Welcome to the Weekend Reccs by Harrison Satcher. This newsletter delivers a lovingly-tailored collection of thought-provoking goodness for your Sunday. Inside you’ll find: (1) a weekly column on economics, politics, or something unexpected, (2) a curated list of links for your enjoyment, (3) a lagniappe (because everyone deserves lagniappe), and (4) a collection of interesting, relevant charts. Grab a coffee and enjoy your morning.
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The (Short) Read: Polarization and Durability
Takeaway: Polarization imposes external pressure on policymakers’ views on what is optimal, which can result in suboptimal outcomes as policymakers seek less robust but more lasting gains.
Polarization is bad for a lot of reasons, and plenty of folks have covered them at length. Today I just want to discuss one cost that I think is underrated and will matter for the next two years, despite Democratic control of the federal government — the preference for policy durability.
This preference can be costly in many ways, but to make things easy I’d like to look at the trade-off between durability and policy efficiency.
To start, I want to be very clear about what I mean by durability and policy efficiency, as I may be using these terms idiosyncratically.
Durability relates to the difficulty later regimes will face in altering or abolishing a policy. There are a ton of ways this can take shape. To give an example, in 1992 the Federal Housing Enterprises Financial Safety and Soundness Act was passed. In it was a provision that Fannie Mae and Freddie Mac must include in their portfolio at least a certain percentage of mortgages originated for low-income families. This required level of demand put downward price pressure on these mortgages, making them more affordable. Due to the way the government guarantees Fannie Mae and Freddie Mac, this ultimately results in government dollars helping make housing more affordable for low-income families. While this is a lot more complicated than just directly provisioning funds for an affordable housing program through the Department of Housing and Urban Development, it is much less visible and therefore more durable. A budget line item for HUD very directly spends money to support affordable housing. Contrariwise, the Affordable Housing Goals spend government money in an incredibly convoluted way (that I’m happy to discuss with those interested but is not worth detailing here) that most people would not even realize. Given that I don’t trust the GOP to support affordable housing I prefer that we have this durable alternative to more direct HUD spending, which would be on the chopping block on Day 1.
Now when I talk about policy efficiency, I am referring to the efficiency by which a given measure achieves its intended goal. For example, if we are hoping to accelerate the penetration of electric vehicles to the market, there is greater policy efficiency in giving all new owners an immediate $1000 check with proof of purchase than there is in a $1000 tax credit when they file next year. The cost of both would be pretty close to equal in both fiscal and political terms, but the impact is greater for the instant rebate.
Now, with our terms in place, is it always the case that policy efficiency and durability are orthogonal to each other? Certainly not.
There are plenty of policies that are more efficient and more durable than their alternatives, and there are plenty that are more durable by virtue of their greater efficiency (in the electric vehicle example, voters would like the rebates and they enhance uptake, therefore it dominates the tax credit along both axes).
Yet the fact remains that these are two different axes, and therefore at times they will conflict. You can think of the space like this, where B is clearly optimal to C (at least on these two axes) but B could be better or worse than A depending on the policymaker’s preferences.
Under polarization, each party has a greater incentive to overturn the opposing party’s policies. This greater incentive may come about due to a desire for symbolic, identity-driven victories (i.e. being able to claim you’re undoing your predecessor’s legacy), or by increasingly large ideological divergences which make addressing new issues relatively less advantageous than overturning policies on the books. This hostile environment makes durability more valuable, as the specter of a future antagonistic regime always lingers.
Particularly of note here is the implication that despite Democrats’ unified control of government polarization would still push them towards favoring more durable policies than they might otherwise desire. This is a wholly different phenomenon than partisan gridlock or intra-party policy concessions. This pivot towards durability is strictly about preventing whipsawing.
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Unfortunately, policymaking is not so easy as to solve for the best point along the durability—policy efficiency axes. Policymaking is an N-dimensional space and policies ought to be judged along all relevant dimensions. As I said at the top, this preference for durability is not just distortionary for policy efficiency, but also for all other dimensions where it may come in conflict (say, comparing a popular program to a durable one).
Thus we can say that (1) a tension will often exist between durability and other important policy aspects, and (2) when polarization is high the policymaker will prefer durability more than they otherwise would. In this way polarization is an external factor that distorts the policymakers’ preferences and can lead to suboptimal outcomes.
The Links
Go for a Drive* Turn off your brain for a little while and listen to the radio.
Smuggled Haggis* [$] This article from last year stuck with me and was on my mind as we approach Burns Night on Monday.
It’s not not easy being green* [$] Electric battery cars like the MINI SE and Nissan Leaf are not just good from an emissions standpoint — they are also some of the cheapest cars on the market.
Food Chemistry* How the Spurs head coach used elegant dinners and wine to build a formidable team culture.
Sacrificial Heron* Some blue herons are placing their nests near the nests of the #1 predator of their young — bald eagles. At first blush this seems like a really bad strategy. Yet, surprisingly, this appears to improve their reproductive chances. The bald eagles are territorial, so while the herons forfeit a small number of their young to the resident eagles, they gain protecting from all other eagles.
The Itch* [$] An old but really incredible piece in the New Yorker exploring itching and telling the story of a woman who couldn’t stop (s/o Kathryn Fatima)
Lagniappe
I’ve been enjoying Time Out, an app that forcibly prompts you to take breaks or look away from your monitor at regular intervals.
They have a pretty cool business model where, under the free license, practically no functionality is off limits, but the bells-and-whistles will cancel your preferences after an hour. So you have a chance to try out what the premium version is like without the awkwardness of 7-day trials.
I currently take a 20 second break every 20 minutes (look away from screen) and a 10 minute break every hour (walk around, do some light exercises, drink water). Give it a try, either through this app or some other service.
This came across my radar thanks to Jeremy Caplan’s Wonder Tools, a neat newsletter that covers different productivity and creative apps each issue.
Graph(s) of the week
[Economist] JRB2 hit the ground running when it came to executive orders. Tangentially, GWB is the most recent POTUS to start his first term without control of Congress.
Speaking of Burns Night, I want to close with a favorite poem (if you have some issue reading Scots, try reading it out loud):
My luve is like a red red rose
That’s newly sprung in june;
O my Luve's like the melodie
That’s sweetly play'd in tune;
As fair art thou, my bonnie lass,
So deep in luve am I;
And I will luve thee still, my dear,
Till a’ the seas gang dry;
Till a’ the seas gang dry, my dear,
And the rocks melt wi’ the sun;
I will luve thee still, my dear,
While the sands o’ life shall run.
And fare thee weel, my only Luve
And fare thee weel, a while!
And I will come again, my Luve,
Tho’ it were ten thousand mile.
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Keep the faith,
Harrison