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A Few Thoughts on the Democratic Debate
I watched the Democratic debate last night. I thought all the candidates did well on foreign policy but Senator Clinton's answers were more specific and informed.
When asked whether, if they had "actionable intelligence" on Bin Laden's location in Pakistan, they would strike even without the Pakistani government's approval, Edwards and Obama jumped at the chance to show how tough and determined they were. Clinton was tough also but she said she would sure let the Pakistani government know what was happening before the missiles hit otherwise the Pakistani's might think it was an attack from India. I think she could have jumped on Edwards and Obama for perhaps starting a nuclear war due to their inexperience but she didn't and I suspect that the point may have been lost on the audience. In answering questions about troop withdrawal, Senator Clinton was also thinking through the details at a greater level than the other candidates mentioning, for example, that it was important to make plans for the Iraqi's who have worked with US troops.
On economics, Obama was by far the best. Former Secretary of Energy, Bill Richardson, who performed poorly throughout the debate, said a carbon tax was a bad idea because it would raise prices to consumers which is why he supported cap and trade! Obama pointed our correctly that cap and trade would also raise prices but he nevertheless supported cap and trade because some sacrifices were necessary.
On energy and economics, Clinton was very poor. She made some crazy argument that mandating energy efficiency was the way to get us out of the looming recession - as if wishing for greater efficiency would make it so.
Edwards didn't say much specific on economics and so didn't make too many pure gaffes but he scared me with all of his talk about how going after corporations was personal.
Posted by Alex Tabarrok on January 6, 2008 at 07:08 AM in Current Affairs | Permalink
Comments
Their voting records carry a lot more signal:noise ratio than these silly and easily
gamed debates.
Posted by: sa at Jan 6, 2008 7:31:03 AM
I agree that Edwards is scary. Hillary is starting to sound like a policy wonk when she wants to hit the "change" note. It will be interesting to see if it works for her.
Obama reminds me of JFK. While this is probably by design, I like it. I did not know much about JFK at the time. I was born in 1961.
That said, I think the command and control economic approach of the Democratic candidates (and most Repubs) is worrying too.
Posted by: Alan Coffey at Jan 6, 2008 9:44:44 AM
Who cares about the debates? If Senator Obama wins in New Hampshire the Democratic Primary seasons is essentially over.
Posted by: superdestroyer at Jan 6, 2008 10:01:18 AM
"On energy and economics, Clinton was very poor. She made some crazy argument that mandating energy efficiency was the way to get us out of the looming recession - as if wishing for greater efficiency would make it so."
I'd think that as an economist, you'd perhaps point out that greater energy efficiency, while nice, might not really get us out of a recession. You might even be able to back that up with back-of-the-envelope calculations, as somebody like Krugman would.
But mandating greater energy efficiency works. It is not wishful thinking. And if you dislike mandates, mere promotion of efficiency also has worked. Examples include CAFE standards, efficiency standards for appliances and heaters, more efficient lighting, building codes for insulation, ad nauseam.
Posted by: Mike Huben at Jan 6, 2008 10:05:27 AM
But mandating greater energy efficiency works. It is not wishful thinking. And if you dislike mandates, mere promotion of efficiency also has worked. Examples include CAFE standards, efficiency standards for appliances and heaters, more efficient lighting, building codes for insulation, ad nauseam.
Just wonder: are people really that stupid that you have to mandate them what is good for them?
Posted by: andy at Jan 6, 2008 10:46:54 AM
"Just wonder: are people really that stupid that you have to mandate them what is good for them?"
Ever heard of collective good problems?
Posted by: LemmusLemmus at Jan 6, 2008 11:30:44 AM
Edwards didn't say much specific on economics and so didn't make too many pure gaffes but he scared me with all of his talk about how going after corporations was personal.
The guy's a trial lawyer. How could you expect anything less?
Posted by: Apostate at Jan 6, 2008 11:52:55 AM
If yoy take measures to save energy, no matter is good or not for other ,your bills will be lower.So there is not public good problem.I switched for energy saving light bulbs in the year 2000, the goverment here began to subsidy them in the year 2007. My bills have been lower years ago.
