My latest Mathematica demonstration uploaded to the Wolfram Demonstrations Project illustrates income and substitution effects via a constant elasticity of substitution utility function. Below the indifference curves and budget constraints is a graph of the Hicksian and Marshallian demand curves. Note that the graphs can be resized for better projection in front of a classroom.
Download the free player software to run the demonstration.
The Fed posted their minutes from the last FOMC meeting today. Check out the charts at the back that show the shift in the forecasts of the participants on variables such as GDP and inflation going out to 2010. There has been a noticeable shift since January. However, it does appear that the last meeting will be the last rate cut for a while. The Wall Street Journal's Brian Blackstone has a good summary of the minutes.
See also Donald Kohn's speech from yesterday.
Janet Yellen is on the lecture circuit. (Reuters)
"The 1970s were a horrible period. If there's one thing that has to be very high priority, we don't want to go back to a period that is anything like that," she said, critiquing presentations on the economy at a symposium for college students in Tacoma, Washington.
She is, of course, talking about inflation (not bell-bottoms or disco).
"During the 1970s the Fed failed to keep inflation low in the face of supply shocks (which) became incorporated into inflation expectations," Yellen said.
She acknowledges, as I think most of us do, that this is not a simple problem with a simple answer. She's worried about the prospects of lower growth as well. But the fact that she, as one of the more dove-ish members of the committee, is talking about inflation risks is a sign that the tide may have turned.
Always start out the summer with a new book. In my mailbox today... Physics of the Impossible by Michio Kaku.
Kaku was on C-Span2's Book TV recently, and the talk associated with this book was fascinating. Who knows if any of what he describes will come to pass, but if a fraction of it does it would be amazing. Stuff like that is just fun to think about.
Reuters carried the story a few days ago and somehow I missed it.
WASHINGTON (Reuters) - The Federal Reserve's Board of Governors will hold a closed meeting on Wednesday [Apr. 30] to discuss paying interest on bank reserves, one of a number of options officials have been mulling to address liquidity problems in financial markets in case measures taken to date fail to gain traction.
This is not a sudden development, as the article goes on to point out...
Congress in 2006 granted the Fed authority beginning in 2011 to pay interest on bank reserves. At the time, the central bank assigned staff to study the implications such a move could have on its operations.
The staff report is now ready and will be presented to the Fed during the regularly scheduled meeting of its interest-rate setting panel, a Fed official added, declining to comment further on whether the presentation is pegged to any imminent steps to boost liquidity.
This was scheduled to go into effect in 2011, but they are looking for approval to start doing it now. I think that's a good idea. It is certainly not without precedent. Other central banks do it, including our neighbor to the north.
Now, the fact that this was passed back in 2006 went largely unnoticed, but not here. In fact, I even gave you a scholarly reference...
The October minutes are on the Fed's web site. Here's the first thing that caught my eye.
The Chairman noted that the President had recently signed the Financial Services Regulatory Relief Act of 2006, which among its provisions gave the Federal Reserve discretion, beginning October 2011, both to pay interest on reserve balances and to reduce further or eliminate reserve requirements. The Act potentially has important implications for many aspects of the Federal Reserve's operations and the Chairman asked Vincent Reinhart, Director of the Division of Monetary Affairs, to form a committee of Federal Reserve System staff to consider these issues.
They could learn from Canada, the UK, and New Zealand, as this publication by Sellon and Weiner from the Kansas City Fed explains.
And here's a technical paper on how the Bank of Canada does it.
I'll go on the record that this is a good idea. It will help to smooth out the recent fluctuations in the funds rate that garnered so much consternation at this blog among other places. It would prevent interest rate policy from getting in the way of policies for directly injecting liquidity into the financial markets by effectively keeping a floor on the funds rate even during a big injection of liquidity.
Fed Governor Donald Kohn spoke about it back in 2004 as well.
Hat tip to Barry Ritholtz and the WSJ.
UPDATE: Mark Thoma thought of it too.
And now for something completely different...
One type of post that gets people talking is when I discuss the teaching of economics. So a few posts back, I pointed out that the NY Times confused "demand" and "quantity demanded". The Times wrote:
An open letter signed recently by more than 100 economists said the proposed tax holiday would do little to reduce gas prices. In part, that is because a fall in prices would lead to more demand, which would cause prices to return to their earlier level. The result would be that overseas oil-producing governments would get money now flowing to the United States government in gas taxes.
