Category Archives: politics

Weoponization of the Politics of Currency

The social sciences can be dangerous stuff.  Get you public health policies wrong people die.  Get your diplomacy wrong and all hell breaks loose.  Follow the wrong economic policies and folks starve or worse.

One of the charts that most effected me over the years is this one that shows when various nations abandoned the gold standard during the depression and the lead up to the 2nd world war.  I think you make a pretty straight forward argument that the 2nd world war might have been avoided if the sequence had been different.  Hard money kills.

All currencies have an agenda.  Sometimes their designers are too foolish to know what it is, but still.  Gift cards, frequent flier miles, credit cards, check clearing networks all have an agenda.  You can manage your nation’s currency to make workers insecure and increase the level of unemployment.

This essay by Charlie Stross about why Bitcoin is evil says many of the things I have been thinking.  He calls it a weapon by design.

I’ve wondered if nation states engage in cold warfare by viciously engaging in PR campaigns designed to advance the bad economic policies in their rivals.  I don’t see why not, all the other players in the democratic policy strive to guide social policies to their benefit.

Gauntlets of Adverse Selection v.s. Healthcare Exchanges

374px-Running_the_gauntletAdverse Selection is the name for a common syndrome in markets where “market participation is a negative signal.”Adverse Selection is the name for a common syndrome in markets where “market participation is a negative signal.”  For example you always gotta worry if they guy trying to buy life insurance is old and sick, or the guy trying to get a mortgage can’t pay for it.

The new healthcare exchanges have this problem.  The “worse,” i.e. most needy, customers are the one’s mostly likely to struggle thru the frustrating the sign-up gauntlet.

This failing of the software architecture and implementation.  It is required by the system’s political architecture.  The tangle of means testing, shopping metaphor, and the federation of insurance companies, states, and federal agencies forces it.  Let’s just pray engineers and their managers can make the gauntlet less daunting.

Approving the Journal

Voteview is an amazingly simple model for behavior of legislators. It takes as input the votes of the legislature and assigns each legislator a score. These scores are, surprisingly, quite stable. Surprisingly, legislator’s behavior is dependable and predictable. It takes only two numbers to model legislators with surprising accuracy. Two numbers mean we can draw scatter plots with one point for each legislator. That reveals natural coalitions.

The math doesn’t tell us what the scores mean. To puzzle that out you need to look at what the votes were about. When this technique was first discovered the first score measures the left/right (economic) political spectrum. That means things how the government aids small vs. large economic entities. The second was left/right (social); primarily civil rights, but also broader issues such as the franchise. But the two score means can vary from one legislature to another and can shift over time. The first score is a more powerful predictor and if you add a third score it hardly improves the accuracy.

Here, for example, is the vote to reduce the food stamps program. The letters indicate the legislators. The line shows how the bill partitioned the space.


This bill was nearly perfectly aligned on the economic left/right spectrum.  With the left wanting to aid the small players in the economy.   The right panel shows the errors in the model’s fit.  You can notice how there is no overlap between the Democrats and the Republicans.  That is unusual from a historical perspective.  This model was the first clear way to show that the congress was growing extremely polarized over the last decades.

The meaning of the vertical score has become less clear over the last few years.  As for various reasons social left/right issues have tended to condense into the economic issues.   It is interesting, and somewhat rare, to see an example vote where the 2nd score has a lot of power.


But what the heck is “Approve the Journal”?  Well you can read all about it here.  It is the a record of what the house has been up to (votes, conference reports, vetoes, etc. etc.).  The voteview community tends to believe that the vertical axis is now measuring some they call insider/outsider – that the people with lower scores are in the outsider group.  If so, what we are seeing here is a sort of protest vote by the outsider group.

Remember the second score adds only a little to the model’s quality.  I wrote about voteview a decade ago.  There you can see how little the second score adds to the model’s fit in that post. I’m not aware of any published data on how that has changed over time.

The voteview blog always gives an interesting clean perspective on current events.

Hourly Cost of Healthcare?

When you see a gas station with cheap gas are you actually observing?   Consider for example a gas station owner who hires people to pump his gas.  His costs are lower if he can skip providing health coverage.  Examples like that are one reason I support universal provision of healthcare is the powerful way that market competition works to eliminate it.  It’s an ethical puzzle, eh?

The national minimum wage is $7.25/hour, while spend $6,815 per person on health care.  If we presume a 40 hour work week, 52 weeks a year, that’s $3.40/hour.   Or to look at it another average premium for health insurance is $215/month, e.g. $1.29 an hour.

Setting standards, for things like provision of healthcare is one way to address the problems ethical and otherwise that market’s present.   But standards come in many forms, for example labeling.  Maybe the gas stations that have uninsured employees could be required to display a large shaming sign.  Or if you into techno-utopian solutions maybe we could spin up an App for your phone that let’s you look this info up.

The Times has an article today about how the people who pick our vegetables lack health insurance and providing it might cost a dollar an hour.  Well yeah.

