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EuroCrisis 101: Or, some questions for Paul Krugman and Joseph Stiglitz

September 17, 2011

In my day job I claim to be a political scientist.  In my hobby time, I claim to be a political economist.  Most materialists and institutionalists don’t really distinguish between the two fields, but in the current economic and financial crisis (2007 – ?), these fields are especially blurred.  I’ve studied the current crisis quite in depth in the domestic context, but despite being an “International Relations” political scientist, I don’t have a really firm grasp on the international and institutional context of the situation in the Eurozone.  So I have a bunch of questions for people who do; maybe Professor Krugman or Professor Stiglitz can answer them?

Reading the September 17, 2011, issue of the Economist precipitated these questions, especially their prescription for future Eurohealth [my additions in brackets]:

A rescue must do four things fast.  First it must make clear which of Euorpe’s governments are deemed illiquid and which are insolvent [meaning which just need capital infusions to weather the storm, and which are unable to pay back their liabilities even if given capital infusions], giving unlimited backing to the solvent governments but restructuring the debt of those that can never repay it. [However, I agree with Felix Salmon that this is essentially a distinction without  much of a difference.]  Second, it has to shore up Europe’s banks to ensure they can withstand a sovereign default.  Third, it needs to shift the euro zone’s macroeconomic policy from its obsession with budget-cutting towards an agenda for growth. And finally, it must start the process of designing a new system to stop such a mess ever being created again.

So I have institutional questions for someone more versed in this field than I.  Assuming that we are slouching toward Mount Megiddo, and that informal institutions, conventions, norms, or constraints are basically out the window…

  1. Can the ECB ‘nationalize’ or even buy failing banks, either on the periphery (Greek, Portuguese banks, etc.) or in the center (Dutch, French banks, etc.)?  Could the ECB go around the French or German governments and purchase French or German banks, if they deem it necessary?  What are the legal issues surrounding such steps, laying aside the conventions that prevent such thing from happening (at least in the case of French or German banks).
  2. Presumably, the French and German governments could nationalize their banks at will.  They are constrained by domestic politics from doing so.  This seems obvious, but are there hard constraints that I am not aware of?
  3. I understand that the French and German banks are the most exposed to this crisis.  But are there ‘southern’ banks that could be nationalized to head off the crisis, from reaching the ‘northerners’?
  4. Do you think its possible to create Eurobonds for past debt only, i.e. no future debts?
  5. If the ECB or another facility, or sovereign nations, bought or simply ‘nationalized’ the banks most in need, or created ‘temporary, one-time’ Eurobonds for past debts, could these new creditors demand as ‘collateral’ or conditions:
    1. a tariff on Greek (or other ‘defaulting’ sovereign) goods and services (perhaps a super VAT), triggered on a future inability or unwillingness to pay?
    2. a financial transaction fee on Greek (or other ‘defaulting’ sovereign) finances—private finances or public finances, with a similar trigger?
    3. conditional Greek (or other ‘defaulting’ sovereign) budget oversight/approval?
  6. Do you think such collateral or conditions would actually discipline the ‘southern’ governments and their (nontheless multinational) financial sector, and do you think that ‘northern’ governments and financial interests would view this as credible collateral?  Would the Germans and the French, and their banks, go along with such a deal?
  7. To address a negative GDP spiral, can the ECB, the World Bank, or some other entity (which???) finance Keynesian stimulus in the shrinking Southern European economies, such as, say, high speed rail from Athens to Venice (spitballing), or some other infrastructure development?  They could presumably require the labor to be local, and thus stimulate the local economies…
  8. How does Basel III fit in to future banking regulations?  Does the EU or the ECB have a mechanism to tighten banking rules, to make banking more ‘boring’ as (Prof. Krugman has advocated), or is it just up to Basel III?  Is there a failsafe for the Europeans?  And does the push for more boring banking have to come from outside the EU?

And if we assume that the ECB is a free actor that isn’t under the control of the French and the Germans, how do these answers change?  (I can imagine that panicking ECBankers might act without approval of their central governments, it that is even possible.)

Does anybody know the answers to these questions?

Update: Actually, Matt Yglesias might know too, given his careful study of these issues, as an institutionalist.

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10 Years On: 9/11

September 4, 2011

I originally posted this story on Daily Kos on 9/11/06, the five year anniversary of 9/11.

