Monday, September 27, 2010

Reapportionment after the 2010 census

One purpose of the census is to give us population data in order to determine the relative political power of the states .

A new estimate of the 2010 census is out, calculating which states lose or gain house seats and therefore electoral votes.

The list is (the parenthesis indicated the Cook Partisan Voting Index of how Republican or Democrat the state is):

Utah (20R) +1
Texas (10R) +4
South Carolina (8R) +1
Georgia (7R) +1
Arizona (6R) +1
Florida (2R) +2

Nevada (1D) +1
Washington (5D) +1

Massachusetts (12D) -1
New York (10D) -2
Illinois (8D) -1
Michigan (4D) -1
New Jersey (4D) -1
Pennsylvania. (2D) -1
Iowa, (1D) -1
Louisiana (10R) -1
Ohio (1R) -2
Missouri (3R) -1

Basically you have Republican states getting net +6 seats and the Democrat states losing -6. This means 1 more Kansas sized state to the Republicans.

Another way of counting is that solidly Republican states gain 7, solidly Democrat states lose 5, and battleground states lose 2.

In a 2008-style major victory, none of this matters. But if we in 2012 get an even year like 2000 or 2004, this redistribution of power might influence the outcome.

You need 270 for a majority (269 if your party controls the house). Start with the 2004 map.

Bush got 286, taking three Democrat states of Iowa, Nevada and New Mexico. With the new figures, he would have gotten 294.

This means a Republican aiming for the Bush map in 2012 can afford to lose 24 electoral votes. For example he can win even though losing:

New Mexico and Iowa and Nevada and 7 more electoral votes
New Mexico and Iowa and Colorado and 4 more electoral votes
Ohio + either Iowa or Nevada or New Mexico

There are 3 reasons political power is shifting. One reason is that Democrat states have a lower rate of reproduction, and lose people. This is a pure republican win.

Another reason is immigration. Since immigrants are leftwing, this means that while the red states are getting larger, they are also getting less red (witness Nevada that is trending to the Democrats). It is not clear who this benefits, sometimes the Republicans, sometimes the Democrats. Over the long run I think the Democrats.

Lastly you have native Americans moving between states. It would be interesting to study how this effects political views.

Are the people who are moving on average republicans sick of the expensive, high tax blue states? That could make the new states even more red (for example there is the notion that out of California migrants did this in the Rocky Mountain states).

Are they typical liberal blue state voters who bring their values with them? That would make the red states more blue. This seems to have happened in New Hampshire where Democrats from Massachusetts settled.

A last possibility that I suspect has some explanatory power is that the (on averge) more blue voters in time will be effected by the social pressures and information in their new states to move rightwing.

Friday, September 24, 2010

A short comment on the Swedish 2010 election

The 2006-2010 Reinfeldt government undertook a lot of supply side reforms, mainly of taxes and insurance systems.

These reforms take time to generate results. More importantly, the crisis in the short term dominated the long term effect of the reforms. Thus a lower share of Swedes are employed now than in 2006, not because Reinfeldt and Borg's reforms don't work, but because of the global crisis.

Even of the government does nothing major new for 4 years (and it will), it will still reap the benefits of the stuff it did before. In 2014, several hundred thousand more Swedes will be employed than now.

If the Social Democrats had won, they would get the benefit of all of the Alliance reforms, which would unfairly be seen as a sign that Social Democratic economic policy generates more jobs than free-market economic policy.

In this sense it matters less that Reinfeldt did not capture a full majority.

It is generally a major problem that voters confuse the effects of the business cycle with the effects of economic reforms.

Tuesday, September 21, 2010

Data on the 2010 Swedish election

Some analysis of the election based on the exit polls and on the latest large survey of voters.

1. The trend for LO (workers union) members to abandon the left continues. In 1994 66% of LO-members voted for Social-Democrats. This election it was 51%.

Many have gone to other left of center parties. But not all. In total, the share of LO members who voted for any left alternative has declined since 1994.

2. As late as 2002 44% of Swedish voters consider themselves left and 34% right. After the Moderate party done away with much of the libertarian parts of their platform and rhetoric, this changed.

In this election, 42% of Swedish voters consider themselves right, whereas only 38% consider themselves left.

