Thursday, July 15, 2010
Japan's turn to China as a primary export market
According to the Financial Times, "China replaced the US as Japan’s biggest export market last year(2009)".(1) Here's a chart from RIETI showing the relative shares of Japan's total exports:It's remarkable that the proportion of exports to the USA has practically halved in ten years. Figures from Japan's Ministry of Finance show that Japan actually had a trade deficit with China in 2009,
Monday, July 12, 2010
Wilkinson and Pickett misrepresent research again
I want to point to an exchange from The Spirit Level authors Richard Wilkinson and Kate Pickett to again illustrate the lack of scientific rigor from these two authors.
The Spirit Level claims that inequality within American states causes lower life expectancy.
When Princeton Professor Angus Deaton and UIUC professor Darren Lubotsky controlled for racial composition, this effect vanished.
University of Massachusetts Amherst scholars Ash and Robinson wrote a reply, saying that they could find an effect, with a certain specification.
Deaton and Lubotsky responded:
“Ash and Robinson… consider alternative weighting schemes and show that in one of our specifications, in one data period, and with one of their alternative weighting schemes, income inequality is estimated to be a risk factor. All of our other specifications, as well as their own preferred specification, replicate our original result, which is supported by the weight of the evidence. Conditional on fraction black, there is no evidence for an effect of income inequality on mortality.”
Angus Deaton is not just any guy. Unlike Wilkinson and Pickett, he is a scientific heavy-weight. When he came to the University of Chicago the last time to speak about econometric methodology, I saw at least 3 Nobel Prize winners in the audience.
Furthermore, as any economist knows, with multiple variables and no clear model, you can data-mine any result you want in 1-2 specifications. If you have to use correlations, what matters is the weight of the evidence.
So how do Wilkinson and Pickett present this exchange to their non-academic , trusting audience?
They simply write that Ash and Robinson find a result, neglecting to even mention the Deaton and Lubotsky study - the one actual researchers take seriously, the one that has 145 citations in google scholar. The Ash and Robinson study in comparison has 1 (sic) citation (although in fairness it is 6 years newer).
If you only read and trust Wilkinson and Pickett, you would not even know the Deaton and Lubotsky study even existed!!!
Wilkinson and Pickett have weak evidence in terms of causation, so they rely a lot on falsely claiming scientific consensus. But if you read the articles, the truth is that the field of research they are engaged in is best described by a consensus that the inequality and health have not been convincingly established to be causally connected, a lack of clean identification, and with the weight of the evidence going against Wilkinson and Pickett.
What academics know, and the broad public does not, is that if you lack a clear model, lack clean experiments, and have multiple variables, have unobservable variables, and when what you are studying can be suspected to be endogenously related (such as health, race and income inequality), you can almost ALWAYS establish a result in some specification, through sufficient data-mining.
In this situation it is very important to rely on the best studies, rely on the weight of the evidence and model averaging, and if you theoretically have reason to belive some varible may be important (such as race), to include the control if possible.
But the scientific standard that Wilkinson and Pickett use is that if someone somewhere finds a correlation in one specification (that they like), that is the end of the story! Proof! Scientific Evidence!
They can ignore all the other research, even if written by much more senior researchers, in more prestigious journals, with better methodology, and go straight to the naïve public and claim that science has proven Wilkinson and Pickett’s ideology true.
Journalists should know this the next time they read Wilkinson and Pickett claim to objectively present scientific evidence.
The Spirit Level claims that inequality within American states causes lower life expectancy.
When Princeton Professor Angus Deaton and UIUC professor Darren Lubotsky controlled for racial composition, this effect vanished.
University of Massachusetts Amherst scholars Ash and Robinson wrote a reply, saying that they could find an effect, with a certain specification.
Deaton and Lubotsky responded:
“Ash and Robinson… consider alternative weighting schemes and show that in one of our specifications, in one data period, and with one of their alternative weighting schemes, income inequality is estimated to be a risk factor. All of our other specifications, as well as their own preferred specification, replicate our original result, which is supported by the weight of the evidence. Conditional on fraction black, there is no evidence for an effect of income inequality on mortality.”
Angus Deaton is not just any guy. Unlike Wilkinson and Pickett, he is a scientific heavy-weight. When he came to the University of Chicago the last time to speak about econometric methodology, I saw at least 3 Nobel Prize winners in the audience.
Furthermore, as any economist knows, with multiple variables and no clear model, you can data-mine any result you want in 1-2 specifications. If you have to use correlations, what matters is the weight of the evidence.
So how do Wilkinson and Pickett present this exchange to their non-academic , trusting audience?
They simply write that Ash and Robinson find a result, neglecting to even mention the Deaton and Lubotsky study - the one actual researchers take seriously, the one that has 145 citations in google scholar. The Ash and Robinson study in comparison has 1 (sic) citation (although in fairness it is 6 years newer).
If you only read and trust Wilkinson and Pickett, you would not even know the Deaton and Lubotsky study even existed!!!
