Does Clinton Appeal to the Moderate Voter?

It is argued in Downs that in the primaries, one can see a bimodal distribution between the leftists and the rightists. Once a candidate is chosen on both sides there is a race to the median voter by both candidates. Whichever candidate can better appeal to the median voter receives the most votes and wins the election. One of the nuances of the transition from a party appeal to a general appeal is the appeal to the extreme voters. As an extreme voter you can either vote for the candidate that is from your party (although they no longer represent the platform you truly want) or to abstain from voting because you feel alienated by the new platform.

This article argues that the DNC divide from the primaries between Clinton and Sanders has left the  Sanders supporters (viewed generally as more extreme) feeling largely alienated from Clinton. A poll from YouGov released mid-September "showed that only 51% of Sanders supporters plan to vote Hillary". That is a substantial base of the democratic party, and one that could ruin Clinton's chance at the office if the supporters hold true to their poll vote. Even further, the author argues "the divisions between Democrats may be far more deep-seated and electorally consequential". To put it in Downs-ian graphical lingo, he sees there may be a rift that questions the idea of the unimodal median distribution, where voters vote for their aligned party candidate although they have altered their platforms for the moderate voter. This begs the question, is it time for a third party coalition to form for the extreme liberals? Only November will show if far-left voters will follow the Hotelling model and vote for Hillary, despite their qualms with her stances or if they will abstain in an expression of intolerance for the liberal party's acceptance of her moderate platform.  

http://www.thedailybeast.com/articles/2016/10/02/despite-donald-trump-many-bernie-sanders-supporters-won-t-forgive-hillary-clinton.html

Tiebout is True: Northern Virginia's Population Growth

According to population data from the University ofVirginia's Weldon Cooper Center for Public Service, northern Virginia counties and the city of Alexandria drove more than half of the population growth for the state. The amenities offered by the northern Virginia area attract more citizens than the amenities offered by other regions in Virginia. This holds true in my own experience of moving in Virginia. My family moved to Reston, Virginia, an area in northern Virginia, from Dahlgren, Virginia, a very small town more south. The better public schools, proximity to D.C., and number of restaurants and things to do attracted my family to relocate. This long-term drastic growth of northern Virginia proves Tiebout’s model of consumer voters voting with their feet to match his or her preferences to a local government’s expenditure plan. Instead of Virginians changing their locality’s expenditure plan to match their preferences, they move to the area that already has the amenities they desires. 

There are some assumptions to Tiebout’s model that do not necessarily hold in real life, such as perfect information and no costs associated with moving. However, I found in my situation that in the long-term these assumptions do not interfere with the model itself. For example, while in the short-term the cost of moving stopped my family from moving, in the long run this cost proved less than the benefits we received from relocating. I believe that in the long term the assumptions of the Tiebout model such as no moving costs can be held true.

An Overseen Presidential Election in 2016

With the whole world on top of these coming US elections, I had forgotten Nicaragua’s [my home country] presidential elections are also happening this coming November. Do I just care more about the country in which I’ve been living for the past 3 years? Johnson would agree with me in that it has nothing to do with a lack of patriotism or moral responsibility. Through Johnson’s Rational Abstention model, we were able to conclude that the costs of voting are higher than the benefits, and that people vote because they derive some utility from voting and to minimize the maximum potential regret from abstaining. However, this theory assumes no other external costs/obstacles, like faulty institutions. Nonetheless, in Nicaragua, like many other Latin American countries, this obstacle has a lot of weight on many Nicaraguans’ decision to abstain from voting.


Current Nicaraguan president, Daniel Ortega (from the socialist National Sandinista Liberation Front party), changed the country’s constitution last year, for the second time, to run for re-election for his third consecutive period. Fortunately for Ortega, Nicaragua’s National Assembly “randomly decided” to destitute the now ex-candidate of the Independent Liberal party (opposition), Luis Callejas, together with 28 congressmen from the same party. The reason: A legal dispute against the Liberal party that started back in 2007 and that was “suddenly” brought up to court earlier this year; during the least appropriate time. Weird huh? Well, the list of random incidents keeps going. It was decided (there’s still a debate over who really made this decision) that the new candidate of the Liberal party would be Pedro Reyes a.k.a The Stranger. To be fair to Mr. Reyes, the Supreme Electoral Court accepted his request to dismiss the few congressmen left of the opposition party who did not accept his leadership. I know this post is already too long, but to end the list I want to put one more fun-fact out there. Ortega’s vice-president became ill earlier this year, which forced him to relinquish to his position, leaving the first Sandinista congresswoman as the new vice-president. Any guesses? None other than his wife, Rosario Murillo.


There’s no doubt 2016 was by far the luckiest year for Daniel Ortega. 