The right has gone from a -10 to +4 in self-identification.

Of course what "right" means in Sweden is very different from what right means in the U.S. But there are meaningful differences in terms of which path you want to take society and how you self-identify. American observers of Sweden should keep this trend in mind.

3. While Sweden-Democrats are over-represented among the unemployed and other types of welfare recipients, my calculations using the exit polls and SCB is that the majority of their voters are in fact employed. An additional large group are students in college or high-school.

Overall among young men and first time voters SD does well, which probably means they will continue to grow at least for a while.

4. It seems hard to poll a party who those in polite company consider racist.

This is the third time the exit poll under-estimated the Sweden-Democrats. On average the Sweden-Democrat seem to get 25-30% more in final votes than when someone personally asks them who they voted for.

The normal polls underestimated their support by about one tenth, or in absolute terms 0.5%.

Here is how the polling firms did in their last poll:

United Minds: (internet panel) Overestimated by 25%
Synovate: Overestimated by 4%, got it almost exactly right.
Demoskop: Underesimated by 11%
Skop: Underesimated by 12%
Novus: Underestimated by 25%
Sifo: Underestimated by 33%

For all of September, here is how the polling firms did compared to the average of the polling firms in terms of percentage points:

Sifo: -1%
Novus: -0.6%
Skop: -0.6%
Demoskop: -0.45%
Synovate: +0.3%
United Minds: +0.7%

One conclusion is that United Minds internet based poll overestimated the support for SD, because SD is overrepresented among internet savvy people in a way that United Minds has been able to sufficiently control for through sampling weights.

Synovate seems to have gotten it right this time, either through luck or superior polling methods.

The other 4 polling firms under-estimate the support for SD by about one fifth. So if tomorrow they tell us SD has 4% support, the true support is 5%.

5. There is a weird tradition among Swedish political scientists to claim that party leader does not much influence election outcomes (they claim this with confidence, even though we have no way of identifying the counter-factual).

My instincts is that this is false. Just like Americans, Swedes judge the competence and character of the party leaders, in particular the prime minister candidates.

Case in point:

A historic 45% of Moderate party voters mentioned Fredrik Reinfeldt as important for their choice.

In comparison Social Democratic party leader Mona Sahlin only got 19%

Sweden is no longer a Social Democratic country. But nor is it a moderate, classically liberal right of center country as some commentators seem to believe. Instead it is now roughly evenly divided between the left and the right. What made the right crush the Social Democrats was that we have a popular, competent leader, while Mona Sahlin is dim and does not convey confidence.

This could easily change 4 years from now.

(A sign of danger for the left and right both is that 31 year old SD-Leader Jimmy Åkesson is as popular with his party as Carl Bildt was with the Moderates in 1998)

6. In an election where the left block was decimated, 77% of non-European immigrants voted for the left. Immigrants in Sweden are very leftist.

Of native Swedes, I estimate that only 42% voted for any of the 3 left parties. If it were not for leftist support from immigrants, Sweden would now have a majority right government.

For now, the non-European immigrant share of the voting population is relatively small (around 2%). But it is growing each election. The libertarians who want to increase immigration based on irresponsible dogma are swiftly destroying the prospects of Sweden to take a more free market path.

Monday, September 20, 2010

Krugman criticism from Rajan

Paul Krugman is very smart, tremendously well-informed and a skilled writer. But he lacks wisdom, judgment and character. Thus he has become not only partisan, but also exceptionally dishonest as a debater.

There is a professional ethic among economists to be intellectually honest in debates. Krugman keeps violating this rule, with articles heavy on ad-hominem personal attacks, straw-man misrepresentations of the claims of his opponent, a refusal to ever admit that he is wrong, and ignoring fact and logic whenever it suits him just to appear stronger in the debate.

Everything is about maximizing the short run argument in favor of the policies that Krugman favors, rather than finding out the truth, which is what economists are supposedly supposed to do.

For example Krugman pretends that European policies do not harm economic performance by looking at growth rates, despite the fact that he knows perfectly well that established economic theory predicts that the costs of policies that dampen economic activity appear as different levels of output, not growth paths.

Krugman's audience are unsophisticated non-trained economists, which makes all his violations of the academic rule of conduct worse.

