Rational Abstention in Virginia

In this Washington Post article, the author claimed that the election this November would result in a particularly low voter turnout in Virginia. He had several reasons for this prediction. First: “quirks of the state’s calendar…produces a ballot every four years featuring no federal or statewide races to drive turnout”. Second, most of the state is not looking at a competitive election. Also, redistricting in much of Virginia may lead to some confusion of where to vote, which he said could possibly lower turnout. The last similar election similar resulted in only 30% of Virginia voters turning out as opposed to the 75% of registered voters who turned out in 2008. The author claimed that voters should care about this election because “control of the state senate hangs in the balance, and with it the possibility that Republicans could soon control all the levers of power in Richmond”, but he also recognized that voters wouldn’t vote.

Essentially the author tapped in to Johnson’s theory of rational abstention. For several reasons, voters in Virginia decided rationally not to vote. Even though control of the state senate was determined by this election, voters did not find this to be enough of a reason to incur the costs of voting. In class we discussed having to take work off, waiting in line, and confusion in the registering process as reasons not to vote. This author names another; confusion in where to vote, due to the redistricting.

The author claims that independent voters will be the ones to stay home. This could be due to the voters feeling either indifferent to the candidates, or alienated by the candidates. Either the difference in utility the voter would derive from the Republican vs. the Democrat is outweighed by the cost of voting, or both candidates are so far from the voter’s ideology that they would not gain enough utility from either candidate being elected to incur the costs of voting. Finally the voters may have decided, as Johnson would suggest, that their vote does not make enough of a difference in the overall results of the election, to be worth the costs of voting (rational abstention). The author mentions this when he notes that most of the election in Virginia will not even be contested. The fluctuation in voter turnout depending on which offices are being contested is however, not necessarily supportive of Johnson’s thesis. After all, one vote out of all Virginia voters has a higher probability of making a difference, than one vote out of every voter in the US, for a presidential candidate. Yet it is the elections to determine the president that draw the largest percentage of voters. That being said, voters are much less likely to be indifferent to who holds the office of the presidency.

The Super Case-Study

The Congressional Joint Select Committee on Deficit Reduction (The Super Committee) offers an unusual opportunity to study the behavior of our elected representatives. This committee is charged with the task to reduce our deficit and help support long-term financial solvency. The uniqueness of this committee offers an interesting way of thinking about and evaluating the different aspects that effect representative behavior.

Because the deadline is looming, the committee has regained attention. While there is a consensus on the end goal: that the government needs to get its financial house in order, there is left-right disagreement about how to do it.

It is clear that 'the people' want to see financial reform, but whether it is through tax hikes or budget cuts is unclear...it seems that some sort of combination would appeal to the median voter (this will be the assumption). Therefore, in order to represent the

median voter 4 people must agree to compromise. In fact, this committee seems to be built in order to incentivize compromise as much as possible. There seems to be no way to form a geographical coalition (see map) and if there were, it is unclear what consensus such a coalition could come to.Cuts will be made regardless of the super-committee but neither side would be happy. While it will cut spending it will largely affect the DoD and Homeland Security. Furthermore, the committee is made up of 6 democrats and 6 republicans: in order pass anything, someone has to cross party lines.

Basically, 'shirking' will happen if the committee fails, the representatives will prove to be strictly ideological in the most important of issues (perhaps revealing their own costs of 'shirking' ideologically) and in fact allow legislation to pass that would not be preferred to almost any compromise. I am not saying that passing legislation would magically appeal to the median voter, however it would do something which most people, it would seem, want.

Ideology is the only barrier to passing legislation. Will this unprecedented super committee compromise, or will they make an irrational decision to accept budget cuts that would not be preferred by any individual congressman (transitive preferences).

The TSA and bureaucratic inefficiency

In class, we have discussed bureaucratic inefficiency and competing theories of agency-clientele relationships. The TSA appears to be a classic example of an oversized, inefficient bureaucracy. In a recent report, Congressmen Paul C. Broun and John L. Mica (House Transportation Committee Chairman) harshly criticized the TSA, calling it "massive" and "bloated." They claim that the TSA has not made flying any safer (despite a $56 billion government investment in airline security) and that the TSA has "wasted money on ineffective equipment." They also challenged the need for 3,986 TSA employees at the Washington headquarters.