Wilkinson and Pickett have weak evidence in terms of causation, so they rely a lot on falsely claiming scientific consensus. But if you read the articles, the truth is that the field of research they are engaged in is best described by a consensus that the inequality and health have not been convincingly established to be causally connected, a lack of clean identification, and with the weight of the evidence going against Wilkinson and Pickett.
What academics know, and the broad public does not, is that if you lack a clear model, lack clean experiments, and have multiple variables, have unobservable variables, and when what you are studying can be suspected to be endogenously related (such as health, race and income inequality), you can almost ALWAYS establish a result in some specification, through sufficient data-mining.
In this situation it is very important to rely on the best studies, rely on the weight of the evidence and model averaging, and if you theoretically have reason to belive some varible may be important (such as race), to include the control if possible.
But the scientific standard that Wilkinson and Pickett use is that if someone somewhere finds a correlation in one specification (that they like), that is the end of the story! Proof! Scientific Evidence!
They can ignore all the other research, even if written by much more senior researchers, in more prestigious journals, with better methodology, and go straight to the naïve public and claim that science has proven Wilkinson and Pickett’s ideology true.
Journalists should know this the next time they read Wilkinson and Pickett claim to objectively present scientific evidence.
Sunday, July 11, 2010
Wall Street Journal article
The day before yesterday the Wall Street Journal published an article co-written by me about the book Spirit Level. It is my brothers third, my first, in the journal.
I will be visiting my parents in western Sweden, so postings will continue to be light.
I will be visiting my parents in western Sweden, so postings will continue to be light.
Saturday, July 3, 2010
The Fiscal Connection
A recent poll by Pew shows that the public (who wants to reduce deficits) are against both tax increases and against most spending cuts.
This does not surprise me. In the public finance literature, it has been known for a long time that the public by large does not make the “fiscal connection”. This means they do not seem to be fully aware that taxes, spending and deficits are virtually a zero sum game, unless you very clearly remind them. Most people are not trained economists.
Of course, it is also possible in this particular poll that there are other spending cuts not specified in the poll that people actually support (such as cuts in public employee benefits). Also tax collection can be made more efficient, through lower rates and a more broad tax base.
But more generally, the implication of the lack of a fiscal connection is that polls that only ask about one part of the fiscal equation cannot be trusted. The sum of people who want tax cuts, spending increases and deficit reduction is far above 100%!
Even in Sweden, support for tax cuts regularly poll above 60-70%. Some individuals interpret the question narrowly as ‘would you like your personal taxes to go down’? Since we have self-serving bias, most of us, including those who want a larger public sector, think we are over-taxed relative to others.
But naïve Economic Conservatives that run on this agenda lose, because the necessary implication of the tax cut is reduction in spending, or larger deficits, alternatives not stated in the poll.
Meanwhile, leftist groups can regularly show support for new programs by simply asking “do you support more money for X”?
One solution is to compare answers over time and across demographical groups, but giving little weight to the raw percentage itself. Another way around this is to force people to choose, such as the question “Generally speaking, would you say you favor smaller government with fewer services, or larger government with more services?”
When asked that way, when asked this way 58% of Americans currently choose smaller government and 38% more services. But even here deficit reduction is not offered as an alternative.
Don’t trust any poll results about taxes, spending and deficits that do not force people to make the fiscal connection.
This does not surprise me. In the public finance literature, it has been known for a long time that the public by large does not make the “fiscal connection”. This means they do not seem to be fully aware that taxes, spending and deficits are virtually a zero sum game, unless you very clearly remind them. Most people are not trained economists.
Of course, it is also possible in this particular poll that there are other spending cuts not specified in the poll that people actually support (such as cuts in public employee benefits). Also tax collection can be made more efficient, through lower rates and a more broad tax base.
But more generally, the implication of the lack of a fiscal connection is that polls that only ask about one part of the fiscal equation cannot be trusted. The sum of people who want tax cuts, spending increases and deficit reduction is far above 100%!
Even in Sweden, support for tax cuts regularly poll above 60-70%. Some individuals interpret the question narrowly as ‘would you like your personal taxes to go down’? Since we have self-serving bias, most of us, including those who want a larger public sector, think we are over-taxed relative to others.
But naïve Economic Conservatives that run on this agenda lose, because the necessary implication of the tax cut is reduction in spending, or larger deficits, alternatives not stated in the poll.
Meanwhile, leftist groups can regularly show support for new programs by simply asking “do you support more money for X”?
One solution is to compare answers over time and across demographical groups, but giving little weight to the raw percentage itself. Another way around this is to force people to choose, such as the question “Generally speaking, would you say you favor smaller government with fewer services, or larger government with more services?”
When asked that way, when asked this way 58% of Americans currently choose smaller government and 38% more services. But even here deficit reduction is not offered as an alternative.
Don’t trust any poll results about taxes, spending and deficits that do not force people to make the fiscal connection.
Sunday, June 27, 2010
North Korean economic history
There is a new book (in Swedish) about North Korea. It is written by Villy Bergström, a respected Swedish Social Democratic economist, and Benjamin Silberstein. Silberstein is a young guy who is obsessed with North Korea, has read everything about the country, and probably known as much about the hermit Kingdom than anyone in Sweden.