I’ve edited the story at points, but I’ve noted such edits in text with brackets.

9/11 stories are probably universally difficult to tell. I’ve always had trouble conveying to my friends and family what it was like in New York City on 9/11 and for the months afterwards. Some memories will always and only be my own, impossible to express fully. They are usually little details that don’t get through the media filter. The massive amount of dust covering sidewalks and cars when I returned to my office downtown a week later. The lingering stench of ground zero. The strangeness of Manhattan streets empty except for emergency vehicles. Thousands upon thousands of fliers in the subway stations posted by families begging for any information about missing persons–describing the height, weight, hair color, or tattoos of the lost–even the tower and floor of their office. Wondering, on the way to work, if any of those people got home safely. The eyes of dust-covered people staggering northward through the East Village on 9/11.

My story from 9/11 itself is rather mundane. Thousands like it (and, of course, thousands worse) occurred all across Manhattan five [now ten] years ago.

I was working as a paralegal in downtown Manhattan in the fall of 2001. Two friends and I–recent college graduates–had rented a preposterously small apartment at the corner First Avenue and 12th Street.

On my way to work on September 11, just as I reached the subway entrance two blocks from my apartment, I noticed that all pedestrians had stopped their morning routines and were looking south by the hundreds, toward what looked like an enormous fire in one of the World Trade Center towers. Smoke was already drifting east toward Brooklyn, and I remember being struck by how large the fire seemed to be.

From the pavement, I called my supervisor Jim, who [I believed] was probably already at work just five blocks east of the towers. I got his voice mail: “Hey Jim, it looks like there’s a fire in the World Trade Center. I’m not even going to try to get down there with the subway, so I’ll find a cab and I’ll be a bit late.” I then called my mom in Moraga. She knew I worked near the World Trade Center, and she worries a lot. So I woke her just after 06:00 Pacific Coast time, and told her that there was a fire in the World Trade Center but that I was okay. I don’t think she was awake enough for the conversation to register, but in retrospect I’m glad I called. The cell phone system soon crashed.

My curiosity got the better of me, and instead of taking a cab directly downtown, I walked the two blocks back to my apartment to turn on the news. My roommate’s sister was visiting that week, and she was still asleep when I turned on the television. We didn’t have cable, which meant that our rabbit-eared TV usually got its reception from the antenna on top of the north tower [of the WTC]. But this morning, only one station came through: CBS, which had another antenna in Brooklyn.

Despite the chaos in Dan Rather’s studio, the general outline of the morning’s events came through clear. A terrorist attack. Both towers had been hit. The Pentagon and possibly the State Department had been hit. We wanted more news and an Internet connection, so L. and I decided to walk over two blocks and across Union Square to an Internet café [the News Cafe] that usually had multiple televisions tuned to news stations.

As we walked, I started calling my friends in Manhattan, but I could reach no one. The phone lines were jammed or destroyed, and if I did get a connection, it went to straight to voicemail. Two of my friends lived one block south of the World Trade Center, but I could not reach them. I was miraculously lucky that day: of all my [probably dozens of] friends working in finance downtown, none died.

The café was, unsurprisingly, packed with people, shoulder-to-shoulder, chest-to-back, all watching the images on the televisions. [Perhaps 100 people jammed in the place.]  As I moved to the front, and bought L. water and myself a coffee, I overheard a newscaster say the word “collapsed.” I looked up to the television and saw only one tower standing in the picture. I asked the man next to me, “One of them collapsed?” The south tower had crumbled at 09:59, as we walked to the café.

I repositioned L. and myself near the door. We watched newscasters try to keep up with the information spilling across their desks, into their earphones, and onto their monitors.

Around 10:28 the north tower began collapsing on the television screens. Several of us raced outside, where we could see straight down 5th Avenue to the area soon named ground zero.

The tower had already finished collapsing and gigantic billows of dust and soot pushed outwards and then upwards like a mushroom cloud turned on its head. The streets were empty of cars. Several women were screaming and crying hysterically on the sidewalks. Some men stood dazed, or on phones.

I walked back into the café. And watched more news. A short time later–how long I can’t remember–as the patrons in the crowded café stood silent and awed in front of the televisions, a piercing alarm went off far in the back of the café, near the computers. The alarm was shrill like a fire alarm in a school–the kind where you put your hands over your ears. In this café, packed wall to wall with people, with only a single door as an exit, in the initial hysteria on September 11, 2001, someone in the back yelled:

“IT’S A BOMB!”

