09 November 2010

Steve Pejovich o postizbornoj situaciji

Prenosim, uz dozvolu autora, analizu Svetozara Stevea Pejovicha vezanu za sitauciju u SAD posle ovih izbora.

The Results of US Elections, November 2, 2010; Causes and Consequences
Svetozar Pejovich
Texas A&M University, and
University of Donja Gorica, Montenegro

This short analysis of the last week elections in the United States is my general response to a few inquiries I received from colleagues on my mailing list. I am not going to discuss the results of US elections. You know the results as well as I do. Democrats had been all but wiped out in the South and Southwest; and they suffered major losses in Midwestern states such as Ohio, Pennsylvania, Indiana, Michigan and Illinois (where they lost former Obama’s senate seat). Democrats have remained strong in New York, New England and California. I am also not going to waste your time telling you how much I enjoyed the rejection of Obama’s policies. You know that, too.

However, I do want to discuss with you three very important issues that our media either ignores or misrepresents. I am certain that those issues are likely to have significant consequences on the American political landscape in the years to come.

1. The mainstream Media (i.e., New York Times, Washington Post, major TV networks, etc.) has been describing the Tea Party Movement as a bunch of fascists and/or a bunch of racists and/or a bunch of white supremacists and/or a bunch of religious fanatics, and/or all of above. They have been telling their diminishing audience (FOX News had more listeners on the election night than any other network) that the Tea Party Movement is politically irrelevant and socially backward. The mainstream Media has a minor problem; it is called empirical evidence.

The Tea Party Movement candidates did well nationally (Paul, Rubio, Bachmann, Hensarling, Kasich, Johnson, etc., with only two major misses in Nevada and Delaware). Moreover, the Tea Party Movement candidates did extremely well in statewide and local elections.

If the mainstream journalists, TV commentators and editorial writers read Hayek they would have understood why and how the Tea Party Movement emerged spontaneously and simultaneously throughout the USA. It was not created by a committee; it has no pre-determined program; and the Tea Party Movement has no well-defined leadership structure. The Tea Party Movement emerged spontaneously in response to Obama’s and his cohorts disregard of some basic constitutional principles that define the American way of life such as limited government, credible private property rights, low taxes, free exchange (including labor markets) and well-defined division of power between Washington and the States (the 10th amendment). The fundamental reason for the birth of the Tea Party Movement was then to defend the Constitution that has done well, with predictable ups and downs, in protecting the American way of life since 1787.

Obama, an admitted disciple of Saul Alinsky and liberation theology, is a left-wing ideologue who wants to spread the wealth around from those who create it to those who do not. Indeed, once in the White House, he immediately moved to replace the American tradition of individualism with collectivism, and the American tradition of equal opportunities with equal outcomes. To that end, Obama used current economic recession as an excuse to increase the size of federal government, change the balance of power between Washington and the States, raise the costs of entrepreneurship, and attenuate private property rights.

Ordinary Americans saw Obama’s policies, and correctly so, as a direct attack on the basic constitutional principles. Predictably, those policies provoked spontaneous and simultaneous reactions throughout the country. And the Tea Party Movement was born. Since the United States is a very heterogeneous country, people’s reactions to Obama’s policies also reflect local cultures. The emphasis on faith and family, the right to bear guns, the security of borders, and the respect for state rights are just a few such examples. Yet, the defense of the basic constitutional principles such as limited government, low taxes, free exchange and private property rights is the common denominator that pulls together all local chapters and defines the Tea Party Movement.

In this election cycle, the Tea Party Movement had no appointed or elected leader; and so far it has not been institutionalized. The Tea Party Movement has, however, many spokesmen such as Dick Armey, former Majority Leader in the House, Sarah Palin, former governor of Alaska, and Rick Perry, Governor of Texas. Before going to Washington, Dick Armey was head of the Department of Economics at North Texas State University. Rick Perry is a charismatic leader and a true supporter of the free-market, private-property economy. Perry is currently suing federal government for the violation of the 10th amendment. As you know, the 10th amendment says that all activities not explicitly given to federal government belong to the States and/or individual citizens. And James Madison wrote in The Federalist No.45, ‘The powers delegated by the Constitution to the Federal government are few and defined [while] those which are to remain in the States are numerous and indefinite.’ The courts have already agreed to consider whether Obama health care violates the Constitution.

