Perhaps We Need Washington Apparatchiks Afterall

Jonathan Rauch’s July 2016 Atlantic Magazine article argues for the lubricating role of strong political party machines to keep the legislative system working and that the good government reforms of the 1960s and 1970s have had unintended consequences.

This challenged several assumptions I held and is worth a serious read.

Chaos syndrome is a chronic decline in the political system’s capacity for self-organization. It begins with the weakening of the institutions and brokers—political parties, career politicians, and congressional leaders and committees—that have historically held politicians accountable to one another and prevented everyone in the system from pursuing naked self-interest all the time. As these intermediaries’ influence fades, politicians, activists, and voters all become more individualistic and unaccountable. The system atomizes. Chaos becomes the new normal—both in campaigns and in the government itself.

Our intricate, informal system of political intermediation, which took many decades to build, did not commit suicide or die of old age; we reformed it to death. For decades, well-meaning political reformers have attacked intermediaries as corrupt, undemocratic, unnecessary, or (usually) all of the above. Americans have been busy demonizing and disempowering political professionals and parties, which is like spending decades abusing and attacking your own immune system. Eventually, you will get sick.

The disorder has other causes, too: developments such as ideological polarization, the rise of social media, and the radicalization of the Republican base. But chaos syndrome compounds the effects of those developments, by impeding the task of organizing to counteract them. Insurgencies in presidential races and on Capitol Hill are nothing new, and they are not necessarily bad, as long as the governing process can accommodate them. Years before the Senate had to cope with Ted Cruz, it had to cope with Jesse Helms. The difference is that Cruz shut down the government, which Helms could not have done had he even imagined trying.

Exit, Voice and Loyalty – Albert O. Hirschman

Albert O. Hirschman – Exit, Voice, and Loyalty.

 

hirschman

Albert Hirschman defined three modes of responding to unresponsive governments that apply to our times too, in his monograph, Exit, Voice, and Loyalty.

I’m choosing “voice.”

Read about Hirschman’s intellectual legacy in Cass Sunstein’s New York Review of Books tribute.

Where the Big Money Comes From

[Contributors] are overwhelmingly white, rich, older and male….

Just 158 families, along with companies they own or control, contributed $176 million in the first phase of the campaign….

They are overwhelmingly white, rich, older and male, in a nation that is being remade by the young, by women, and by black and brown voters. Across a sprawling country, they reside in an archipelago of wealth, exclusive neighborhoods dotting a handful of cities and towns. And in an economy that has minted billionaires in a dizzying array of industries, most made their fortunes in just two: finance and energy.

This New York Times article analyzed major early campaign contributors (individuals and PACs).  The graphic of Monopology houses shows the distribution of these interests.wealthy-campaign-contributors

 

And below is a map of where those wealthy donors come from. If money = influence, then the map below demonstrates that influence ≠ votes.

map-of-2016-contributors

And what do the rich donors get for their access and influence?  One answer appears to be an generous tax code rewrite, as suggested in the below chart and more fully discussed in this article, that starts with a statement that would only shock the naive and the corrupt:

The very richest are able to quietly shape tax policy that will allow them to shield billions in income.

rich-tax-rate

The Mother of All Externalities: Superfund Sites Cleanup List

The US EPA’s Superfund site list is the mother of all economic externalities.

 

do-not-play-in-the-dirtExternalities, as defined elsewhere, is the shifting of costs from the buyer-seller pair to a third party.  Externalities are a form of market failure — when the pricing mechanism fails to capture the full and true cost of the product or service.

The U.S. Superfund Sites list, is the list sites requiring a toxic contamination cleanup. Typically, these sites are the where now defunct manufacturing businesses operated in the days when “dumping out the back of the factory” was the cheapest toxic chemical disposal method.  The sites are contaminated beyond safe use — and they often pose hazards to people downwind or downstream of them — until they are cleaned up (remediated).

Under the US law creating the Superfund, polluting companies are responsible for the cleanup costs.toxic-waste-barrels  If the companies are bankrupt or no longer exist then US taxpayers pay for the cleanup.  In the former case, that is shifting externality/costs from prior stockholders of the polluting company to current stockholders.  In the later case, it is shifting externalities/costs from the stockholders of the polluting company to today’s US taxpayers.

As of 2014, there were 1,322 sites on the list; 53 more proposed additions; and 375 sites removed from the list because they have been remediated and do not require on-going management (source).

superfund_sites-svg
US EPA Superfund Sites

This National Geographic interactive site lets you find Superfund sites near you.

More broadly, the ToxMap site plots a broader list of contaminated toxic sites — it is largely a map of urban populations, railroads, and US highways but with some notable “off the beaten path” exceptions.

toxmap
ToxMap

Economic Externalities

Economic externalities explain how society works when the market fails.

Externalities, quoting Wikipedia, are:

In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit.[1] Economists often urge governments to adopt policies that “internalize” an externality, so that costs and benefits will affect mainly parties who choose to incur them.[2]

For example, manufacturing activities that cause air pollution impose health and clean-up costs on the whole society, whereas the neighbors of an individual who chooses to fire-proof his home may benefit from a reduced risk of a fire spreading to their own houses. If external costs exist, such as pollution, the producer may choose to produce more of the product than would be produced if the producer were required to pay all associated environmental costs. Because responsibility or consequence for self-directed action lies partly outside the self, an element of externalization is involved. If there are external benefits, such as in public safety, less of the good may be produced than would be the case if the producer were to receive payment for the external benefits to others. For the purpose of these statements, overall cost and benefit to society is defined as the sum of the imputed monetary value of benefits and costs to all parties involved.  Thus, unregulated markets in goods or services with significant externalities generate prices that do not reflect the full social cost or benefit of their transactions; such markets are therefore inefficient.

Externalities are pricing mechanism (market) failures. When the market fails, another entity must step in to correct the pricing distortions.  Typically, this other entity is government.