The book is largely based on two trips Bergström took to North Korea, one in 1971 (at the height of North Koreas success), and one in 2002 (when the country was near starvation). The diaries from the trips are quite fascinating; I could not put the book down once I started reading it. The cult around Kil Il Sung is unbelievable.
Some random observations on the book:
• Apparently North Korea in 1971 had a reasonable standard of living. In particular we can believe this observation through the fog of propaganda as Bergström compares his visit in 1971 with his visit in 2002. One reason was massive aid from the Soviet Union. Villy Bergström is a skilled economists, and tries to estimate the standard of living indirectly (the official figures are of course pure lies), for example through observing electricity production, how healthy the population looks and how they live and are dressed. In 1971 people seem well fed, but in 2002 some beg food.
According to Maddison (who sadly passed away recently), Bergström is right. In the early 1970s North Korea was about as rich as South Korea, (about 2500$ per capita in 1990 dollars). The subsequent development is known to anyone.
Here is per capita income (as best estimated) in North and South Korea, between 1950-2008.
• We can also speculate that centrally planned economies do better the first few decades. When the revolutionary fervor is still high the incentive problems are mitigated. During the initial phase the country can grow through brute capital accumulation (forced savings) and by pushing everyone into the labor force. When they target a few heavy industries, such as steel production and military hardware, the information problem is less severe. But after a while the socialist economy inevitably runs out of steam, and starts to stagnate. They have never been able to solve the information problem to produce decent consumer goods.
• Even though Villy Bergström was a leftist, he showed a lot of integrity in his 1971 diaries, as he questioned the cult around Kim Il Sung and the lack of democracy. Apparently the Swedish left was very upset with him when he originally published the diaries.
• Bergström in 1971 gets to meet some North Korean economists. He asks if they study Keynes. “Of course” They reply. “The Kim Il Sung version!” The Korean economist also study Adam Smith and Ricardo, combined with critique of these classical economists written by Kim Il Sung…
• Villy Bergström writes beautifully. The skill to write well in Swedish is lost in my generation of economist, who only work in English. Since English is our second or third (in my case fourth) language, there is a natural limit for our ability to express ourselves. This makes it less likely for a broader audience of Swedes to read work done by Swedish economists. Quite sad really.
• The book is weakest in its analysis of foreign policy. While Villy Bergström is immune to North Korean economic propaganda, he completely accepts their lies about foreign affairs and the war (perhaps because of the Vietnam War atmosphere). He thus accepts the premise that the Korean War was a war of aggression by the U.S, “American imperialism” against “little North Korea”.
First of all, there is no serious historical dispute that North Korea attacked South Korea (supported by Stalin and Mao), not vice versa. The U.S would never have allowed South Korea to attack North Korea (and South Korea at any case had a very weak military). Second, the Korean War was largely between the U.S and allies and China, not betweeen the U.S and "little North Korea".
Bergström even believes absurd stories the North Koreans tell him about how Americans G.Is would come to North Korean villages, systematically round up hundreds of men, women and children, put them in a basement, pour gasoline on them and lit them on fire to burn to death. Sure, if North Korea propaganda say so, it must be true, who cares about historical evidence? Also, not a word is mentioned about the people who actually committed atrocities, the North Koreans (who murdered tens of thousands of civilians) and the South Koreans. Only America, the generally innocent party, is hated and lied about.
I like Swedes, but I will never accept their rancorous anti-Americanism.
• The chapters written contemporaneously are much more balanced in the historical foreign policy describtion.
• In 2002 about 20% of the North Korean population was members of the communist party. In George Orwell’s “1984”, 15% of the population is members of The Party (of which 2% are members of The Inner Party). Orwell was nothing if not insightful.
• Typical of Social Democratic ideology, Villy Bergström attributes everything to policy. He for example favorably notes that the North Korean school children have more advanced mathematic training than Swedes. Sure, there is absolutely no other explanation other than education policy why east Asians would be better at math than Swedes. Never mind that we notice the exact pattern in Japan, South Korea, China, Taiwan, Singapore, Hong Kong and among South Asian immigrants in the U.S (and Sweden...), despite different policies.
A richer theory of the world would account for, say, culture, and not automatically assume every social pattern is due to political decisions.
• The book is hints at how crazy the ideological atmosphere was in 1971. As I wrote, Villy Bergström was a brilliant economist, and considered a centrist Social Democrat. Yet he writes in one point, favorably comparing North Korea with other nations:
“[Classical] liberalism and capitalism in South Korea has led to fascism and an upper class in ruthless luxury, with a destitute, hopelessly stagnant proletariat. This has happened in South Korea, Taiwan, South Vietnam, Pakistan, South America and southern Italy”.
Pakistan and South America in the 1970s were hardly free market systems. And are South Korea, Taiwan (and more recently Vietnam) really examples of economic ‘stagnation’?!?
And why focus only on one region in southern Italy, when we want to judge policy? Doesn’t all Italy have roughly the same policy? If we observe that most of Italy does well, and a couple of corrupt, low trust, low cooperation regions in the south do poorly, is the most reasonable explanation to blame capitalism?