Sarah Palin has completely re-energized the Republican Party. She is extremely popular in rural America and small cities, where people see her as “the girl next door” that speaks with passion about the values (church, family, hunting, self-responsibility) they hold dear. The Left claims that Palin has no executive experience. Yet, Sarah Palin was governor (executive position) while Obama was in the Senate (deliberating body). She was mayor of a city in Alaska (executive position) while Obama was community organizer in Chicago (bullshitting position). By any measure, Palin has more executive experience than Obama.

The Left considers empirical evidence as a nuisance that interferes with the pursuit of “correct” policies. Hence, the character and integrity (rather than policies) of the individuals like Dick Armey, Sara Palin and Rick Perry are almost daily maligned by the mainstream Media and intellectual dwarfs such as George Soros, Jimmy Carter and the Hollywood crowd.

2. Every ten years we have census in the United States. This year is the census year. An important political implication of census is a change in the number of congressmen (in addition to two senators) each state sends to Washington. The formula for determining the number of representatives from each state is somewhat complicated but it comes to something like one congressman for every 600,000 people in that state. Depending on the flow of people, every ten years some states gain and others lose the number of congressmen they send to Washington. This time, Texas and some southern states like Georgia will gain the number of congressmen, while New York and California are likely to see their delegations diminished in size.

Since the United States is culturally and socially a heterogeneous country, those changes in the number of congressmen representing individual states have major consequences on the type of policies coming out from Washington. By implication, local elections are very important. Why?

In census years, Governor and state legislators are supposed to redesign election districts in their respective states in order to accommodate changes in the number of representatives they send to Washington. With minor adjustments between censuses, their decisions on redistricting remain in force for ten years. The Party that wins statewide and local elections in the year of census has incentives to redesign election districts, each district having about 400,000 people, in a way that would maximize the number of its members representing that state in Washington. Predictably, election districts in many states have strange looking borders; some look like a rattlesnake moving though high grass.

With a very strong support from the Tea Party Movement, this year elections have given republicans a majority in about two thirds of the States. That is a tremendous advantage for the Republican Party that will have policy implications until next census.

3. Professions create specific and predictable behavioral incentives. Regulations create demand for lawyers. Investments in knowledge create demand for teachers and scholars. Low marginal taxes increase the supply of entrepreneurs. It is then arguable that lawyers in government have incentives to regulate the economy, that educators and scholars in government have incentives to allocate more funds for teaching and research, and that entrepreneurs and businessmen in government have incentives to seek lower taxes. The composition of professionals in two major parties in the United States should then provide a testable proposition about policies that our two major parties are expected to support. Below is brief and incomplete but telling information about the composition of professionals in our two parties.
The Democrats:

Barack Obama is a lawyer.   
Michelle Obama is a lawyer
Hillary Clinton is a lawyer.
Bill Clinton is a lawyer.
John Edwards is a lawyer. 
Harry Reid is a lawyer. 
Nancy Pelosi is a lawyer.
Every Democratic presidential nominee since 1984 went to law school

The Republicans:
President Bush is a businessman.
Vice President Cheney is a businessman.
Newt Gingrich was professor of history.
Sarah Palin was a journalist and hockey mom
Tom Delay was an exterminator.
Dick Armey was professor of economics.
Phil Gramm was professor of economics.
Rick Perry was a rancher
House Minority Leader Boehner was a plastic manufacturer.
The former Senate Majority Leader Bill Frist is a heart surgeon.
Gerald Ford was the last Republican president who was a lawyer; he left office in 1976.