The high costs and inefficiency of the TSA make sense if we think of the TSA (or the head of the TSA) as a budget-maximizing agency. The TSA has little incentive to maximize "output" or actually "solve" the problems it is supposed to handle (its existence depends on the existence of these problems). Instead, it seeks to use up as much of its budget as possible. And since only the agency (and not Congress) knows its true cost curve, it has no incentive to be efficient in its use of funds. Nuskanen and other traditional theorists would say that agency autonomy (lack of oversight, etc) makes this bureaucratic inefficiency a fact. Weingast and Moran, on the other hand, would say that the relevant Congressional committees possess a system of rewards and sanctions that is sufficient to effectively align the incentives of the agency with the incentives of Congress.

It appears from this article that the relevant congressmen (which would include Mica, as the House Transportation Committee chairman) either do not possess an effective system of rewards and sanctions, or have not yet put this system into place. The congressmen might want to make greater use of its power of appropriations, and threaten to make cuts to the TSA's budget if the TSA does not 'get in line.'

Keeping Agencies In Line

Last summer, Representative Cardoza (D-CA) was upset that the secretary of the Department of Housing and Urban Development was flying off to various conferences rather than dealing with the housing foreclosure crisis, so he eliminated the secretary’s travel budget. He said “Frankly I want to cause officials a little personal pain. I want them to understand they’re hurting folks in my district by their lack of actions and so they need to plant their butts at their desk and do the jobs they were appointed to do”. Rep. Cardoza added this cut as an amendment to the Transportation, Housing, and Urban Development spending bill.

If we had read this news story before taking public choice we might think that representative Cardoza lost his temper or overreacted a bit. However, Weingast and Moran enlighten us by explaining this kind of behavior. The Weingast and Moran article argues that Congress has several tools at its disposal to control agency behavior. Congress has created a system of incentives for agencies by rewarding agencies that pursue congressional goals and sanctioning those that don’t. Congress probably exercises its most potent oversight of agencies through the appropriations process. Since Congress controls the purse strings, it can cut off or reduce funds to agencies. Rewards go to those agencies that pursue the policy preferences of current committee members which reflect the preferences of the voters in their district. Specific committees have more influence than the rest of Congress over a specific agency. Cardoza was offended that the secretary of the Dept. of Housing and Urban Development didn’t notice the severity of the housing crisis and how it was affecting his constituents back home who were facing foreclosures. Clearly, the members of Congressional committees play an important role in influencing regulatory policy. Congress can use sticks or carrots to influence agency action and Rep. Cardoza thought sticks might be more effective in this case.

U.Va Coal Power and the Group

Few may realize that among the numerous coal trains that travel rumble through grounds each day, a small percentage of their cargo is actually destined for right here at U.Va. The strange “chugging” sound that is sometimes present on the corner is none other than the sound of coal being unloaded from train cars and loaded into the silos of the University power plant nestled between the corner and the hospital. According to The Daily Progress, the coal that is burned on U.Va property accounts for about 40% of the total electricity consumption of the University. In addition to this coal, U.Va also burns natural gas and heating oil at the University owned plant while at the same time importing electricity from the national grid. With the average Virginian receiving, on average, 38% of their electricity from nuclear power, the large portion of U.Va that is powered by coal generated right here on grounds has irked many environmentalists here in Charlottesville.

Olson would see the generation of power here at U.Va as a public good being provided by a relatively large group of people. The 20,000+ U.Va students who pay tuition at U.Va and the countless other faculty, staff, and visitors who also have a stake in University activities make up this group and share in the benefits and costs of generating power right here in Charlottesville. A group here at U.Va, Beyond Coal, has embodied some of the issues that Olson finds with large groups. The students among this group could be assumed to have a rather large personal interest in the elimination of coal power at U.Va and would gain a large amount of personal utility if this goal was accomplished. Their proposals for accomplishing this goal are generally a move to cleaner fuel sources such as natural gas and renewable sources such as solar power. These sources of energy would be more expensive to the U.Va community if used to supply the same amount of power currently supplied by coal. I would also argue that the majority of U.Va stakeholders would prefer to have their energy generated in the cheapest possible way and if given the choice of higher tuition costs or continued coal generation, would choose the latter. The relatively small interest group, Beyond Coal, is looking to take advantage of the size of the group by free-riding the cost increase of the cessation of coal generation among the entire U.Va community.

