A Look at the ESP Spectrums – Political Part 2

As I did with the social spectrum, I’m going to start this look at the political spectrum by copying exactly from my first post in this series.  From my previous column:

“To narrow it down to what we see in the United States, we have Figure 3, which is the republic portion of Figure 2.  Technically, the United States is a republic, not a democracy.  The difference is mainly in the voting structure.  In a democracy, all eligible voters vote on all matters, but in a republic, eligible voters elect representatives to vote on their behalf on most matters (save the occasional referendum).  Both structures allow for a single executive branch to be elected.  One can easily see how a true democracy is impractical.  In Figure 3, we see darker red/blue as we get further away from the purple center (because red and blue make purple). 

Ultra-Left-Wing	Left-Wing	Center-Left	Moderate or Center	Center-Right	Right-Wing	Ultra-Right-Wing

I’m not going to go into excruciating detail here.  On the left, we would typically expect to see various classes of liberals like democrats, socialists, progressives, and communists.  On the right, we would typically expect to see various classes of conservatives like republicans, libertarians, and social conservatives.”

This is where I’ll go into more detail.  The table below is my quick guide to the lay of the land on political issues.  We have four columns, namely issue, left position, center position, and right position.  These are admittedly very simplistic views on the issues, so they’re more like guidelines rather than hard rules.  You can use this to evaluate your personal views.  It’s the easiest way I could think of to handle this discussion, and could be a useful quick guide for people new to American politics.  Basically, I asked myself how I would go about trying to learn another country’s politics and a table like this would be great.  Note that some of these choices are somewhat binary in nature while others have nuances to consider.

I think it’s a disservice to oneself to make the blanket statement of, “I’m a leftie/rightie,” because there are times when a person may go left/right on most issues, but not all.  I don’t see the sense in towing the party line if you don’t agree with it.  If you’ve read my blog for a while, you know I go left on a few issues, right on others, in the middle on some, and off the spectrum from time to time. 

You’ll also note that my left/center/right spectrum is generalized and we often end up with policy positions that are not at the extremes.  That’s the nature of our system.  It’s also basic negotiation in that two sides start at extremes and work their way inward to make a deal (or they remain at the ends and no deal is made). 

Tending toward the center or left of center would tend to put one in Democrat territory, while tending toward the center or right of center would tend to put one in Republican territory.  We have other parties in the USA.  The far left is where we would find Socialists and Communists.  Libertarians would tend to the left on social issues, but to the right on economic issues. 

These parties outside the duopoly are almost better thought of on the social spectrum, where the Libertarians would claim the center for freedom while the Socialists and Communists would tend toward totalitarian and secular real.  There really isn't a far right equivalent in the USA that would occupy the totalitarian and theocratic realm.