The crowd surged in panic toward the door, near where L. and I stood. The press of the crowd instantly pinned our arms to our chests, shuffled us involuntarily toward the door, momentarily pinned us in the doorway, and then wrenched us to the street. I remember looking at L. next to me and hoping she was okay. We were some of the first people to get pushed out of the door since we had been standing near it.

Finally free, L. swung right, away from the crowd that was now rapidly popping, person-by-person, out of the doorway like rubber balls from a tube. I stood about 5 to 10 feet from the door, in the middle of the crowd, as people burst forth and fanned out. Instinctively foolish, I stood there and grabbed those people who emerged, stumbled, and fell. I put people back on their feet, and then they started running again.

But then the alarm itself seemed to burst from the café and run down the street. A businesswoman dressed in a blue-grey suit ran down the street, with the alarm screaming from her purse. As she turned a corner and the alarm dissipated, some of us guessed that she was carrying a panic alarm to protect her from muggers. Or she had an anti-theft devise on her laptop. Or perhaps she was trying to steal computer equipment from the café. In any event, for all I know, she may still be running.

L. was now standing in tears on the sidewalk, as were many others. I comforted her, told her that everything was okay and that it was a false alarm. Unfortunately, the events earlier that day were not.

2012 and the Progressive Agenda

August 18, 2011

As we swing into the 2012 election cycle, I thought I would offer some free advice for Democrats.  I think the following agenda would mobilize the base of the Democratic Party, and give voters the perception that Obama is a fighter for the middle class.  (It also doesn’t increase the deficit except for student loan forgiveness.)  Given Republican control of the House, these laws almost certainly would not be adopted between now and election day, but “losing well” by forcing the Republicans on record and setting the agenda for a second term are also useful political and policy goals.  Other policies could be adopted by the administration without Congressional approval.

Family Security Act

Living Wage Act

  • Change the minimum wage to a living wage, but base it on regional costs-of-living.  New York, California, and other high cost areas would have different living wage levels than low cost areas such as Alabama and Wyoming.

Prosecute the Banksters

  • People’s anger against ‘Wall Street’ has been successfully co-opted by the corporately-financed Tea Party movement into an ‘anti-government’ feeling.  This was political malpractice on the part of the Obama administration, but I think it can be rectified.

Taxes on the Millionaires and Billionares

  • Ditto.

Student Loan Forgiveness

  • Most (if not all) other developed countries give their citizens higher education for next to nothing or for free.  It’s pretty appalling that we don’t.  Also, it would help my family out a lot!

Family Home Debt Forgiveness

  • While we’re at it, why not knock 10 percent off everyone’s mortgage?  Currently, homeowners have been the only ones punished by the housing bubble; banks still hold the mortgages on a dollar-for-dollar basis.  Stick it to the banks– always a good election strategy.

Obviously these are pretty pie-in-the-sky… but the President and Congressional Democrats need to lose well going into 2012.  Heck, they might also win a couple of fights before winning the election!

The Political Economy of Decline in California

August 9, 2011

Co-authored commentary with Nicole, just posted to the California Journal of Politics and Policy.

Link to the journal website (must register for free copy).

Or, link to .pdf file.

The Political Economy of Decline in California

Nicole and George Willcoxon are doctoral candidates in political science at UC Berkeley

Is California a ‘failing state’?  When political scientists refer to states they generally do not mean, for instance, Maryland, Hawaii, or Alaska, but rather the state as the collection of political institutions that govern and administer a given geographic territory—institutions such as the bureaucracy, the judiciary, the police, and the legislature.  To assess whether these ‘state institutions’ are in decline, our academic field investigates whether such institutions can provide public services and solve collective problems, and whether their performance is improving, stable, or worsening over time.

Typically, scholars of state weakness, decline, and failure almost exclusively study countries in Asia, Africa, and Latin America, and it is counterintuitive to group California together with developing countries, given that our state is a global leader in technology, cultural production, agriculture, and tourism.  However, we believe that California is beginning to show features of political and administrative incoherence usually found in developing countries.