And I said:
The whole sentence about demand is the sort of circular statement that we caution our students not to make but that newspapers print all the time. Not only is it a terrible misstatement of demand vs quantity demanded, it's not even consistent with the claim (advanced by Krugman among many) that supply is fixed.
John Whitehead pointed out something similar in another story. After taking a little heat in the comments, he links back to me approvingly.
Why the heat? Well, I have to admit that when an economics professor starts to pontificate on demand vs quantity demanded, it tends to border on the pedantic. I know it does. I can't stand it, but I do it anyway. Why? Because the misunderstanding often leads to circular reasoning as it did here. You argue that prices fall, which causes demand to rise, which causes prices to rise and you're back to where you started.
Every principles of economics textbook seems to have a homework question devoted to identifying and critiquing that sort of circular reasoning--often from a real-life example like this.
So we've got a a real problem with the terminology here. It's made worse by the fact that the principles textbook terminology has absolutely zero chance of catching on in the wider world. Face it, journalists are not going to use demand and quantity demanded correctly in an Econ 101 sense. Not going to happen. But we need to figure out how to educate them to avoid making hideous errors even if they don't use Econ 101 terms.
I have addressed this before.... Digging into the archives for Polley's greatest hits of November 2005:
Stephen Karlson (Cold Spring Shops) links to Phil Miller's (Market Power) post and mine on a common media mistake. Karlson adds this,
...the source of the confusion in many observers' minds might be in the terminology of introductory economics (and nowhere else in economics) itself.
Much of the discipline refers to the act of drawing a new demand or supply curve as a "change in demand (or supply)," sometimes calling that an "increase" or "decrease" in demand or supply. A new choice along the same demand or supply curve goes by the cumbersome locution "change in quantity demanded (or supplied.)" Bleah. I recommend the use of the term "shift" to describe the drawing of a new curve, and I'm continually reinforcing "left shift" and "right shift" as "increase" and "decrease" have the potential for mischief on the supply curve. A new choice along the same curve is a "movement along."
I agree. Bleah. He is absolutely right that this terminology is only an issue at the introductory level. Why, you ask? Long story. At more advanced levels, the mathematics forces you to keep track of what is going on without resorting to these labels. That's part of it. We (those of us who teach this) also just tend to obsess over making sure students shift the right curve. These labels, properly used, do force you to be clear about what you're doing. But I agree with Karlson that there has got to be a better way.
Unfortunately, "shift" is not likely to catch on with journalists either. That only makes sense if you're thinking of the curve, and most of their readers aren't thinking that way. So I'm still puzzling over this one. Your suggestions, and any discussion on the topic, are very welcome.
Anyway, back to the article at hand, it is true that the writer confuses demand and quantity demanded. But the greater sin is that the passage was not even consistent with the main critique of the tax holiday. And I don't think that these errors are unrelated. Sloppiness begets sloppiness. Once you introduce that circular logic, the next step is more likely to go off-track. If anything, that's why professors need to continue to instill some professional discipline in the use of language to describe supply and demand.
We just need to come up with something that resonates better with journalists.
A summary of all of my recent comments on the proposed gas tax holiday is as follows:
1. The benefit to the consumer would probably not be literally zero. (This is the part everyone has been seizing on as the most charitable thing being said about the proposal. Ok, so be it. If you call that charitable, you go ahead and run with it. See where it gets you.)
My reason for saying it would not be literally zero is that there is evidence that inventories are higher than usual and that capacity utilization is lower than a couple years ago. The system is probably capable of squeezing out a few more barrels, but not terribly many.
I would also add that the open letter signed by over 100 economists says, "...research shows that waiving the gas tax would generate major profits for oil companies rather than significantly lowering prices for consumers." I have already said that I agree with that letter, and I think they were correct (but subtle) in saying that it would not significantly lower prices, leaving open the very sensible possibility that there might be a very small benefit. I fully agree with their wording.
2. While not literally zero, the consumer benefit is likely to be very small. I'd say a third or less of the total (half of what these authors found concerning the Illinois tax holiday in 2000). And I would probably bet the "under" if it came to that.
3. Good public policy should be well outside of the neighborhood of "pointless". (That is, the effects should be economically as well as statistically significant.) This proposal fails, even under my most charitable assumptions.
4. A tax holiday at the federal level will have less impact than the state tax holiday Illinois had in 2000. Then, gasoline could be diverted to Illinois from other states. That's harder to do at the national scale.
