other words, he'll make sure to err on the side of policy that's too tight because if he tries to get policy right he might accidentally end up being too loose and then he'd need to tighten in response and that would be bad.

As a technical issue, the problem should be addressable with level targeting. But as an issue of priorities, there's just no addressing it.

Imagine you're teaching a kid archery. You tell him to aim for the bullseye. But you also warn him that if the arrow goes to the left of the bullseye, he's going to be in big trouble while if it goes to the right of the bullseye you won't really mind. Well, naturally the kid's never going to hit the bullseye. He's going to shoot too far the right. And that's the Fed right now. They'll act to prevent total collapse of output and employment but what really worries them is inflation. They're so worried about inflation that they're happy to have an output gap that persists for years and years and years.

The Latino Non-Voting Problem

Good report from Pew:

This gap is driven by two demographic factors—youth and non-citizenship. More than one third of Latinos (34.9%) are younger than the voting age of 18. And an additional 22.4% are of voting age, but are not U.S. citizens. As a result, the share of the Latino population eligible to vote is smaller than it is among any other group. Just 42.7% of the nation's Latino population is eligible to vote, while more than three-in-four (77.7%) of whites, two-thirds of blacks (67.2%) and more than half of Asians (52.8%) are eligible to vote.

Yet, even among eligible voters, Latino participation rates lag those of other groups. In 2010, 31.2% of Latino eligible voters say they voted, while nearly half (48.6%) of white eligible voters and 44.0% of black eligible voters said the same.

Obviously, progressives in general and Latino groups in particular should try to work on closing that turnout gap. But I think a lot of people underestimate the extent to which these demographic factors make a difference in driving our politics. A hugely disproportionate share of the poor people in the United States are children. And a hugely disproportionate share of the poor adults in the United States are non-citizens. The fact that poor eligible voters tend not to turn out and don't possess the social capital and money needed to impact the system through non-electoral means all make a difference. But the fundamental base on which all the other inequities are layered is the simple fact that the electorate is substantially richer than the population.

Irony Watch

I came up to New York City to speak this morning at a conference on The Future of the Fed and now am having trouble finding an Internet connection sufficiently fast to let me watch a web stream of Ben Bernanke's first press conference. I imagine this is what meeting the man of your dreams and then meeting his beautiful wife must feel like.

Tight Money Policies From The European Central Bank May Doom European Monetary Union

This post from Henry Kaspar is in German, but Google Translate renders it pretty cogently and it makes the important point that hard money policies from the European Central Bank threaten the viability of the overall monetary union. He makes the point with reference to an economic history article (PDF) by Marc Flandreau, Jacques Le Chacheux, and Frederic Zumer that's conveniently in English, "Stability without a pact? Lessons from the European gold standard 1880-1914″:

One clear lesson is that debts matter. Another basic finding is that the stability of the European gold standard depended on the underlying price trend. Deflation prior to 1895 resulted in rising public debt burdens, Which forced some countries to leave the system. Once gold was discovered and deflation gave way to inflation, real interest service fell, debt grew more slowly and a high degree of convergence allowed most countries to return to gold. For EMU, this result implies that stability will hinge on the ECB's policy not being too restrictive

. Other lessons concern the fragility of institutions in the face of deep public finance difficulties, the risks for the single market of leaving out countries that have not fully converged, and the existence of a virtuous cycle including low real interest rates, fast growth and debt decumulation.

Under the gold standard, countries didn't really conduct monetary policy. Instead it just "happened" as gold was or wasn't discovered in the ground. So monetary policy shifted from uniformly tight to uniformly loose when massive gold reserves were found in South Africa. This lets us see that the tight monetary union worked fairly well under inflationary conditions, but that during the deflationary period the more indebted countries (yes: Italy, Spain, Portugal, and Greece) couldn't stay in the system.

"Overnutrition" In The Contemporary West

I'm not sure I love this verbal formulation, but the basic data seems right:

One thing Mr. Fogel did not expect when he first started his research was that "overnutrition" would become the primary health problem in the United States and other Western nations. Obesity, which increases the risk of heart disease, stroke, hypertension and some cancers, threatens to upset the links in the upward march of size, health and longevity that he and his colleagues have spent years documenting.

This is just one of several ways in which life is different for a rich country. For the vast majority of human history "more calories available" has been a pretty untrammeled good. In the contemporary developed world, that's much less clear.

Climate Change Polarization

I wrote yesterday that I don't think Republicans have been "moving right" on health care policy over the decades, they've just been changing their tactics. And I really do think it's worth emphasizing that they've changed their tactics so as to make them less effective. The old strategy of "block progressive healthcare proposal by offering moderate alternative to split the Democratic coalition" worked really well. And it probably would have worked in the difficult winter of 2009-2010. But their determination to brook no compromise ultimately kept the Blanche Lincolns and Ben Nelsons and Evan Bayhs of the world onside and in favor of an incrementalist-but-progressive health reform bill.

