Interrogating Statistics

Always check statistics. Look at the units, methods, meanings, and source or sources. It’s easy to say “40% of Americans believe that X”–but what does that mean? How was the number derived? Who derived it?

If properly researched, statistics can produce some of the most solid pieces of evidentiary ground in debates. Rigorous investigation should yield scientific levels of accuracy; that is to say, statistics should be able to meet standards of evidence in the hard sciences, namely repeatability (if you try this ten times you should get the same result). That’s pretty solid ground, especially in the frequently mushy fields of social sciences and humanities.

Here’s an example that I saw yesterday on The Economist website. Watch the video if you have a few minutes: it looks fascinating and groundbreaking. Lots of scientific research is wrong!

Let’s hold on for a moment, though. What are the sources for that information? The narrator pulls a series of numbers out of thin air to change the color of the little squares. Without citing a single source. The difference between 20% false positives and 80% is rather significant…and there isn’t any substantive explanation for why the narrator throws those numbers around. Besides which, it’s not as if scientists only test a hypothesis only once. One of the most important rules of science is the repeatability that I mentioned above.

It is in part because statistics are viewed as being solid that it is vital to understand what they actually mean. Quantitative analysis, unlike qualitative analysis, is generally seen as precise and accurate (unless one is predisposed to doubt the source of the information). If you watch that video without looking for citations and methods behind the numbers, you would simply believe the conclusions as they are presented. In a perfect world, we would be able to trust statistics and the people who derive them–but we can’t. The power of numbers is an incitement to manipulation.

What questions, then, should we ask about statistics? The queries vary a lot by discipline–polling and costing estimates are very different–but they can be grouped into three categories.

First, it’s important to know who produced this information. Was it a group of academics, a government agency, the Heritage Foundation, or the Brookings Institution? Just about everyone has an agenda. The most accurate information will come from sources of proven reliability and/or independence (that is to say, a source which has accuracy as its agenda).

Second, you need to find out how the information was produced. This can be very complicated for some types of information, and involve plowing through many pages of figures and calculations. It’s not always terrible, though: good sources will provide some form of abstract or summary and polling agencies usually publish their questions as well as the responses. The wording of polling questions is a great example of how to investigate statistics: slight changes in the phrasing can significantly affect the responses.

Using the first two parts, figure out what the information really means. This sounds simplistic–it isn’t. A number isn’t a number when it has meaning, when it is used in an argument to prove a point. A responsible reader or debater should know what the number means, and just as importantly, what it does not mean. For example, just because Republican favorability ratings are at or below 30% does not mean that Republican candidates will get 30% in House and Senate races next year, or 30% of the popular vote for president in 2016. The number means that about 30% of Americans view the party favorably. The party, not any individual candidate, and only right now. The meaning is derived from the manner in which the information was found (the second group of questions). This is a sort of path-dependency of statistics: if you take a particular route to find an answer, the route will affect the answer.

The key point of this all is to encourage curiosity and examination. Don’t take statistics without thinking about their source, method, and meanings. It’s easy to throw numbers around, and sophists have been doing this for many years. It’s harder, but vital, that we look into the figures that they spout and try to find if those numbers mean what those sophists claim.

Polarization and Intransigence

Building off of an earlier post about the causes of the current US government crisis, here are some more thoughts about how we got here, and specifically why negotiation is less possible than in the past.

Let’s get theoretical for a moment: imagine that we can place political ideology on a grid (one-, two-, or three-dimensions, it doesn’t matter). The extent of polarization in a two-party system is the distance d between Party A and Party B. Generally, it will be more difficult for parties separated by a greater d to achieve compromise, because the center point between the two parties is very far from their ideal ideological point.

This is a crude theoretical framework, of course: parties would be better represented by an ideal policy point for each party adherent (each voter), combined to create a blob that shows both policy position and density of adherents at each policy position. (This means, if political ideology can be described with a two-dimensional plot, the number of party members at each policy point will turn a two-dimensional blob into a three-dimensional blob, with the largest number of adherents producing the highest “peak.”)

