Saturday, December 27, 2008

China in Guinea

Guinea is in the news due to a coup, which the US, EU, and AU have condemned. Africa certainly doesn't need any more coups, but it also doesn't need any more direct interference from Chinese mineral concerns. As Africans rightly ask, what's the problem with free trade? The problem is that where free trade with liberal democracies is about benefiting individuals and their voluntary organizations (companies) in those countries, trade with China is about benefiting China - and once the trade link is established, China's doctrine of supposedly not interfering with other countries' internal workings is right out the window. In 2006 China offered to build a soccer stadium for Guinea and in 2008 a hydroelectric dam in exchange for bauxite (aluminum ore) rights.

So far so good. Now look at Zambia. Zambia is an excellent example of the effect of Chinese mineral attention. It's a country whose mineral wealth in the form of copper is being rapidly removed from the country through the backbreaking and poorly compensated labor of Zambians, and to the profit of China. Zambians know this all too well, and in 2006 they came close to electing a candidate (Michael Sata) mostly because his position could be reduced to disliking the Chinese. China stated that should he be elected, they would have broken off all diplomatic ties to Zambia. It's hard to see how that's "non-interference"; I think we English speakers must be mistranslating a word that more accurately means "we should be able to do whatever we want with Tibet and Taiwan".

Unfortunately it seems Zambians recently have only had the choice of either a government that sells them out to Chinese state-run mineral interests, or (in Michael Sata) a student of Bobby Mugabe. Maybe this is why Sata is suddenly more receptive to Chinese investment, as Mugabe has always been.

Should we be surprised by China's neo-colonialism in Africa? Hardly. "In 2001, the Politburo set down its global zou chuqu ("go out") directive, instructing state-owned enterprises to seek long-term access to natural resources." Does this sound familiar? The Chinese government reached the same conclusion that the PNAC did, and they've been acting on it - and more effectively than the US to boot.

There is a way to focus foreign policy and incentivize investment and free trade in commodity-rich (resource-cursed) countries while encouraging the development of infrastructure and liberal democracy in a place where people have struggled with it. It's harder to do it this way, the right way, than to just be overt imperialists, and China is much better at moving in and exploiting moments of vulnerability. What do I mean? We thought "the oil would pay for the war" - and yet China is the first foreign government to sign an oil deal with post-war Iraq. China has the advantage of not having to trouble themselves about the incompetence, barbarism and human rights nightmares of dictators when signing deals with them; and those dictators like not being hounded about reforms, so they're natural allies. Steal elections, arrest and execute your opposition while your people die of cholera and have inflation of literally eleven million percent? No problem! Not for China, not if you have platinum.

A new Great Game has started in Africa; China has had the ball for the whole first quarter of the game, because the West is only now realizing that clock has started. It's difficult not to speak in adversarial terms, and indeed, China and the West still think we're playing two different games. It's critical that China is brought further onto the same playing field in the twenty-first century.


Credit: Economist

Friday, December 26, 2008

Australia is Making a Mistake

Apparently the Australian government now thinks that China is the country to imitate.

Telecommunications Minister Stephen Conroy has called for a Great Australian Firewall that would block websites (sound familiar?). The trial began Christmas Eve, and there's not even any legal mechanism to determine what goes on the blocked-list - just government fiat.

As with most first steps by big government into telling its citizens what they're allowed to see and read, he's acting under the guise of protecting the children. It's an old strategy - you dare speak out against burning witches? Then you must be one too! Speak out against protecting children? You must be an evil pervert! It's deadly for politicians to take a stand for something abstract like freedom of information when they can be cast as taking a stand against something concrete like the safety of children. Australia has been a vibrant democracy and I hope its citizens speak out against this outrage and keep it that way.

Monday, December 22, 2008

First Quake-Related Lawsuit in China

The first Sichuan-quake-related lawsuit is being filed. Briefly there seemed to be a promise of Chinese glasnost after the Sichuan quake, with an unusually open Chinese government; then the openness stopped, and it was back to business as usual. And obviously, no one noticed this more, or suffered more as a result, than the people of Sichuan Province.

Far from being a cynical celebration that another nation has joined the U.S. in litigiousness, I welcome this as a test to see if China is a modern state, a nation of laws and not of men, with citizens entitled to demand redress from their government for shoddy buildings that took human lives. If it is indeed the People's Republic of China, they should be.

Friday, December 19, 2008

Another Broken Promise

The Olympics are over and now, with less international attention, China re-blocks websites. Surprise, the Great Firewall is back up, strong as ever! Given that I do get hits from China (hello progressives, you're not alone!), it's even possible that you're reading one of them.

Animal Activist Gets Jail Time

Another moron carted off to the clink. Whether or not you agree with his apparent assertion that it's more important to keep an animal alive than to try to cure AIDS or cancer, terrorist acts are never justified - and that's what these kinds of actions are. Same goes for the vandals in Santa Cruz this week).

