Support A Robot For Fed Chair!

Matt Yglesias, at his new Slate Moneybox gig, says good stuff about the role of central bankers:

First: I see no real reason to think that as a rule unaccountable central bank bureaucracies are going to make better long-term economic policy choices than a democratic process. The very same people who seem enthusiastic about this model of policymaking would likely be the first to explain to you that it's unwise to have a centrally planned economy run by unelected bureaucrats.

Second: that there actually is good reason to think that giving elected officials direct control over short-term macroeconomic stabilization is a bad idea, namely that they'll try to time the business cycle to the election cycle, which is exactly how central bank independence came to be enshrined as a principle of good governance. But in the medium term once it becomes clear that central banks are using their "independence" to encroach on other areas of policymaking, the central banks are (rightly) going to wind up having their independence taken away.

The problem of central banks trying to shape policy is an especially big deal in an environment where wealthy interests have a big role in choosing central bankers. Then you get the awesome power of central bankers deployed on behalf of wealthy interests against ordinary working people.

I'm wondering why we don't eliminate the role of human central bankers in setting interest rates and replace them with a computer program that just follows the Taylor rule or whatever formula the consensus of academic economists suggests. If we've got a reasonably good formula for determining what values interest rates should take, a computer would be better at following it than a human, since a human might be tempted to diverge for the purpose of threatening elected policymakers into making policies they prefer in other places or supporting a favored political leader, as Alan Greenspan seems to have done for Bush in 2004. And if we don't have a good formula, it's unclear how central bankers are supposed to decide what they should do anyway, and it's time to not have central banks. I don't think we're in this unfortunate situation -- we know enough about inflation/unemployment tradeoffs and other economic relationships to have good quantitative rules that humans can follow, and that robots can follow better.

In any event, I don't see why setting interest rates would be like writing novels or throwing parties or recognizing faces, where the best humans are going to do better than impartial robots following formulas programmed in by smart professors. If well-programmed computers can beat us at math and now chess and Jeopardy, why not at monetary policy?

Everything Old Is Newt Again

Newt Gingrich may have changed positions on a bunch of things over the years, but there's no way the GOP base will fundamentally understand him as a flip-flopper. Or at least, anyone in the base old enough to remember 1994. (Benjy Sarlin points out that Newt runs strongest among older voters.)

There are moments in politics where bonds are forged between ideologically driven base voters and the politicians who take high-profile positions advancing their issues. The base then comes to trust these politicians, and ignores their deviations from the party line or treats them as clever tactical moves. If you were in the GOP base in the Contract With America days when Gingrich led the Republicans to victory in 1994, you probably formed that bond with him. And now you trust him and you're willing to make excuses for him. From the same era, Hillary Clinton had a similar store of goodwill on the Democratic side that made her the presidential frontrunner for a lot of the last Democratic primary. It was a really impressive achievement on the part of Obama and his team to win the nomination over such a powerful candidate.

Now, I'm very willing to believe that Newt's role in the GOP takeover wasn't actually that important, and that his incompetence as speaker made things turn out much worse for the Republicans than if John Boehner could've time-traveled (and seniority-traveled?) into the Speakership of 1995. But I don't think that's what the GOP base voter saw, because Newt was pretty good at getting himself in front of the cameras. The proto-Tea-Partiers have an indelible image of brave Sir Newt leading the charge against big spending and Democratic corruption in Washington, and losing only because of devious Slick Willie and his friends in the liberal media.

Mitt Romney never had such a moment where the GOP base voter really identified with him. Maybe in Massachusetts (I don't know the details here) but definitely not nationally. So people don't have the bonds that lead to making excuses for him. And even if the flip-flopper case were objectively equal against Newt and Romney, GOP base voters would be much more willing to make excuses for their former Speaker than for the former Massachusetts Governor.

(Entirely random personal update: I remember 1994 pretty well myself. I was 14 and a sophomore in high school. I went to the Wake County Democratic Party election night event at a hotel, and the older folks were happy to see a youngster like me there. But obviously it wasn't a very happy place overall. I vividly remember watching the TV announce Chuck Robb's victory over Oliver North in Virginia, as a nice middle-aged black man said "Thank God for small favors.")

Why Do Republicans End Up Defending Obama's Policies?