However we design this “map” of American political opinions, an analysis of the change in the distance between the centers of the Democratic and Republican blobs over the past 30-50 years would almost certainly show an increase. The “average Democrat” and the “average Republican” (if we pretend that those exist for a moment) are further apart on policy than they used to be.

The result of this is both clear and concerning: it is much harder for Democrats and Republicans to compromise. Here’s an analogy: you are planning a week-long vacation with a friend. You want to visit Vermont, she wants to visit the Adirondacks. You can compromise by spending a few days in Lake Placid and a few days in Burlington. But what if you want to go to Germany and your friend wants to go to South Africa? It will be much harder to come up with a route that satisfies both of you and doesn’t cost a prohibitive amount. In the same way, if two parties are much further apart on policy, then it will be very difficult–if not impossible–for the sides to find an acceptable compromise.

In this sense, many commentators and armchair pundits (I’m looking at you, random angry people interviewed on the street) have their causation all wrong. The problem in Washington is not that policymakers can’t negotiate. It is that the policy distance between them is greater, so that they cannot develop compromises that they and their constituents will find acceptable. Polarization makes compromise much harder, and after some point the policy distance is too great for any compromise at all.

This problem becomes even more damaging when political actions are “all-or-nothing”–that is, when any change is unacceptable. For example, many Democrats would find any cuts to Social Security or Medicare entirely unacceptable, and many Republicans would find any tax increases entirely unacceptable. The mere action is intolerable (usually because it sets a precedent or impinges upon an inviolable right or principle), regardless of scale.

When voters’ policy points are so far apart, another factor also comes into play, which I will refer to as “otherizing.” Quite simply, because those people whose opinions are over there have such different opinions, there must be something different (and probably bad) about them. Democrats become liberals and liberals become communists. Republicans become conservatives and conservatives become fascists. This means that negotiating with the “other” is increasingly dangerous politics for policymakers, as they may be seen as basically supporting the enemy. Another result is that any proposal from the other side is necessarily viewed with concern and suspicion.

We have seen some of these results in the past few years, and there will surely be more in the near future. In general, the process is clear in theory and supported by the evidence of recent American politics: polarization makes compromise and even negotiation much more difficult. I will explore some of the causes for this polarization in the coming weeks.

Congress isn’t really “The Government”

During the shutdown, many Americans have expressed frustration with the failures, sluggishness, and infighting of “the government.” “Throw the bums in Washington out!” is a popular idea. We’ll leave aside for a moment the fact that we voted for those folks in Washington in order to discuss something more important.

The United States Congress isn’t really “the government.” In political science terms, it is: the House and Senate legislate for the country and therefore govern it, sharing sovereignty with the President, Supreme Court, and state and local governments. But when most people think about “the government,” they mean an amorphous blob of bureaucrats and politicians who do stuff with our money. As the last few weeks have shown, we don’t remember what exactly our government does. There are rather a lot of people who work for the government doing pretty important stuff.

Congress is only a small part of this blob, albeit one of the most visible parts. “The government” also includes things that make us feel warm and fuzzy, like National Parks and National Monuments, as well as organizations that protect us: not only the military, but the National Institutes of Health, the Food and Drug Administration, the Nuclear Regulatory Commission, and the National Transportation Safety Board, to name a few.

We will probably soon forget about most of the services that the federal government provides. However, many people will not forget about the dysfunction up on Capitol Hill–although whether they blame it on the Rs or the Ds will mostly depend on their own political orientation. The trouble for all of those regulatory bodies and other government services is that because members of Congress draw their paychecks from the U.S. Treasury, just like government officials, the problems in the Capitol can easily morph into problems of “the government.” To jump back to political science language, it is easy to conflate “the state” (the legal, regulatory apparatus that includes everything from the Navy to the EPA) and “the government” (the specific group of policymakers in office at this time). People who do the jobs for which Congress has legislated shouldn’t be lumped in with the policymakers who pass laws and make appropriations.