According to Maddison, between 1946 and 1971 Italy had an average per capita growth of 5.6%. Would you call that stagnation? Bergström thinks the standard of living in southern Italy was the same or lower than North Korea, even though according to Maddison Italy at the time had 4 times higher per capita GDP (of course the south is poorer, but it is not really enlightening to compare the richest part of North Korea with the poorest part of Italy, and even there Italy wins with a big margin).
• The authors are impressed that North Korea recovered from the war by 1971. But it seems to me countries recover from war faster than people think. Conditional on institutions and human capital, physical capital is easily rebuilt.
• In 1971 the Swedish Social Democrats had brilliant economists like Villy Bergström, ideologically committed to their cause. Today people as smart and rational as Bergström rarely become Social Democrats. Much of the he talent in the working class has already moved upwards to becoming middle class, and no longer identifies with the workers movement. The academics they have are not top-economists, but cultural Marxists (feminists, multi-culturalism cooks, postmodernism etc). The decline in talent is perhaps the biggest problem facing the Social Democratic party.
• The anecdotes about Kim Il Sung worship are worth buying the book alone. It makes a great companion to “1984”, comparing Orwell’s fiction/fact with North Koreas bizarre mix of fiction/fact.
The book is largely based on two trips Bergström took to North Korea, one in 1971 (at the height of North Koreas success), and one in 2002 (when the country was near starvation). The diaries from the trips are quite fascinating; I could not put the book down once I started reading it. The cult around Kil Il Sung is unbelievable.
Some random observations on the book:
• Apparently North Korea in 1971 had a reasonable standard of living. In particular we can believe this observation through the fog of propaganda as Bergström compares his visit in 1971 with his visit in 2002. One reason was massive aid from the Soviet Union. Villy Bergström is a skilled economists, and tries to estimate the standard of living indirectly (the official figures are of course pure lies), for example through observing electricity production, how healthy the population looks and how they live and are dressed. In 1971 people seem well fed, but in 2002 some beg food.
According to Maddison (who sadly passed away recently), Bergström is right. In the early 1970s North Korea was about as rich as South Korea, (about 2500$ per capita in 1990 dollars). The subsequent development is known to anyone.
Here is per capita income (as best estimated) in North and South Korea, between 1950-2008.
• We can also speculate that centrally planned economies do better the first few decades. When the revolutionary fervor is still high the incentive problems are mitigated. During the initial phase the country can grow through brute capital accumulation (forced savings) and by pushing everyone into the labor force. When they target a few heavy industries, such as steel production and military hardware, the information problem is less severe. But after a while the socialist economy inevitably runs out of steam, and starts to stagnate. They have never been able to solve the information problem to produce decent consumer goods.
• Even though Villy Bergström was a leftist, he showed a lot of integrity in his 1971 diaries, as he questioned the cult around Kim Il Sung and the lack of democracy. Apparently the Swedish left was very upset with him when he originally published the diaries.
• Bergström in 1971 gets to meet some North Korean economists. He asks if they study Keynes. “Of course” They reply. “The Kim Il Sung version!” The Korean economist also study Adam Smith and Ricardo, combined with critique of these classical economists written by Kim Il Sung…
• Villy Bergström writes beautifully. The skill to write well in Swedish is lost in my generation of economist, who only work in English. Since English is our second or third (in my case fourth) language, there is a natural limit for our ability to express ourselves. This makes it less likely for a broader audience of Swedes to read work done by Swedish economists. Quite sad really.
• The book is weakest in its analysis of foreign policy. While Villy Bergström is immune to North Korean economic propaganda, he completely accepts their lies about foreign affairs and the war (perhaps because of the Vietnam War atmosphere). He thus accepts the premise that the Korean War was a war of aggression by the U.S, “American imperialism” against “little North Korea”.
First of all, there is no serious historical dispute that North Korea attacked South Korea (supported by Stalin and Mao), not vice versa. The U.S would never have allowed South Korea to attack North Korea (and South Korea at any case had a very weak military). Second, the Korean War was largely between the U.S and allies and China, not betweeen the U.S and "little North Korea".
Bergström even believes absurd stories the North Koreans tell him about how Americans G.Is would come to North Korean villages, systematically round up hundreds of men, women and children, put them in a basement, pour gasoline on them and lit them on fire to burn to death. Sure, if North Korea propaganda say so, it must be true, who cares about historical evidence? Also, not a word is mentioned about the people who actually committed atrocities, the North Koreans (who murdered tens of thousands of civilians) and the South Koreans. Only America, the generally innocent party, is hated and lied about.
I like Swedes, but I will never accept their rancorous anti-Americanism.
• The chapters written contemporaneously are much more balanced in the historical foreign policy describtion.
• In 2002 about 20% of the North Korean population was members of the communist party. In George Orwell’s “1984”, 15% of the population is members of The Party (of which 2% are members of The Inner Party). Orwell was nothing if not insightful.
• Typical of Social Democratic ideology, Villy Bergström attributes everything to policy. He for example favorably notes that the North Korean school children have more advanced mathematic training than Swedes. Sure, there is absolutely no other explanation other than education policy why east Asians would be better at math than Swedes. Never mind that we notice the exact pattern in Japan, South Korea, China, Taiwan, Singapore, Hong Kong and among South Asian immigrants in the U.S (and Sweden...), despite different policies.