True, public administration in California is fairly resilient in the face of the current crisis, and it continues to fulfill basic functions despite the seemingly permanent fiscal chaos in Sacramento: the highways are patrolled, judges render verdicts, children go to school, public health and public order are maintained, and the state university systems still graduate tens of thousands of students each year.  Yet, while our ‘state institutions’ are not ‘failing’ in the strictest sense, these institutions are undoubtedly in decline and are in danger of severe, irreparable, long-term damage.

State Decline in California

A simple glance at the newspaper reveals that in virtually every major public sector state capacity and service delivery are rapidly diminishing.  This trend puts paid to the analogy with developing-world public administration.  The federal courts have seized parts of California’s prison system because of human rights violations.  Our public universities have abandoned the core tenets of the longstanding Master Plan with far too little public discussion, and they are well down the road to being indistinguishable from private universities in their funding sources and exclusivity.  Public infrastructure is in abysmal and declining condition.  State parks have been shuttered.  Public servants are commonly furloughed, and state and local authorities are considering selling off government buildings and other properties.

Given the current crisis, it is hard to imagine that even twenty years ago the public administration in California could deliver services relatively efficiently and at a relatively high capacity.  Today virtually every sector of governance built up over decades of careful investment and planning across the 20th century—from the UC system to the prison system—is in danger of unraveling.

Revenue Management as State Capacity

Why does California find itself in this predicament?  Political science can help explain some causes of this deterioration, which go far beyond the need for simple belt tightening in a time of economic crisis.  In large part, the answer comes from the manner in which our state collects, adjusts, and manages its revenues.  Put simply, extracting economic resources from the population—usually through taxation, and especially from elites—is the core competency of modern, successful states.

Few findings enjoy such consensus.  Raising revenue through taxation is so crucial to state capacity that it forms the basis of large swathes of political science, sociology, and public policy literatures.  From both the right and left of the political spectrum every major scholar of state institutional development—Max Weber, Joseph Schumpeter, Freidrich Hayek, Samuel Huntington, Charles Tilly, and, most recently, Francis Fukuyama—puts the ability of states to raise and manage revenues at the foundation of their institutional success or failure.  States that cannot fund themselves effectively through taxation lapse into institutional decline; states that utilize other sources of revenue such as tariffs or oil and mineral wealth generally fall prey to their own unique pathologies such as economic inefficiency or the ‘resource curse’.

Collecting revenue through taxation, especially from elites, is the single most important task of successful modern states, and political scientists consider it one of the best indicators of the ‘health’ and ‘effectiveness’ of the wider set of institutions that govern society.  Citizens can argue over whether the state should be ‘generous’ or ‘stingy’ with its spending, but every government needs the capacity to adjust revenues in a flexible fashion on a year-to-year basis, given economic boom or bust.  This flexibility is an obvious cornerstone of any rational budgeting process: it is much easier to tweak tax rates or revenue sources than to tweak the bureaucracies that they fund—at least without damaging the decades-long cumulative work that it takes to build successful political institutions in the first place.

Yet the government of California is not able to generate consistent and stable revenues, or even adjust this revenue in the face of changing economic conditions; in particular, the state finds it exceptionally difficult to extract resources from elites such as corporations, millionaires, and landowners.  It is, thus, unable to perform the core function of successful modern governance.  While California can issue debt to finance its short-term deficits, borrowing is only a second-best solution to true fiscal solvency, especially given the political difficulty of running large surpluses to pay down debts rather using surpluses to increase services or decrease taxes.  As a result, we are now witnessing the beginning of a sharp decline in California’s capacity to provide public services.

Institutional Constraints in Sacramento

California’s revenues whipsaw through the business cycle due in part to an overreliance on highly volatile revenue from income taxes, sales taxes, and fees rather than relatively stable revenue from property taxes, but more importantly, due to a world-historical legislative logjam in Sacramento related to taxation.

The legislative logjam exists largely because of the combination of two dynamics: first, a counter-majoritarian requirement that raising taxes requires a two-thirds vote in the legislature; and second, new interest group politics that enforce a doctrinaire anti-tax discipline on the small-but-just-large-enough Republican minority in the legislature.

Until it was repealed last year, California had operated under a supermajority requirement to pass a budget since 1933.  With the passage of Proposition 13 in 1978, voters enacted an additional supermajority requirement to raise taxes, which remains in force.  The original, budgetary supermajority rule existed with little problem for roughly sixty years, and Proposition 13’s supermajority was commonly surmounted in the 1980s and early 1990s.