As repugnant as their behavior is, the trial shows that the justice system works, even without the Patriot Act repealing the basic protections that Americans have fought for. And now that it's Obama's people reviewing the tapes, does the Patriot Act still seem like a good idea to you?

First Memorable Mistake of Obama Administration

This CNN article is clear about why picking Rick Warren was divisive. If Obama wanted a minister at his swearing-in, there are thousands of others he could have chosen from. The Religious Right is not going to start suddenly trusting Obama because he picks Rick Warren, but reasonable Americans of all stripes might start to wonder if "bridge-building" means "favoritism politics".

Monday, December 15, 2008

Subversion of Science and Education for Politics

Here is yet another case of politics intimidating science, and the nation damaging its economy and badly losing. Just because evolution and genetics is threatening to a certain group of people doesn't mean it's not true, and certainly doesn't mean that it should be replaced in universities by dogmatic, unquestionable pseudoscience. Am I belly-aching again about evangelicals trying to force creationism on our kids?

Funny, I guess there is a similarity - but I was talking about Stalin's Biology Director Trofim Lysenko, partly responsible for the famines in 1950s Russia in which millions died. He liked to shout at scientists who dared disagree with his party-line science that they were unpatriotic, or elitists, or out-of-touch. One of his favorite rejoinders was to call dissenting Russian scientists "fly-lovers and people-haters". I know the election is over, but I can't help being reminded of a very similar comment made by someone else.

Need a Laugh? Get One at Hugo Chavez's Expense

Sr. Chavez - ¿Está Fidel llamándote de veras? I ran across this a couple weeks ago. Kudos to Enrique Santos and Joe Ferrero at WXDJ in Miami for actually getting through on the phone to Hugo Chavez pretending to be Fidel Castro. Article here; call here (in Spanish). They tricked Castro too but somehow that's not as funny to me.

Sentencing for Tibetan Resistance

China carefully timed this sentencing to coincide with the global distraction of the U.S. election, so people around the world wouldn't be reminded of what had happened in Tibet in March and April before the Olympics. I wonder if any of the Nepal protesters were "extradited".

Sunday, December 14, 2008

Why Should Currency Standards Be *Gold* Standards?

A more updated version of this article can be found at one of my other blogs, The Late Enlightenment.

My question is not whether or not we should be on any kind of standard at all, but rather why it should be gold. So, fiat currency exorcists, please spare me your arguments about the evils thereof. There isn't a single currency based on gold today so in any event your work is cut out for you, and I concede that this is an academic exercise. Still, it's a question that's interested me for a while, and it's curious that there seems to be no solid, rational answer to the question of "why gold?"

The traditional arguments in favor of gold as the most rational exchange medium are invariably a combination of some or all of the following, all of which are undone by modern technology or empirical data:

1) It's easily divisible.

2) It's identifiable (and elemental - it can't be created ab initio).

3) It's durable.

4) It's rare.

5) It's useful.

Gold certainly qualifies for these categories, but today, so do most of the other transition metals. Let's dispense with 1, 2, and 3 immediately since they're no longer unique features of gold. Modern technology lets us work with and machine and divide into coins all metals - and identify them as well (we now have better techniques than color, oxidation and specific gravity). No, this technology wasn't available to past governments, but it's available to us, and we're talking about why would gold still be the standard now, not historically - or at least why it would be the fall-back.

In terms of durability, although gold is more resistant to oxidation than other metals, once mined and refined, metals are stored under contolled conditions (like vaults or pockets) that make the durability question moot. Pure gold nicks and bends easily too; many other metals do not.

So I ask again: why gold? In terms of usefulness, gold does have industrial and medical applications, but in that regard it's sure no uranium or silicon, and in any event it would be hard to quantify the innate industrial value of an element. That leaves us with only one physical attribute to be the source of gold's central role in human economics.


Rarity

I had always assumed that value correlated with rarity, but realized I'd never seen data on this. Therefore, to determine which metal would be the best value reserve, I looked at the value to rarity ratio by comparing the relative abundance of metallic elements in the Earth's crust and their modern values; most values came from the Los Alamos periodic table pages, or from current commodities markets for those metals that are commonly traded. For practical purposes, we can rule out as a potential value reserve for humans any elemental metals which are unstable or unhealthy to handle at room temperature. For example: radium is radioactive, tellurium stinks, cesium explodes, and francium exists only momentarily and as part of a nuclear decay path (which means it's both radioactive and becomes cesium, which explodes).