A richer theory of the world would account for, say, culture, and not automatically assume every social pattern is due to political decisions.
• The book is hints at how crazy the ideological atmosphere was in 1971. As I wrote, Villy Bergström was a brilliant economist, and considered a centrist Social Democrat. Yet he writes in one point, favorably comparing North Korea with other nations:
“[Classical] liberalism and capitalism in South Korea has led to fascism and an upper class in ruthless luxury, with a destitute, hopelessly stagnant proletariat. This has happened in South Korea, Taiwan, South Vietnam, Pakistan, South America and southern Italy”.
Pakistan and South America in the 1970s were hardly free market systems. And are South Korea, Taiwan (and more recently Vietnam) really examples of economic ‘stagnation’?!?
And why focus only on one region in southern Italy, when we want to judge policy? Doesn’t all Italy have roughly the same policy? If we observe that most of Italy does well, and a couple of corrupt, low trust, low cooperation regions in the south do poorly, is the most reasonable explanation to blame capitalism?
According to Maddison, between 1946 and 1971 Italy had an average per capita growth of 5.6%. Would you call that stagnation? Bergström thinks the standard of living in southern Italy was the same or lower than North Korea, even though according to Maddison Italy at the time had 4 times higher per capita GDP (of course the south is poorer, but it is not really enlightening to compare the richest part of North Korea with the poorest part of Italy, and even there Italy wins with a big margin).
• The authors are impressed that North Korea recovered from the war by 1971. But it seems to me countries recover from war faster than people think. Conditional on institutions and human capital, physical capital is easily rebuilt.
• In 1971 the Swedish Social Democrats had brilliant economists like Villy Bergström, ideologically committed to their cause. Today people as smart and rational as Bergström rarely become Social Democrats. Much of the he talent in the working class has already moved upwards to becoming middle class, and no longer identifies with the workers movement. The academics they have are not top-economists, but cultural Marxists (feminists, multi-culturalism cooks, postmodernism etc). The decline in talent is perhaps the biggest problem facing the Social Democratic party.
• The anecdotes about Kim Il Sung worship are worth buying the book alone. It makes a great companion to “1984”, comparing Orwell’s fiction/fact with North Koreas bizarre mix of fiction/fact.
Thursday, June 24, 2010
A guide to the 2010 Swedish Election
On the 19th on September Sweden will have elections. Historically, since the 1930s the Social Democrats and their allies usually win a majority of seats, although sometimes with small margins, and three times gaining power even when losing the popular vote. The last election in 2006 however was won by the center-right coalition referred to as “Alliansen” (The Alliance).
Ignoring an unusual exception, you need 4% of the vote to be represented in the Swedish parliament. Above this the votes are allocated proportionally. Compared to the U.S parties are strong, it is extraordinarily rare for Swedish members of parliament to vote against their party.
There are 8 viable parties. 3 on the left, 4 on the right, and one anti-immigration party outside the left-right division.
Here is the average vote of the Left the last few decades:
Next, let's provide some historical background:
1. The Social Democratic worker’s Party.
The historically dominant party in the country, called by some the most successful party in the democratic world. One nuance that foreigners sometimes miss is that part of the reason the Social Democrats win so often is that they positioning themselves in Sweden as a center-left, pro-growth, even pro-business party. This strategy often work.
Here is their historical vote share:
As they radicalized since 1968, they have lost votes. Note also that the variability in Swedish elections and opinion polls has increased dramatically. A generation or so ago, block-voting was the norm, sticking to “your” party depending on what class or social segment you belong to, and largely diregarding the political winds.
The Social Democrats have lost working class votes. Part of the reason is the shrinking working class, another part is weaker class identification among voters. To some extent the Social Democrats have compensated this by getting new voters, especially non-European immigrants. Furthermore, while the working party have been getting weaker, some of the support is lost to the former communists and to the new Green Party, that generally votes with the Social Democrats.
They lost the 2006 election because of high hidden unemployment in Sweden. Most Swedish voters have a strong Lutheran work ethic, and dislike the idea that a large part of the population are “outsiders” in terms of labor market participation.
Their post war (1948-2006) mean vote share is 43.7%.
Their latest election result (2006) was 35.0%.
Current poll average 30.4%
The most important historical development in Swedish politics is that The Social Democratic workers party has gradually lost power and prestige, and for the first time they have promised that if their block wins they are going to form a coalition government with the two smaller leftist parties.
The Social Democrats have an unpopular leader, called Mona Sahlin, who is widely considered to be less than competent. This and their recent move to the left helps explain their poor polls. However, they are the default choice of many Swedes, and are helped by the fact that many voters dislike the type of cutbacks in social welfare programs the center-right has carried out.
2. The Left Party.
Former communists, for many years financed by Moscow. After the fall of the Soviet Union they became more of a normal party. However the hard left in this party recently cleansed many of the reformers who wanted to modernize, pull down pictures of Lenin from the walls of their headquarters and move more towards the center. A drag on the Social Democrats, although they have a loyal core of supporters and a pretty sharp debater as their leader.