5. The average consumer will absolutely NOT notice the difference. Differences in price between locations and over time in the last couple weeks have far exceeded my most charitable estimate of the gain. Econometric studies would be done after the fact. There would be t-statistics, p-values, arguments over assumptions, and in the end some very small, but probably positive, estimates.
In short, I stand by my statement that consumers would likely see a couple (maybe even a few) pennies worth of benefit. But most importantly, the point I was trying to make was that this: This proposal does not have to be literally pointless for it to be a really bad idea. I think that is a worthwhile point to make.
But again, the relevant question is how much the price would have to fall to get consumers to buy up whatever increase in production would optimally be obtained if the tax were temporarily gone. That is, I think, the clearest statement of the question--and the answer is not much.
UPDATE: I have sent a message adding my name to the open letter.
Ok, we need a break from gas tax holidays. This column from John Tierney is nothing particularly earth-shattering in its pronouncements, but it addresses the moderately interesting (and moderately amusing) questions of why people would believe that buying insurance actually affects the future outcome.
But I liked this somewhat tangential remark:
The fear of tempting fate showed up in further experiments with Cornell students. When told about an applicant to graduate school at Stanford who had been given a Stanford T-shirt by his mother, people assumed he would hurt his chances for admission if he had the hubris to wear it. And they believed that a professor was more likely to call on them in class if they didn’t do the assigned reading.
The latter might actually be true. We can read faces, you know.
I posted this as a comment at Angry Bear.
The real question is this: How much would gas prices need to fall in order to induce consumers to buy up whatever additional production would be optimally squeezed out of the refineries if the gas tax temporarily went away?
When you think about it that way for a little bit, it becomes easier to see that the answer is probably greater than zero, but not much.
The most recent data point on refinery capacity from the EIA was 85% in February. Unless things have ramped up immensely in a way that hasn't been seen for years (which due to the higher than average inventories, I doubt is the case), then I am a little bit skeptical of claims that the supplies, even in the short run, are "fixed". (Get this data and more from the EIA.)
From the summer of 2006 to the summer of 2007, inputs of crude oil into the refineries went down, operable capacity went up, and idle capacity went up.
If capacity utilization were on the level it was in 2000, I'd be more inclined to see the supplies as fixed. Any extra capacity would suggest that the consumers would get some benefit from the tax holiday. But again, let me be very clear... the amount that the consumer would benefit would be a small fraction of the tax reduction--5 or 6 cents out of the 18.4 would be as high as I would be comfortable in guessing. Maybe more like 3 or 4 cents. That's just not enough to justify temporarily tinkering with the tax code to win political points. It's bad public policy. If you want to provide relief to working families, fine. There are a dozen better ways.
While looking for something else, I came across this from the Congressional Budget Office...
Various media reports are incorrectly attributing to CBO a figure (that the average driver would save about $30 this summer) associated with a gas tax holiday. CBO has not published such a figure and the citations to CBO are inaccurate.
This misattribution raises a larger point. CBO is a nonpartisan organization, and we are not in the business of scoring or evaluating campaign proposals. In some cases, CBO may have previously estimated or evaluated a proposal similar to one subsequently proposed in a campaign and those estimates generally are available on our website.
The bottom line: If you read something suggesting that we have issued numbers or an analysis about a campaign proposal, you should be skeptical — and also let us know.
Jabberwonk posts the open letter signed by a number of economists opposing the gas tax holiday. Here's the key paragraph.
There are several reasons for this opposition. First, research shows that waiving the gas tax would generate major profits for oil companies rather than significantly lowering prices for consumers. Second, it would encourage people to keep buying costly imported oil and do nothing to encourage conservation. Third, a tax holiday would provide very little relief to families feeling squeezed. Fourth, the gas tax suspension would threaten to increase the already record deficit in the coming year and reduce the amount of money going into the highway trust fund that maintains our infrastructure.
Read closely all of the reasons behind why so many economists oppose the gas tax holiday.
Now look at how the NY Times summarizes it.
An open letter signed recently by more than 100 economists said the proposed tax holiday would do little to reduce gas prices. In part, that is because a fall in prices would lead to more demand, which would cause prices to return to their earlier level. The result would be that overseas oil-producing governments would get money now flowing to the United States government in gas taxes.
The whole sentence about demand is the sort of circular statement that we caution our students not to make but that newspapers print all the time. Not only is it a terrible misstatement of demand vs quantity demanded, it's not even consistent with the claim (advanced by Krugman among many) that supply is fixed.