Ruling out the intolerables, we find that osmium and iridium are both rarer and more expensive than gold. Before you start celebrating the inherent rationality of the human valuation of metals, a) iridium is rarer yet cheaper, and b) please find me someone advocating an osmium standard for a currency, or a single currency or economy that has ever been based on either osmium or iridium. By the reasons given for gold as the basic commodity metal, currencies should be based on osmium, at least now that we can collect and refine it. Then again, maybe two centuries from now the foolish age of fiat currencies will have passed and the world economy will be on an iridium standard and I will be hailed as a visionary. (Use the right side of my profile on coins, please.) Of course, I'm not making coin-portrait appointments yet, because on further investigation, any semblance of economic logic breaks down:



Platinum has the same value as gold (or historically, often higher) even though it's substantially less rare in the Earth's crust. It bears mentioning that for some reason platinum has never been the basis for any economies either. Palladium is about twice as common than gold. Rhenium is slightly rarer than gold but about a third the value. Rhodium is about 4x rarer than gold but only about 15% more valuable. Ruthenium is about three times rarer than gold but has similar value, even though it's more industrially useful, even if still obscure. Even so, you don't see it being traded in Chicago, and there have never been currencies based on it, or to my knowledge even the suggestion thereof.

One objection to my theory is that a commodity that's too rare is useless as a basis for wealth, and that there is a rarity "sweet spot" for precious metals. While self-evidently true, this really doesn't tell us anything since it's a circular argument. That is to say, by this argument gold has "just the right level of rareness", which we know because it's what people use, so it must be just right. No dice. I might concede that iridium, which is almost 9 times rarer than even gold, wouldn't be a great choice for a standard, but why not palladium or rhenium? They're both of similar abundance to gold, and they're both industrially useful too.

You might object that just because an element is in the Earth's crust, it's not jumping out of the ground, and that production is a measure of said element's availability to human activities. So I ordered elements by global production as well:




There's a slight trend here, but it's still not the ordering you might expect to see. One thing I noticed was that (not surprisingly) gold was produced far out of proportion to its crustal abundance, which suggests that economic value isn't just a function of ease of extraction. So I also ordered the elements in terms of the ratio of production to abundance. Without showing you the scatterplot, the first ten most "overproduced" relative to their natural abundance were, in decreasing order, carbon, nitrogen, gold, lead, antimony, bismuth, tellurium, phosphorus, sulfur, and mercury. Gold is in there with some rather economically indistinguished elements.

Oddly enough, copper is 20,000x more common in the Earth's crust than gold, and yet it has been used as currency, as has silver. What's going on? There are three things going on: oxidation potentials, animal behavior, and habituation.


A Behavioral Explanation

I added this paragraph after the fact, because of the timely eruption of a tailor-made scandal driving home my point: if you don't think irrational grouppthink psychology plays a major role in human economic behavior, how did the Japan Enten scandal happen? I added this later because it was tailor-made for this article. If you're still not convinced, take the time to read MacKay's Extraordinary Popular Delusions and the Madness of Crowds.

First, gold, silver and copper are the only metals likely to be found at the Earth's surface that have negative oxidation potentials for the transition from pure to oxidized metal (meaning they can be found in nature in their unoxidized forms). Okay; so one day a few thousand years ago, someone was wading up a creek, and found gold nuggets glinting under the water. So what? Why was he interested in the physical properties of shiny gold nuggets any more than wood or rock or water?

It bears constant repeating that when we talk about economics, we're talking about the behavior of a specific animal. Economists concede today that Homo sapiens is not the perfectly rationally self-interested and profit-maximizing animal it was sometimes previously thought to be. Having said that, in asking "why gold?", it seems to me the principle factor that's overlooked is entirely irrational and human-dependent, and it best explains why modern humans might be predisposed to maintain gold as a store of value. That factor is that we're monkeys, and we like shiny things.

I mean that to be taken literally and seriously. Though gold does have industrial applications, we still use it primarily for decoration. On the other hand, I've never seen a palladium necklace at Tiffany's. My wife is a monkey who likes shiny things, and I'm a monkey who likes her, so I went to Tiffany's to get her shiny things. So does everyone else. So gold is valuable.

Now add several thousand years on top of our initial monkey-fascination with gold (which keeps it from being like, say, tulips) and you have considerable historical inertia. By this I mean many (but not all) civilizations independently adopted gold as their exchange standard and store of value, and now that billions of us are all trading, it would be even more impossible to change. To do so, you'd somehow have to simultaneously convince all humans who now recognize gold as inherently more valuable than most other metals (the majority of humans, including wives) that another medium was more valuable; this would be true even if there were no other reasons to use gold as a standard. Even the effective removal of monetary gold from circulation in the U.S. in the 1930s had little impact. It would be very difficult to convince people to switch to a different metal, because everyone already is programmed by history to value gold, and would you trust your neighbor to stop considering it valuable at the same moment you do? It's for this same reason that Ithaca hours, among other quirky currencies, have largely died out. When people in your town take Ithaca hours and American dollars, and no one in the town next door takes Ithaca hours, you get pretty nervous about, say, opening your 401K in Ithaca dollars.

