Take the A Train—Outta Heah

In the last week America’s remaining certifiable egomaniacs Presidential candidates have descended on the center of the known universe and current source of these dispatches, New York City. As far as I can find, this is the first time that New York will ever hold a standalone competitive primary for both parties, which makes this campaigning phase notable and unique.

While it may be nice to have national politicians paying attention to New York for something besides fundraising or a UN meeting, it also means we are currently being treated to a classic aspect of political behavior which, while not new, seems to have taken on a more distasteful veneer in the era of professional campaigns. This ploy is the Attempt To Fake Being A Regular Person: the construction by campaigns and candidates of situations that make the single human to whom they hope to deliver control over the Executive Branch, the armed forces, the nuclear arsenal, and all of the duties, privileges, and trappings of the Presidency seem like a Regular Person.

This should be a folly. None of the remaining candidates (or, in fact, any of the remotely plausible candidates in any Presidential election for more than half a century) live anything like a “normal” American life—if we could even pretend to construct or imagine such “normalcy”. Some of their work is certainly reflective of tasks that most Americans carry out in a professional setting—meeting with colleagues to work through issues, reading and writing emails, trying to keep projects moving—and there are similarities in their personal lives—they do have to eat and sleep, I presume—but much is still very different. I would venture a guess that the share of Americans who are constantly surrounded by armed guards (who may or may not enjoy the wholesome company of Colombian prostitutes) is probably between 0.01% 0.001%.* It’s very uncommon, and reflective of a life that’s quite different from the lives of just about everyone they seek to represent. Politicians are also disproportionately at the top end of the income distribution, to pick out another example totally at random.

Plenty of Americans are unintelligent or ill-informed (the dear reader may be interested to know that at least half of Americans are of below-average intelligence), but it’s probably fair to say that most people implicitly understand that national politicians live in a different sphere from the rest of us. As a result, politicians and their campaign teams know that they have to work to seem like Regular People. Talk like Regular People do—our President, for example, has been guilty of this at times—and say that you do “normal” stuff.

This conveniently, and long-windedly—I didn’t call this blog “Brief Notes Across the Pond” for a reason—brings us to this week’s guilty parties: the junior Senator from Vermont and the last Secretary of State. Bernie Sanders kicked off our display of thoroughly avoidable and embarrassing Attempts To Fake Being A Regular Person by telling the New York Daily News that he had taken the subway “about a year ago”. Any attempt to verify this statement, Sir Humphrey Appleby would have said, is sufficient to cause severe epistemological problems: Sanders quickly revealed that he thought the subway was still accessed using tokens. We could easily put this down to the imperfect memory of a busy politician, but the following back-and-forth with Sanders suggests strongly that he was trying, and failing impressively, to burnish his reputation as a Regular Person.

Not to be outdone in shameless Attempts To Fake Being a Regular Person, Hillary Clinton’s team organized an elaborate Subway journey for the arduous and interminable distance from Yankee Stadium-161 Street to 170th Street in the Bronx. Clinton took 4 or 5 swipes and about 30 seconds to pass through the turnstile, had security and media take up a decent portion of the train car who stopped at least one person from getting off the train at 167th, and had the gall to talk to a stranger wearing headphones (of all her offenses, this is by far the worst). If there were ever any doubt that she is not a Regular Person, she effectively dispelled it during that fifteen-minute jaunt.**

Why do Sanders and Clinton feel the need to lie about or manufacture Regular Person-ness? Do they really think we are stupid enough to think they actually live in relatable ways? (Possibly yes.) They and all of their colleagues should quit while they are way behind. At the same time, the rest of us shouldn’t expect our politicians to be Regular People, but to gather views with attention and empathy and work to make good decisions based on evidence and articulated principles. Hopefully, politicians can represent us effectively without being representative. But more on that another time.

If you’ve made it all the way to the end of this, head over to YouTube for some Duke Ellington.

*This means between 30,000 and 3,000, which I’d suggest is not an unreasonable guess on the basis of exactly no data.

**Any discussion of subway riding stunts by politicians would not be complete without mention of Mayor Bloomberg’s elaborate car-to-express maneuver.

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Presidential Tax Calculators Are Misleading—Stop Publishing Them

Amid the din of insults and sloganeering that is the American presidential election process, a few places on the series of tubes that make up the internet are continuing to engage in serious discussions about the policy preferences stated by the various remaining self-aggrandizing lunatics candidates for president.

Attention to genuine policy—as opposed to catchphrases—is commendable, though also disappointingly rare. However, there is at least one manifestation of policy journalism that has no place in a thoughtful discussion: projections of changes to individual tax burdens inherent in the candidates’ proposals. This tool set up by Vox and the Tax Policy Center is particularly misleading, although graphs of tax changes across the income distribution aren’t very useful either.