The party in addition to communists gets many votes from immigrants, feminists and anti-American activists.
Their (1948-2006) mean vote share is 5.6%.
Their latest election result (2006) was 5.8%.
Current poll average 5.6%.
If the combined left wins, it will be the first time in history this party is allowed to be a part of the government. Before, if the combined left had a majority the Social Democrats tended to form a one-party government, while relying on the votes of the smaller left parties to form a parliamentary majority.
3. The Green Party.
Founded in 1981 as part of the environmentalist movement. Basically Swedish hippies.
Has done very well in Sweden, where voters are extremely environmentally friendly. Votes with the left, but is considered much more centrists on economic issues than the Left Party.
They currently have a competent and popular leader, Maria Wetterstrand, and are doing well in the polls. Especially strong support among young people in large cities and among the highly educated. The Green party social-liberalism is quite hip right now, so they are getting a lot of people who support them for identity reasons. They and the Liberal People’s Party are the "Stuff White People Like" parties.
Their (1982-2006) mean vote share is 3.9%.
Their latest election result (2006) was 5.2%.
Current poll average 9.8%
The Green and the Left party support completely open borders, free immigration for anyone who wants to live in Sweden, combined with keeping the welfare state.
4. The Moderate Party.
Full disclosure: I vote for this party.
Conservative/classical liberal party. Was quite neo-liberal from the late 1980s until early 2000s. After Fredrik Reinfeld and Anders Borg took over the party moved to the center with resulting electoral success.
The policy shift can be summarized as taking their previous top 10 agenda, dropping points 3-10, but keeping the first two, which were lower taxes and reform of the education system. Another part of the re-branding was a change in attitudes, not to be seen as the “upper class” party (remember that Sweden unlike the U.S has a historical aristocracy, disliked by ordinary Swedes).
Their (1948-2006) mean vote share is 17.9%.
Their latest election result (2006) was 26.2%.
Current poll average 32.1%
It is quite rare for the Conservative Party to be larger than the Social Democrats. If this holds true on election day it will mark a teutonic shift in Swedish politics. The strength of the Moderate Party is it’s extremely competent leadership, including Prime minister Fredrik Reinfeld, finance minister Anders Borg and foreign minister Carl Bildt.
5. Liberal People’s Party:
Social-Liberals who sort of like the market economy. Our version of centrist Democrats.
This party is strong in large cities, amongst teachers and among academics (the "enlightened" classes).
Has a decently popular party leader far to the ideological right of his party, a former military guy.
Their historic (1948-2006) mean vote share is 13.7%.
Their latest election result (2006) was 7.5%
Current poll average 6.3%
6. The Center party.
The party for agrarians and small town folks. Is shrinking, because they moved sharply to the right in a failed attempt to get voters from the Moderate party. This party is the most pro-small business in Sweden, and the only one pushing to de-regulate the labor market.
They also attempted to modernize their image as a modern, cosmopolitan party. What instead happened was that some of their rural base, who are hardly Laissez-faire fanatics, felt alien in this new party and stopped voting for them. The Stockholm voters in turn patted the Center Party on the heads, and countinued to support parties with less dirth under their historic fingernails.
Their (1948-2006) mean vote share is 13.1%
Their latest election result (2006) was 7.9%
Current polls average 5.0%
7. The Christian Democrats.
Swedish Christians, and mild social conservatives. Often dangerously close to the 4% threshold. They are looked down by the media and the by the chattering classes, but actually have lots of smart people and are slowly moving toward intellectually founded conservatism (as opposed to instinctual conservatism that Swedes do not respect).
Their historic (1964-2006) average vote share is 4.1%
Their latest election result (2006) was 6.6%
Current poll average 4.5%
8. The Sweden Democrats:
Anti-immigration party, who are outside of parliament, and slowly growing. Has historical ties to the neo-nazi movement. The 2.9% they got in 2006 was surprisingly high. Strong among first time voters and in conservative Scania. Very active online. They are in the middle on economic issues, proposing to cut immigration and foreign aid and use to money for tax cuts and to improve the living standard of nursing homes for the elderly. Interestingly the only party in Sweden that could be described as fully socially conservative.
Since this party is despised by the establishment, it is hard to poll them, because people do not admit they belong to it. They will most likely not be allowed on many TV debates, despite the fact that they have as much support as several other small parties.
Their current standing in the average of the polls as of writing is 4.6%.
Going by the two last elections they will get 20-30% more votes than the polls indicate, perhaps more.
A very important question is what happens if the Sweden Democrats become the swing vote, something which is very likely.
So will The Sweden Democrats (Sverigedemokraterna) get into parliament? I am certain they will.
Average poll result for the Sweden Democrats since 2006:
As the election approaches, I expect the small parties to do better. What the election will hinge on is the verdict of the voters on the ability of the Alliance to “create” jobs during a crisis (and, as the right hopes, on the leadership qualities of Reinfeldt vs. Sahlin).
Right now the center-right (blue) is ahead, really for the first time since they took power almost 4 years ago.