Issue	Left	Center	Right
Gun Control	As strict as possible.  Guns kill people and shouldn’t exist.  Less guns means less killing because people won't have guns to kill with.	Keep the guns out of the hands of criminals while still allowing upstanding citizens access to guns.	As loose as possible.  Guns don't kill people - people kill people.  Guns protect people and more guns mean less killing due to deterrence.
Abortion	Pro-choice in all circumstances.  Abortions always and for everyone.	Let individuals decide for themselves.  Alternatively, pro-choice in some situations (rape, incest, danger to the mother, etc.) and pro-life in others (procedure restrictions, trimester restrictions, etc.).	Pro-life in all circumstances.  Abortions for no one ever.
War (Military)	War is not the answer.  Ever.	War is sometimes the answer and sometimes not the answer.  Alternatively, differentiate between pro-defense and pro-war.	War is the answer.  Always.
War (on Drugs)	Legalize everything.  Treatment for everyone.	Legalize to various degrees and balance treatment with punishment.	Criminalize everything.  Jail time for all offenders.
Gay Rights	Federal law explicitly legalizing gay marriage and equal legal benefits.  It's beautiful.	Let the states decide, but each state has to honor other states' marriages.	Federal law banning marriage and equal legal benefits.  It's an abomination.
Illegal Immigration	Amnesty for all instantly, no questions asked.	Streamline the citizenship process.  Both amnesty and deportation are needed.	Deportation for all instantly, no questions asked.
Death Penalty	Never justified.  Make it impossible to execute.  It's not a great deterrent, it's expensive, and could kill innocent people.	Sometimes justified.  Assess on a case-by-case basis.	Often justified.  Make it easier to execute.  It's a great deterrent, cost can be solved by streamlining, and innocent people aren't killed.
Taxes	Raise them.  The government knows best how to efficiently allocate money.	Lower some, raise others, leave the rest unchanged.  Maybe scrap the entire current tax code.	Slash them.  People know best how to efficiently allocate money.
Defense Spending	$1 is too much.	Spend wisely and as needed.	There can never be enough.
Environment	Save it at all costs.  Man is a plague upon the Earth.	Balance the needs of man and those of the environment.	Who cares?  The Earth is ours to plunder.
Energy Sources	No drilling or mining.  Green energy can do it all.  Fossil fuels and nuclear are dirty.	Don't rely on just one source.  Come up with something that makes sense.	Drill baby drill.  Green energy is bad.  Fossil fuels and nuclear power are great.
Energy Efficiency	We should use no energy ever.	Let's try to be energy efficient to the most practical degree.	Who cares?  If I can pay for it, I'll use it.
Raise Taxes or Cut Government Spending to Fix the Deficit?	Raise taxes.	A mix of both.	Cut government spending.
How to Fix Social Security?	Tax the rich and deny them benefits.	Tax increases, benefit cuts, age increases, means testing, and/or individual accounts.	Privatize it.
How to Fix Medicare?	Tax the rich and deny them benefits.	Tax increases, benefit cuts, age increases, means testing, individual accounts, and/or cost containment.	Privatize it.
Which is Worse - the Public or Private Sector?	The private sector is the root of all evil.	Evil stems from both the public and private sectors.	The public sector is the root of all evil.
Interwebs	The government owns the interwebs.	Nobody owns the interwebs.	The private sector owns the interwebs.
Favorite Presidents	FDR, Woodrow Wilson.	Could be any of them.	Ronald Reagan, Abraham Lincoln.
Regulation	The more, the better.	Do what makes sense for the situation.	The less, the better.
Government Spending	Raise it.	Raise some areas and slash others.	Slash it.
Affirmative Action	It's still absolutely necessary and needs to be expanded.	The need has dropped over the years, but still exists.	It was never necessary and should be abolished.
Labor or Capital?	Labor.	Neither or both.	Capital.
Income Inequality	The most pressing problem in our society today.  No income inequality is permitted ever.	It's a problem when it becomes too excessive, but it's also necessary to ensure a functional society.	Not a problem at all.  Income inequality is good, even in excessively large levels.
Bias in the Media and Academia/Education	There's no liberal bias anywhere, but there's conservative bias everywhere.  Fox News is the sole and ultimate propaganda and deception machine.  The mainstream media and academia are fair and balanced and objective with no agenda.	Fox News has a conservative bias.  The rest of the media and academia have a liberal bias.  Some of the mainstream media lives up to the lamestream media label.  I'll hear them out with a focus on bias and agenda, then decide for myself who's right and wrong.	There's no conservative bias anywhere, but there's liberal bias everywhere.  The lamestream media and academia are the ultimate propaganda and deception machine.  Fox News is fair and balanced and objective with no agenda.
General View of US History	The US has done nothing but rape, plunder, pillage, murder, and exploit throughout its history.  US history is all evil and a blight on humanity.	The US has done both good and bad things, but it has done more of one than the other.	The US has done nothing but improve humanity and has never done anything wrong.  US history is all good and the bright spot for humanity.

Book Review – “This Time Is Different” by Carmen Reinhart and Kenneth Rogoff

My latest read was “This Time Is Different” by Carmen Reinhart and Kenneth Rogoff.  The only thing I really need to say is that if you’re looking for the definitive overview of centuries upon centuries of financial crises worldwide, this is it.  Instead of going specifically into one crisis, they go into a broad overview of worldwide financial crises from the past eight centuries.  This is a truly remarkable effort they’ve undertaken.  I don’t want to steal their thunder, and I’ll thus keep the book review in fairly broad terms.  I will say, however, that the main theme of the book is exposing the foolishness of believing the title because it never is different (in this context).  We just think it is.

Before we dive into the content, I'll say that the tone and writing style are both engaging.  It has an academic feel to it, obviously, but it's not that dry academic feel we get so often in books like this.  They actually spruce it up.

I’d also point out that this book is the source of several key data points we often hear about, including how government debt/GDP ratios above 90% increase the probability of danger.  There are some critical nuances regarding this measure that they highlight. 