We’ll leave aside for the moment the fact that the chance of any candidate’s plan getting passed in its current form is nil, because this is less important than the main point: taxation is only half of the impact of these fiscal policy changes. Cruz and Trump’s plans include large reductions in taxes across the board, and Sanders’ plan includes substantial increases in taxes, particularly for the wealthy but also across the income distribution, but this is only a very limited picture. It doesn’t include, for example, the impact of Cruz’s national value added tax plan on net income, as this can’t easily be calculated for any individual; it will depend on the quantity and distribution of consumption between different goods.

The other half of the picture that is ignored by this analysis is the impact of government spending. Even the most conservative observer would agree that the government can transfer money across the income distribution, however inefficiently such a person may assume the government will be in doing so or the long-run implications for incentives to economic activity. Sanders is not simply proposing to raise taxes, but to raise taxes and then spend the money in ways that he claims will help lower and middle income people.

This means that a simple analysis of income tax changes is pathetically incomplete. Donald Trump will spend most of the next 7 months (barring a highly entertaining Cleveland convention) telling you that Hillary Clinton will raise your taxes while he will cut them. Even if this is true (which will depend on your income), it’s intentionally misleading. Trump would try to cut taxes as President, but tax cuts are a cost that someone will have to pay, and that person may well be you, in the form of government services, public investment, future public benefits, or interest on the national debt. Sanders would try to raise taxes as President, but that money would be spent (in the same equally unlikely scenario that includes 1)Sanders winning the presidency and 2)Sanders pushing through tax increases) on public provision of healthcare, public services, and infrastructure.

In brief, public spending also has distributional consequences, and if this isn’t included in the calculations, you’re better off not publishing the tax tool—it’s highly misleading and presents government as a fixed institution that either takes more or less of your money and does nothing with the tax revenue it does collect. This is a very American view, but one that continues the distorted political discourse around public spending and fiscal policy that has dominated the last 35 years. News organizations should stop publishing these tools until they can account for the full impact of both taxation and spending.

New Dispatches Coming Soon

Yes, it’s true! After more than a year of absence (blame the library of Sir Thomas Bodley, the existence of Middle Common Rooms, and education-induced financial deleveraging), more dispatches are on the way.

(He writes, as if that is a good thing.)

The Essential Question of Scottish Independence

Today, more than four million Scots will go to the polls to decide whether their country will become independent from the United Kingdom. After more than three centuries of union, a few years of campaigning may divide Scotland from the rest of Great Britain and Northern Ireland.

A yes vote would be cataclysmic. It is also unlikely. Just about every poll has shown a lead, albeit a slight one, for the no side. Something in the region of 46-48% yes and 52-54% no is probably a reasonable expectation. Getting out the vote may be a moot point, given the atmosphere around the campaign and the near-universal understanding that this election matters.

If we’ve learned one thing from the campaign, it’s that even in jaded western democracies, if people are provided genuine power — not mediated through representatives or bureaucracies — over substantial and comprehensible decisions, they will vote.

Despite the consistency of the polls, how the Scottish people will vote is still a matter of some concern, particularly in Westminster. There have been suggestions that David Cameron could face calls to resign if Scotland votes yes, and that his premiership and reputation have already been irreparably damaged by presiding over a near-split in the union. This is quite unfair on Cameron. He is not the cause of the Scottish independence movement, but has merely had the misfortune to be Prime Minister of a center-right government that is unpopular north of the border.

But it is the question of the decision, rather than the conclusions we can draw from the campaign or the recriminations from the result, that is more important for today. The polling gives us a good (although not perfect, considering the lack of past comparisons) sense of the probable outcome. But how should the Scots vote?

It’s not for any of us outside to lecture one way or another — on the importance of a stable currency or the empowerment of self-determination. However, there are some points that can lead us toward ways to answer the referendum question.

First, it is very difficult to conceive of a situation whereby Scotland will be economically better off as an independent country. Not impossible, but difficult and unlikely. Between the issue of the currency, dependence on the fluctuations of oil prices for the treasury, uncertainty over its trade relations, and the likely movement of many large corporations, an independent Scotland will need excellent policies, leadership, and fortunate external circumstances. None of those can be ruled out, but the necessity of a combination makes them unlikely. If nothing else, we can be quite sure that an independent Scotland will have a less stable economy than Scotland would within the UK.

Second, independence doesn’t need to be about improving the Scottish economy. Frankly, it shouldn’t be. The people of a geographic region who want to be independent have usually drawn that desire from their common identity and solidarity. This may be why the constant lectures from various wise and learned professors, economists, policymakers, and even celebrities have failed to convince around two million Scots. These people are probably right on their own terms, but they are fighting on the wrong ground.