Currently the odds markets are indicating a 53% chance for the center-right to win. This promises to become a closely contested election. Almost as exciting as the World Cup if you ask me...
Update:
Go to this page for live results of the vote.
Go to http://super-economy.blogspot.com/2010/09/uppdate-on-swedish-election.html for live update.
Ignoring an unusual exception, you need 4% of the vote to be represented in the Swedish parliament. Above this the votes are allocated proportionally. Compared to the U.S parties are strong, it is extraordinarily rare for Swedish members of parliament to vote against their party.
There are 8 viable parties. 3 on the left, 4 on the right, and one anti-immigration party outside the left-right division.
Here is the average vote of the Left the last few decades:
Next, let's provide some historical background:
1. The Social Democratic worker’s Party.
The historically dominant party in the country, called by some the most successful party in the democratic world. One nuance that foreigners sometimes miss is that part of the reason the Social Democrats win so often is that they positioning themselves in Sweden as a center-left, pro-growth, even pro-business party. This strategy often work.
Here is their historical vote share:
As they radicalized since 1968, they have lost votes. Note also that the variability in Swedish elections and opinion polls has increased dramatically. A generation or so ago, block-voting was the norm, sticking to “your” party depending on what class or social segment you belong to, and largely diregarding the political winds.
The Social Democrats have lost working class votes. Part of the reason is the shrinking working class, another part is weaker class identification among voters. To some extent the Social Democrats have compensated this by getting new voters, especially non-European immigrants. Furthermore, while the working party have been getting weaker, some of the support is lost to the former communists and to the new Green Party, that generally votes with the Social Democrats.
They lost the 2006 election because of high hidden unemployment in Sweden. Most Swedish voters have a strong Lutheran work ethic, and dislike the idea that a large part of the population are “outsiders” in terms of labor market participation.
Their post war (1948-2006) mean vote share is 43.7%.
Their latest election result (2006) was 35.0%.
Current poll average 30.4%
The most important historical development in Swedish politics is that The Social Democratic workers party has gradually lost power and prestige, and for the first time they have promised that if their block wins they are going to form a coalition government with the two smaller leftist parties.
The Social Democrats have an unpopular leader, called Mona Sahlin, who is widely considered to be less than competent. This and their recent move to the left helps explain their poor polls. However, they are the default choice of many Swedes, and are helped by the fact that many voters dislike the type of cutbacks in social welfare programs the center-right has carried out.
2. The Left Party.
Former communists, for many years financed by Moscow. After the fall of the Soviet Union they became more of a normal party. However the hard left in this party recently cleansed many of the reformers who wanted to modernize, pull down pictures of Lenin from the walls of their headquarters and move more towards the center. A drag on the Social Democrats, although they have a loyal core of supporters and a pretty sharp debater as their leader.
The party in addition to communists gets many votes from immigrants, feminists and anti-American activists.
Their (1948-2006) mean vote share is 5.6%.
Their latest election result (2006) was 5.8%.
Current poll average 5.6%.
If the combined left wins, it will be the first time in history this party is allowed to be a part of the government. Before, if the combined left had a majority the Social Democrats tended to form a one-party government, while relying on the votes of the smaller left parties to form a parliamentary majority.
3. The Green Party.
Founded in 1981 as part of the environmentalist movement. Basically Swedish hippies.
Has done very well in Sweden, where voters are extremely environmentally friendly. Votes with the left, but is considered much more centrists on economic issues than the Left Party.
They currently have a competent and popular leader, Maria Wetterstrand, and are doing well in the polls. Especially strong support among young people in large cities and among the highly educated. The Green party social-liberalism is quite hip right now, so they are getting a lot of people who support them for identity reasons. They and the Liberal People’s Party are the "Stuff White People Like" parties.
Their (1982-2006) mean vote share is 3.9%.
Their latest election result (2006) was 5.2%.
Current poll average 9.8%
The Green and the Left party support completely open borders, free immigration for anyone who wants to live in Sweden, combined with keeping the welfare state.
4. The Moderate Party.
Full disclosure: I vote for this party.
Conservative/classical liberal party. Was quite neo-liberal from the late 1980s until early 2000s. After Fredrik Reinfeld and Anders Borg took over the party moved to the center with resulting electoral success.
The policy shift can be summarized as taking their previous top 10 agenda, dropping points 3-10, but keeping the first two, which were lower taxes and reform of the education system. Another part of the re-branding was a change in attitudes, not to be seen as the “upper class” party (remember that Sweden unlike the U.S has a historical aristocracy, disliked by ordinary Swedes).
Their (1948-2006) mean vote share is 17.9%.
Their latest election result (2006) was 26.2%.
Current poll average 32.1%
It is quite rare for the Conservative Party to be larger than the Social Democrats. If this holds true on election day it will mark a teutonic shift in Swedish politics. The strength of the Moderate Party is it’s extremely competent leadership, including Prime minister Fredrik Reinfeld, finance minister Anders Borg and foreign minister Carl Bildt.
5. Liberal People’s Party:
Social-Liberals who sort of like the market economy. Our version of centrist Democrats.