When the policies pushed by Krugman did worse than he promised, he does not update his views. He just becomes even louder, claiming that the lack of success of Krugmaonomics just proves we need more of the exact same Krugman-style economics.

Imagine Krugman's reaction if the Bush administration people argued that the failure of their foreign policy and economic policy just proves we need more of the exact same recipe.

One of Krugman's dubious and partisan claims is that government policies to increase home ownership among poor americans and minorities had nothing to do with the sub prime-mortgage bubble. Here star Raghuram Rajan, a University of Chicago professor takes Krugman to task. Read it carefully.

If I understand the history involved correctly, the government sponsored enterprises that we have all come to know and love in the last few years invented sub-prime mortgage backed securities (MBS), which gives them a part of the blame of the crisis even if they had done nothing after this (which they did).

So, go read it all. It´s good for you.

Saturday, September 18, 2010

Uppdate on Swedish Election: [Update Updated]

Tomorrow Sunday is election day in Sweden.

The poll of polls of the latest surveys of the 5 institutes looks like this:

Center-Right Alliance: 49.9%

Left-Green block: 43.2%

Sweden-Democrats: 5.2%

Some issues:

* During the last days of the election the left is surging and the right falling.

* The Swedish-Democrats probably will do better than polls indicate. I personally don't believe this effect is very large, but I have friends who do.

* While it is all but certain that the center-right will win, the question is if they will get their own majority without the Sweden-Democrats.

* A symbolically important question is if the Moderate party will become larger than the Social-Democratic party. It looks very close. My guess is that the Social-Democrats will probably inch ahead.

NEW Data:

The results from the exit polls are:

Center-right alliance 49.1%
The left: 45.1%
Sweden-Democrats: 4.6%

In previous elections the SD got 1/4 to 1/3 more in end result than in exit polls. I predict 6% for SD before the night ends.

This means with high likelihood there will be no majority government, unless the Green party crosses from left to right and joins the Reinfeldt government.

According to Exit polls the left did better among first time voters than last election, due to the success of the Green party.

Update 2

The preliminary results are that the left did even worse than the exit polls suggested. The center-right might get own majority.

Update 3

With 98% of the districts counted, its looks like:

Center-Right 49.2% of the votes, 49.6% of the seats
Left: 43.7% of votes, 44.7% of seats
Sweden-Democrats: 5.7% of votes, 5.7% of seats.

This means the center-right has won, but does not receive their own majority.

Update 4

Final results:

Center-right 49.3%
Left: 43.6%
Sweden-Democrats: 5.7% of votes

Thursday, September 9, 2010

Sweden is more politically corrupt than you think

On the micro-level, Sweden is one of the least corrupt countries in the world. Officials do not take bribes, and politicians typically do not give jobs to their relatives.

However, what many outsiders (and for that matter many naïve Swedes) don’t realize is that there is a large degree of macro-corruption in corporatist Sweden. Perhaps the most important example of this is the role of labor unions in elections.

In a free society people should of course be able to organize themselves. However, unions in Sweden are not operating in a free institutional context. They have been granted extraordinary power by law.

• By law they negotiate wages for everyone, not only for union members.

• They control the unemployment insurance system. Since non-union members risk being discriminated against, and since almost every worker needs unemployment insurance, this forces many Swedish workers to become members.

• In Sweden if an employer needs to lay off workers, he or she does not decide which worker to keep. Regulation dictates that they have to go by job tenure, firing first those who were hired first. However, the Unions have the power to circumvent this law, and pick who gets to stay and who gets fired. As expected they use this power to benefit their members. As a result if you don’t join the Union you are much more likely to be fired, should the plant need to downsize.

Partially because of these biases, a very large proportion of workers belong to a labor union.

And here the fun starts. The union of workers (LO) and the Social Democratic party are for all intents and purposes the same organization. The head of LO sits in the top deciding organ of Social Democracy. The LO has at least stopped collectively enrolling its members as members in the Social Democratic party, as of 1987.

In the 2006 election according to this election survey 52% of LO-members voted Social Democrat. Another 13% voted for the Greens and the former communist party.

Yet, despite the fact that many of its members are not Social Democrats, the LO each year uses member fees to donate massive amounts of money and services to the Social Democrats.