A small group, Beyond Coal is very focused in their interests and has little internal debate among their members about their goal. They would likely be unwilling, however, to take the entire cost that ending coal generation at U.Va would incur and internalize it in their small group. It is likely, however, that they value the cessasion of coal generation at U.Va at more than they would personally pay should the cost be divided among over 20,000 people. They would prefer instead to spread it out among the large group that is U.Va. If they succeed in eliminating coal power at U.Va they would incur a personal utility gain that would far outweigh the personal expense that they would endure once the expense is divided among the whole group. In this way we find a good example of what is wrong with large groups right here at U.Va where a small group has the possibility of gaining a large gain in personal utility at the expense of the large group.

The Man Who Can Make Larry Page Sweat

Herb Kohl is a US Senator from Wisconsin who made headlines this summer when he subpoenaed Google's CEO Larry Page. After being issued a subpoena, Larry Page reluctantly appeared before the Senate Judiciary Committee and allegedly began sweating when interrogated by Senator Kohl. Besides being known for his ability to make corporate heads sweat, Herb Kohl is also known as the CEO of the Milwaukee Bucks and the chairman of several influential committees. He is the chairman of the Senate Committee on Aging, the Judiciary Subcommittee on Antitrust, and the Appropriations Subcommittee on Agriculture.

As we read in the article "The Industrial Organization of Congress", committee assignments are based on seniority. Kohl's committee assignments can be partially explained by his ranking in the seniority system. Kohl is a four term democrat who has been in the Senate since 1989 so he is given priority when bidding on committee assignments. As chairman, he has property rights over three committees including the powerful appropriations subcommittee on agriculture. Kohl represents Wisconsin which is known as the dairy state or America's farmland. Many of his constituents are dairy farmers that enjoy receiving agriculture subsidies and Kohl has the ability to appropriate those funds to them. A congressman's reelection prospects depend on his ability to obtain benefits for his constituents therefore, legislators seek assignment to those committees that will have the greatest impact on their electoral fortunes. We know from the Weingast and Marshall paper that committees are composed of high demanders or individuals with greater than average interest in the committee's policy area and that committee members gain a greater share of the benefits from these policies. Kohl's policy interests reflect his constituent's interests and the committee system serves his electoral needs because it allows him to provide benefits to his supporters. Congress is organized to support the electoral needs of members like Kohl.

Do Governments Work for Public Interest?

This article shows a simple example of government regulation taking place in the country of Hungary in the retail market. The government is attempting to apply regulation on retail store sizes, banning the construction of any building over 300 square meters. This use of entry controls is what Stigler would say is the ‘most important’ form of government regulation. It seems, at first, that the government might be trying to issue this regulation with a public interest argument by saying that the regulation would help local, smaller retail businesses. A Hungarian government official explained that these larger retailers, who are typically controlled by international groups, were controlling about 69% of all returns, while they only represented “1% of all retail enterprises.” The public though, explains that this regulation is in fact NOT looking out for public interest, since this regulation is neglecting the potential loss of local jobs, regardless of corporation ownership. This ban also is negatively affecting other local Hungarian business, such as the real-estate and office market. Despite this attempt at government regulation for supporting local businesses, it seems that the government might not have really been looking into the best interest of the public. It might have looked ‘good’ on paper to do this as a way of supporting local businesses, but this neglection of some basic international trade shows an obvious negative impact. Stigler would argue that there could be a possibility here that the industry is looking more towards itself rather than at consumers and the negative impacts outside of the industry. Some firms, we learned, seek government regulation because it allows them to act and receive the benefits of a monopoly/oligopoly without the work of getting to that position; instead, the government does it for them. So here, we might be seeing a government trying to ‘cover up’ almost selfish industry seeking behavior with a ‘so-called’ public interest argument.