The Times' statement that oil producing countries would get some of the gain is only true insofar as gasoline production (and therefore oil consumption) would actually increase. As I have pointed out, that effect is likely to be small though positive. I wouldn't call it my main objection to the tax holiday. The open letter is careful to say that "it would encourage people to keep buying costly imported oil and do nothing to encourage conservation," in effect implying that it spending on oil could stay the same as the "fixed supply" adherents would suggest.
Students writing term papers often rephrase the words in an article that they cite, and occasionally the rephrasing ends up changing the economic meaning of the passage (sometimes with comic results). I see this all the time. If I had a nickel for every time I said to myself while grading, "That's not what that article really meant, was it?" I'd have a pretty big collection of nickels. Likewise when I read the Times article, I immediately said, "That can't be what was written in that open letter, can it? No economist would say it that way." Indeed, they did not.
I suppose the Times could say that the paragraph in question was not a summary of the letter but their own analysis. But that would be just as bad, wouldn't it?
Bottom line: Members of the media sometimes have trouble quoting economists correctly because we don't always fill in all the blanks. The media (and students writing term papers) want to fill in those blanks, and sometimes they get it quite wrong. Understanding that people want to fill in those blanks (and understanding the ways that they are tempted to do so) goes a long way toward making you a better communicator of economic ideas.
We've been tough on the "McCain-Clinton gas tax holiday". We economists, that is. Seems there's not one of us who thinks it's a good idea. It's just plain bad public policy. The actual effect will be small. A family that goes through two tanks of gas a week might see a difference of maybe a couple dollars a week under the best case scenario (full explanation here). If you want to give working families some relief there are certainly better ways to do so. A check for $50 for every family with less than $50,000 income would be better targeted, subject to less uncertainty, and would have a larger effect. Just about any economist would tell you this.
Ah, but what do they know.
“Well I’ll tell you what, I’m not going to put my lot in with economists,” -- Hillary Clinton
And...
“When the federal government, through the Fed and the Treasury gave $30 billion in a bailout to Bear Stearns I didn’t hear anybody jump up and say, ‘That’s not going according to the market, that’s rewarding irresponsible behavior.’ We’ve got to get out of this mindset, where somehow, elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans.”
The market reference is strange. You see, I think many economists did have reservations about what happened with Bear Stearns, although many of us ultimately feel that it was necessary to prevent even further catastrophe--one which might have had a pretty sizable impact on "the vast majority of Americans." Rather than take that chance, the Fed decided to put its own credibility up as collateral--no small decision, that.
So suddenly Senator Clinton has all this concern for markets? Is she implying that her gas tax holiday should be supported by economists because it removes the tax that is somehow distorting the free market?
No, more likely it was just a convenient sound bite. But I do see one very troubling problem in this exchange and it's going to have me thinking for a while. These quotes by Senator Clinton show that economists have not done a very good job of explaining what we really know objectively and scientifically to be true. Though my previous post (as well as posts on other blogs) pointed out some caveats, the basic thrust of tax incidence theory is not in question. The questions deal with specific issues such as whether summer production quantities have been set and how costly it would be to change them. That's an objective scientific question. Once we know the answer to it, we know whether the market price of gas would go down by roughly half of the tax cut (as econometric research suggests) or not at all (if quantities are already set).
The level of economic literacy in this country is so low that few people know that this is a point of near 100% agreement among economists. But correct though it may be, it is a counterintuitive result. People expect that the tax cut would drop the price one-for-one. People will believe a politician who tells them that this tax cut will help them. In fact, other policies would help them more, but because this one is believable and strikes an emotional chord, they'll remember it at the ballot box.
To add insult to injury, the same politician can discredit the economists on this point of near 100% agreement and mountains of objective evidence by pointing to a more controversial and unsettled issue where our pronouncements seem to favor the "elites" for reasons that are hard to explain in a hundred words or less, hard to draw on a blackboard, and are based on more recent scholarship.
It's sort of like saying that the meteorologist who sees clouds, hears thunder, and predicts rain should not be believed because he's on the wrong side of the global warming issue for your tastes. That would be ridiculous and should be called out as such. The level of economic understanding necessary for good citizenship is a level that would enable a person to see that connection.
True economic literacy does require some understanding of the concept of elasticity.
Let us begin with this short little post from Brad DeLong which sums it up nicely.