Peter Sandman: Risk Communications

My sister (thanks RH) pointed me to an interview of Peter Sandman on NPR.  Peter says his gig is “Risk Communications.”  Which, to hear him tell it, is the art of managing outrage: turning it up, turning it down, and riding the wave – as appropriate.   He has a spectacularly rich and interesting website.  Many years ago he wrote a book “Responding to Community Outrage: Strategies for Effective Risk Communication” which you can pick up on Amazon for only two hundred and fifty bucks; or you can now get it for free on his site(pdf).

outrageWhen explaining what he does Peter most often begins with a curious fact.  People’s outrage about a given hazard is largely independent of the actual danger, only a 4% correlation.  I like to reframe a statistic like that.  It’s not about “people,” it’s about you.  Unless you’re better than most of us then you are aroused about the wrong things, but yeah – I’m sure you are better.

He calls this outrage, not arousal; and he has a list (pdf) of how to fuel the flames:

  • Controlled by Individual/Others
  • Source: Trustworthy/not
  • Process: Responsive/not
  • Voluntary/Coerced
  • Fair/Not
  • Not/Morally-salient
  • Natural/Industrial
  • Familiar/Exotic
  • Not/Memorable
  • Not/Dreaded
  • Knowable/not

You can feed or starve these fires.  Turn it down: “Outrage Management.” Turn it up “Precaution Advocacy.”

He argues, interestingly, that getting people to take an issue seriously usually requires lowering the level of outrage.  Lots of people find that counter intuitive.  I agree that managing the arousal is usually the first step in getting a group to solve a problem.

There is an alternate framing of that: conservation of outrage.  If you accept that people have a natural level of outrage, i.e. it’s part of their personality, then you can begin to see the problem in terms of transferring outrage from one worry account to another.

Recently, This American Life did a piece on climate change.  In one segment they visited Colorado.  The state was on fire.  The weather was bizarre   The crops were dying.  But nobody would even say the word climate change.  At one point the reporter utters the unspeakable and the farmer she is talking to goes ballistic.  But not really about climate change, rather his outrage is about environmentalists, leftists, etc.   Dan Savage mentioned this episode as reminding him how gay men would deny AIDS in the early years.  That in turn reminds me of the vigorous emotional lumber that resists addressing other issues – austerity, income distribution, health care, public transit, etc. etc.  Do people resist these because their outrage is elsewhere?

Experts in a domain to often work hard and carefully to read a conclusions about what needs to be done.   Usually they need to convince some other group to act.  Whenever they, or you, start to engage with that other group the exact same thing happens.  You say “X! and they say Z!;” and you reaction is that “WTF?  X has nothing to do with Z; … well very very little to do with it.”

There are plenty of words for alll this:  arousal, outrage, motivation, “what are those idiots thinking!”

The ideas in Peter’s work are scale free; they are useful from problems big and small.

Voting Rights

The civil rights movement of the 1960s marked one of the very very few major shifts in the politics of this country.  I.e. the racist southern whites switched from the Democratic to the Republican party.  Those southern Democrats had some redeeming value, i.e. politically their loyalties lay with the little guy.  So at the time the Democrats were pro-little guy v.s. the Republicans tended to like big institutions (particularly commercial ones) more.  From today’s perspective it’s hard to see how civil rights and your preferences for large vs. small economic entities would be orthogonal.

kouns_63_selma1aBoth parties, at the time, were split internally on the issue of civil rights, and battles. The national battle civil rights resorted things.  Don’t gloss over how vicious these battles were.  We are talking riots, murders, etc.  Nothing in modern American politics comes close; even if it ought to.

Civil rights won.  But, the Republican party came infected with a severe case of racism.  An ugly hybrid emerged from this. The pro-little-guy attitudes was driven out of the new southern Republican party was driven  out of the party.  Later the entire party went in insane.

The insanity is principally about the big/little guy debate, but it’s always flavored with a large dose of spiteful prejudice.   That used to be focused on black people, but these days it’s has a broad spectrum.  In part because if as you become more committed to the big guys in the big/little debate you trend toward demonizing all the little guys.

Yesterday’s destruction of the Voting Rights Act by the supreme court is a direct decedent of those battles, and of the civl war before them.  It will disenfranchise a tremendous number of people.  It political consequences will be very ugly, we know because we ran voting with a large dose of voter suppression in the century following the civil war.   It is a tragic development.

Tax the Rich

Why have the top few percent have taken over such a large part of the economy?



That chart (source) shows that lowering their taxes plays a very large part in the story.

Is this due to economic fundamentals (aka: globalization, computers, the rise of winner take all business models), or a simple political victory by agents of high income individuals?


Your stupid.  At least according to U. Chicago Economist Steve Levitt.

DUBNER: So Levitt, how can you in your life, when you wander around, tell the difference between a smart person and a not-so-smart person?

LEVITT: Well, one good indicator of a person who’s not so smart is if they vote in a presidential election because they think their vote might actually decide which candidate wins. . . . there has never been and there never will be a vote cast in a presidential election that could possibly be decisive.