Showing up the Shirkers

This article from the online "Anchorage Daily News" puts the spotlight on the "brave, new, and incredibly broke" Joint Select Committee on Deficit Reduction. They make an argument about how polarized partisan lines have been major contributors to the deficit (approaching $15 trillion at the time). This seems to coincide with Kalt and Zupan's assertion that Senators shirk because of voters' rational ignorance. Those of us who love to see the world in black-and-white (or in this case red-and-blue) will vote along our party lines and root for our senators as they vote against the "cold-hearted Republicans" or the "socialist bleeding hearts" without examining the causes of the deficit and creating some sort of bi-partisan hybrid.

It's reassuring that the article refers to the Joint Select Committee on Deficit Reduction as "a cyclical signal" that the government needs to be repaired. Although the government is made of thousands of legislators and millions of voters, maybe we need to take messages like the one sent by this faux committee and implement measures, like the ones we discussed in class, to minimize shirking. We could even tip the balance slightly away from rational ignorance so that the voters take responsibility for monitoring some of their representatives'/Senators' actions.

Another thing that Kalt, Zupan, and this article agree upon is that shirking could be reduced with more clear-cut performance expectations (for this article, as per the founding fathers and the Constitution). I'll close with a quote from the article, "The creators of our political system apparently never considered the effects of long-term inbreeding or tertiary stupidity, avarice and megalomania on such an enterprise."

I guess the creators were bound by a system devoid of slack.

Committees and Sen. Scott Brown

Senator Scott Brown has been a member of the National Guard since 1979. He completes annual training every year, and this year did his training in Afghanistan. In the Senate he represents Massachusetts, a state whose population is only 8.3% veterans, notably less than the national average of 9.8%. Thus it seems that his constituents would not have particularly strong preferences with regard to veterans’ affairs. However, Sen. Brown serves on the Senate Committee of Veterans’ Affairs.

Weingast and Marshall’s discussion of committees implies that committee members are generally preference outliers. That is, states whose preferences are particularly strong with respect to agriculture are more likely to have a representative on the agriculture committee. The Committee on Veterans’ Affairs does not seem to follow this logic. Only five of the fifteen members of this committee come from states in which veterans comprise at least 12% of the population (of which there are nine), and Sen. Brown comes from the state with the sixth lowest veteran population percentage.

An alternative theory on committee membership presents expertise as a leading factor. As for Sen. Brown this explanation seems to fit. Sen. Brown is also a member of the Committee on Armed Services and the Committee on Homeland Security, both of which require some knowledge of the military. It seems that Sen. Brown has a comparative advantage in military knowledge that makes him a suitable member for these committees. Whereas other senators might need to learn quite a bit to function on these committees, Sen. Brown already has an applicable base of knowledge and opportunities to gain more, such as his training in Afghanistan. In addition to comparative advantage, Sen. Brown also gets to take advantage of intellectual economies of scope through his membership on these particular committees since some of the knowledge they each require separately is common to all of them. Sen. Brown’s committee membership is one example of inconsistency with Weingast and Marshall’s theory.