For a hard-hitting example of how legally induced union membership converts into political muscle, here is a charming poster from this election (widely distributed), with the face of the minister of industry upside down, with the word "Superstupid" (roughly) superimposed.

According to Liberal party member and economics professor Carl Hamilton, the LO donates almost 90 million kronor (PPP adjusted $10 million) in cash and advertising money and about 550 million kronor ($60 million) in free labor to the Social Democrats.

A note about the free labor: According to Swedish labor market regulations, private firms are forced to treat much of the political efforts of Union activists as being part of regular work. Therefore when union activists are campaigning for the Social Democrats they are being paid for this by the private sector.

The support from the unions alone amounts to 7.8 dollars per Swede this election.

In contrast President Obama’s entire record campaign raised through voluntary donations cost only 2.2 dollars per American!

Of course, the presidential campaign is far from the entire cost of the American elections. However we should keep in mind that in addition to the LO money the Swedish state and local counties give the parties about $40 per Swede per election cycle, from which the Social Democrats receive I believe about one third.

Another bizarre source of funding is that the Social Democrats have a de facto monopoly among the political parties when it comes to lotteries, giving them another $4-5 per Swede per election.

As part of corporatism Swedish industry funds several free-market think tanks. However they do not engage in election campaigning. And of course the Unions also fund their own think tanks.

Because of the leftist intellectual climate and because of status quo bias, the corrupt legal advantages given to the Unions used to fund the Social Democrats are accepted as normal in Sweden. People are not generally aware of the financial advantage of the left, assuming that since the Social Democratic voters earn less than the center-right voters that they Social Democrats as a party are also the poor underdogs.

Therefore what the Swedish media is currently concerned about is that the center-right Moderate party in 2009 received $200.000 in private donations, and that they are not disclosing the name of the donors (which in fairness, they probably should).

I personally think the Swedish type of macro-corruption is worse for politics than the Southern-European type of corruption where bureaucrats take bribes and help their friends.

Money is not everything, of course, and their ill-gotten financial advantage will probably not save the left in this electoral cycle. However it is wrong in principle and on average in each election biases the results a few percentage points in favor of the left.

Another consequence is also that LO:s political power rests on the labor market regulations that force people to join the Unions, hence they defend them tooth and nail (using the money of their opponents). Maybe there are other good reasons for the unions to support these laws, maybe not. But because of the political self-interest involved, we can never be sure of their motives. Since their entire power structure rests on these laws, the unions can be sure to defend the status quo regardless of the impact on the welfare of the workers.

There is also a moral aspect to this. LO donates 100% of their funds to the Social Democrats, even though only 50-60% of their members typically vote for them. If you are a classically liberal worker, not only will you be essentially forced because of regulations to join the Union, you will be forced to donate money to your political opponents. This is simply not democratic, and it is not consistent with the spirit of a fair and free society.

Saturday, September 4, 2010

Don’t believe the hype: Somali immigration to Minnesota is a complete failure

Immigration from the third world to Sweden has led to massive social and economic problems. However, the Swedish elites compactly believe in the ideology of multiculturalism. This is true both of the left and of the right.

Their main strategy is to deny objective reality. If our lying eyes tell us that immigrants disproportionally commit crime, live off government benefits and cause negative social externalities, our eyes and our statistics must be wrong. First, anyone who points out data about the effects of immigration is silenced using the effective ad hominem accusation of racism.

Once everyone who is not a multi-culturalist is out of the way and the intellectual level of the debate is lowered to satisfactory levels, the elites are free to exaggerate the benefits, reject or underplay the problems, and make up fantasies about what would happen without immigration. So for example they have claimed that without immigration from the third world Sweden would not have olive oil in the stores or fast food. Or that immigrants, who even when they are younger than Swedes are a net burden on the welfare state, and who like everyone else age and eventually collect pensions, will somehow magically save the pension system.

There is however a second strategy, that I want to write about today. This is when problems with immigration are acknowledged, but blamed on Sweden. Under the dominant multi-culturalist ideology immigration is axiomatically good, so any problems must be due to external factors.

Each side self-servingly attributes the problems of immigration to what they don’t like about the Swedish system.