Jonathan is discussing why Republicans often reject Democratic policies and then go on to endorse the same policies with the Obama / Democratic label not attached to them. Huntsman, for example, wants to eliminate Dodd-Frank, and then pass the two biggest parts of Dodd-Frank (derivatives regulation and resolution authority, see Mike Konczal for details). Jonathan writes:

I suspect this isn't really about Obama just being pretty moderate, and so there's nowhere to go to oppose him on the right. I think it's more about a lack of policy knowledge and interest among Republican politicians; they just don't really have serious ideas at hand to contrast with Democratic policies, and in many instances don't appear to have a good grasp of what those policies are (see: Michele Bachmann, and her wonderful theory that Obama has a secret plan to replace Medicare with Obamacare). And then there's a piece of it that is demand-driven, with conservative audiences wanting to hear that everything Obama wants is radical socialism; it's not acceptable to say, for example, that Dodd-Frank has some things to agree with and some that should be changed.

As far as I can tell, all of this really is just about Obama and mainstream Democrats being pretty moderate, so there's nowhere to go (or at least nowhere sensible) on the right. Huntsman's a smart guy, and if there were really were a good case for totally overturning Dodd-Frank and replacing it with some kind of conservative plan, he'd probably be for it. At the very least, someone at AEI would've written it up and it would've been absorbed into right-wing wonk circles and he'd know how to talk about it. But there is no such case, leaving Huntsman nothing to say. So instead of conservative audiences pushing him towards a smart conservative plan, they push him to say negative things about Obama and then endorse what's basically the mainstream Democratic plan.

(I was looking at the AEI website for their commentary on Dodd-Frank. Peter Wallison doesn't like Dodd-Frank, saying that its resolution rules only give you ways to take down individual bad financial institutions. It doesn't deal with the root cause of the crisis -- a "common shock" to all institutions that hurts them all. That sounds plausible to me, as I don't see how Dodd-Frank would've prevented a housing bubble and the resulting damage to the whole system. But really what you're asking for if you're saying that is something more extreme that would allow more dramatic government intervention in financial markets to avert bubbles. "Dodd-Frank just tinkers around the edges" is a radical point, not a moderate one. And that goes back to the point about how there's not much sensible-conservative room from which to criticize Obama and mainstream Democrats.)

Of course, you get some conservatives who don't embrace anything Obama or mainstream Democrats said, and start making up silly options like chicken barter for health care and 9-9-9. But many of them, particularly the ones who actually know something about public policy, don't.

Cainwreck

Herman Cain has dropped out of the race. The Onion provides the deepest commentary, using only a single headline.

As far as the affair is concerned, I don't think something like that needs to sink a presidential candidacy. But in a primary where there are lots of other options, it's a serious problem. And you can't let your campaign be about your sexual misdeeds, which is basically what had happened to the Cain campaign. I guess that's what can happen to candidates who have lots of misdeeds and poor-to-mediocre top-level campaign staff. I don't think even the best management would've saved him, but things got a lot weirder than I imagine they would've with the best and brightest in charge.

I imagine that part of the reason Republicans got so excited about Cain was that they liked the idea of playing the race card back against Democrats. It's not so much that they thought he'd win black voters (though I'm sure some of them had unreasonable ambitions of stealing black voters from Obama). It's more that a lot of them feel that accusations of racism have been unjustly used as a political weapon against them, and they were pleased at the thought of having that weapon in their hands to use against their enemies.

Of all the bad things Cain has done, the one that I felt the most upset about came recently, when his campaign attacked the various women accusing him of sexual harassment and affairs for being "husbandless." I've had the good fortune to be briefly involved with a few husbandless ladies in the past few months, and I won't stand for anyone saying nasty things about them. I know he's done a lot worse than that stray remark, but I guess it just really got to me.

Marriage Inequality Follies

I'm sure this response to gay marriage supporters sounds clever to the people who say it, but it really doesn't work:

JANE SCHMIDT: Then, why can’t same-sex couples get married?

BACHMANN: They can get married, but they abide by the same law as everyone else. They can marry a man if they’re a woman. Or they can marry a woman if they’re a man.

So suppose we banned heterosexual marriage, and legalized gay marriage. Straight people could still get married! And they'd have about as many legally available partners as they had before! It's just that they wouldn't be interested in sexual relationships with any of these people.

Obviously, this would be a disastrous infringement on the rights of straight people. If you're a straight person and you can feel how messed up it would be if only gay marriage were legal, you can feel what's wrong with only heterosexual marriage being legal.