Beating the Presidential Elections

The coming presidential elections for Ecuador will happen in February 2017. This election is considered critical, as it could create significant economic and political impact for the country in the long run. Ecuador’s current president, Rafael Correa is the representative of the socialist party Alianza Pais (PAIS Alliance), considered to be from the left. This party has held office for the last ten years, and if reelected their power could be maintained indefinitely, thus, the importance of this election.  Many people disagree with the political ideologies of this party, which has given strength to the opposition. At the beginning of the presidential campaigns, there were many “strong” candidates running for office representing the major political parties, opposing the current president. However, now as the election time approaches, the opposition leader, Jaime Nebot, a political activist, suggests that the main opponents of Alianza Pais unite their parties, in order to gain the most votes and win elections.

The scenario presented can be directly related to Downs and the median voter theory. Nebot has made an intelligent suggestion, by saying that the main opposition candidates, Guillermo Lasso, Paco Moncayo and Cynthia Viteri, should combine their ideologies, and select one candidate in order to increase their chances of winning the elections. By having so many candidates in the elections, the votes are dispersed between the parties. Thus, according to Downs theory, in a multiparty system, the equilibrium allocation depends of the distribution, which cannot be clearly determined. Therefore, it is difficult to predict who the winner of the election will be. If the candidates are reduced, to two major ones, being Alianza Pais and the opposition, the candidate who reaches to the median voter will win. If the new party formed by these three candidates, unites their ideologies and political perspectives, then they will move towards the median of the population. If this happens, voters who do not support the government will have a unifying force to vote for a candidate, increasing the likelihood of winning the elections. 

What's Wrong With This Election??

I've never been one for the show Dirty Jobs, but after reading what celebrity Mike Rowe had to say to a fan asking him to encourage his fans to vote, I instantly gained a massive amount of respect for the guy. While agreeing with his fan that voting is fundamentally important, Mike goes one step further and acknowledges what so many people fail to: that the very voters celebrities encourage to head to the polls are also some of the most ill-informed people. This touches directly on the issue of rational ignorance. Without using those exact words, Mike Rowe addressed one of the underlying issues with our political system. With such a large number of voters, a fraction of those people will be well educated and well versed in the major issues at hand each election cycle. To encourage those who do not take the time to study economics, history, politics, and other relevant subjects, is to encourage ignorant people to make decisions for the whole country.

Not only does Mike address the idea of rational ignorance, but he takes the stance that voting is not a duty or a moral obligation but is instead a fundamental right. With that, he likens encouraging people to go out and vote without first educating themselves to encouraging people who know nothing about guns to go buy an AR-15. Does this seem responsible to you? He pushes back against celebrities using their visibility to send people to the polls by saying that kind of ignorance is how we have arrived at our current predicament with two downright lousy presidential candidates. This is because the rationally ignorant voter is just as likely to vote for issues/candidates that are against their self-interest as they are to vote correctly in line with their beliefs. Mike would therefore relax the assumption in the Downsian model of no abstentions, and even encourage people to abstain from voting if they wish to remain rationally ignorant. He sees abstaining from voting as a positive if the people who would otherwise show up to the polls choose poorly. Because of these poor choices, now it is a game of 'who do we hate the least' instead of selecting the most qualified person for the job.

Mills Godwin's Downsian Switch

Mills Godwin Jr. served as Virginia's governor twice, from 1966 to 1970 and from 1974 to1978. He is remembered as a the father of Virginia's Community College system, the architect of the 1971 Virginia State Constitution and the institutor of Virginia's sales tax. What people often forget, is the massive political transformation he underwent between the two terms.

From World War II until the early 1970's, the Byrd Organization and the Democratic Party dominated state politics in Virginia. The Byrd Organization was a political machine that effectively controlled the election of state officials ranging from localities to the state level. Godwin's career blossomed under the Byrd Organization's support in the early 1950's, and he remained a prominent member of the organization until he became governor in 1966.

Following the supreme court decision in Brown v. Board of Education (1954), numerous conservative state legislators balked at the idea of integrating and instead began a movement know as "massive resistance". The Byrd Organization fully supported massive resistance and Godwin followed suit. Despite massive resistance's early success, with the signing of the Civil Rights Act 1964 by President Johnson and the efforts by civil right activists, by the late 1960's and early 1970's school integration was inevitable. Massive resistance and the Byrd Organization were ousted in 1970 when Virginia elected its first Republican, non-Byrd, pro-integration candidate since the Civil War - Linwood Holton. Holton won the election by garnering African American support and exposing the corruption of the Byrd Organization.

The following election, in 1974, Godwin ran again and won. This time as a Republican, a non-Byrd candidate and an advocate of integration.