Part 1 lays the ground rules for the rest of the book.  Chapter 1 explores how they define crises in the book.  In Chapter 2, they introduce the concept of debt intolerance and a discussion of how/why some countries may be more vulnerable to crises stemming from high levels of debt than others.  Chapter 3 discusses their database and methodology.

Part 2 focuses on sovereign debt crises.  This is when a government defaults on debts owed to foreigners.  Chapter 4 is a more high-level, theoretical, even abstract, look at this event and addresses several key nuances, such as the question of illiquidity versus insolvency and what exactly constitutes a default (many alterations to the initial deal, such as extending the duration or reductions in rates or balance, could be considered forms of default).  The next chapter examines the mechanics of external default and the chapter after that explores the history of such incidents. 

I will, however, single out Chapter 5’s exploration of Newfoundland in the late 1920’s.  This is a riveting tale of how external default basically forced Newfoundland into Canada.  It was a historically significant event in that democracy and sovereignty literally took a back seat to debt.  Few Canadians are even aware of this story.  In some ways, this mirrors what we’re seeing today with Greece, as their sovereignty is taking a clear back seat to their debt.  This is the exact opposite of how Iceland handled its problems recently, but these are a whole other story.

Moving on, Part 3 takes us on a journey through the world of domestic default.  Here, the government defaults on debts it owes to domestic entities.  Like Part 2, they first focus on the more theoretical aspects of the matter in Chapter 7 before moving onto a look at the mechanics and dynamics in Chapter 8 (which also explores the history of these events).  Unlike before, the last chapter focuses on the question of whether domestic or external default is worse and seniority in determining who is higher on the ladder for loss recovery.

Part 4 gets really meaty as it covers other types of crises.  Chapter 10 explores banking crises and shows that, while a nation may be able to graduate from the risks of sovereign external and domestic default, nobody has yet “outgrown” banking crises.  In banking crises, it’s not an issue of whether the government will default somehow, but some kind of issue with the banking system.  The key point is to differentiate between the government and the banking sector.

Chapter 11 explores a type of stealth default called currency debasement, in which a government defaults on its debt by weakening its currency.  In the days of yore, when we had metal-based currencies, the governments would just reduce the metal concentration and reissue currency, but the nominal debt remains the same.  More recently, central banks would fire up the figurative printing presses, but even that’s outdated because they just electronically increase the banks’ reserves today.  Chapter 12 takes currency debasement one step further and looks at inflation.  I’ve discussed many of these dynamics previously.

Part 5 is where they try to apply all this knowledge to the present day.  They examine our recent global crisis, which they called the Second Great Contraction (SGC) and is also commonly called the Great Recession, through the lens of history.  In Chapter 13, they explore the run-up to the SGC.  Chapter 14 then looks at the aftermath of previous global crises to give us a glimpse of where we may go with the SGC.  They follow in Chapter 15 with an exploration of contagion, which looks at what factors are involved in containing a crisis to just one nation or region versus a global issue.  Chapter 16 is the pinnacle of the book.  Here, they attempt to create a crisis index.

Part 6 attempts to string it all together.  Chapter 17 asks the question of what we should take away from history and the SGC for the future. 

This is a must-read for anybody who wants to understand financial crises on a broader scale.  It won’t tell you much about any one specific crisis (aside from the most recent one), but it will show you the commonalities underlying them.  Truth be told, I cannot recommend this book highly enough.  

GOP Race Updates and Obamacare

I’m in catch-up mode since I didn’t post anything last weekend.  I’ll briefly touch on the two topics that have dominated the news recently in this post (two topics that you’re probably sick of).  First up is Obamacare, which was argued before the Supreme Court of the United States (SCOTUS).  An updated look at the GOP race will follow.

Unsurprisingly, I’m of the position that Obamacare should be struck down in its entirety due to the unconstitutionality of the individual mandate and the inability to separate it from the rest of the bill.  I’ve laid this out before and I won’t retread that.  Probably the best overviews on Obamacare I’ve seen are courtesy of Thomas Miller at the American Enterprise Institute (AEI) from March and April of 2012.  Miller does a great job of laying out the arguments and logic used by both sides.  Yes, he’s clearly of the same mindset that I have regarding Obamacare, but his work still does well at playing devil’s advocate.