Scotland has a history, it has laws, a parliament, a language and an accent (or a range of them), it has a football league and national teams. These elements, and much more, make up the Scottish identity and their sense of nationhood. This is more than many other states had at their independence. And many other states, when they chose to become independent, could not have expected a brighter economic future on their own. In 1776, cutting adrift from the trade and power networks of the British Empire was probably an economically irrational choice for the American colonies (the inhabitants of which were likely just as divided as Scots are today). The Americans did it anyway, due to a variety of factors that included a growing sense of solidarity among themselves and antipathy towards their rulers from far away. They, like the Scots, still had some affinities with England, Wales, and Ireland, but preferred the bonds between themselves to those with their erstwhile countrymen.

There is a sense in which at least some Scots seem to view the parliament at Westminster as a foreign power intervening in their affairs, and while there are huge differences in degree from the American case, the essential point remains the same: independence isn’t necessarily a choice based on calculable and rational economic factors, and for people who believe in national self-determination, this is good. Life and nationhood are about more than account books. At the same time, privileging non-economic factors imposes costs.

The question every Scot will have to answer today is whether the incalculable value of independence is a greater good than the calculable and tangible costs of cutting adrift from the UK.

Quick Thoughts: Cantor Loses Republican Primary

Eric Cantor (R-VA) was roundly beaten 55.5%-44.4% by Tea Party challenger David Brat in Tuesday’s Republican primary. Here are some first impressions of the result:

  • A couple of weeks ago the media were calling the Tea Party “dead.” The basis of this claim was that the Republican mainstream has shifted far enough to the right to pick up Tea Party endorsements and voters. The results of last week, with Thad Cochran (R-MS) going to a runoff against Chris McDaniel, and this week show that shifting in the wind isn’t always good enough. The Tea Party’s politics of logical conclusions and opposition to any compromise with Democrats still have a hold on a substantial part of the Republican party — and a part that votes in low turnout elections. Essentially the Tea Party has taken over the Republican party, and it still has enough of a draw to knock off “establishment” figures.
  • A quick bit of political geography: Cantor won the northern three counties of the district plus the city of Richmond. Brat won the rest (the southern six counties). I need to dig into the numbers here a bit more, but I believe the northern counties + Richmond were tighter in the 2012 presidential race than the counties won by Brat. This might mean what is commonly understood: the bigger the Republican margin, the more likely a portion of the Republican electorate will cut off to the right. Not shocking, but some more evidence to suggest that establishment candidates in very safe seats (safe from Democrats) will remain under threat, particularly if they touch a third rail issue like immigration.
  • Here are Cantor’s margins of victory (by percent) since he was first elected to the House: 2000 – 52; 2002 – 39; 2004 – 52; 2006 – 30; 2008 – 36; 2010 – 25; 2012 – 17.  Cook Political Report has the district as R+10. I don’t know the Democratic candidate, but with a good one, this district might just be in play in November, especially if Cantor runs a write-in campaign.
  • The Republican party is going to continue to tear itself apart on immigration. The hard right won’t give an inch on this issue, and is ready to devour anyone who tries to compromise. This is both bad for the country (the current system is obviously not functional) and bad for the Republicans. It is very unlikely that they will be able to hold back the dam in the red states that are going purple much beyond 2020 — those state legislature elections will be very significant — and, if the Democrats don’t mess things up as they usually do, the House could be back in their control with a substantial majority.

That’s all for tonight. More on this in the coming weeks.

The Number One Criticism of Financial Fair Play is Wrong

Financial Fair Play is a burden on those poor suffering clubs that were bought up by billionaire owners who have poured money into them. It’s a heartbreaking story of UEFA oppressing some of the world’s richest people and most successful football clubs.

Right? Wrong.

FFP will have a number of results, but keeping the pitiable Roman Abramovich from spending as he would like is no tragedy. Yes, it will prevent massive injections of cash from outside investors. Shrewsbury Town or Fortuna Köln won’t be able to rocket up the divisions and join the elite clubs in the Champions League courtesy of a wealthy backer. And that’s good.

The idea that an owner bankrolling a relatively less successful club is a great story of self-improvement is simply stupid. It isn’t. Winning the lottery can happen regardless of one’s personal qualities. You can be responsible with money or not, you can work hard or be shiftless. In football, clubs could spend recklessly or be responsible, put time and investment into developing players and engaging with their fanbase, or ignore these areas – it doesn’t matter, either way a club could be the beneficiary of an external capital injection.

What is common to most of the clubs that have benefitted from these owners is that they are clubs in big markets: Chelsea, Manchester City, PSG, and (to a lesser extent) QPR. (The main exception would probably be Wolfsburg.) Well-managed? Sometimes yes, sometimes no. These aren’t clubs that worked hard and made good. They got lucky, and are happy to join with the pre-existing elite in removing the route they took to the top.