In my inbox right now, from a highly-respected public finance economist:
In the long and sad annals of truly bad ideas, it is unusual for one to receive bipartisan support at such high levels right in the middle of a campaign as this one has...
He is referring, of course, to what has come to be known as the McCain-Clinton gas tax holiday. Reuters has the summary.
"Score one for Obama," wrote Greg Mankiw, a former chairman of President George W. Bush's Council of Economic Advisers. "In light of the side effects associated with driving ... gasoline taxes should be higher than they are, not lower."
Republican McCain and Democrat Clinton, who is battling Obama for their party's nomination, both want to suspend the 18.4-cents-per-gallon federal gas tax during the peak summer driving months to ease the pain of soaring gas prices. The tax is used to fund the Highway Trust Fund that builds and maintains roads and bridges.
Economists said that since refineries cannot increase their supply of gasoline in the space of a few summer months, lower prices will just boost demand and the benefits will flow to oil companies, not consumers.
"You are just going to push up the price of gas by almost the size of the tax cut," said Eric Toder, a senior fellow at the Urban-Brookings Tax Policy Center in Washington.
Paul Krugman adds,
Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount. The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers.
Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it’s Econ 101: the tax cut really goes to the oil companies.
The Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it’s pointless, not evil. But it is pointless, and disappointing.
Is it?
Maybe not totally pointless, but definitely in the neighborhood. This is Econ 101--tax incidence theory. This is bread and butter for economists. But our pronouncements are only as good as what we really know about the relevant supply and demand elasticities. To make things even more interesting, the question of incidence (i.e. whose price will rise or fall) is not just a matter of absolute elasticities, but of the relative elasticities of demand and supply. Supply may be relatively fixed in the summer, but if short run demand is also inelastic, it is not a foregone conclusion that the suppliers will get all the benefit.
We take as one of our stylized facts that gasoline demand is fairly inelastic in the very short run. A 10% change in gas prices this month will probably not cause me to change my driving habits much. A permanent 10% increase will cause me to change my habits more over time. The federal excise tax of 18.4 cents is roughly 5% of the going price. In fact, I think we can expect that the fluctuations in price over the summer due to refinery maintenance, hurricanes, pipeline problems, etc. could be as large or larger in magnitude. I wouldn't expect it to change driving habits much at all. In other words, the demand is inelastic. Not perfectly inelastic, but quite inelastic.
Krugman suggests that the supply is practically fixed. If he's right in the extreme case (i.e. perfectly inelastic supply) then the game's over. The oil companies get all the benefit. But that's probably not the case either. A commenter at Angry Bear posts a link to the ever useful Energy Information Administration, or EIA. They point out in a recent newsletter that gasoline inventories are currently at the high end of the normal range. Given that production of the summer formulations has probably not fully ramped up yet, they probably have a little more wiggle room than Krugman is assuming. I'm not saying that they have a lot. But if demand is also quite inelastic, they wouldn't need an awful lot of wiggle room for the tax incidence to be split more equally.
The most recent piece of academic research on this that I could find is in Economics Letters (2004) by Hayley Chouinarda and Jeffrey M. Perloff (non-gated version here). They find that the incidence of the federal tax is split roughly equally between suppliers and consumers. The state taxes fall more on the consumers, and the burden on consumers is smaller in large states.
That last fact might have been useful for Obama to have known back in 2000 when he supported a statewide gas tax holiday in Illinois. As a resident of Illinois then as now, I can tell you that I didn't notice much of a difference. All I remember is seeing the signs on the pumps that told us that the legislature had suspended the sales tax on gas and that this should be reflected in the price.
I remember how I chuckled about it each time I filled up.
You did notice a few cents difference in the immediate run (i.e. shorter than the short run... first few days), but as time went on, elasticities and tax incidence theory did their thing. It was hard to see the difference with the naked eye. So was there any academic research on it?
Funny you should ask... in fact there was. (Hat tip to Daily Kos). Joseph J. Doyle, Jr. and Krislert Samphantharak of MIT and UCSD, respectively, found that the elimination of the 5% tax was associated with about a 3% drop in the retail price, or 6 cents on the (now) quaint sounding average price of $2 per gallon. But again, with the normal market fluctuations going on in the background, this was hard to see without your econometric glasses on.