This massive political realignment can only be explained by the economist, Anthony Downs. As Downs says "parties (and candidates) formulate policies in order to win elections, rather than win elections in order to formulate policies." In this case we can clearly see Godwin's political platform reflecting the Downsian hypothesis. Linwood Holton's success ushered in a new era of politics. With the growing number of African American voters starting in the 1960's, candidates could no longer stand by segregationist policies without jeopardizing their chances of winning. As Downs proposes in his essay - assuming candidates are vote maximizers, they have the tendency to adjust their policies towards the median voter. In this case, we see that the distribution of voters and the median voter are evolving. Therefore, we see candidates, like Godwin, altering their platform to maximize votes.

Swiss Bliss or Swiss Miss? Rational Abstention or Irrational Irrelevance ?

      I spent last semester studying abroad in Geneva, Switzerland, so when we started talking about low voter turn-out rates in Switzerland, I immediately wanted to know more. I did think it was odd that during my time living in Geneva there was almost no mention of Swiss politics, with the favorite political conversation being about Donald Trump. I saw no political advertisements in newspapers or around the city and I left knowing no more about the political system than when I first arrived. Johnson tells us that “ the only country with a voting turnout lower than the United States is Switzerland." Only about 40% of people in Switzerland vote. 

      This article, while not refuting that fact, explains that “'selective voters'” constitute the bulk of the electorate, simply picking and choosing which votes to take part in” and thus showing that disinterest is not the sole determining factor, but it is rather disinterest in or ignorance of some issues. Per this article, Switzerland has seen a decrease over the years, but in contrast to the US, they are asked to vote three or more times per year. Another reason voter turnout is so low is attributed to the fact that the political parties are not as polarized and conflicting as they are here, and that the same “four main parties have held the seven cabinet seats for more than half a century under a power-sharing agreement.” It seems that even though in my opinion Switzerland is the ideal place to live, (a fact that is backed up by Forbes which places Switzerland as the 3rd happiest country), the lack of interest in voting is a problem that is being remedied by online voting. It remains to be seen whether or not this will make a difference and change things for the better. So in summary, the reasons the Swiss don't vote are perhaps the high frequency of being asked to vote, the consistency of their political system and a strong interest in some issues over others. I would ask, is it really that bad that people aren't voting? Rational abstention and rational ignorance about some issues are very real but clearly they are working for the country, so why are they seen as something that needs to be fixed? 

                                         

Brexit and Tiebout

In a well-known, controversial vote held in June, the people of the United Kingdom voted to leave the European Union - a decision universally known as "Brexit." The "leave" camp passed by a vote of 52% to 48%, with a voter turn out of over 70%.

While, of course, there are numerous views regarding the advantages and disadvantages of this decision, Tiebout likely would have said that the vote should not have even occurred in the first place. If UK citizens were unsatisfied with the revenue-expenditure patterns of their government, the best option would be to vote with their feet and move to another "community," or in this case, country. Tiebout's argument is based around the fact that individuals have heterogeneous preferences, and so providing goods in a heterogeneous fashion eliminates forced conformity. Tiebout asserts that the governments' revenue-expenditure patterns should be taken as given and individuals should move to the locality in which that system best meets their preferences; in this case, the best option would have been for unhappy individuals to move to a different community.

Downs and McMullin

In "The Statics and Dynamics of Party Ideologies," Anthony Downs distinguishes between two types of new parties: The first is designed to win elections, and the second to influence already existing parties. The first is concerned with the present, the second with the future; Downs describes this second type of party as forming simply to blackmail existing parties. Given this criteria, how do we categorize Evan McMullin?

The New York Times reported last Friday that McMullin -- a former GOP staffer and independent candidate running as the only "true conservative" in the presidential race -- is quickly gaining in the polls in Utah. McMullin began his campaign as essentially a protest candidate, someone able to give Republican voters a candidate they can vote for without feeling like they have to take a shower immediately afterward. However, McMullin has focussed his efforts almost entirely on winning Utah in the hopes of throwing the election to the House by depriving both Trump and Clinton of 270 electoral votes; this is an unlikely but plausible scenario if Trump wins enough swing states (see attached map for one scenario). The fact that his team does have a strategy for winning the White House would suggest McMullin's candidacy is more than just protest or blackmail.

In my view, how McMullin fits into Downs' party categories depends not on if he wins the White House (he won't--Clinton is poised to win in a blowout), but on what path the GOP takes after the election. Contra Trump, McMullin is a typical Republican in that he's an advocate of free trade and the TPP, and a staunch critic of Trump's isolationism and Muslim ban. If after November 8th the GOP reverts back to its traditional positions of free trade and interventionism, McMullin will forever be known as a protest candidate--i.e. one who springs into action only if his party drifts too far from its original ideological position. However, if the GOP embraces Trumpism and becomes an Americanized version of France's National Front, I think McMullin and his backers will see no choice but to officially start a new party committed to the GOP's former principles. The first option seems more likely, but the second is more fun to think about.