Republican and Democratic legislators alike responded to California voters’ preferences for high-quality services paid for with high taxes on corporations and the wealthy, including higher taxes on landowners than currently exist.  As long as the two political parties could find negotiating space, the supermajority requirements did not preclude high quality administration, paid for in full.

This high quality administration brought significant improvements in our state’s human development.  During the 20th century, our state became the technological capital of the world, the center of the greatest public education systems in human history, and a home where most people enjoyed a relatively high standard of living.  The California Golden Age was not a fluke of nature caused by our sandy beaches and excellent skiing; prudent, high-quality public administration funded by taxation was responsible in large part for these circumstances.  We were both born in California under this social contract, an arrangement that is under siege today.

The New Age of Ideological and Party Discipline

Democrats have controlled the legislature almost continually since 1970.  And starting in the 1990s, Democrats have enjoyed ever-larger majorities, reflecting the growing dominance of Democratic Party registration and left-leaning policy preferences in California.  These majorities would prefer to tax corporations and the extremely wealthy in order to maintain what they perceive as an equitable provision of public services.

Yet, while these large legislative majorities have had the responsibility and the democratic mandate to maintain the high-quality government services they promised during election campaigns, they have not had the authority to pay for these services unless they could draw some minority party members to their side, or win an almost unobtainable two-thirds of the seats in the legislature.  This arrangement essentially granted a veto to a well-organized minority faction in the legislature, which was not a problem so long as there was bargaining space for the two parties to compromise.  But starting in the late 1990s, the dwindling number of Republicans in the legislature figured out this leverage, and they have used it to hold hostage virtually any tax increase, despite being unable to convince a majority of voters in the state to endorse their small-government agenda and elect more Republicans to the legislature.

What precipitated this change in Republican legislative behavior?  Republicans, even early in the ‘Tax Revolt’ era, had previously considered taxes to be a normal public policy tool.  Today taxes are anathema.  Republicans have shifted their legislative voting patterns because deviating from the ‘party-line’ has become political suicide; most importantly, these legislators are reacting to a new ideological and interest group driven party discipline in Sacramento.  Relative to their left-leaning counterparts, right-leaning, anti-tax interest groups are better organized, better funded, more ideologically driven, and less pragmatic.  With fewer legislators to pressure, right-leaning groups also have better focus.  As a result, Republican legislators face nearly insurmountable incentives to vote against any tax increases (even tweaks!), because right-leaning interest groups can very credibly threaten ‘defecting’ legislators by running primary challengers against them or by withholding campaign donations or endorsements.  Among the most effective such pressure groups are the Howard Jarvis Taxpayers Association and Americans for Tax Reform, led by Grover Norquist.

Term limits, uncompetitive redistricting, and a rightward shift in preferences among Republican voters contribute to a system in which independent-minded Republican legislators are unwilling to strike a bargain with Democrats on taxes.  Yet we believe the single biggest explanation of Republican legislators’ voting behavior on tax policy is the effect of the anti-tax interest groups. Events during the height of the recent budget negotiations strongly suggest that interest group pressure, rather than voter preferences or uncompetitive districts, drive Republican behavior in the California Legislature.  On June 10, the newly created California Citizens’ Redistricting Commission released its first draft maps.  These maps radically realigned virtually every legislative and congressional district, and the media and analysts breathlessly declared the maps a political “tsunami” (San Jose Mercury News), a political “earthquake” (Politico), or another such dramatic event.  Eric McGhee at the Public Policy Institute of California determined that the realignment was so complete that 25 out of 120 state legislators would share a district with another incumbent legislator, and that perhaps as many as seven additional Assembly seats and four additional Senate seats were now competitive.  At the time of the budget negotiations, a consensus emerged that in the 2012 general election, Democrats had a very good chance of picking up a couple of seats in each chamber and reaching the two-thirds majority necessary to raise tax rates and call a constitutional convention.  These ‘tectonic’ shifts could not have escaped notice of the Republican legislators, and they happened just as pressure to agree to Governor Brown’s budget plan was highest.  Yet budget negotiations broke down only a few days later.