You may detest the people in the Senate and House chambers. But let’s be very clear: they aren’t the same as the Capitol Police, Park Rangers, or food inspectors. Plenty of people don’t like government (a trait curiously shared by Tea Partiers and anarchists), but don’t tar civil servants we the brush we use for politicians. And if you’ve got that brush out for the politicians, don’t forget the feathers.

Dispelling Myths: Your Household is not the Government

If you have paid attention to American politics for any amount of time during a discussion of spending bills, you will have heard some analogy that compares fiscal policy to a household.

This is a terrible comparison. Worse, it’s very misleading. Governments do not have to, and do not, behave like households. Governments have resources on a scale incomparable to any household. They can (unless they are in a currency union like the Euro) literally print money to pay their obligations. They can run deficits in many more years than surpluses without triggering any sort of panic. They can accumulate debts and never have to clear all of their debts.

That last point is probably the most crucial: governments do not have to clear all of their debts. As long as an investor who buys a ten-year bond can expect to get paid back, there is no problem. The government will be able to keep borrowing at reasonable interest rates, and unless an economic catastrophe produces a sharp drop in tax receipts, a reasonable rate of GDP growth will allow the government to take in enough money to pay back the bondholders.

The analogy is even more ridiculous when it is used to compare a household to the US government. Treasury bonds are not like a credit card or a mortgage. When the markets get scared, they don’t come running to American families, begging them to buy things with their credit card or acquire a new house. Investors move their money to secure investments, and US government debt is an extremely secure investment. When T-bill yields fall, it is because lots of investors want to buy government securities. This is good news for the government because it means the interest rates on public debt are lower. This will not happen if you have a variable-rate mortgage. In an economic crisis, banks will be scared to lend to individuals and charge a higher rate of interest, if they lend at all.

After twenty or thirty years, you are expected to pay a mortgage back. If a basic economic unit (individual or nuclear family) continually spends more than it takes in, the credit supply will stop. Lenders don’t think they will be paid back. At the front end of a mortgage, a household will be in far more debt than any country–several times its annual income. A family making $100,000 a year could have a mortgage for $800,000 for an income-to-debt ratio of 800%. Over the period of the mortgage, the family would eventually pay that debt off–all of it. That’s the expectation, and banks don’t lend if they don’t expect to be paid back in full. Government creditors (generally, and in the case of the United States, always) get paid back. The difference is that the family can’t permanently run a debt-to-income ratio of 80-100%–eventually lenders will doubt that they will get their money back. By contrast, people who buy public debt know that they will get paid back. American bondholders have always gotten back every penny that they have been owed, no exceptions. Because of this, and because an economy at a normal growth rate will allow the state to accumulate more in taxes when the debt must be paid, they can finance deficit spending on a year-to-year basis.

Here’s an example: US GDP growth has averaged around 2-3% for the last fifty years. Let’s take a conservative year-on-year growth rate of 2% over ten years. This means that the GDP will be about 20% larger at the end of the decade. In terms of debt, it means the country will have 20% more in tax revenue (ceteris paribus) at the end of the period. Family income is not assumed to grow consistently in this way, which is one of the reasons households have different debt-accumulation constraints. Therefore, an investor could expect that, even if the deficit in year 1 is 10% of GDP, and that deficit is financed entirely by issuing bonds, growth in tax revenue will allow the government to repay its debts with interest. (The US and UK have run deficits that are about 10% of GDP for the last few years).

To sum up: markets do not treat governments like banks treat your family. The US government debt is nothing like your mortgage.

Dispelling Myths: Career Politicians are not the Cause of All Evils

I was watching CNN this morning (I know that I shouldn’t, but I wasn’t able to resist) and they interviewed a guy at a bar in Detroit as part of a “let Americans vent about how much they hate their elected officials” segment. Upwards of 90% of the people who appear in these segments say nothing more than, to paraphrase, “I’m mad! They suck! Get them out!”–which is exactly the type of blind anger that produces political deadlock. Anyway, this one guy that they interviewed placed the blame for the difficulties of the American political process at the feet of “career politicians”.