One frequent objection is that if the use of gold were really just an economic legacy system or in game theoretic terms a massive and long-running coordination game, then there should have been economies that assigned higher values to shiny metals other than gold. And of course there were. For centuries China valued silver more highly than gold (whether you can say they were on a silver standard is another question). Isaac Newton even wrote on the topic for the British government, and illustrated his concern over the trade imbalances that would result for the two ends of the Old World if economies on opposite sides of Eurasia used different standards. Note that he didn't state that one was better than the other, just that having two value systems operating simultaneously was unhealthy. Today the gold/silver price ratio in China is the same as in the rest of the world. China's system was Betamax to Europe and the Middle East's VHS; I make this analogy to stress that, like Newton, I don't think that gold is necessarily better either, just that more people were using gold, and those people happened to colonize the rest of the world, so it was a matter of time before China's commodity valuations would have to adjust if they were to keep trading with everyone else.

CONCLUSION

I'm no commodities expert which is why I took advantage of a friend's recent visit to pick his brain. He does trade commodities, and works as a geologist for a major U.S. government contractor. When I asked him "why gold", he made the usual jokes about going on a selenium standard, and then said, "I don't know. Historical reasons I guess."

I'm not interested in convincing anybody to stop using gold. If you're going to use a precious metal as a store of value, everybody should use the same one, and gold is the one that humans have settled on at this point in history; it's still a kind of stable value reserve, even if it doesn't anchor currencies anymore. Some economists have predicted that it will eventually lose its value, as matter becomes smarter and labor continues to get more valuable, but we'll see. I asked the question "why gold" purely out of curiosity, but it's interesting to note that no anti-fiat-currency websites have begun calling for a rhodium standard, and that no one has provided an argument that explains the tenacity of gold as well as primate inertia.

World's Smallest Political Quiz

You can find it here. It takes about 45 seconds; see where you end up. I've often said half-jokingly that not only should ballots be secret, they should be blinded - that is, you would only see a list of the candidate's positions but not his or her name. I think Americans might vote a little differently if they could no longer vote straight-ticket Republican or Democratic like their friends and family, or for incumbents, and they actually had to think about how those positions aligned with their principles.

Why Can't Conservatives Go To Marches

I'll give you a chance to get past all the "because I actually have a job to go to" comments - because so do I, and I go to marches. The reason we're conservatives or libertarians is because we know that the best form of government is a lean, efficient democracy with full individual rights and the freedom to pursue happiness and express yourself as you like. This is why it's literally tragic that individual conservatives think the word "activist" is a slur, and that we aren't more vocal (and participatory) about the human rights atrocities regularly occurring at the hands of the world's dictators. This is moral high ground that left-wingers think they own at the moment - why not pull it out from under them?

If you're doing your charitable giving at the end of the tax year or you just want to commit to making the world a better place, here are three groups worth of the dedication of any real red-blooded American fiscal conservative or libertarian. If these don't make you want to get involved based on your principles, what will?

Human Rights Watch - This outstanding organization works in areas like child trafficking, war crimes, and in general helps to keep dictators accountable. For this they've become the target of a campaign organized by left-wing critics who would rather see HRW remain silent than dare criticize nominal socialist states like China and Venezuela. If for no other reason than that, now is the time to donate or get involved.

The Lights of Liberty - a group dedicated to grassroots and educational efforts right here in the US of A.

Human Rights in China - The name says it all. What's for an American conservative not to like about a group that promotes democracy in our biggest competitor?

How to Make the Healthcare Problem Easier: Raise Sin Taxes

I've said before that you need tax revenue to run a country. We usually only hear about two ways to control this when there are at least three. The first two are

1) What you spend it on

2) How much you tax


And the third is

3) What you tax


I wish #3 would have a greater role in health care policy discussions in the U.S.

The solution is not to nationalize American healthcare, which I've written about before. Our Kafkaesque tax code is in any event already in dire need of a real overhaul to organize it clearly according to modern principles and, by ironing out the labyrinthe, leveling the playing field for the middle class by removing at least some loopholes. I've also said before that it's foolish to tax income, because by doing this, you necessarily disincentivize earning money (or you incentivize earning money and cheating). Earning money is a good thing; so why not tax bad things instead? Pollution, waste - and unhealthy behavior. In whatever cases we can, when the government has to spend money on human-created problems, we should localize the expense to the people creating those problems.

Lee Kwan Yew, while I can't accuse him of being democratic, did something right: his long administration in Singapore turned a postcolonial swamp into the Switzerland of Southeast Asia in mere decades; to put this in perspective, today it's often said that Dubai is the Singapore of the Gulf. Only now is Malaysia catching up, although they've insisted on setting other challenges for themselves that Singapore wisely avoided. How did Singapore do it? One method that I find admirable is focusing revenue collection on fines, rather than on income. Wouldn't you rather your government take money from people who were misbehaving than people behaving successfully (by making money)? It's here that I'll get the first outcries of "social engineering!" from the more fundamentalist of my fellow libertarians - and of course, that's exactly what it is. News flash: the purpose of law is to change behavior. That's why we levy fines or put people in jail for doing bad things.