I drive a low comsuption car and i fill the tank twice a mont.I paid less than before when i need to do do it once a week
Posted by: karl at Jan 6, 2008 12:07:13 PM
Greg Mankiw, economic advisor to Romney and previously G.W. Bush, agrees with you that Obama nailed the economics of climate change. Here's he is quoting Obama and then commenting on it on his blog:
SEN. OBAMA: Well, I agree with Bill, that I think cap-and-trade system makes more sense. That's why I proposed it because you can be very specific in terms of how we're going to reduce the greenhouse gases by a particular level. Now what you have to do is you have to combine it with a hundred percent auction. In other words, every little bit of pollution that is sent up into the atmosphere that polluter is getting charged for it. Not only does that ensure that they don't game the system, but you're also generating billions of dollars that can be invested in solar and wind and biodiesel.
I do disagree with one thing, though, that Bill said, and that is that on a carbon tax the cost will be passed onto consumers and that won't happen with a cap-and-trade. Under a cap-and-trade there will be a cost. Plants are going to have to retrofit their equipment, and that's going to cost money, and they will pass it onto consumers. We have an obligation to use some of the money that we generate to shield low-income and fixed-income individuals from high electricity prices, but we're also going to have to ask the American people to change how they use energy. Everybody's going to have to change their light bulbs. Everybody's going to have to insulate their homes. And that will be a sacrifice, but it's a sacrifice that we can meet. Over the long term it will generate jobs and businesses and can drive our economy for many decades.
[Mankiw]: For the passages I put in bold, Bill Richardson and Barack Obama deserve special commendation, for opposite reasons. As a former energy secretary during the Clinton administration, Richardson has presumably studied these issues. But here he demonstrates extraordinary ignorance (or perhaps extraordinary disingenuousness) about the economic impact of cap-and-trade systems. By contrast, Obama shows extraordinary clarity and honesty about the effects of the policy he is proposing.
Posted by: A student of economics at Jan 6, 2008 12:13:30 PM
karl,
I agree of course that if you consume less energy you save money. It does not follow, however, that there is no collective good problem. This is because the consuming individual only bears part of the cost of his/her consumption - the pollution (negative externality) still occurs, and that affects everybody. Hence, the collective good problem remains.
Posted by: LemmusLemmus at Jan 6, 2008 12:32:02 PM
Lemmuslemmus... that doesn't seem to solve any problem. If you are more efficient then you can use the spared energy...to get other things - and as a whole even more energy can be consumed.... Today we are much more efficient then 30 years ago and yet we use more energy!
Thus, it seems to me that mandating efficiency won't solve any collective problems. Now..it solves personal problem. However - are people really that stupid that they must be told what is good for them?
Posted by: andy at Jan 6, 2008 1:21:25 PM
Alex,
What's your thought on the Republican debate?
Posted by: unsworth at Jan 6, 2008 2:09:06 PM
Andy, when people face proper price signals, they will generally make the correct decisions, maximizing benefits minus costs.
However, when there are large externalities, as their are with energy, they people do NOT face the right price signals. They do not pay the full cost of the energy they use -- other people pay some of the costs.
In such cases, the best solution is to internalize the externality, either via clear property rights (you have to pay me for the potential lung cancer or climate change damage you do to me), or Pigovian taxes (e.g. a carbon tax that increases the relative price of carbon based fuels to account for their full costs). People can still use energy, but they will want to do so more efficiently and reserve it for situations where the benefits exceed the full costs, including externalities.
When both of these solutions are infeasible, a mandate can improve welfare. In other words, no people don't usually need to be told what's good for themselves (although better information, e.g. labeling, can be beneficial). But, yes, people do need to be told what is good for OTHER people or they won't necessarily take it into account in their decisions.