Even though the redistricting tsunami and the subsequent breakdown of budget negotiations happened nearly simultaneously, we believe that if voter preferences were driving legislative behavior during the budget negotiations then two things could have happened.  First, Republicans in newly competitive seats could have switched their support to the Governor’s budget to appeal to the preferences of the median voter in their new districts, with Brown making some minor concessions.  Second, the Republican caucus as a whole could have shifted the bargaining terms to react to their newly precarious political position.  Neither event took place, which suggests that the pressure of anti-tax interest groups—which was intense and constant both before and after the release of the redistricting maps—trumped legislators’ perceptions about voter behavior in their districts.  Future, more detailed, multi-methods research should be able to answer these questions more comprehensively.[1]

On the other hand, with less intense pressure coming from their own interest groups, Democrats have repeatedly proposed significant spending cuts over several budget cycles.  In other words, the incentives are misaligned for a ‘grand bargain’ that cuts some spending and raises some taxes and, indeed, are aligned asymmetrically between the two parties:  Republican legislators are less willing to bend than their Democratic counterparts.  Governor Brown proposed a ‘grand bargain’, as Governor Schwarzenegger did before him, but unless the incentives facing Republican legislators, the supermajority requirement for taxes, or both, change significantly, our political leaders will be unable to slip the iron fetters on the budget process.

These political arrangements act as a ‘ratchet effect’ on government finances in California regardless of economic circumstances: tax rates go downward easily, but upward only with herculean effort.  Yet, instead of dramatically lowering public expenditures as was intended (‘starving the beast’), the ratchet effect has led to the type of hand-waving, smoke-and-mirrors budgetary gimmicks that have characterized budget negotiations in Sacramento for at least a decade and have put California’s credit rating in the tank.  (Ironically, the same political factions that wish the government to operate ‘like a business’ have prevented California from raising taxes in the same fashion that any business might raise its prices.)

The budget enacted on June 30 is a vast improvement over the hand-waving budgets of the Schwarzenegger era, but its success relied heavily on luck and the passage last year of Proposition 25.  Higher than anticipated tax revenues and the new simple majority requirement for budgets that do not include tax increases allowed the Democratic legislature and Governor Brown to enact a budget without Republican interference.  But the budget deal punted again on raising taxes on the wealthiest Californians and corporations.

A Grim Future

The risks of continued gridlock are stark: far fewer weeks of K-12 education per year, decrepit roads, poor families and the unemployed abandoned to their fate, higher education focusing not on the best students but on the most ‘profitable’ ones, and declining standards of living for all Californians.  Yet, changing the state constitution to lower the supermajority requirement for tax increases requires the same legislative supermajority, and the anti-tax discipline enforced on Republican officeholders shows little sign of abating.  If anything, California has exported its longstanding anti-tax ideology, almost off-the-shelf, to the rest of the country.  Similar budgetary gridlock is a growing concern in Congress, where external actors such as the Club for Growth, Americans for Tax Reform, Americans for Prosperity, Fox News and its commentators, Rush Limbaugh, and various corporate-funded Tea Party groups impose an increasingly strict discipline on Republican congressmen and women, short-circuiting any attempts at brokering legislative deals with Democratic colleagues, such as during the recent debt-limit negotiations.  But instead of a supermajority requirement for tax increases, Congress is struggling with its own institutional hurdles in the form of divided government and the Senate filibuster.

So for the foreseeable future, our state institutions will likely be left in a condition of arrested development and decline—similar to struggling developing countries—despite large majorities of the public and the legislature supporting high-quality public service provision.  (The public also likes low taxes in general; but clearly supports higher taxes on the extremely rich and even themselves, if such taxes are linked with maintained or improved public services.)

Since the collapse of the efforts of the California Constitutional Reform Commission (1995), most attempts to precipitate thoroughgoing constitutional reform have failed.  A recent bright spot has been the ongoing work of the California Forward coalition.  Previous editions of this journal offered many reforms worthy of consideration, and a few key reforms have recently passed.  The Citizens’ Redistricting Commission (Proposition 11) seems promising even if it failed to change legislative behavior in the most recent budget negotiations; perhaps after future elections legislators will be less responsive to interest groups and more responsive to the electoral center.  Simple majority budgeting (Proposition 25) has already led to the first on-time budget since 2006 (only the second in a decade), even if the final budget agreement still relied on a huge dollop of luck.