So needless to say I agree with Kevin Drum that overall the idea that Barack Obama is a Republican from 20 years ago is misleading:

What conservatives want hasn't changed all that much. They want government out of the healthcare business; they want minimal environmental regulation; and they want to keep taxes low. What has changed has been purely tactical. In the early 90s it seemed likely that Democrats could push through single-payer healthcare and a command-and-control solution to acid rain.

I think this is particularly interesting on the climate change issue. After all, not only is it true that 30 months ago plenty of conservatives seemed on board for some form of cap and trade, but 30 months ago all the sensible liberals I know (myself included!) took it for granted that a legislative compromise would strip the Environmental Protection Agency of its mandate to implement command-and-control curbs in greenhouse gases under the Clean Air Act. But we took that for granted in part because we thought conservatives would stick to cap-and-trade as an alternative. As soon as the right yanked the rug out from under that tactical response to command-and-control, support on the left for moving ahead with command-and-control skyrocketed. It's true that there's now a movement afoot in congress to repeal the Clean Air Act and thus eliminate the threat, but every progressive I know is now seriously committed to defeating such efforts when just a little while ago most of us took it for granted that this would have to happen as part of a compromise.

Which is to say that, again, I think the uncompromising tactical turn on the right has brought some political benefits but the jury's really out as to whether or not it's working. Thus far the immediate consequence of killing cap and trade has been to resurrect support for command and control air pollution regulation.

Adventures In First Past The Post Voting

I wrote on Monday that I was torn between voting for Patrick Mara and voting for Bryan Weaver in yesterday's DC City Council at-large race, but that what I basically wanted to do was vote for either of those guys over Vincent Orange. And in discussion after discussion of people with similar values to mine, that was the debate—shake things up with Mara the moderate Republican or go with Weaver the smart progressive reformer, but most of all let's not end up with Vincent Orange. I also thought Josh Lopez seemed like he'd be a good councilman but just didn't have the support. And now that the votes are in everything's coming up Orange:

Orange claimed just over 28 percent of all votes cast, with Mara coming in at close to 26 percent. Sekou Biddle, who was appointed to the seat by the D.C. Democratic State Committee in January, ran third with 20 percent, Bryan Weaver had 13 percent, and Josh Lopez seven percent. Turnout only slightly exceeded 12 percent.

There's not perfect way to run elections, but this particular way—lots of candidates in a first past the post race—is surely the worst of the lot. It's possible that Orange is the second choice of an overwhelming number of Sekou Biddle supporters and thus that he would have won anyway in a IRV/AV election or an actual runoff. But we'll never really know. And we ought to know! There's no reason the fact that someone is the first choice of 28 percent of the voters should close the books on the question of who gets the job.

About Those Milwaukee Vouchers

Kevin Drum wrote yesterday that one reason Wisconsin Governor Scott Walker doesn't want Milwaukee voucher recipients to take the same tests that Milwaukee public school kids take is that when the kids take the same test it reveals that they don't do any better:

Unfortunately for voucher fans, when kids all take the same test it's way too obvious that voucher schools don't really outperform traditional schools. Nor do they outperform schools in poor neighborhoods (that's the blue line in the chart). At best, they perform about the same, and at worst they perform more poorly.

I once wrote a long and very anti-voucher article precisely about these findings out of Milwaukee. Since that time, I've really changed my mind about what this shows. More statistically sophisticated studies tend to show exactly what statistically sophisticated studies of charter lotteries show, namely that kids who get to take advantage of choice programs do exactly the same on average as demographically similar kids who don't. And yet, the families who win are happier. So as say at a minimum this is a strong argument in favor of choice. People should be free to have more choices and be happier unless we have a really compelling paternalistic argument that this has bad long-term results, which we don't. Also note that in a competitive equilibrium the Milwaukee "choice" schools and "regular" Milwaukee schools should all be equally good since they're all competing on a level playing field.

But there's obviously no panacea here in the choice per se. Which, again, is why it's important to keep doing the tests so that we can at least see which schools are doing well. If we do that, then we can nudge successful schools to expand and nudge families to try and enroll in them. But one difficulty with a consumer model of education is that just as health care consumers don't seem to choose to prioritize cost effective health outcomes, parents show relatively little interest in prioritizing demonstrating learning gains.

What Will China's New Rich Want?

Bettina Wassener reports on a new estimate of wealth in China indicating that almost 600,000 PRC citizens now "have more than 10 million renminbi, or about $1.5 million, in investable assets." That's about double the number from three years ago.

Wealthy individuals are politically influential in all societies, and even more influential in countries with non-transparent political systems, so it's worth pondering what these people want. On the one hand, many of them are probably businessmen with interests in the export sector who benefit from Chinese currency policies that amount to a de facto subsidy to exporting firms. But presumably some of them have interests primarily in the domestic market, or even work buying things abroad and selling them to Chinese consumers. And all of them are attaining the kind of level of wealth where you start to think seriously about your investment options. I wonder how many of them are realizing that at this point letting the Yuan float would be far and away the easiest path to increasing the value of that $1.5 million nest egg. When you're holding 10 million units of undervalued Chinese currency, you don't really need to make any more money, you need the money you already have to become more valuable.