This is a popular idea, but it isn’t true, not in its entirety. I have railed against the entire Tory frontbench (or much of it) being Oxford graduates who studied PPE, but that is more about social class. If politicians start out as regular folks (read: they don’t go to Eton), they can maintain connections to people and understand what the government can do to help solve local and national problems.

We need politicians who know about government, public policy, politics, and economics. Not everyone understands these areas–in fact, most people don’t. But some people need to. The difference between a legislator who understands macroeconomic principles and one who does not is pretty important: it’s the difference between someone who will not let the United States default on its debt and trigger a global economic crisis, and someone who has no understanding of what default even means. Expertise matters. Knowledge matters.

In fact, I’d argue that a lot of our current problems are due to the exact opposite cause: too few career politicians. Legislators with many years of experience will be better negotiators (on average) and more likely to put practicality over principle. People who enter politics with little or no understanding of the four areas of knowledge I mentioned above, no experience in political negotiations, and who are absolutely committed to a set of principles make terrible politicians. Great campaigners, but terrible legislators. We should look for legislators with a mix of experience in public service and outside of it, whether that be in academia, non-profits, or the private sector–make sure that they know life outside of politics. But politicians have to understand how politics works in order to govern effectively.

Nick Clegg’s Selfish Flexibility

The Liberal Democrat leader and Deputy Prime Minister, Nick Clegg, has signaled his willingness to continue in a coalition with the Conservatives, should David Cameron’s party win the largest share of seats at the next election. Despite their rightward swing in the last three years, the ideological space between the Lib Dems and Labour is still much less than that between the Lib Dems and the Tories–and this is even more true of the grassroots party members than the leadership.

Clegg would likely say that this is a decision to govern “in the national interest.” Don’t believe him. It wasn’t true when Cameron and Clegg proclaimed this as the justification for their May pact in 2010, and it wouldn’t have been true of a Lib-Lab coalition either. Not all politicians are purely self-interested actors, and none can simply be understood in this way–there are far too many complex incentives and pressures for this to be the case. However, I would suggest that politicians at the top levels of national governments are more likely to behave in ways that respond to rational self interest (or what they perceive as their rational self-interest).

To the contrary, Clegg joined with Cameron for political reasons. First, he and his party wanted to be in government during peacetime for the first time since the 1930s. Power-seeking political action is a basic theory of political science and political activity, and Clegg’s participation in coalition fits neatly with that behavioral principle. At the same time, as I wrote at the time, Clegg would have been taking a risk by not entering into coalition as well. (As it turns out, his gamble on the AV referendum entirely failed, but the relative non-responsiveness of FPP systems to polling swings means that, vitally for Clegg, there is still a reasonable chance for the Lib Dems to be kingmakers in 2015).

There was another political consideration at work in 2010 that may have precluded a Lib-Lab pact (aside from Clegg’s personal antipathy for Gordon Brown and the latter’s terrible personal poll ratings). The Conservatives had won the largest share of the Commons seats and a plurality of the raw vote. Should Labour win the largest share of seats and votes in 2015, Clegg will have to choose between a swing back to the left or abandoning the principle upon which he chose to work with the Tories in 2010. A Con-Lib coalition after Labour wins a plurality of seats and votes would be a very controversial move, arguably one that repudiates a swing for change among the electorate.

In a sense, Clegg is just keeping his options open, but his comments were also a response to continued mutterings about a Lib-Lab coalition. As a representative of the right wing of the Liberal Democrats, he is more likely than most to work with the Tories. He also doesn’t seem to get along very well with Ed Miliband, although this could simply be current political necessity. Still, the Conservatives’ rightward swing, particularly the renewed Euroskepticism of the frontbench, may be problematic for a Con-Lib coalition in 2015. As it stands, an in/out referendum may well take Britain out of the EU, and the Liberal Democrats will want to prevent that however they can (although not at all costs).