However, the most politically unpopular but necessary reforms remain in limbo: adjusting Proposition 13’s property tax rules, removing the supermajority requirement for tax increases, reforming the popular initiative process to reduce or eliminate budgeting through the ballot box, and loosening term limits to undercut the power of interest groups.  Furthermore, other promising, more far-reaching reforms—such as introducing some amount of proportional representation, switching to a unicameral legislature with more representatives, or eliminating unnecessary or duplicative local government authorities—are likely too ‘wonky’ or ‘foreign’ to appeal to California voters.  Asking voters to approve unpopular or obscure and unfamiliar reforms in a piecemeal fashion through the initiative process seems destined for failure.  Far more promising is bundling these bitter pills with other, more popular reforms—such as further decentralization or realignment, or a rainy day fund—as part of a broader constitutional ratification campaign in which both political parties, and leading Californians, have endorsed the whole charter, even if they object to certain parts of it.  Piecemeal reform risks allowing necessary members of the reform coalition—most importantly, the two political parties—to defect on individual initiatives and campaigns.  While a convention strategy is not without risks of dysfunction and deadlock, these risks can be mitigated with careful planning and preparation.  A convention strategy also has a chance of internalizing tradeoffs and encouraging ‘buy-in’ among the deeply divided and mutually suspicious stakeholders across California, in a way that the alternative ‘expert commission strategy’ does not.

A constitutional convention sounds more dramatic than it really is: since 1945, various US states have enacted 15 new constitutions, usually through conventions.  While our constitution has been amended hundreds of times since statehood, California has not had a constitutional convention since 1879, and has not had root-and-branch revision since 1976.  California is due for such far-reaching constitutional reforms.

Our diagnoses of the problems and our prescriptions for change are not novel—California has been in a budget crisis for a long time.  But it is not too late to arrest our state’s institutional decay; it will require sustained, intense political pressure on both Republican and Democratic legislators to call a constitutional convention.  That pressure can only come from Governor Brown, major interest groups, and the public at large.

 

[1]  An alternative explanation is that internal discipline kept the Republican caucus intact. However, we believe that intra-caucus discipline is being enforced by the external interest groups noted above; and that, for all intents and purposes, intra-caucus discipline is identical to interest group discipline in the California legislature. With severe term limits, incumbency loses its power to insulate legislators from interest group pressure, and power shifts from elected officials to lobbyists, consultants, and interest groups.

My Trip to Ankara

July 3, 2011

From May 27 to June 3, I left Nicole in Istanbul and traveled to Ankara. I was hoping to set up contacts for when my field research (and not the background research) actually started at the beginning of July. Ankara was as advertised: very modern, wide streets, car-centric, a bit soulless. I stayed in a nice area, called Çankaya. This area is near the ministries and agencies I wanted to approach about obtaining data.

So, one of the problems with not knowing much Turkish yet, is that when you walk in cold into a ministry and ask for help, it takes about an hour to find someone who speaks a bit of English. Then that person just tells you they have no data for me. Even just data tables, let alone reports in English.

But, as always, the World Bank Public Information Office was helpful. They had several background reports on development projects in Turkey and the Southeast in particular. The Southeastern Anatolia Project also claimed to have many reports in English, but they don’t exist electronically (despite being written over the past decade), and exist only at the regional HQ in Şanlıurfa. So I have to schedule a trip there.

I also signed up for access to the National Library, which should have annual reports from many ministries, as well as provincial yearbooks that might help construct a dataset. Hopefully I have access when I return to Ankara.  Unfortunately, the library seems to be the local ‘meet market’ for high school and college students, so it is slammed packed.  Maybe now that school is out, the library will be a bit more bearable.

Otherwise, the city got the job done as far basic field research needs: cheap food and accommodations, beer, and internet access.

Our Life in Istanbul

June 15, 2011

By Nicole

In March George and I made the big move to Istanbul. After months of mulling through our options we decided Turkey would be a relatively inexpensive–yet exciting–place to work on our dissertations. After sadly leaving my job at PPIC, I am happy to say that this is the first time since, well, ever that I am devoting my time solely to school. No work for me! Only dissertations!  But really, it’s time for us to get these suckers done. So I had to put my workaholic attitude aside for a spring and summer.  Although George has lived abroad before, this is my first time living outside of the United States, and will be the longest time I have lived outside of California. Needless to say, Turkey has been quite an experience so far.