This party is strong in large cities, amongst teachers and among academics (the "enlightened" classes).
Has a decently popular party leader far to the ideological right of his party, a former military guy.
Their historic (1948-2006) mean vote share is 13.7%.
Their latest election result (2006) was 7.5%
Current poll average 6.3%
6. The Center party.
The party for agrarians and small town folks. Is shrinking, because they moved sharply to the right in a failed attempt to get voters from the Moderate party. This party is the most pro-small business in Sweden, and the only one pushing to de-regulate the labor market.
They also attempted to modernize their image as a modern, cosmopolitan party. What instead happened was that some of their rural base, who are hardly Laissez-faire fanatics, felt alien in this new party and stopped voting for them. The Stockholm voters in turn patted the Center Party on the heads, and countinued to support parties with less dirth under their historic fingernails.
Their (1948-2006) mean vote share is 13.1%
Their latest election result (2006) was 7.9%
Current polls average 5.0%
7. The Christian Democrats.
Swedish Christians, and mild social conservatives. Often dangerously close to the 4% threshold. They are looked down by the media and the by the chattering classes, but actually have lots of smart people and are slowly moving toward intellectually founded conservatism (as opposed to instinctual conservatism that Swedes do not respect).
Their historic (1964-2006) average vote share is 4.1%
Their latest election result (2006) was 6.6%
Current poll average 4.5%
8. The Sweden Democrats:
Anti-immigration party, who are outside of parliament, and slowly growing. Has historical ties to the neo-nazi movement. The 2.9% they got in 2006 was surprisingly high. Strong among first time voters and in conservative Scania. Very active online. They are in the middle on economic issues, proposing to cut immigration and foreign aid and use to money for tax cuts and to improve the living standard of nursing homes for the elderly. Interestingly the only party in Sweden that could be described as fully socially conservative.
Since this party is despised by the establishment, it is hard to poll them, because people do not admit they belong to it. They will most likely not be allowed on many TV debates, despite the fact that they have as much support as several other small parties.
Their current standing in the average of the polls as of writing is 4.6%.
Going by the two last elections they will get 20-30% more votes than the polls indicate, perhaps more.
A very important question is what happens if the Sweden Democrats become the swing vote, something which is very likely.
So will The Sweden Democrats (Sverigedemokraterna) get into parliament? I am certain they will.
Average poll result for the Sweden Democrats since 2006:
As the election approaches, I expect the small parties to do better. What the election will hinge on is the verdict of the voters on the ability of the Alliance to “create” jobs during a crisis (and, as the right hopes, on the leadership qualities of Reinfeldt vs. Sahlin).
Right now the center-right (blue) is ahead, really for the first time since they took power almost 4 years ago.
Currently the odds markets are indicating a 53% chance for the center-right to win. This promises to become a closely contested election. Almost as exciting as the World Cup if you ask me...
Update:
Go to this page for live results of the vote.
Go to http://super-economy.blogspot.com/2010/09/uppdate-on-swedish-election.html for live update.
Monday, June 21, 2010
How much is military spending?
The Wars in Afghanistan and Iraq are costly, especially in terms of lost lives. However, they are probably not as expensive in financial terms as people think.
In 2010 national defense costs about 680 billion dollars, which translates to approximately 4.5% of GDP. The 2 wars are about 1-2% of GDP. During the cold war (1946-1989) defense spending as a share of GDP averaged 7.7%.
Overall, the share of national income that goes to defense has been declining, with the expectation of two minor bumps associated with the Iraq war and now the escalation in Afghanistan.
There are those in Europe who claim that the U.S is engaged in an arms race. However all of the increase in military spending is due to the operations in Afghanistan and Iraq, in fact in terms of procuring weapons excluding Iraq and Afghanistan U.S military spending as a share of GDP has declined.
This is from the Congressional Budget Office.
And this longer series from the White House:
Having undertaken the responsibility of two invasions, the U.S should try to win the wars in Afghanistan and Iraq, both for moral reasons and not to lose military prestige. After that however I hope America stays out of foreign wars for a while and cuts defense spending a few hundred billion, in light of the looming deficit problem.
In 2010 national defense costs about 680 billion dollars, which translates to approximately 4.5% of GDP. The 2 wars are about 1-2% of GDP. During the cold war (1946-1989) defense spending as a share of GDP averaged 7.7%.
Overall, the share of national income that goes to defense has been declining, with the expectation of two minor bumps associated with the Iraq war and now the escalation in Afghanistan.
There are those in Europe who claim that the U.S is engaged in an arms race. However all of the increase in military spending is due to the operations in Afghanistan and Iraq, in fact in terms of procuring weapons excluding Iraq and Afghanistan U.S military spending as a share of GDP has declined.
This is from the Congressional Budget Office.
And this longer series from the White House:
Having undertaken the responsibility of two invasions, the U.S should try to win the wars in Afghanistan and Iraq, both for moral reasons and not to lose military prestige. After that however I hope America stays out of foreign wars for a while and cuts defense spending a few hundred billion, in light of the looming deficit problem.
Subscribe to:
Posts (Atom)