Why the Borda Count Makes Sense for MLB MVP Election, Not for U.S. Politics

In class we mentioned a few of the rare real world examples of a Borda Count. One of these examples is the Major League Baseball election of the Most Valuable Player. The Borda Count is used in many such sports elections, but this system makes far more sense in sports than it does in politics. Although the Borda Count is the voting system with the highest Condorcet Efficiency, it has some practical pitfalls in the political realm. The United States has one of the lowest voter turnout rates of any country in the world, due at least in part to the high number of opportunities we have to vote. With so many elections, Americans can often plead rational ignorance. The Borda Count, like other forms of Ranked Choice Voting, requires voters to know enough about every candidate to rank them in order of preference. A Simple Majority Vote, by contrast, allows voters to be more selective in their engagement. The MLB MVP is elected by the Baseball Writers' Association of America (BBWA), a selection of national and beat reporters from across the country. It is part of these writers' jobs to be well informed on the statistics of the best baseball players in the country, so, unlike in the case of American political voters, MLB voters have a high incentive to be informed.

The other issue often raised about the Borda Count is strategic voting: the incentive for voters to put their candidate's rival or biggest threat at the bottom of their rankings, even if this candidate would not actually be their their last choice. In American political elections this is a real danger. It is not hard to imagine Republican voters ranking a Democratic nominee below a third party candidate, or vice versa, even if that third party candidate is clearly unqualified for the job. Again, MLB voting differs. Sportswriters do not have an explicit stake in the outcome of an MVP vote. While an American political voter may risk seeing his taxes raised or rights infringed upon, the sportswriter is simply trying to reward the best player in the league. Sportswriters also tend to have a level of objectivity, a willingness to vote for a candidate that they don't like personally but respect professionally, that is rarely achieved in American political voting.

Climate Change: Classic Prisoner's Dilemma

Today, President Obama praised an international deal to phase out emissions of hydroflourocarbons beginning in 2019.  Roughly 200 countries signed the agreement, including the US, which carries legal force and which aims to cut such emissions by 80% by 2047.  Hydroflourocarbons are a type of pollutant emitted by air conditioners and refrigerators, and as the middle class burgeons in large countries such as China and India, statisticians predict that without this treaty, the widespread adoption of such consumer goods may balloon HFC emissions by 15% per year.

This article naturally reminded me of our discussion of the Prisoner's Dilemma and the "thug" rationale for government, but on the international stage.  Without legally-binding emissions treaties, individuals and corporations alike have little incentive to singlehandedly curb their consumption of hydroflourocarbon-heavy air conditioners and refrigerators, because such behavior would carry high switching costs without any guarantee of unilateral behavior among other individuals and firms.*  In other words, keeping one's current cooling systems is a dominant strategy, and one that does not lead to a socially optimal outcome.  This clear example of the Prisoner's Dilemma provides a rational basis for a legally-binding international treaty, and President Obama's praise is well-deserved.

*It is interesting to note, however, that--contrary to what we might predict--a few US corporations have already switched to more expensive, greener cooling systems.  Why?  Likely to reap the marketing benefits of appearing as a progressive company.  After all, now that the treaty has been signed, the lion's share of companies will merely conform to legal standards by switching, and can no longer market such a choice as "green" or "progressive."

Will Alternative Voting Systems Function As We Want in the Real World?

In class we discussed how alternative voting systems such as Hare, Coombs, and Borda count all can lead to high Condorcet efficiency and resolve some of the issues of simple majority. Still, politically, these systems have gained little traction. Is there a rational answer for this, or are the lawmakers standing by plurality simply failing to heed the advice of economists once again?

One explanation could be that simple majority benefits the two major parties in control. Many journalists this election have been emphasizing the importance of not voting for a third party candidate, which may make us consider if the current voting system helps keep these arguably less than ideal parties in control.

Another explanation could be the feasibility of the multiple rounds of voting some of these systems require. Primary runoffs had an average reduction of turnout of 35.3% according to one report. Not only this, the reduction was biased with regards to demographics. This is likely not ideal for a more widespread election system.

Lastly, strategic voting may erode much of the benefit of these alternative voting systems. To clarify, strategic voting is "when voters cast an insincere ballot in order to increase their expected value for an election outcome." As seen in the graphic below, the group satisfaction when people vote strategically can decrease significantly when using these alternative systems. Still, the group satisfaction is likely to be higher than when using plurality. Overall, while these explanations at least provide some reasoning for the prevalence of plurality, it may be time to reexamine if alternative systems could perform better in various scenarios.  

U.S. Tax Evasion: A Major Free Rider Problem

We have discussed the basics of public goods and externalities in Samuelson's paper "The Pure Theory of Public Expenditure", which detail the function of public goods and its two notable characteristics of being non-rivalrous and non-excludable.  It is important to note that the free rider problem stems from its non-excludability, meaning that that certain good cannot be excluded and will be difficult to restrict access to the good based on price.