Trying to handicap SCOTUS is tough because they are, to put it mildly, unpredictable.  If I have to guess (which I don’t, but I will because it’s fun), I think we’ll see a decisive ruling that overturns the individual mandate and the entire bill.  I’m thinking more than the conventional wisdom of 5-4 with Thomas, Scalia, Roberts, Alito, and Kennedy comprising the five.  I’m also thinking we’ll see a lot of opinions by SCOTUS standards, meaning beyond the typical majority and dissenting opinion.  I wouldn’t be surprised to see Breyer and/or Ginsburg join the majority of the aforementioned five, but via concurring opinion(s) that kill the mandate, yet uphold the rest of the bill.  I can’t realistically see Sotomayor or Kagan striking down the mandate, if only because I somehow doubt Obama would have been foolish enough to pick a justice who would overturn his signature bill.  There’s no way that didn’t come up in vetting.  Kagan being able to vote in this case is questionable at best and unethical at worst, but I digress.

One last thing I’d like to touch on before switching gears is Barack Obama’s words about the case.  It’s one thing for a president to express the opinion that a given law is constitutional and think that it will be upheld by SCOTUS.  There’s absolutely nothing wrong with that and I would fully expect a president to make such statements.  However, Obama didn’t stop there.  Two quotes are very revealing.

“The Supreme Court is the final say on our Constitution and our laws and all of us have to respect that.  But it’s precisely because of that extraordinary power that the court has traditionally exercised significant restraint and deference to our duly elected legislature, our Congress.”

“Ultimately, I’m confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically-elected Congress.”

Let’s be real here.  Whether a law is passed 99-1% or 51-49%, if SCOTUS deems it unconstitutional, it is their job to strike it down.  It’s not unprecedented or extraordinary for SCOTUS to do this.  Also, the Judicial branch is not and should not be expected to show deference to either the Executive or Legislative branch.  This is not the way the Constitution is written.  Constitutional law professors like Obama surely must be aware of this.  Yes, the Obama administration issued some clarifications to say that they were referring to just commerce.  Simply put, this is pure damage control.

It’s also interesting to see Obama talk about judicial restraint versus activism.  As I’ve said before, it’s not judicial activism if the court strikes down an unconstitutional law.  That’s the court doing its job.  The act of upholding an unconstitutional law is not judicial restraint because that is the court failing to do its job.  If the Judicial branch rules a law unconstitutional, the Legislative branch can then attempt to rewrite the law to ensure that it becomes constitutional and the Executive branch can sign/veto that law (the Legislative branch can overturn the veto if they want it enough).  If the new law is constitutional, it will survive the Judicial branch’s review.  If not, repeat.  This is how the system works.

To be fair, even if Obama is somehow trying to intimidate SCOTUS, such behavior isn’t unprecedented as the GOP alleges.  What Obama’s doing is nothing in comparison to what FDR tried to do.  FDR didn’t just try to intimidate the court, but stack it by trying to get the power to appoint a justice for every current justice on the bench over the age of 70.  Such a measure would have given him six appointments and would have tilted the court decidedly in his favor.  Congress didn’t like this idea and squashed it.  Of course, both parties are guilty when it comes to relations with the courts, as George W. Bush did all he could to keep many of the “War on Terror” activities a secret.

And we’re onto the GOP race.  There’s not really much to say here and this is likely my last GOP primary update.  You probably know that Newt Gingrich scaled back his campaign.  You also probably know that Rick Santorum has suspended his campaign.  Ron Paul remains in the race, but the odds and numbers for him to win on a first-ballot at the convention are a mathematical longshot at best and impossibility at worst.  All of this has more or less cleared the way for Mitt Romney to become the nominee.  The GOP can and will begin to refocus themselves on the general election, as Obama and the Democrats have already.  We’ll see Romney bring himself back toward more center or center-right positions.

I still registered with the GOP to vote in my state’s primary and I will still vote even though it’s so late in the process and the race is more or less decided.  The split schedule nature of the primary races effectively disenfranchises large numbers of voters, particularly in later states.  The electoral college’s winner-take-all system has a similar effect on voters in the minority in states where there is a clear majority.  This is all another story for another time, of course.

On the bright side, now I can get back into other matters on the blog here (like my next post, which is a book review).

Links:

Thomas Miller content via AEI: http://blog.american.com/author/tmiller/