Given their terrible poll numbers (as low as 8% in one recent YouGov survey) the Liberals’ best hope is a very hung parliament. By that I mean a set of results that leaves them with the most possible leverage, where Labour or the Tories couldn’t make a deal with one of the smaller parties in order to govern (a Lab-SNP-Plaid pact for devo max to Scotland and Wales, for example, may be an option if Labour gets about 315 seats). What Clegg is trying to do here–or what he should be doing, certainly–is create maximum leverage for his party in any future coalition negotiations.

Playing Politics with a Government Shutdown

We have no federal government. Well, not really–there is still a skeleton of administration, security and, of course, Congress. Based on your political views, you will probably have an opinion about whom is to blame for the shutdown. I, too, have a view, but it’s not the point of this article. No, I’m interested in why this has happened, and in the possible long-term results.

The inability to agree on funding for normal government operations is at minimum a democratic failure. This ought not happen in an effective system of governance. Whatever the problems of democratic politics–and there are many for any democratic system–a shutdown is not normal, but a concerning extreme. Even if you are a libertarian, this should concern you: a government shutdown indicates that our political system cannot produce policy. It demonstrates that the ideological divisions are so deep and wide that they cannot be bridged in our current extreme circumstances. (Anarchists and localists may rejoice, as national-level gridlock opens up faint possibilities of fracturing the US into small, self-governing communities. However, this is extremely unlikely to happen.)

The problem we have is simple. The government shutdown is the result of a situation in which neither side can accept the other’s desired outcome. The obvious parallel is the winter of 1860–61: South Carolinians could not accept the result of a Republican President. Lincoln, for his part, could not accept the expansion of slavery in the Western territories. And the war came.

A large segment of today’s Republican Congressional caucus cannot accept the implementation of the Affordable Care Act (ACA), and they want it repealed. As it is his signature piece of legislation, the President cannot accept its repeal, and neither will the Democratic caucus. The current crisis probably could have been avoided if a segment of House Republicans had not tied a continuing resolution to de-funding the ACA–but they did, and from a political perspective, that is probably good for most of those Representatives. They generally represent very conservative districts and their constituents want the ACA repealed, or at least de-funded. Now that the Republicans have nailed their colors to the mast, there is no going back. Politically, to back down now would be to lose face in a very significant way. Both sides, from partisans watching TV on their couches to those battling in front of a keyboard to the legislators in halls of Congress, have dug in their heels.

As an historian, I am intrigued by how this episode will be treated in fifty years’ time. It is a striking (and disastrous) event in American history; it is one with a precedent, but it feels without parallel with respect to the vitriol on both sides. While, in fairness, I was too young to remember the previous shutdown, my hazy political memory does not include the same level of hatred for the other side. This event is more than an individual instance, and I suspect that, looking back, it will form just part of an arc of government crises: from the debt ceiling near-calamity of summer 2011 to now to the next debt ceiling crisis (and yet more crises unimagined). This is a recurrence of the same problem: neither side can accept the other’s desired outcome. The Democrats cannot accept only spending cuts. The Republicans cannot accept any tax increases. And so the cycle continues, with the state limping to the next deadline.

Our government is not functional, and the process is reflective of the nation as well as the legislature. Something has to give, and since neither side looks to be shaking in resolve, we are left with the following possibilities: 1)One side is punished electorally for these crises and the other major party benefits; 2)Both sides are punished by the emergence of a successful third party (very unlikely, hasn’t happened in 160 years); 3)Economic turmoil and federal inefficacy results in increased state divergence in policy and increases in state power (weakness at the center allows growing strength in regional centers; also unlikely); 4)Charismatic centrist president gets elected and uses the constitutional convention clause of Article V to re-formulate the government system (I’d suggest this is more likely than it may at first appear); 5)Breakdown of state authority leading to anarchy (most probably not going to happen, but worth putting on the list for comprehensiveness). (Please feel free to add more possibilities in the comments, I haven’t gone into all the potential results, I am sure.)

As I have said: this ought not happen. A government shutdown is not necessary, and serves the interests of very few people. To invoke Lincoln again, one would hope that the mystic chords of memory would draw the relevant parties towards a conclusion–but that seems unlikely now. Too many lines have been drawn in the sand.