The question begs to be asked if America is slowly becoming a nation of "Free Riders" with tax evaders. The argument holds that those who evade in taxes are labeled as free riders because it "creates horizontal inequalities, since equally well off people share different tax burdens."  This is because the government is deprived of revenues from tax evasion that could have been set aside for the production of public goods.  There's a huge irony here.  We have learned (and the author mentions this as well) that the free rider problem generally arises in common property resources or even in the provision of private goods.  So, it would "be necessary to use enforcement mechanisms of taxes and/or user charges with the force of the law."  The tax system that was meant to solve the free rider problem in the first place has its OWN free-rider problem!

But this is where it ties in to Samuelson's argument.  The author states that "tax evasion, if pervasive due to lack of monitoring and enforcement, may necessitate higher tax rates, thus causing further evasion and loss of productivity and income."  Samuelson would argue that individuals are rational and base their decisions on what is in their best economic self-interest.  The reality, whether we like it or not, is that these tax-evading individuals are acting economical and according to their self interest, as they have realized that there is a much higher Marginal Benefit to avoiding taxes legally than their Marginal Cost (in this case, the financial cost of paying taxes that will be allocated to the government for public goods if they didn't decide to tax evade).  Why pay taxes if you can free-ride off the public goods provided to you if it's not excludable?

GE Relocates to Boston

Approximately 6 weeks ago, General Electric officially relocated its headquaters to Boston, Massachusetts. Fairfield, Connecticut had been the home of GE's headquarters for nearly 35 years; which begs the question - why relocate now? The answer is simple - tax incentives. Mayor of Boston, Martin J. Walsh, has been working hard over the past several years to rid his city of its"taxachusetts" nickname. The main tool Mayor Walsh has been utilizing is tax breaks for businesses.

GE had been threatening to leave Fairfield for a number of years but it wasn't until January, 2016 that GE announced they intended to follow through on their promise. GE ultimately decided to transition to Boston, rather than Providence, RI or Austin, TX (other cities vying for GE's business) because of Boston's generous 25M city property tax incentives and another 120M in state subsidies towards infrastructure development (roads and parking facilities). In a press conference, GE executives cited these tax incentives, as well as Boston's emphasis on small business startup, as the main reasons for their relocation.

This is an obvious application of Tiebout's essay on public goods, local expenditures and the problem of preference revelation. In this paper, Tiebout criticizes Samuelson's reliance on national government to provide public goods. Instead, Tiebout argues that localities can take the role of producers with revenue expenditure patterns as their product. Then individuals could buy/vote with their feet by moving to the locality that best suits them. In this example, we see the differing revenue expenditure patterns of Fairfield and Boston creating trade offs for individuals and corporations. In the end, this example proves that, due to heterogeneity of individuals, it is often more efficient to create a market for public goods and let individuals / corporations vote with their feet.

Using the STV to End Gerrymandering

Though gerrymandering is widely disliked by both the Republican and Democratic general public, solutions to gerrymandering have not been very forthcoming. Independent commissions are often independent in name only, and fair redistricting is a harder problem for computers to solve than most would expect. But ranked-choice, instant-runoff voting, often called the Single Transferable Vote (STV) is a possible solution.

As this study outlines, movement to multi-member districts with STV voting could effectively end the gerrymandering problem. The STV allows for the most widely-supported candidate to win. However, STV alone won’t solve gerrymandering, since that widely-supported candidate would still likely be the candidate from the party for which the lines were drawn to protect. Thus, the need for multi-member districts.

Large multi-member districts bring their own problems, though, which the STV would remedy. Specifically, large distracts would hinder the ability to create majority-minority districts, which are imperative to the Voting Rights Act. If a state has just a few large districts, they may not have a large enough minority population to make one of those districts majority-minority. And therefore, state legislatures could use this as an excuse when drawing district lines to dilute the minority vote by dividing them among separate districts. Therefore, some minority groups may not even be able to elect one representative, bringing us back to the state-of-affairs before the Voting Rights Act. The STV, therefore, is required to ensure that there is some acknowledgement of the minority viewpoint. STV could, as Supreme Court Justice Thomas said, “produce proportional results without requiring division of the electorate into racially segregated districts.” In addition, STV makes election more competitive and difficult to predict, and therefore make manipulation of district lines more difficult to successfully implement.

Unfortunately, STV’s political feasibility is iffy. As we’ve discussed, candidates support policies that get them reelected. And, gerrymandering is a very effective “policy” that gets incumbents reelected. So, efforts to curb gerrymandering are bound to face significant political hurdles.

As a final note, Arrow’s Impossibility Theorem tells us that no voting system is perfect. A multi-member district with STV will not solve all of our problems. Still, it will probably leave us better off than before.