One of my problems with any kind of nationalized healthcare is that invariably, you end up paying for someone else's bad habits. Why should you be on the hook for my lung cancer treatment when I've chosen to smoke my whole life? Or even stickier, what if I have some inherited disorder - not my fault, but certainly not yours either. That's why you can help support the American healthcare system - and encourage a healthy America - by sin taxes. For example:

- Cigarettes - if it's possible to tax them further.

- Alcohol - I'm probably in the top quarter of American beer and wine drinkers, and I would pay more. Non-drinkers don't owe drinkers treatments related to their beer guts and liver damage.

- Junk food - again, I bet I eat at Taco Bell more than you do, so this definitely hits me. Why allow the government this power, you ask? They have to get money from somewhere - would you rather it be straight from your employer to penalize you for making money as they now do, or on top of your receipt at Jack in the Box, where you can decide to go somewhere else?

- Legalize and tax marijuana - Have you ever seen the estimates for what this would bring in? Extrapolating the numbers in this study, we're talking about $25 billion in combined annual revenues and savings.


Optimistically, this reform may be the beginning of a simpler consumption-based Federal tax system that encourages savings and growth rather than consumption. (Have you seen American saving rates recently? Courtesy captaincapitalism.) Another tax incentive I'd like to see is a way to translate savings rates into flash and status to get people to do it more. This is a problem that Robert Frank identified.

Remember that Capitalism and Freedom author Milton Friedman is the one who masterminded tax withholding; if that's not (good) social engineering, then what is?

My Dad Was a Steel Company Executive

It's not quite the first line of a Bruce Springsteen song, but thinking about this yesterday it provided some perspecive. The biggest steel company in the world today is Mittal-Arcelor, which may be headquartered in Luxembourg but the majority of whose management board is Indian. My dad is no doubt rolling over in his grave that such a thing could happen. I'm sure he thought it was bad enough when Nippon Steel formed in the early 1980s, but India?

Of course India. We should not only be prepared for the possibility, but expect that the emerging economies will continue to take over the old-economy brick and mortar Frick and Carnegie industries, as happened in the 1980s with Japan Incorporated in many fields, including steel.

Back here in the States, my father's generation over-reacted: they had seen decades of U.S. dominance in every industry, and saw Japan - the first example of Zakaria's "rise of the rest" - as a signal of American decline. The irony is that of course these lieutenants of capitalism did not have the background to appreciate that what to them was just good patriotism was actually in direct conflict with the principles of free trade. If something can be made just as well somewhere else for cheaper, even after transportation costs, then it will be made there. As the rest of the world industrializes, we should expect this cycle to continue, that mature industries - industries which don't depend strongly on continuing innovation for their growth - will continue to be taken over by the developing world. My personal favorite example is the transfer of electronics manufacturing in the last ten years out of Japan and into China. My Japanese father-in-law has been to China twice, both times to inspect new plants for Mitsubishi.

The danger for my generation is that we've grown accustomed to this cycle, and we're under-reacting when there are industries and growth-drivers that we should genuinely be worrying about. Offshoring call centers does hurt American workers in the short-term but is in the long-run not a wealth creator; R&D is. This is why Americans should pay more attention to, among other things, stem cell milestones being met in Korea and the U.K. and Japan, but not here. The ultimate source of economic growth is innovation, and in high-tech, industries where labor produces most of the value, like my own, biotechnology. This innovation tends to occur in geographic clusters of horizontally integrated companies centered around universities. (Visit the Schumpeter Club for more discussion.) This is why, for example, Detroit continues to be a poster-child for urban decay, because it's never gotten over being a one-industry town, but Pittsburgh has been reinventing itself as a biomedical and high tech center - thanks to Pitt and Carnegie Mellon.

You might be asking yourself that if we're under-reacting, how should we react? Can we ask China and India nicely to stop outcompeting mature American industries on the basis of their low production costs? Obviously not - but we can focus on those sectors where we can and do outcompete the rest of the world, and those sectors are the innovation-dependent new ones, and those depend on our best-in-the-world university system. Even leaving aside for the moment the current crisis in Detroit, it is difficult to imagine a future in which the U.S. continues to compete with China and India and the rest in the auto industry, once the semi-skilled workforces there come online and bring their quality standards up to snuff. High tech, pharmaceuticals, medical and financial services will continue to be the source of growth, and that's exactly why we have to protect those industries and improve the educational system that catalyzes them. While the dislocations from the auto industry's decline are no fun for our economy or the workers involved, it's not a battle we can fight forever, nor is it one we should be devoting our resources to. A statistic from Zakaria's Post-American World that I never tire of quoting: in 1907, Britain produced four times as many bicycles as the U.S. The U.S. produced twelve times as many cars. It's even possible that the profit from the auto industry at that point was lower than from bicycles in absolute terms to both economies, but I think the point is clear. We should be America, not Britain.