Posted by: A student of economics at Jan 6, 2008 2:35:12 PM
Although I don't think anyone in particular won the debate, I think the favoring of Sen. Clinton's answer on Pakistan is the sort of process point that she thinks is a huge deal but voters don't. Alex, do you or Senator Clinton really believe that Obama or Edwards would attack bin Laden in Waziristan and not make sure that nuclear powers Pakistan and India understood that it wasn't an attack from the other? Really? Clinton has a pattern especially in these areas of making a big deal when the opponent's debate answer isn't appropriately footnoted. Which is what her point about notifying the leadership really was, a footnote. Sure, it's important on some level if you truly believe that the other party wouldn't do this but it is so self-evident that it should be assumed. Interesting that the non-law professor is the one who gives debate answers like they are going into bluebooks for grades.
And I'm surprised that no one noticed that Obama was just killed by Senator Clinton as being naive when he first made this argument a couple of months ago. Now, Senator Clinton is just concerned that the call list be completed before the attacks begin.
Posted by: John at Jan 6, 2008 2:35:52 PM
Obama becomes Osama by one letter transposition. I wonder if such subtle emotions unconsciously influence how people vote!
Posted by: anon at Jan 6, 2008 2:52:06 PM
Speaking about the bin Laden in Pakistan question, isn't the proper response, "Well, I think it's inconceivable that there exists any state in the world today, including Pakistan, who would refuse us permission to capture bin Laden when there was solid evidence of his location. I'll say, "yes, if they said No, I would still attack", but the premise is ridiculous on face.
And if asked, what would I like to take back from a previous debate, surely the answer should be, "Every single "zinger" I may have used was a mistake, even if the media seems to think that reporting who got in the best line is more important than reporting who made a factual error or who seemed most competent to hold the most important job in the world."
Just sayin'.
Posted by: cure at Jan 6, 2008 3:15:25 PM
While perhaps Edwards lacked pure gaffes, he did skew Blinder's result of "30-40 million jobs potentially being offshorable" into "30 million Americans COULD lose their jobs" and thus we need a new tax policy and new trade policy. What a meaningless statement -- you know anyone COULD lose their job? Such a scare tactic is just as bad as using terrorism threats to justify the sacrifice of civil liberties.
Posted by: DRDR at Jan 6, 2008 3:51:40 PM
When both of these solutions are infeasible, a mandate can improve welfare. In other words, no people don't usually need to be told what's good for themselves (although better information, e.g. labeling, can be beneficial). But, yes, people do need to be told what is good for OTHER people or they won't necessarily take it into account in their decisions.
Sorry, I don't get it. We were explicityly talking about mandating EFFICIENCY. We were not talking about taxing/forbidding externalities.
Efficiency in economics is basically effectivity of reaching a goal compared to other alternative means. It is SUBJECTIVE. The only way you could say it "works", i.e. that the new situation is more efficient - is by assuming the people are too stupid to figure out themselves what is good for them.
What you seem to assume is that if you mandate 'efficiency' (whatever that means), you will reduce externalities. However, that is very improbable.
If you force people to use more efficient appliances, they will have more resources afterwards - that will be later used for other things. If you lower someone's electric bill by 50%, there is high chance that he uses the spared money and buy something that...ultimately uses the same energy. We DO use much more efficient things today, yet we use much more energy as well.
Mandating efficiency COULD improve welfare. There is alse above-zero probability that you could improve your welfare by burning your house. However: unless you assume the government is cleverer then the market, it is very improbable.
Posted by: andy at Jan 6, 2008 4:50:24 PM
Can we all agree that there is no difference between "cap and trade" and "carbon tax" except for the initial allocation of the spoils? Once they are running, all players see the same marginal cost for a ton of pollution.
Posted by: TomHynes at Jan 6, 2008 5:01:25 PM
"Clinton was tough also but she said she would sure let the Pakistani government know what was happening before the missiles hit otherwise the Pakistani's might think it was an attack from India."