Low Voter Turnout Results in Platform Stagnation

We have discussed Johnson’s paper “Voting, Rational Abstention, and Rational Ignorance” in class which argues that it is rational for people to abstain from voting because an individual’s single vote has little probability of affecting the outcome of any election. Johnson also pointed out that a large portion of the American population do not vote. This New Yorker article describes non-voters as typically younger, less educated, and of lower income brackets which aligns with Johnson’s descriptions. The New Yorker article furthers that non-voters have “roughly the same view of the Democrats.”

If non-voters decided to vote, electoral races would be swept by the Democrats. The public’s assumption that America is more or less evenly split between Democrat and Republican values is an incorrect reflection of reality. Johnson clarifies this as a problem when he notes that non-voters’ preferences are not reflected in the outcome which “is difficult to interpret as consent of the governed.”

The incorrect belief that the public is evenly split between Democratic and Republican values is one of the most dangerous implications of rational abstention. If every American voted, more Democrats would be elected than Republicans due to the non-voters’ liberal preferences. That in turn would cause the Republican Party and its candidates to change their platform so that they could win elections because, as Downs pointed out, candidates change their platform to win elections. Altering party platforms is part of the natural evolution of politics. However, if the non-voter trend increases, we risk platform stagnation. As voter turnout decreases, our candidates and parties increasingly do not represent contemporary American values.

Shifting Voter Distribution Leads to Shifting Politicians

As the center of the voting population disappears and voters become more polarized, the probability distribution shape of voters has changed to reflect that. Assuming the Downs model of the Median Voter Theorem holds, even a strongly polarized bimodal distribution has a median voter. The Theorem focuses on one central idea: candidates formulate policies (and campaigns) in order to win elections rather than win elections so that they can formulate the policies. The candidates position themselves to appeal to a certain demographic of voters, with the median voter in mind, and plan a strategy in order to capture those voters to win the election.

Donald Trump is one such example. He trademarked "Make America Great Again" a mere 6 days after Obama won reelection in 2012 leading one to assume that Trump has been planning this campaign for at least the last four years. He has studied the changing electorate and positioned himself in a place he believes is optimal to win the median voter. His slogan, "Make America Great Again" was taken from Ronald Reagan's campaign and revived for this 2016 campaign. Reagan's presidency is considered the Republican heyday by many conservatives, which may be the reason Trump chose that particular phrase.

The problem Trump may face in the election, however, is that the Downs assumptions are not the way real life works, and voters can chose to abstain. Trump is likely to alienate voters and lose a good portion those that stay home or those that vote for a third party candidate.

Coase v. Pigou: A False Dichotomy?

The typical introduction to Coase seems to be framed as an alternative to a Pigouvian tax. This seems a bit unfounded to me.

The Coase theorem may work well as an alternative to legal/court action (in a small and local sense), but in the case of its opposition to a more generalized Pigouvian tax, its primacy is less clear. Take, for example, a standard Pigouvian tax: the carbon tax. A condition for an effective Coasian solution is property rights. But how do you assign property rights in the case of global atmospheric pollution? There is also a condition that costs are generally known* by the affected parties. But with the sweeping and invisible effects of global warming, how is the damaged party supposed to both be aware and able to determine the costs to themselves? Are they aware of the difference in their medical bills, food costs, insurance premiums?** In addition, there is difficulty in achieving the cooperation of affected parties. Though most global warming is a result of rich countries’ actions, the ramifications are most felt by people in poorer nations or poorer areas of polluting nations. Though these affected may be willing to pay in negotiations, they are far from able. Furthermore, the real victims are the one who will inherit a damaged earth; do we expect the unborn to mobilize in their opposition?

It seems unlikely that Coase himself would universally oppose a carbon tax (or he'd at least acknowledge the subtleties of each argument). We acknowledge that a Coasian solution works best when the parties involved are small, yet a Pigouvian tax is almost never implemented on just a handful of local actors. A Pigouvian tax is generally seen in a larger national context. It may even be that when Coase’s conditions are least likely, that a Pigouvian tax is a type of Coasian solution. In class we certainly acknowledged this, but I wanted to explicitly state it.

*Though with Coase individuals to not have to precisely calculate the costs (like they do with Pigou), they do need to be aware of the difference between a “bad” and “good” deal.

**There are also monetary benefits of climate change on the general public, such as cheaper energy. No matter who is doing the calculation, it’s a difficult process. However, the general point is that in this case the government may do a better job in measuring costs than the private individual. This is further complicated by the global nature of global warming.

Roommates, Chores, and Making the Pareto-Optimal Move

How do we deal with a roommate who won't do her chores? This can be a big issue. After all, a clean apartment is a public good that everyone* can enjoy. Although our dominant strategy would be to not clean to avoid the costs of spent time, everyone would be better off if we all did our weekly chores.