National Association of Evangelicals Head Resigns

Richard Cizik has been forced out of NAE, the leading lobbying organization for American evangelicals, for saying his position on (at least) gay civil unions is changing. Apparently the good old American right to make up your own mind and conscience doesn't sit will with the organization's senior management.

On the heels of Bush's "admission" that he believes in evolution at least some of the time, and that the Bible isn't literally true, this hasn't been a good week for evangelical politics in the United States. Hopefully these bad weeks will continue for them, and the GOP will emerge from the 2008 debacle with a new lease on life in 2012.

In any event, it's worrying that so many grown-ups spend more time worrying about gay marriage and yoga than potential nuclear wars between Pakistan and India or the economic competition from our creditor China.

Friday, December 12, 2008

China's Desperate Need to Stifle Dissent Is Holding It Back

Harvard polymath Steven Pinker attacks what he sees as another contemporary myth:

"Everyone says that China will be the next scientific and economic power. Is this compatible with their ongoing rejection of open debate and exploration of ideas? Is a technologically advanced society compatible with anti-intellectualism and suppression of debate? It’s hard to see how China will ever compete with the West as a source of scientific and technological innovation if ideas cannot be discussed and evaluated."

As the blogger discussing the article on futureprogress points out, China has other tricks to try to absorb knowledge without contaminating itself. It's worth pointing out that pre-World War II Japan modernized at an astonishing pace and did not democratize until it was atom-bombed. This is no call for an attack on China (which would be the biggest lose-lose in history) but rather a reminder that we shouldn't be overoptimistic about the automatic liberalization of a state following that state's arrival in the modern economy.

Wednesday, December 10, 2008

Excellent Point on Fractals of Change

Tom Evslin starts out a post by saying "Antitrust law needs to be updated to include 'too big to fail' as a criterion for dismemberment."

Best Bailout Humor Yet

If you think capitalism works, be sure to read the fine print:

Monday, December 8, 2008

Election Analysis - An Opportunity for Twenty-First Century Conservatives

This is the conclusion section of my full regression analysis of the 2008 election in terms of demographic variables; full text and figures here.

In the US, evangelical and Mormon populations are not growing well in the fast-growing, ethnically mixed, well-educated, and economically strong cities on the coast. The number of atheists in the US is growing (6% of over-30, 12% of under-30 are atheists). Population density, and the resultant admixture of people from different backgrounds, is increasing. The proportion of white voters in the US is dropping. Per capita income will (we hope) continue growing. Hopefully, Americans' average education will continue to increase as the economy increasingly depends on innovation in technical fields. The young voters who helped sweep in Obama will doubtless become more conservative as they age, but whether they will ever become as culturally conservative as their parents is in question. Note that I didn't deliberately set out to pick six demographic variables that are all changing in the Democrats' favor; I picked the six I thought were most clearly relevant to the election. This is not good news for the current incarnation of the GOP, either in California or anywhere else.

At a time when the global credit crisis is causing many inside and outside the US to doubt whether markets are the best mechanism to allocate wealth and promote growth, the GOP cannot afford to allow the Religious Right to continue steering. The market/strong-defense/evangelical alliance is broken, and one of the partners in that alliance has to go.

May I make the unsurprising suggestion to rank-and-file Republicans that you insist on throwing out the partner that, for the last eight years, has revealed itself as a kind of inept religious statist, that can sometimes win elections but has no real governing principles and in the end can't govern its way out of a wet paper bag. Until you do, I'm over here with the Libertarian Party, and a lot of other former Republicans don't know what to do, but they'll be damned if they'll continue voting on the basis of armband religion, as Kathleen Parker put it. The Southern Strategy is dead, it's 2008, and we need new ideas: we need somebody to speak up for the high tech economy that is America's strong suit in this new world, we need somebody to recognize the economic threat-cum-opportunity that is India and China, we need someone to take a principled stand on human rights abuses by our supposed allies and ourselves, and we need someone to show leadership on energy and market reforms and not just let lobbyists write legislation that benefits not just certain industries at the expense of taxpayers and troops, but certain companies. That our government should govern sounds radical, I know; but as an American, I demand the best government in the world. You want to hear it straight from the capitalist horse's mouth? In The Wealth of Nations Adam Smith said "The proposal of any new law or regulation of commerce which comes from [the owners of businesses], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the publick, who have generally an interest to deceive and even to oppress the publick, and who accordingly have, upon many occasions, both deceived and oppressed it." From Book I.

