Naked Economics by Wheelan, Charles (spanish books to read .txt) 📕

campaign. At the first candidates’ forum, the moderator, a political columnist for a Chicago newspaper, asked each candidate to comment on his or her view of federal earmarks. Earmarks are the mechanism by which members of Congress insert pork into bills; an earmark directs federal money to a specific project in a member’s district and is therefore insulated from any formal review as to whether the project makes sense or not. For example, an earmark in a transportation bill, such as the notorious “bridge to nowhere” in Alaska, allocates money for the bridge even if the Department of Transportation never would have funded it. The subject of earmarks had come up because the first spending bill signed by President Obama had nearly nine thousand earmarks. (No, that is not an exaggeration.)

One by one, each candidate excoriated both the concept of earmarks and the politicians who support them. One candidate even proposed arresting members of Congress who cut such deals. But the earmark question was a trap, and a clever one at that. The moderator asked a follow-up question, something like, “So each of you would oppose an earmark to support Children’s Memorial Hospital?” As you may have inferred, this particular children’s hospital is in the Fifth Congressional District, about 300 yards from where we were sitting. The answers to the follow-up question were less emphatic than the original assault on earmarks and included comments like, “Of course, a hospital is different” and “That particular earmark involves children” and “I will do everything I can as a congressman to support Children’s Memorial Hospital” and so on. No one suggested that politicians who support an earmark for the hospital should go to prison.

Everyone despises earmarks, except for their own. A member of Congress who secures special funding to expand Children’s Memorial Hospital is a success. A ribbon-cutting ceremony will celebrate the project, with cupcakes and juice and speeches lauding this politician’s hard work in Congress. How did the funding come to pass? Not because this one politician gave a speech on the floor of the House that was so emotional and inspiring that the other 534 members decided to lavish funds on a children’s hospital in Illinois. He did it by supporting a bill with nine thousand earmarks, one of which was his. Such is the political reality in a democratic system: We love our congressman who finds funding for the hospital; what we hate are politicians who support earmarks.

Would campaign finance reform change anything? At the margins, if that. Money is certainly one tool for grabbing a politician’s attention, but there are others. If the dairy farmers (who benefit from federal price supports) can’t give money, they will hire lobbyists, ring doorbells, hold meetings, write letters, threaten hunger strikes, and vote as a bloc. Campaign finance reform does not change the fact that the dairy farmers care deeply about their subsidy while the people who pay for it don’t care much at all. The democratic process will always favor small, well-organized groups at the expense of large, diffuse groups. It’s not just how many people care one way or the other; it’s how much they care. Two percent who care deeply about something are a more potent political force than the 98 percent who feel the opposite but aren’t motivated enough to do anything about it.

Bob Kerrey, former Democratic senator from Nebraska, has said that he doesn’t think campaign finance reform would lead to much change at all. “The most important corruption that happens in politics doesn’t go away even if you had full public financing of campaigns,” he told The New Yorker. “And that is: I don’t want to tell you something that’s going to make you not like me. If I had a choice between getting a round of applause by delivering a twenty-six-second applause line and getting a round of boos by telling you the truth, I’d rather get the round of applause.”7

So, if I were asked again why our growing knowledge of public policy does not always translate into a perfect world, this chapter would be my more complete answer.

CHAPTER 9

Keeping Score:

Is my economy bigger than your economy?

As I have mentioned, in the late 1980s I was a young speechwriter working for the governor of Maine. One of my primary responsibilities was finding jokes. “Funny jokes,” he would admonish me. “Belly laughs, not chuckles.” Two decades later, one of those jokes stands out, not so much because it is funny now, but rather for what it tells us about what we were thinking then. Recall that George Bush, Sr., was president and Dan Quayle was vice president. New England was in the midst of an economic slump and Maine was particularly hard hit. Meanwhile, Japan appeared to be the world’s economic powerhouse. The joke goes like this:

While vacationing at Kennebunkport, George H. W. Bush is hit on the head with one of his beloved horseshoes. He slips into a coma. Nine months later, he awakens and President Quayle is standing at his bedside. “Are we at peace?” Mr. Bush asks.

“Yes. The country is at peace,” says President Quayle.

“What is the unemployment rate?” Mr. Bush asks.

“About 4 percent,” says President Quayle.

“Inflation?” queries Mr. Bush.

“Under control,” says President Quayle.

“Amazing,” says Mr. Bush. “How much does a loaf of bread cost?”

President Quayle scratches his head nervously and says, “About 240 yen.”

Believe it or not, that was good for a belly laugh. Some of the humor derived from the prospect of Dan Quayle as president, but mostly it was an outlet for anxiety over the popular notion that Japan was on the brink of world economic domination. Obviously times change. We now know that Japan went on to suffer from more than a decade of economic stagnation while the United States moved into what would become the longest economic expansion in the nation’s history. The Nikkei Index, which reflects prices on the Japanese stock market, peaked at 38,916 just around the time