In fact, the Clinton administration, I believe the State Department, did inform Pakistan of its intention to attack Bin Laden with cruise missiles in Afghanistan. I don't have it in front of me, but Lawrence Wright reported it in The Looming Tower. If I remember correctly, we missed Bin Laden by chance, not because he was informed, but I'm pretty sure Defense and NSC were pretty upset about it, for fear of a leak.
Now, it seems to me that we should have learned, and Clinton especially should have learned, that going after Bin Laden with cruise missiles fired hundreds of miles away is not the way to get him. It also seems to me that only cruise missiles flying over Pakistani airspace from the Indian Ocean could realistically be perceived as an attack from India. An incursion of special forces and/or aircraft coming in from Afghanistan into Waziristan would not.
I don't know if it was clear from the question, or the other's answers, but if Clinton was equating a strike with the same tactics that tried and failed in the 90s, she has no business whatsoever being Commander-in-Chief. Ditto if that's what Edwards and Obama were thinking. If, on the other hand, no one was really thinking cruise missiles, then I have to agree with John that she's just adding a footnote. A pointless, I'm-more-nuanced-than-everyone-else footnote.
Posted by: Chuck at Jan 6, 2008 5:20:58 PM
On economic issues Hillary seemed to move to the left. She quite openly said she'd raise corporate taxes and income taxes for the wealthy...more than just rolling back Bush tax cuts. She seems to have realized she has to win the primary, no longer a given, before she moves to the center for the general election.
I wonder how much of Edwards' rhetoric he believes. Surely he must realize that companies don't hire for the fun of it. but for profit. So if he taxes, and demonizes, and regulates them to death, they'll hire fewer, not more people. I think it's mainly hot air...but from Edwards, maybe not. And that's even worse than if he were just using rhetoric to appeal to his base. I'm reading Atlas Shrugged right now. I think Rand goes way too far. Edwards though is surely a great example of the anti-industrialist, anti-profit,anti- self-reliance, populist mongering that she so opposed.
Posted by: Concerned at Jan 6, 2008 6:33:39 PM
"Can we all agree that there is no difference between "cap and trade" and "carbon tax" except for the initial allocation of the spoils? Once they are running, all players see the same marginal cost for a ton of pollution." - TomHynes
Its not true that both systems will be equally efficient at achieving the desired outcome of reducing net carbon emissions. The Climate Change - Getting it Right report by the Committee for Economic Development of Australia concludes that cap-and-trade systems have higher administrative costs than a carbon tax, increase volatility in energy prices and are open to evasion and manipulation. A carbon tax is "easier and less expensive to administer, less vulnerable to manipulation and evasion, and provide more reliable incentives to develop and use alternative fuels and more energy-efficient technologies".
Posted by: Robbie at Jan 7, 2008 12:24:21 AM
andy,
good point about saved money being used to buy other stuff the production of which also takes up energy (assuming constant energy prices). Whether efficiency standards ultimately save energy is an empirical question, and I don't have the expertise to submit an estimate.
However, I don't see the connection to the statement "people know what's best for themselves, hence no problem".
Posted by: LemmusLemmus at Jan 7, 2008 5:17:12 AM
A student of economics quotes Obama...
Everybody's going to have to change their light bulbs. Everybody's going to have to insulate their homes. And that will be a sacrifice, but it's a sacrifice that we can meet. Over the long term it will generate jobs and businesses and can drive our economy for many decades.
And if that doesn't work, we can break everybody's windows.
Posted by: MikeP at Jan 7, 2008 8:08:27 AM
If you force people to use more efficient appliances, they will have more resources afterwards - that will be later used for other things. If you lower someone's electric bill by 50%, there is high chance that he uses the spared money and buy something that...ultimately uses the same energy. We DO use much more efficient things today, yet we use much more energy as well.
The point Andy is raising is called the Jevons paradox. (see article at http://en.wikipedia.org/wiki/Jevons_paradox). There are several replies to this argument. Andy ignores all of them and assumes that the Jevons paradox is insurmountable.
Posted by: ben g at Jan 7, 2008 8:11:54 AM