But that's actually a reasonable conclusion. Given that Chouinarda and Perloff find that the consumer incidence of state taxes was quite high (close to 100%) but definitely smaller in the larger states (like Illinois), I would not be surprised to see that the breakdown was maybe somewhere between 50 and 75% for a state like ours. Doyle Jr. and Samphantharak put it at 60%. So like I said, it's reasonable.
But if Chouinarda and Perloff are correct in that the burden of the federal tax is more evenly split, then you'd notice it even less than we did in Illinois in 2000. If Krugman is even somewhat correct that it is too late in the game for quantity adjustments to be made, then the consumer's benefit shrinks further. Just guessing at a number, say maybe the consumer gets 5 or 6 cents out of the 18.4. With gas at $3.50 and perhaps more than 5 cents of variation across local markets and over time... you're going to need to have super-powered econometrics glasses to see the effect.
My conclusion: Maybe you would benefit 5 or 6 cents per gallon, give or take a couple pennies. Maybe a couple dollars a week. Better than nothing, I suppose, but only a tiny fraction of the "fiscal stimulus" check that I received this week. But then there's the issue of how to replace the lost revenue (revenue that is used to maintain the crumbling roads and to create jobs in a seasonal industry that is going to need to take up some of the slack from the slowdown in construction and manufacturing). Clinton proposes a tax on oil company profits. That's the part that Krugman calls not evil, but pointless. In one pocket and out the other. Maybe not totally pointless, but definitely in the neighborhood.
UPDATE: The Wall Street Journal's Real Time Economics blog says that my comments (specifically the last sentence above) are "probably the strongest show of support available". That may be. Though I meant it to be a bit of "damning through faint praise." My criteria for good public policy is that it be well out of the neighborhood of "pointless." Still, I'll bet others would agree that the consumer might benefit a few cents, but I think it is safe to say that we stand firm in agreement that this is a bad, bad idea.
That's less than I expected. Here's a link to the current BLS report and the first paragraph summary.
Nonfarm payroll employment was little changed in April (-20,000), following job losses that totaled 240,000 in the first 3 months of the year, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The unemployment rate, at 5.0 percent, also was little changed in April. Employment continued to decline in construction, manufacturing, and retail trade, while jobs were added in health care and in professional and technical services.
While it was less than I expected, I'm certainly not jumping up and down. The economy is marking time until it works its way out of the credit market problems that the housing boom created. Today's data makes me marginally more confident that we can avoid an "official" recession. Yet at the same time, I don't think anyone should be under the illusion that this is over yet.
Felix Salmon had an interesting post recently that sums it up well.
I feel like we're at a fork in the road right now. There are two possible outcomes: either the crisis will remain contained within the housing and finance sectors, in which case we should be able to bounce back, or else it will feed through into the economy more generally, in which case defaults will rise, employment will fall, and a nasty recession, complete with negative official growth rates, will bite right in the middle of the presidential election campaign. The Fed has done what it can; the dice are rolled. All we can do now is watch to see what happens.
Thing is, we have been standing at that fork for a while now.
We have had almost 8 years to fix the election system. And yet there are probably just as many, and perhaps more, problems and potential problems today. The NY Times' Adam Cohen opines...
It is chilling to think that state legislators and election officials would intentionally try to make it harder for Americans to vote, but they always have — with poll taxes, literacy tests and gerrymandering. There was a time when the Supreme Court regularly struck these restrictions down. In 1966, it held Virginia’s $1.50 poll tax unconstitutional. In 1972, it ruled that Tennessee’s one-year residency requirement for voting violated the Constitution.
Now the Supreme Court has switched sides. This week, it upheld a harsh Indiana voter ID law that could disenfranchise many poor, elderly and student voters. The ruling will make it even easier for other states to block voters’ access to the ballot box.
If the courts won’t protect voters, Congress has to. The Constitution, in Article 1, Section 4, gives Congress broad authority to set the rules for federal elections. It should use this power to set minimum voting rights standards that would apply nationwide and ensure that all eligible Americans could vote.
Voter registration rules are the place to start. Federal law should hold organizations like the League of Women Voters harmless if they make good-faith mistakes while registering people. There should be a federal voter registration form, usable in any state, and uniform regulations so Ohio could not throw out forms based on paper thickness and Florida could not bar voters, as it now does, from fixing small errors on a form within a month of an election.
Congress should also regulate voter challenges at the polls. Parties and candidates often use bad-faith challenges as a dirty trick — to intimidate voters or to slow down voting in certain neighborhoods. Senator Sheldon Whitehouse, Democrat of Rhode Island, has a good bill that would require challengers who are not election officials to sign an affidavit stating why they believe a specific voter is not eligible.