source of percentages

Madagascar Faces Too Many Parties

This article in the Wall Street Journal looks at the political situation in Madagascar as its government is in transition to try and get back to a state of democracy. The current President, Andry Rajoelina, is a former disc jockey who made his fame in the 1980’s and has since become Madagascar’s youngest leaders after the military coup overthrew the government in 2009. Madagascar is an extremely resource rich country and has a significant amount of economic potential that has yet to be harnessed due to Madagascar’s inability to organize. The country is trying to prove that they can restore democratic power without Western military firepower, but the political parties in the country are so varied they cannot seem to focus their efforts. Talks in October yielded over a dozen different parties interested in taking power who have had trouble finding a place to meet because venues are afraid the different parties will get in fistfights. Neighboring countries like South Africa, Tanzania, and Zambia are hoping that the numerous parties can find a system of consultation that can resolve the array of issues Madagascar faces. Becker and Olsen would look at these organizational issues as these groups inability to combine their causes. Olsen and Becker would be at odds about whether the large amounts of small groups is hurting or helping their causes. Olsen believes that bigger groups can hurt because the transactional costs are so large that it makes it extremely hard to organize and efficiently accomplish things. Becker believes that there are pros to having larger groups because that means the group has more votes. In this instance it is hard to say who would be right, with so many different political parties vying for power and nobody willing to give up their individual interests it is hard to see how democracy could be a success. Olsen would urge these political parties to put their individual interests aside because maximizing their interests would hurt the group overall. Ultimately, it seems that there may be a balance between having small groups with united interests and large groups that can represent close to a majority of the population. Madagascar will have to find some stand out political parties that can organize themselves and represent the population, but not too big of a group that they once again become inefficient.

It's all about your attitude

In this article, Michael Medved claims, “Romney’s real problem isn’t a question of ideology, it’s a matter of attitude.” Out of all of the papers we have read thus far in the semester, attitude has not been sufficiently addressed. Attitude in this context is not synonymous with ideology, but rather the approach or mind-set about a set of issues or election.

Attitude is difficult to include in public choice theory because it is always changing, and it is very hard to measure because it is multidimensional. Attitude is also something that does not follow “party lines”, and it is completely dependent on the state of the country at the time of the election.

The concept of attitude can be best applied to public choice through the relationship between constituent and representative’s attitudes. Constituents can pressure representatives to adopt certain attitudes, and many legislators base their campaign off an attitude. Attitude plays a major role in a constituents support for their representative. For example, during the 2008 presidential election, Obama relied heavily on the attitudes of “hope” and “change”.

Medved claims that Romney’s attitude is not aligned with the attitude of his fellow conservative constituents. Mitt Romney’s followers from the 2008 presidential election have a much angrier attitude towards Obama and the current state of the country going into the 2012 presidential election. Although, Romney still shares the same ideology with his conservative constituents, his lack of aggressive attitude seems to be his downfall. Romney might respond to this demand for more passion in his campaign in order to please his Republican constituents that share his ideological views, or he may continue to stay composed in an effort to attract moderates. If Romney can win the primary for the Republican Party, conservatives that agree with Romney’s ideology will definitely vote for him over Obama. If Romney realizes that he already has these votes secured, it might be smart for him to maintain his composed attitude going into the 2012 presidential election, because an angry attitude against the Democratic Party and the current state of the country might deter potential moderate votes. Romney’s attitude dilemma demonstrates the importance of constituent and representative attitudes in campaigns and election outcomes.

An Unconventional Campaign Method

This Washington Post article (linked in the title) discusses Newt Gingrich's potential to obtain a Republican presidential nomination. Because of sexual assault allegations against Herman Cain and Rick Perry's recent GOP debate gaffe, Gingrich is looking more and more favorable as a potential nominee. He is also rising in the polls, and therefore could give Mitt Romney, the only other viable candidate remaining, a run for his money.

To increase his viability as a candidate, Mueller would probably suggest that he increase his monetary expenditures in campaigning. However, because of his "underfunded and idiosyncratic campaign," Gingrich has been attempting informative and persuasive campaigning, as Mueller describes it, in unconventional ways. Instead of using traditional television advertisements to increase his visibility, he uses his strong stances and intellect in debates. Debates are where Gingrich is renowned to excel, and allow him to combine both informative and persuasive campaigning by making his strong criticisms of Obama and his rhetorical abilities well known. Because of his exploitation of the debate system, Gingrich has been able to circumvent Mueller's traditional campaigning model that [political success = f(dollars, positions)]. Despite his lack of dollars, Gingrich has been able to make a strong persona for himself for the upcoming nominations.

Rick Perry - Can he Save his Campain via Advertising?

This Wall Street Journal article discusses Rick Perry's attempt to save himself from the mistakes he made during the Republican debate this past Wednesday. His campaign is now spending 1 million dollars to show ads on Fox News, $517,000 dollars of which was spent on Iowa and New Hampshire, the first two states to hold candidate nomination voting.

