Is America Immune from Revolution?

The Daily Beast wonders.

The purpose behind regular elections and a house closely connected to the general population is to ensure that unrest in the general population is contained quickly and effectively. That doesn't mean it always will of course.

Is the Mortgage Crisis a Product of Demosclerosis?

That's a reasonable conclusion from reading the following assessments of what got the country into the current foreclosure mess:

The real scandal is that the process of recording property title is so antiquated, and there are so many interest groups that resist modernizing it. The MERS mortgage database shows what a modern system could look like. But all of the counties that charge fees for title recording, the title "insurance" companies that shake down home buyers to buy "protection" from getting sued to prove that they own their property--these interest groups want to keep the title recording system as expensive and unreliable as possible.

A change in the system, even one that improves the condition of the vast majority is prevented by an entrenched interest. The minority clogs the administration.

Divided and Confused About Health Care

That's the conclusion regarding the public from the Pew Research Center's latest poll on the topic.

A couple points stick out:

• some opposition comes from people who think the law did not go far enough.
• there is a difference in attitudes between the old and young. The old are more likely to oppose it while the young are more likely to favor it.
• people are more confused about what's in the bill now than they were six months ago.

Interest Groups Limit Extent of Health Care Reform

This story shouldn't be a surprise to my 2301 students after the time we spent discussing Federalist #10, demosclerosis, and the consequence of entrenched special interests.

From the NYT:

As the health care debate moves to the floor of Congress, most of the serious proposals to fulfill President Obama’s original vow to curb costs have fallen victim to organized interests and parochial politics.

. . .

Most economists’ favorite idea for slowing the growth of health care spending was ending the income tax exemption for employer-paid health insurance to make lower-cost plans more attractive. But that would hurt workers with big benefit plans, and a labor-union lobbying blitz helped kill that idea by the Fourth of July.

Lobbying by doctors, hospitals and other health care providers, meanwhile, dimmed the prospects of various proposals to cut into their incomes, including allowing government negotiation of Medicare drug prices and creating a government insurer with the muscle to lower fee payments.

“The lobbyists are winning,” said Representative Jim Cooper, a conservative Tennessee Democrat who teaches health policy.

Do U.S. Regulations Inhibit the Development of a Domestic Solar Energy Industry?

Thomas Friedman argues that solar power shows signs of booming in countries where regulations allow it to grow. He suggests that existing regulations in the United States do not, and continue to favor the oil, gas and coal industries that have dominated the energy sector for years.

The reason that . . . other countries are building solar-panel industries today is because most of their governments have put in place the three prerequisites for growing a renewable energy industry: 1) any business or homeowner can generate solar energy; 2) if they decide to do so, the power utility has to connect them to the grid; and 3) the utility has to buy the power for a predictable period at a price that is a no-brainer good deal for the family or business putting the solar panels on their rooftop.

Regulatory, price and connectivity certainty, that is what Germany put in place, and that explains why Germany now generates almost half the solar power in the world today and, as a byproduct, is making itself the world-center for solar research, engineering, manufacturing and installation. With more than 50,000 new jobs, the renewable energy industry in Germany is now second only to its auto industry.

. . .

If you read some of the anti-green commentary today, you’ll often see sneering references to “green jobs.” The phrase is usually in quotation marks as if it is some kind of liberal fantasy or closet welfare program (and as if coal, oil and nuclear don’t get all kinds of subsidies). Nonsense.

This is another example of demosclerosis, covered below and in our lectures on Federalist #10. It also illustrates the concept of agency capture, the process by which an interest group can effectively capture a regulatory agency and ensure that any regulations it issues will favor the industry, not the general welfare.

On Demosclerosis

In 2301 we are covering Federalist #10 and its consequences. In it Madison argues that the way to break up majority factions -- and thus prevent the violence of factions that undermines popular governments -- is to design the governing system so that a great number of issues will be brought into the political sphere which makes it impossible for permanent majorities to form. Every interest is a minority interest.

But this causes problems too because these interests can "clog the administration" meaning that they can make it difficult for government to respond to public needs. The current term for this is "demosclerosis." In a conversation about a recent rash of rude behavior (or at least a recent tendency of the media to pay attention to rude behavior), David Brooks touches on the terms and puts it in context. It should be useful for my 2301 students:

. . . there is a broad consensus on what we need to do to solve many of our major problems, but no political way to get there. Most experts of left and right believe we need a gas tax in order to address our energy problems. No political way to get there. Most believe that we need a flatter, fairer tax code, probably based on a consumption tax. No political way to get there. Most agree that the fee-for-service system drives up health care costs and the employer based insurance system is unsustainable. There is apparently no political way to change these things. Most experts agree that teacher quality is crucial to the schools and that bad teachers need to be fired. Again, no political way to do this.

I could go on. It all reminds me of a thesis that Mancur Olson came up with many years ago, which was nicely explained in Jonathan Rauch’s book, “Demosclerosis.” The thesis was that as nations age they develop entrenched relationships that close off certain avenues of change. This leads to the decline of nations. Germany and Japan, on the other hand, were able to grow so quickly after World War II because those entrenched arrangements had been swept away amid the national cataclysms.