While it is true that FFP may ossify the elite of European football, its critics ignore three facts. First, the top clubs have been entrenched for between twenty and fifty years, and barring colossal failures of management, most of them will retain their current lofty position. There is an element of kicking away the ladder (of external investors injecting capital) in FFP, but no mention of the self-perpetuating system for distributing television money. Why should a sugar daddy owner be the only way for clubs to be transformed?

Second, FFP begins to address some of the rampant inflation in transfer fees and wages of the last five to ten years, and this matters for fans. Keeping up with the sugar daddy clubs requires maximizing revenue, which is a further impetus for clubs to increase their ticket prices. It also encourages them to use leverage in order to compete with clubs that have benefitted from rich owners. Reining in the spending of the top clubs should, over time, lead to a reduction in wages as a percentage of costs, and keep top-flight clubs from suffering significantly due to relegation (especially in England, where the financial drop-off is steep). It almost certainly won’t reduce costs for fans, but it may relieve some pressure on clubs to keep pushing prices up, and it should reduce the incentives for clubs to place themselves in perilous financial situations.

Finally, the system does not close off the one route to the top that we should be encouraging: managed, sustainable growth over time. Clubs can still build up academies, find, shape, and train players, create good teams and grow their fanbase, and make sensible capital investments. Is it a quick route to the top? Absolutely not. Football is a peculiar business in this way; it just isn’t possible to smash the market open with a new innovation or product. At the same time, football fans are very loyal customers and it is possible to cultivate a large following over a long period of time. This isn’t as sexy as the meteoric rise of Manchester City, but it is financially prudent.

FFP is flawed in that it doesn’t account for leverage. Manchester United, Atletico Madrid, and others should be punished for taking on excessive debt without a legitimate economic reason (e.g. building a new stadium or training ground). However, to pretend that it unfairly targets certain clubs who have been driving inflation in football is just wrong. It targets one aspect of football’s financial problems – excessive spending on medium-term investments in players – and is a step towards making the game a bit more fair for all clubs.

Cricket Needs the Mankad

Jos Buttler was run out as the non-striking batsman in the 44th over of Tuesday’s final ODI between England and Sri Lanka, and absolute pandemonium broke out on the cricket interwebs. Buttler had backed up too far, Sachithra Senanayake broke the bails with Buttler a yard out of his crease, and he appealed to the umpire for a dismissal. After consulting with Sri Lanka captain Angelo Matthews, umpire Michael Gough raised his finger and England subsided to 199 for 7.

Others have written very well on Tuesday’s circumstances and the curiosity of asking the fielding captain to uphold the appeal, but there is more going on in this debate. At root, it’s about an essential element of sport: balancing risk and reward.

Cricket can be distilled to the following: the movement of humans and objects around a space that has certain regulated parameters and rules that control the movement of the humans within the space as they aim to achieve set goals (scoring runs and taking wickets). When a batsman backs up, leaving his crease before the ball is bowled, he gains an advantage not explicitly granted to him in the Laws of the Game or the ICC playing regulations, as this movement makes it easier for him to complete a run.

The mankad allows some balance between the batting and fielding sides. Any sportsperson must judge the risks and rewards of an action before taking it, whether making a long crossfield pass in football, raising the pace on a leading group in cycling, or attempting to clear the fielder on the boundary in cricket. Without the potential of being mankaded, batsmen will only be rewarded from backing up; there will be no risk of dismissal. How could this be fair to bowlers or fielding teams?

It obviously is not. Yet every time there is an incident of this type (the two most recent have been R Ashwin’s withdrawn appeal against Lahiru Thirimanne and Murali Kartik’s mankad of Alex Barrow in the County Championship), many people leap to criticize the fielding side! But as Angelo Matthews said today, what else are they to do? There is no sanction imposed upon batsmen who back up to far – except the mankad. In Buttler’s case, they had offered him repeated warnings, and he continued to walk a yard down the pitch by the time Senanayake released the ball. The Sri Lankans were faced with choosing between opprobrium from the sanctimonious British press if they ran Buttler out (see CricketingView’s blog, the first link above, for a sample) or allowing the opposition to steal quick runs by gaining an unfair advantage.

The fielding side needs a deterrent to keep batsmen from walking yards down the track, and the mankad is that deterrent. Quite a few batsmen will get mankaded in backyard and Sunday league cricket after bowlers have seen this week’s reminder of that option – and it’s a great thing for the sport. To maintain (or restore) balance between bat and ball, which is fundamental to cricket, batsmen like Buttler have to be reminded to stay in their crease until the ball is bowled. The threat of being mankaded will keep them there.