My apartment has been experiencing this issue recently, and I instantly recognized it as a classic prisoner's dilemma situation. My immediate thought was: "If we want A to do her chores, we should all stop doing ours until she does her fair share. Then, she'll know that if she does her chores, we'll do ours too!"

The Internet had some advice as well. This article suggested that we develop a mini market economy and use chores to gain "points". Certain chores would earn more points than others. This means that when one person is not able to do a certain chore that week, they can pay another person “points” to have them do the chores instead. Of course, as a result of market transactions, everyone is better off! However, we cannot keep any one person from experiencing the benefits from the clean apartment, and therefore we may still have free riders. This does not solve the problem.

In the end, my roommates came up with the best solution. When sharing my idea with them, they replied: "We'll keep doing our chores, because then we can actually tell A to do her chores as well." They were taking it upon themselves to be the external enforcers** that the apartment needed to ensure that we were making the pareto-optimal move to live in a clean apartment. What a great idea!

*that is, everyone living in the apartment
**they are technically not "external enforcers" as they are also living in the apartment, but they are trusted to do their part, and I am assuming away any corruption.

The Median Voter Theorem and Hillary Clinton's views on the Trans-Pacific Partnership

The Trans-Pacific Partnership is a trade agreement among 12 countries on the Pacific Ocean aiming to promote trade by reducing or eliminating over 18,000 tariffs that act as a barrier to US trade with the other 11 nations. After years of negotiations, the TPP was agreed upon in February of this year, but has not yet been ratified by Congress. Hillary Clinton initially favored this agreement, stating in a 2010 speech that "we know that [the Trans-Pacific Partnership] will help create new jobs and opportunities here at home."

During her campaign in the Democratic primary for the upcoming election this year, though, Clinton faced Bernie Sanders, who openly objected to the Trans-Pacific Partnership. In order to remain competitive with Sanders among democratic voters on such a key topic for this election, Clinton began to shift her views on the TPP to the left. She claimed that she was against the agreement in a primary debate last October, announcing that it "didn't meet my standards."

Downs' Median Voter Theorem helps to explain Hillary Clinton's behavior here. If the median voter is decisive, then candidates will shift their views to be right at the median to ultimately win that determining vote. Clinton's initial view on the TPP was too far to the right for the audience from which she was campaigning to win votes, so she altered her position to better reflect the median voter's views, between Bernie Sanders and herself, regarding the issue of this trade agreement. This example supports Downs' claim that "parties formulate policies in order to win elections, rather than win elections in order to formulate policies."

Does the Libertarian Party differ from other third parties?

In Downs chapter on "The Statics and Dynamic of Party Ideologies," he says that third parties in two-party systems exist for two reasons. The first, which seems more intuitive, is to come to power and at least threaten the main two parties grip on voters. The other is to influence policy. As Downs points out, clearly both these end goals require a voter contingent, but this does not mean electing officials must be the primary goal. The two examples today that clearly seem to be the latter type are the Green Party and, though not a fully separate party, Tea Party Republicans. Both of these examples reside at the edges of the liberal, conservative continuum and seem to be in place to prevent Democrats and Republicans from edging towards the median voter. While the Tea Party Republicans have gotten some officials elected, the rhetoric seems to focus on non-establishment, renewed conservative values that would limit its platform's appeal but not limit its influence on the larger Republican party.

My question then became, which type is the Libertarian Party? With no elected officials in the House or Senate and Presidential candidate Gary Johnson receiving only 1% of the vote in 2012 despite the party being formed in 1971, intuition would say the party exists to influence policy. Furthermore, both Johnson and the Green Party's Stein are likely receiving some substantial boost this election season due to the unfavorability of Trump and Clinton. Still, this answer does not seem satisfactory since its fiscally conservative, socially liberal policies take elements from both main parties (though it does emphasize reducing the government's role consistently). The fact that Johnson draws voters away from both parties backed up by FiveThirtyEight's article back in July, which found that Clinton did only slightly worse in polls with third party candidates. Additionally, Gary Johnson has been polling between 8% and 13% this election in general electorate polls with more substantial numbers in particular subsets (as high as 31% with independents, 36% with those in the military, 26% of voters age 18-29). Overall, the purpose of the Libertarian Party remains unclear and may only become apparent in future elections.

President Obama and Expected Benefit

In one of his most passionate speeches in recent memory, President Obama urged black voters to show up in support for Hillary Clinton this November at a Black Caucus Foundation gala on September 17.  In response to Mrs. Clinton's weak energy among young black voters relative to energy for Mr.  Obama in the 2008 and 2012 elections, the President argued that the 2016 vote will determine far more than merely the next head of state:  "My name may not be on the ballot, but progress is on the ballot.  Tolerance is on the ballot.  Democracy is on the ballot.  Justice is on the ballot."