We arrived on March 23 with way too much luggage, without a place to live. So, our excess baggage was particularly problematic as we bounced around several shoe box-sized hostels. The first two hostels were pretty much unlivable, even for a couple of days. This motivated us to diligently look for an apartment.

Still, the process was trying, and took a couple of weeks. We finally hit the jackpot and found an apartment in the Taksim Square area of Beyoglu in the New City. Ironically, it was right across the street from one of the hostels we stayed in so it seemed meant to be. Before we were able to move into the apartment, we found a hostel in the backpacker area of the “Old City” near the major historical sites. We spent several days there celebrating our arrival in Istanbul–and having a nice place to live–over hookah and Efes beer; as a result are now VIPs at the Sultan hostel.  (We also saw all the major historical sites.)

The apartment itself is perfectly setup for us: it is large, has two large desks and a king-sized velvet chair for George to use, has a dining room, and comes with lots of funky art on the walls.  Best of all, it is located just off the main pedestrian thoroughfare in Istanbul’s new city, Istiklal Caddesi. We are surrounded by a thriving bar and restaurant scene, and are put to sleep each night to the sound of thumping techno beats. We love it! Unfortunately we will only be living here for a couple more weeks, at which point we will be off to Southeastern Turkey.

For those of you who have never been here, Istanbul is a city of about 13 million people. It spans two continents across the divide between Europe and Asia. The divide runs from the Mediterranean Sea through the Dardanelles, the Sea of Marmara, and the Bosporus, ending in the Black Sea. Istanbul straddles the Bosporus, giving it both a European and Asian side. The European side is itself split in two by the Golden Horn, an inlet that separates the “Old City” and the “New City.” The Old City is where all of the ancient Roman, Byzantine, and Ottoman ruins are, and is the main tourist area of Istanbul. The New City is much more cosmopolitan and modern, and is the center of Istanbul’s nightlife, dining, art, and shopping.

Turkey is about 98% Muslim, but is one of the most liberal Muslim countries in the world. Many women in Istanbul wear head scarves, and in some areas full black cloaks are won. But one of the first things I noticed about the city is how diverse it is. There are many different ethnic groups that live in Turkey and quite a range of religiosity; we have run into some pockets of the city where all of the women are covered and in other places it feels like walking in Union Square.

Anyhow, the language barrier has not been too much of a problem for us because most people we have encountered know some English. And we have learned enough Turkish to get by. I’d say the worst things we’ve had to deal with in Istanbul are: terrible traffic, smog, sexism and the impossibility of exercising outside (I will comment on this later), it is not pedestrian friendly, and we have to live on bottled water.

But despite some small setbacks, George and I have both grown to love Istanbul. The people are very friendly. The Turkish food is great. The views from the terraces are phenomenal: Istanbul has a gorgeous skyline and from rooftops you can see the Bosporus Strait, the Sea of Marmara, the Golden Horn, and the many  gorgeous mosques at 360 degrees. Istanbul is very vibrant and exciting, and we each learn something new everyday. We both recognize how fortunate we are to live here even for this short time.

Preview of blog posts to come…

June 11, 2011

So, we have a lot to catch up on. Nicole and I are going to try to fire off as many blog posts as we can over the next six weeks. Here is a list of things we have decided to post on:

  • Istanbul: What it’s like living in the big city, what we think of the sights
  • Our apartment and neighborhood in Istanbul: going to sleep to thumping techno beats
  • Our trip to Plovdiv, Bulgaria: How awesome and cheap it is there–especially the wine
  • Turkish food and beer: Kebap, mezzes, and Efes
  • Working out in Istanbul: Nicole’s aborted attempts to exercise outside of the apartment. And relatedly, sexism in Turkey
  • Rooftop terraces in Istanbul
  • California budget crisis
  • George’s solo trip to Ankara
  • The difficulties of researching in Turkey and researching American politics in Turkey
  • How reading U.S. political news causes Nicole to have a mental breakdown
  • Istanbul nightlife
  • Prince’s Islands: no cars allowed!
  • Turkey’s 2011 Election
  • What it’s like for Nicole to live abroad for the first time
  • Trip back to Kosovo
  • Moving to Diyarbakir and exploring southeastern Turkey
  • Ranked Choice Voting, democratic legitimacy, and racial politics in Oakland
  • Redistricting-a-palooza in California