EFFin' Unsound

post by tensor

Jim Miller misreads a study that really shows why firms should think twice before lobbying the federal government for favors.

From the interview with one of the study’s authors:

Joshua Coval: Our original goal was to investigate how politically connected firms benefit from increases in the power of their representatives.

Mr. Coval goes on to state that “politically connected” firms actually fare worse when their representatives gain power in Congress. (This, ignoring the “politically connected” part, of course — is the basis for Jim’s post.) But Mr. Coval himself seems a little confused as to how such power is gained:

That is, a change in chairmanship can only occur if the incumbent retires or is voted out–both of which are entirely independent of what is currently happening in the ascending chairman’s state.

This statement is false on several counts. First, a change in committee chairmanship need not wait until an incumbent “retires or is voted out.” In the House especially, the desires of the Speaker can go a long way toward determining which chair goes to which member. Second, a complete change in the overall composition of the chamber, such as in 2006, when Democrats swept Republicans out of power in both House and Senate, can also cause a lot of members to lose chairmanships. It should be pretty obvious that such an event is not necessarily “independent of what is currently happening in the ascending chairman’s state.” The former chair might continue to serve in Congress, but in his new, minority capacity, will not have the Chair of a committee.

Mr Coval’s attempt to clarify only confuses matters:

A: We began by examining how the average firm in a chairman’s state was impacted by his ascension. The idea was that this would provide a lower bound on the benefits from being politically connected. It was an enormous surprise, at least to us, to learn that the average firm in the chairman’s state did not benefit at all from the increase in spending. Indeed, the firms significantly cut physical and R&D spending, reduce employment, and experience lower sales.

So we seem to have moved the focus from “politically connected firms” to “the average firm”. But the assumption this would “provide a lower bound on the benefits from being politically connected” seems to have been invalidated by the study itself (!). We would indeed expect a “politically connected firm” to do better than the “average firm” when the Congressional scales tip in favor of the former, but as we have read, Mr. Coval’s study found just the opposite. When the findings of a study contradict the study’s foundational assumptions, one should accept the study with extreme caution. Fortunately, Jim does note:

As far as I know, no one has duplicated their work yet, nor have other economists and political scientists had time to do full critiques.

No worries; if peer-review sinks the study, I’m sure Jim will post a correction, with apologies to Rep. Norm Dicks and Sen. Patty Murry. Maybe he’ll even re-evaluate Rep. Reichert’s and candidate Rossi’s claims to forswear earmarks. Bwahahahahahahaha…

post by tensor

Pudge fails to discover that President Obama and Speaker Pelosi are actually (gasp!) two different persons:

Barack Obama, inaugural address: “In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path for the faint-hearted, for those who prefer leisure over work, or seek only the pleasures of riches and fame.”

Nancy Pelosi, this month: “If you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care.”

That’s the entire post. When commenter Jim notes this equation of unrelated statements by two different persons could easily be interpreted as insulting to musicians, pudge, um, clarifies:

I am a musician. I am not a blogger, and never have been.

Jim notes that the original post still can be read as insulting to musicians, so pudge further ‘clarifies’:

Jim, you’re right that I did intend meaning.

(Does this distinguish it from all other posts at uSP? Anyway, pudge continues:)

However, I really can’t imagine how anyone could read it and think I was insulting musicians, even if they didn’t know I’m a musician: the Pelosi quote was not simply about “musicians,” but about people who quit their job and live (in part) off the government. (Emphasis in the original.)

Yes, receiving public healthcare is “living (in part) off the government.” (Driving on a toll-free public highway is the ultimate act of rugged individualism, however.) In reality, the only persons who are “living” in health-care facilities are the chronically and/or terminally ill. Our Madame Speaker could just as easily have included “start your own business” as one of the “creative” endeavors an American could be free to pursue, and then we could have the fun of watching the pro-entrepreneurial crowd decry government aid to business creation.

(Speaker Pelosi was, of course, referring only to those jobs which provide healthcare — the tens of millions of jobs which do not are another matter entirely. Presumably, one can quit a non-healthcare-providing job without sparking the ire of our not-blogger.)

post by tensor

Whatever the other effects of Arizona’s new anti-immigrant law, this whiny, bitterly incoherent essay is truly a thing of beauty:

The State Department defended Assistant Secretary of State Michael Posner, who at a human rights conference in Washington, expressed his regret to the Chinese regarding the recent Arizona immigration law.

Given that the “source” was Rupert Murdoch’s Fake News channel, we needn’t take this seriously, but we can still enjoy the tone of ZOMG! Americans publicly disagree with other Americans!

At a joint press briefing for the Presidents of Mexico and the United States at the White House, President Obama said, “We also discussed the new law in Arizona, which is a misdirected effort — a misdirected expression of frustration over our broken immigration system, and which has raised concerns in both our countries.”

It’s a bad week for immigration reform when the President of the United States refers publicly to “our broken immigration system”.

In his remarks, Mexico President Felipe Calderon said, “In Mexico, we are and will continue being respectful of the internal policies of the United States and its legitimate right to establish in accordance to its Constitution whatever laws it approves. But we will retain our firm rejection to criminalize migration so that people that work and provide things to this nation will be treated as criminals. And we oppose firmly the S.B. 1070 Arizona law given in fair principles (sic) that are partial and discriminatory.”

It’s a bad week for immigration reform when the President of a bordering country says our immigration laws are flawed.

These words and actions are outrageous. No, they are (EXPLETIVE DELETED) OUTRAGEOUS!

Actually, they were pretty much all just words, and applause for them, which don’t really do anything, but still. (This post was supposed to have an animated .gif of a little boy stamping his feet, and then holding his breath until his face turned purple, but uSP don’t have that much scratch for fancy stuff no more.)

Now, for how much uSP likes us voters:

If these people are not tossed out of power next November, we will have passed the tipping point from a center-right nation to one of sheep sliding down a slippery slope to socialism.

(President Obama is up for re-election next November?)

Well, my fellow slippery sheep (?), we now know that America was a center-right nation (bwahahaha…) and that socialism consists of allowing more workers into a capitalist economy (??).