The prevailing sentiment, often unspoken, in both parties is that they value the option to be able to use what might be termed "dirty tricks" when they need to. That's the only explanation that fits.
Personally, I don't mind the idea of a voter ID card. I have one (though I think it is probably called a "registration card". I think that most counties or cities issue one when you register. Occasionally, just for fun, I actually show the election judge my ID card when I get my ballot. Sometimes they sort of lean back in their chair like they want to distance themselves from the thing and say firmly that they don't need to see it. I've always thought that to be rather odd. Of course, in all the years I've been voting, I don't think I've ever stood in line for more than 2 minutes, and I've never suspected any dirty dealings in my own precincts in any of the six cities in three states in which I have voted in the last 18 years. Count myself lucky, I guess.
Make it simple. My voter registration card is just a postcard. It is not very costly, and something the county does anyway. While forgery is possible, I'm not sure that most college IDs would be that much more secure. If you don't have your registration card, sign an affidavit and your vote should be presumed eligible until specifically challenged.
I'm less inclined to the idea of a standard ballot, though I think that it would be workable to have a set of minimum standards for a short list of possible voting methods. Let very small precincts count paper ballots by hand if they want, but put some parameters on ballot design. Optical scanners are a popular choice in many areas. Again, putting some parameters on the design would be ok. Electronic machines would ideally give you a copy of your vote which would be placed in a traditional ballot box--just in case. And count the paper copies in a random sample of precincts.
Coming up with a system that an objective outside observer would find to be fair (or at least subject to less potential for mischief than the present system) shouldn't be hard. Finding an objective outside observer to render that judgment may be the greater challenge. I, for one, am not holding my breath.
UPDATE: Just to make it clear... I do not favor a national voter ID card. No way. We don't need a national ID card. I just find it odd that my county goes through the effort to print a voter registration card and the election judges practically recoil in horror when I show it to them. I have no doubt that a little tightening of standards using procedures already in place could eliminate a lot of potential for mischief. But like I said, neither party really wants that.
Actually, I think the underlying problem is that most people take the election process for granted. If more people got serious about making the system work in a way that was as efficient and equitable as possible (recognizing that there are tradeoffs inherent in that), then we would be better off. Unfortunately, the incentives (monetary and political) are lined up against that, which is why I'm not holding my breath for any kind of positive change.
I will reiterate that I think it would be smart to count a random sample of paper ballot backups in precincts with electronic voting machines. Just sayin'.
From MSNBC:
NEW YORK - Drivers have long known that slowing down on the highway means getting more miles to the gallon. Now airlines are trying it, too — adding a few minutes to flights to save millions on fuel.
Southwest Airlines started flying slower about two months ago, and projects it will save $42 million in fuel this year by extending each flight by one to three minutes.
On one Northwest Airlines flight from Paris to Minneapolis earlier this week alone, flying slower saved 162 gallons of fuel, saving the airline $535. It added eight minutes to the flight, extending it to eight hours, 58 minutes.
Kind of reminds me of when American Airlines took an olive out of every salad and saved loads of money. Of course, that was not a response to the price of olives, it was just a general cost cutting measure. But the idea is similar. By decreasing their speed (i.e. decreasing the thrust from the engines) they save a few dollars on each flight. Multiply it by many flights a day over many days and before long it does potentially save a respectable amount of money.
As the price goes up, there does come a point where the airlines decide to try to reduce the quantity of fuel purchased. The demand for fuel by airlines is "derived demand" meaning that it also depends on the market (i.e. the price) of the output. But derived demand curves slope downward too, ceteris paribus.
Storms are rumbling across Kansas tonight. That often means that I'll be waking up to them in the morning. Here's a Doppler radar image taken recently. The spot of green and red mixed together west of Emporia is a possible tornado. This is a classic picture of what a tornado signature looks like on the Doppler. Whether or not it actually spawned a funnel cloud and touches down to truly become a tornado is unclear. But if I saw that heading for me I'd hunker down.
They'll sweep across Missouri overnight and cross the river around dawn. If they still have any punch left, it will be an interesting morning. We will see.
UPDATE: The worst of it stayed to the south. Southern Illinois got some of it. My weather radio alerted to one severe T-storm warning this morning and that was it. But you could see rather early in the evening last night that this had the potential to be a significant overnight event. It was just a matter of where.