We don't need any more cheap grand-standing over time-wasting minor social issues - which is about all the GOP seems to know how to do in 2008 - issues that at best are distractions and affronts to privacy and human dignity (like Terri Schiavo) and at worst threaten American business competitiveness (like restricting stem cell research. Notice all those breakthroughs happening in Asia and not here? Surprise!) The strongest Republican governor in the country right now is the governor of California - a centrist who has denounced California's new gay marriage ban as ridiculous. Too bad he wasn't born in the US or I'd already be selling "Presidator 2012" buttons. Religious Right: you broke the GOP and the rationalists want it back - American demographic trends are your worst electoral nightmare, and they're getting worse for you every day. Go off and form the twenty-first century Republican equivalent of the Dixiecrats and win votes in rural Arkansas and Oklahoma if that's your thing. Frankly, after the last election, it seems to be your only thing.

Sun Tzu said the battle is won or lost before it begins; demography is destiny; and David Brooks says the Religious Right will be able to hold onto the GOP's steering wheel at least until 2012. If Brooks is right, fellow moderates and fiscal conservatives, then the battle is lost, and Obama is already a two-term president. For the sake of the country, I hope he's wrong, because I want at least two real American political parties back in action, competing on the merit of their ideas for the next 219 years of the Republic, just as has happened in the previous 219. The party of ideas, the GOP of Reagan and TR and Eisenhower has a golden opportunity here - but if the withered old hands of the Religious Right keep dragging it back, then it's time to consider defection to the Libertarian Party for 2012, or splitting off into the twenty-first century Bull Moose GOP like Teddy Roosevelt did (and kicked Taft's ass, too). And if that's the plan, then we may already have somebody in the wings.

Friday, December 5, 2008

Your Phone Can Read Chinese

Yes, really. Thanks to Linguatec's application using image-recognition software, you take a picture of a sign, and your phone tells you what it says. Pretty cool. One less barrier between China and the rest of the world.

Wednesday, December 3, 2008

Excellent Christopher Hitchens Article on Mumbai Attacks

Hitchens points out that not only is India our strategic ally, but that it has succeeded as a fellow secular democracy with multiple religions and ethnicities while simultaneously mostly keeping religion out of its government, and has benefited greatly in recent years - a sort of mirror-America in Asia. Fareed Zakaria, whose Post-American World I wrote about recently, is from a Muslim family in Mumbai but describes himself as "not a religious guy" - a description that would have been much more unlikely had he been from Pakistan instead.

The choice for Pakistan should be a clear one. Refute these disgusting and desperate cowards, whether or not they have ties to the Pakistani military, and join the modern world as a growing and open society - or fall behind. Especially India.

Do Not Nationalize Healthcare

Because drugs and medical professionals don't grow on trees, citizens of modern democracies must choose where they want to be between two extremes:

1. Where healthcare is nationalized, but to avoid bankrupting the government, you have to limit what care is available to people.

2. Where healthcare is completely private, and instead people rely on private insurance or savings to pay for treatment.

The irony here is that proponents of #1 argue that healthcare is a basic right. And it's true that in a private healthcare system, some people will not be able to get treatment. But it's very hard to see how a policy denying people available treatments - which a nationalized program invariably does - is an improvement over allowing people who can afford medicine or coverage to purchase it.

Nationalized systems also raise the question of whether I have a right to expect you to pay for my lung cancer treatments after 40 years of smoking, or my physical therapy after a bad rock-climbing fall. By insisting on paying for my healthcare, you're now placing limits on my lifestyle - and I'm for damn sure going to place limits on yours. Some systems (for example Sweden) do try to take some of these into account (for example, smokers pay a higher tax) but you can't take into account every example of willfully unhealthy behavior, and we all get stuck paying for the medically irresponsible. For example, in the Swedish system, to my knowledge alcohol intake, rock-climbing, or even simultaneous participation in both does not figure into the scheme.

At this economic low point in late 2008, the less wealthy countries will be tempted to turn economically to the left, especially on questions like this, and it behooves the world's free marketeers to stand especially firm against the tendency now.

Sunday, November 30, 2008

Malaysian Government Spending Its Time Wisely

The Malaysian National Fatwa Council has told Malaysians that yoga is the work of the devil, but now the Malaysian Prime Minister is saying it's dandy as long as there are no mantras.

Are there really heads of state wasting their time on ridiculous debates like this? Apparently yes, since their citizens insist on paying attention to under-medicated and morally bankrupt organizations, like for example the Malaysian National Fatwa Council which unfortunately seems to be running around loose. And while I'm insulting imams in power, please view that famous Mohammed cartoon one more time, just for good measure, here). The Council's last edict was to ban lesbianism (yes, really). Way to go guys! I'm sure with you protecting your people from lesbianism, per capita income will catch up with the rest of the world next year. Soon Malaysia will be the envy of everyone everywhere! Indeed, the mystery is why this isn't the case already.