Vis-a-vis the Johnson reading, Mr. Obama's speech bears two points of interest.  First of all, the speech ups the 2016 ante.  That is, he is attempting to convince black voters that the benefits of their voting for Mrs. Clinton may be higher than they previously thought:  the President is implying that fundamental progressive values are at stake.  Thus, the rational potential voter must not only consider the benefits of Mrs. Clinton's policies, but also the benefits of "progress," "tolerance," "democracy," and "justice," which carry, of course, quite some value.   Ironically, though, given that Mr. Obama is encouraging a higher voter turnout among black voters, the expected probability of a single voter swinging the election decreases even while the benefit of voting for Mrs. Clinton increases, and perhaps the outcome of the individual voter's equation changes very little.

However, Mr. Obama's encouragement to vote may not be naive after all.   A two-term, energetic President with ever increasing favorability numbers, President Obama's actions may very well swing the election if his encouragement convinces enough people in the black community to vote.  His words as a popular figure carry far more influence than his individual vote ever could, and one could perhaps argue that he would do better to spend November 8th making stump speeches at voting locations in Florida or Ohio rather than taking the time to cast a vote.

The Grand Nicaragua Canal: Fact or Myth?

Chinese businessman Wang Jing’s canal scheme is just one more added to the pile. After the Panama Canal expansion project was completed this year, the grand Nicaragua Canal was put on hold, and perhaps for the best. After several studies were performed to analyze the socio-economic and environmental impacts of the project, experts started questioning whether it was a good idea or not to build the canal. China’s record on environmental matters is very poor, so there is a reason to concern about the possible negative environmental impacts. In addition, the area targeted for the project is home to a large population of indigenous farmers that don’t have formal titles to the lands they have inhabited and cultivated from generation to generation. Thus, there is also a big concern regarding the people that would have to be evicted from these lands.

According to Coase, the assignments of property rights have no effect in the way economic resources are allocated, in a world with low transaction costs. If transaction costs were low, Wang Jing and the indigenous farmers’ Cacique would bargain to get to a Pareto Optimal allocation. One possible scenario is that all farmers had legal titles to their lands and Wang Jing pays an amount relative to the market value of the acres of land the farmers would give up for the canal construction. If Wang Jing got the rights for the lands instead, according to Coase’s Theorem, the same allocation result will be achieved. However, in reality, the Cacique is not the sole representative of the whole indigenous population that inhabits that area, so the negotiation will not be exclusively between Wang Jing and the Cacique. Due to the large number of parties in the transaction, transaction costs are indeed very high and bargaining is not possible. The lack of ownership (excludability) over the lands gives government authorities the default right to allocate them however they prefer. In a country with weak institutions that doesn’t usually lead to a Pareto optimal allocation that maximizes social benefit. This is a perfect example that shows how incomplete property rights can create conflict, like Coase suggests.

Celebrities say my vote matters, are wrong about everything

In what is essentially an in-kind donation to the Trump campaign, a group of Hollywood celebrities made one of those obnoxious videos where each person is featured individually in front of a blank white background, and they each repeat the same phrase ad nauseam, before finally moving on to another phrase they each repeat ad nauseam, and then to another, before finally forming one complete and coherent thought. The ad doesn't tell you for whom you should vote, just that you should vote (although it's pretty obvious who their preference is). The ad comes from Avengers' director Joss Whedon's new Super Pac, "Save the Day."

A few things stick out.

First, it's clear the celebrities did not take Public Choice. One tearful celebrity I don't recognize implores me to vote because "we can't say one vote doesn't matter." Don Cheadle points at me, and tells me "your vote matters." The tearful, unrecognized then says: "your vote matters." (I warned you they repeat things) Scarlett Johansson tells me my vote "affects everything." This is doubtful. Living in Virginia, I suppose it's possible my vote matters slightly more than a voter in Oregon, but I still wouldn't say a 1 in 10 million chance of casting the deciding vote means my vote matters, or "affects everything." Plus, Virginia is quickly losing its swing state status, so my vote likely matters even less than normal.

Second, the celebrities don't ask me to educate myself -- they just want me to vote. You'd think in the 3 minutes they spend repeating each other they could spare a sentence to ask my to learn about the issues. Is Hillary Clinton's stance on immigration good for the country? How about Trump's plan to increase tariffs? Does Jill Stein's suggestion that Wi-Fi is giving our kid's cancer have merit, and what are the implications if true? These policy proposals actually do matter, and while they probably are unable to "affect everything", their implementation will certainly affect more things than my vote will. A drive to increase voter education, rather than one that simply tries to increase turnout, would be much more beneficial to society. But perhaps Whedon is aware of at least one lesson from Public Choice: remaining ignorant of these issues is rational for most voters, so asking them to educate themselves would likely be fruitless. A Super Pac simply aiming to increase voter turnout will enjoy a much greater return on investment.