Presumably he believes that utterance increases his reproductive fitness.  I guess some mates find it sexy when a man signals his brilliant intent to defect from the social norms and undermine the commonwealth.  Though I suspect it’s just a maladaptation – the alpha male behaviors repurposed for dominance in graduate seminars.  Possibly membership in his tribe requires that he sing from this particular hymnal.  The  Omeratà  always requires that one not cooperate with the authorities; prisoner’s  dilemma  and all.

The little dose of voter  suppression just adds spice to this foolishness.

Just to be clear there is a powerful rational economic reason for voting.  No doubt we all believe that our fellow citizens, our society, will be better off if our guys win.  What’s that worth to me (not to them, but to me)?  Let’s put a tiny value on that.  Say a dime for every US citizen and a penny for every world citizen.  That’s about 73 million dollars.  So even if I set aside my strong believe that it is a sacred duty to engage in the democratic process the act voting is, effectively my purchasing a lottery ticket who’s prize is a 72 million dollar gift to charity.

I’m not surprised that Paul Ryan is selfish twit as well.  I’ve long suspected that some politicians run for office entirely as a  business  raise money, pocket money.  Which would seem to be the only rational  explanation  for why Ryan is spending time raising money in states that don’t matter.  He is not trying to win, he’s building a nest egg.

It must be hard running a political party where the core value is that individuals should be  maximally  selfish.  Though I guess if what your selling is regulatory capture of the banking and resource extraction industries and the abandonment of the weak in exchange for lower taxes then it is pretty good branding.

Damn it: the tax system is not progressive

I wish the right would stop complaining  about how unfair the tax system is to the rich.  That’s a lie.  The tax system is regressive.  The well off pay a smaller percentage of their income than do the poor and the middle class.  It’s a lie and they shouldn’t be allowed to get away with this lie.

The recently released video of Romney’s at fund event at the home of the infamous sex party hosting hedge fund manager holds few surprises about what the far right actually believes.  E.g. that Democrats are  indistinguishable  from welfare queens. That the nation is drifting toward a democratic take over.  That the underclasses spend their day in  leisure,  sucking the life force from the helpless upper classes.

That polarizing view has been a core value of the far right forever.  And recently it has become a core believe of the Republican party.  They went off the deep end a long time ago.    Low (even medium) information voters are still unlikely to realize this. Still.

Some of press have called this a “gaff.”  You know … falling off message is one thing and revealing your honest beliefs is another.  This was  the latter.

The tax system is not progressive.  It is not Robinhood.  It does not tax the rich more than the poor.  In fact it taxes them less.

I have found the press coverage frustrating.  The counter point to his remarks has been weak.  The meme he was repeating was that 47% don’t pay takes and just take from those that “make.”  He obviously believes this.  The counter point has been in order:  Try to go all technical an point out that he is confusing the listener by a narrow definition of taxes and then highlight other taxes.  Then there is the appeal to emotion response – were we mention the elderly, children, students, and  military.  Finally there is more sophisticated technical point that this situation was engineered by Republicans, as part of the reegineering they did to the poverty programs over the last decades.  For example they introduced Earned Income Credits so that firms could offer low paying jobs and with the help of the credits people could barely survive doing those jobs – assuming they can figure out how to do the paper work.

What frustrates me is that these reports don’t bother to mention the core lie.  It is a lie that the tax system is punishing the rich and transfering money to the poor.  It is not.  The tax system is not Robinhood.  If you think so then you are misinformed.  The rich pay a smaller portion of their income and wealth into the system than do the poor.  If we embrace the victum/parasite framing Romney is using – well then – it’s actually the other way around.  They are the parasites and the lower and middle class are the victums of their free riding.

I rarely do this, but here is a very old posting that explains the details.

I suspect a lot of people believe that their state has a progressive tax structure.    That belief is wrong.    The well-off do not pay a larger percentage of their income and wealth than do the poor.  There are a very few exceptions, Delaware for example – at least in 2002.  Here’s what it really looks like.

Here for example is my state.

That shows how the mix of taxes effect things.  In Massachusetts it’s the sales tax that really does the damage.  The mix of taxes that implement this lovely situation for the parasitic well-off varys from state to state.  New Hampshire manages to be extremely regressive; using a different mix.

If you want to screw the poor then here some hints:

  • Avoid an income tax
  • If you have to have an income tax be sure it’s flat. (that’s what we do in Massachusetts)
  • Adopt a sales tax and some excise taxes
  • Use property taxes
  • Exclude capital gains from income
  • Use tax credits to counteract progressive taxes; say on federal taxes or certain property taxes
  • Be sure your sales/excise tax includes groceries, smokes, beer, and gas
  • Don’t index to inflation if forced into tax brackets, exemptions, or earned income payments
  • Empower local governments to raise funds using regressive means

No doubt there are much more creative schemes for assuring your tax system screws the poor.  I certainly can think of quite a few without much effort.  This posting is based entirely on the original edition of what is currently  this report, from; you can quickly  find your own state here.

This is Washington state, which makes me wonder how those Microsoft and other high tech winners feel about this.