The left therefore claims that the explanation of why half of non-western immigrants don’t work is racism by capitalist firms. The reason immigrants are 6 times as likely to go to jail for committing crime is discrimination in the legal system, and the lack of funding for public services.

The right conversly claims that problems associated with immigration are entirely due to the welfare state.

Usually we rely on some sort of efficiency in the marketplace for ideas through competition. The left will point out the weak arguments of the right, and vice versa. The result is of course not perfect, but at least you don’t get away with anything. But when it comes to immigration the elites to the left and right in Sweden have formed an intellectual cartel.

The respective arguments in favor of continued mass immigration are *never* questioned by either side. So for example when currently the government and academia are lying to the public and claiming that immigration has not contributed to more incidents of rape - even though according to official statistics half of all rapes are committed by immigrants - the law-and-order right is silent.

The secondary debate where each side blames the problems of third world immigration to the policies of the other side (because it would be unthinkable that the problem was immigration itself) is a little less taboo, but even here the elites tread carefully.

Which brings me to the subject of this post. The Center party (the right of center rural, small town party) has a think tank managed by a bright, energetic guy called Martin Ådahl.

They are releasing a new book called “Successful immigration”, claiming that in opposite to common perceptions, research shows that immigration to Sweden is beneficial for growth and job creation.

The book release emphasizes the success story of Somali immigrants in Minnesota by Benny Carlson.

Why do Swedes care so much about Somali immigrants in Minnesota, American readers might ask themselves?

It is very simple. Somali immigrants in Sweden are one of the most problematic groups. Only about 20% work, the rest living on welfare. Since according to multi-culturalists it is not logically possible that immigration from Somalia is not beneficial for Sweden, we must assume Swedes or the Swedish system is to blame.

As we noted the right blames this on the welfare state. They have thus invented the story that Somalia immigrants in free-market Minnesota are a magnificently successful group, largely based on anecdotal evidence. If we could only copy the policies of Minnesota, they would thrive also in Sweden.

Can we trust the research presented by this book? What does the data tell us?

I downloaded US Census American Community Survey 2006-2008 (before the crisis), which allows us to directly investigate Somali immigrants in Minnesota.

The average income of the working age adults in Minnesota is $38.000.

The average income of working age Somali immigrants in Minnesota is $13.800, or about one third(!). As a comparison, one third of the average American income is Mexico.

More than half of Somali immigrants in Minnesota are below the poverty line.

Only one half of Somali immigrants in Minnesota work.

Those who work earn $21.000 per year, compared to $46.000 for Minnesotans on average.

The median income of Somalis that work is $12000 per year, or about 9000 Swedish kronor per month (using 9 kronor to a dollar as a PPP-adjusted conversion rate).

The conclusion that this data tells us is that Somali immigration to Minnesota has been a complete disaster from the perspective of Minnesota.

A group that earn one third of average income cannot possibly be a net contributor to the public sector (in the U.S those with low income pay virtually no taxes, yet consume public services).

A group that earns one third of average income and where half live in poverty is not a success story for other countries to be inspired by.

One consolation is that we find that 51% of Somalis in Minnesota work, compared to about 20% in Sweden. Is that not at least a partial success story?

Minnesota in 2008 has very little labor regulations, low taxes, and much less generous public services than Sweden (although contrary to public perception they do still have some welfare and public services). It is more of a brutal sink-or-swim climate for immigrants than Sweden will ever be in my lifetime.

Yet, half of Somalis don’t work.

Moreover, those who do work earn very little, because they have low productivity.

If we import the Minnesota “success-story” to Sweden, we will get more Somali immigrants to work. But half of them would earn 9000 Swedish kronor per month or less, income levels that Swedes consider abject poverty. Swedes simply do not want a segregated, low-wage labour market.

The entire purpose of the Swedish social experiment is that Swedes are inequality averse, and do not want to live in a society where unskilled workers earn third world wages.

Nor do Swedes enjoy social problems, and are satisfied if over 50% of a community lives in poverty (compared to less than 7% of Swedes).

When a group with this dismal performance is cheerfully presented to the Swedish public as a “success-story” that we should emulate, we know that the intellectual level of the Swedish right has sunk very low.
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