According to Mueller section 20.3, "the number of votes a candidate receives is a function of her campaign expenditures, the expenditure of her opponent, and their positions on issues," and "the most difficult challenge to many new entrants into politics face is to get citizens to remember their names." Based on this, a candidate should spend money on campaigning in a way that is most effective given their stance on issues and their opponent's stance on issues, and in a way that will make voters remember them well. The article says "the hope is that the voters will remember why some of them flocked to the governor back in August: He's a plain spoken governor who says he created jobs."

So the question is whether or not Perry's spending on ads will erase voters' memories of the mistakes Perry made in his debate, and leave them with positive thoughts about the good things Perry could do in office. On the other hand, "Mitt Romney, the favorite to win the GOP nomination, has yet to spend a dime on paid media." Has Romney already reached the point that Mueller says a candidate aspires to reach, where "the candidate has raised enough funds to reach a point where the marginal return to the candidate in votes is zero."? If so, Romney should not waste money on spending if he cannot get positive marginal benefit, or votes, from campaign expenditures.

UVA Living Wage Campaign

On Thursday afternoon, there was a rally in support of a living wage of $11.44 for all University employees outside of the Special Collections Library, where the Board of Visitors was holding its quarterly meeting.  This Cav Daily article on the rally outlines the beliefs of the Living Wage Campaign that current wages do not line up with the University's belief in honor because they leave many employees and their families below the poverty line, despite a recent increase in "minimum hire rate" from $10.14 to $10.65.
Passing by the rally on Thursday piqued my interest, and as I looked into the issue to find a way to relate it to this class, I stumbled across an interview with Economics Professor Edgar Olsen on the topic of the Living Wage Campaign.  In the interview, Olsen suggests that government policy would be a better way to pursue social justice than the establishment of a living wage by the University, saying that welfare programs are in place for just such a purpose.  He goes on to say that "[e]nsuring a minimum standard of living is an appropriate role for government, but not for a private employer." He goes on to cite the example of Harvard, which raised its minimum wage in response to a similar campaign but then, due to higher labor costs, made do with fewer workers when some left their jobs.
While Friedman would disagree with Olsen's assertion that government welfare programs are the best solution to the problem of University employees living below the poverty line, it seems to me that the voluntary implementation of a living wage would also be problematic, especially since the University is the "largest employer in Charlottesville."  Even though it would not really be government intervention, it would interfere with the wage market in the area.  Clearly UVA employees should be able live and support their families, and I agree that it is not a good representation of the importance we place on honor that so many live below the poverty line, but from my limited research it's unclear to me how best to solve the problem because there are negatives that come with government intervention as well as a living wage.

Shirking in the Judicial Branch

In this Time Magazine article, the author discusses special interests essentially “buying” judges that they believe will support their interests. The author claims that big businesses, corporate lobbyists, and others contribute significant amounts of money to getting judges elected. The author claims that this is a problem because “as money floods into judicial elections, we are getting courts that are filled with judges whose first loyalty is not to justice or to the general public – but to insurance companies, big business and other special interests”. In class terms it seems as though this author is accusing judges of economic shirking, as discussed by Kau and Rubin.

According to Kau and Rubin, congressmen are influenced by contributions from interest groups, though they would not say that this is necessarily shirking. One could vote in favor of legislation that supports both constituents and special interests. Theoretically, justices also could vote in an ideological way that matches the ideology of their constituents. That being said, Kau and Rubin do not address the issue of justices behaving ideologically, and/or shirking.

This author seems to be most concerned with the fact that justices are responding to economic contributions by special interest. However, it seems as though the judicial branch was in many ways designed to allow ideological shirking but not economic shirking. Many judges are given appointment for life terms, which both eliminates any incentive to contribute funds to justices, but also almost facilitates ideological behavior, as they can never be “punished” for ideological shirking. My concern is not that "shirking" occurs, but rather that it is economic rather than ideological. The election of justices in some states simply creates another politically driven body, and does not truly serve its purpose as a judicial branch dedicated to justice rather than the interests of either constituents or special interests.