It's no surprise that Malaysia is still playing economic catch-up t secular Singapore. Singapore has been a regional power for years at this point, and Malaysia has an inferiority complex, for obvious reasons. In point of fact, Singapore (per capita income $49,754) and Malaysia (per capita income $13,385) were both part of the same country until they split in 1965. Tempting to see what Singapore did differently, isn't it? A clearer political experiment could not be asked for (although in the case of the Koreas and the Germanys, we got one anyway).

But those imams on the Fatwa Council never rest in their relentless protection of Malaysians (apparently, from economic success, among other things), and their next act may be to protect Malaysians from the teaching of evolution in schools. After all, in Islam Online, in an article called "Call for Muslim Scientists - Join the Scientific Dissent From Darwinism", we are told "'[An] 'ism' of great danger to Islam... is Darwinism,' said Seyyed Hossein Nasr, one of the leading Muslim thinkers of our time, in his book Islam and the Plight of Modern Man. He is certainly right." Does any of the hot air coming out of these yahoos sound familiar? Yes, it does - as does the feeling that it would be hilarious if there weren't millions of people who swallowed every word of it. The article is incredible; you really should read it. Here's a more in-depth discussion over at John Hawks' blog.

If you're still in doubt as to whether America made a smart decision in becoming a secular meritocracy blind to religion, you need look no earlier than to the founding of Georgia colony. Samuel Nunez, a Portuguese Jewish physician, arrived in Georgia and promptly saved the bulk of the population from dying of malaria. One of his descendants purchased Monticello when it was in shameful condition, restored it, and sold it to the National Park Service (photo of a monument on the property by yours truly). Needless to say, back in the 1730s this didn't stop some people from fretting that by allowing him in, Georgia had become a Jewish colony and would be ruined forever. I've been to Georgia. Several times. Great beaches, great hiking. Great people too, not least because they didn't go extinct from malaria.

Hey Malaysia! If you have no use for your independent-minded and college-educated, by all means send them to the U.S. We'll take all your smart and hard-working masses yearning to breathe free. And you can keep that powerhouse economy of yours safe from yoga and evolution. Somehow we'll get by.

Workers Riot at Chinese Toy Factory

A persistent concern of the Chinese Communist Party, addressed by many writers, is their ability to maintain order and perpetuate their rule, called most strongly into questionin 1989 by Tianenmen Square. A strong and growing China is not one ruled by a corrupt communist party. Ironically, nobody knows this better than the workers.

Saturday, November 29, 2008

Zakaria's Post-American World

I finished this book (which I highly recommend) just days before the Mumbai attacks, and it seems like there's little better time to listen to what its market-centric Mumbai-raised ethnic Muslim author might have to say about things.

I'm also glad to see that our president-elect read it (I'm not sure if the people who circulated this email were trying to outrage Americans by out-and-out lying about the contents of the book, or just trying to reach a certain demographic disturbed by the idea that the next president might read voluntarily). If PAW's popularity at the San Francisco Public Library is any indication, everyone else likes it too (they have 16 copies and I had to wait for 2 months to get one after I put it on reserve). I was pleased to discover that my own priorities match those of a recognized international relations expert like Zakaria, namely: 1) China, 2) Climate change and resource issues and 3) religious fundamentalism and violence (a distant third). His conclusions:

1. The economic expansion of the world at the end of the twentieth and beginning of the twenty-first century is good for everyone because it eliminates poverty and decreases violence, and results from the increasing liberalization of economies around the world, especially including developing economies. (Note: he wrote the book before the depth of the 2008 Credit Crisis became apparent, but I think he would argue that this will still be seen in the future as a bump in the road.)

2. The US government as the head of the Western world order has largely been the guardian of liberal democracy and the economic liberalization process, despite its occasional mis-steps and hypocrisies. In the multipolar world that is emerging in the wake of global economic growth, the U.S. cannot expect to maintain this role, especially not if it continues failing to set priorities.

3. In prior eras, threats to world stability like German nationalism or Russian and Chinese communism were real threats only because they had real allies and their ideologies were seen as viable alternatives to liberal democracy and capitalism.

4. By extension, Zakaria sees the acts of Al Qaeda in the same light as does Francis Fukuyama, in Fukuyama's words "a desperate rearguard action" which will be a footnote to history. (I will assume he would have spent more time developing this argument if his book had come out in late 2008.) By further extension Zakaria states that that the U.S. has been distracted by Islamic terrorism from the real challenges it faces, which stem directly from the emergence of economic multipolarity. Today there are two brands of neocons, the orthodox neocons who continue trying to make an industry out of scaremongering, as Zakaria puts it, and the reformed neocons like Fukuyama who, like Zakaria, view religious fundamentalist violence as something to be dealt with but as something not coming close to threatening the foundations of modern civilization.

5. Finally, global economic growth is only threatened by climate change and resource depletion. The book is not an environmental polemic but he does mention these problems, especially where China's growth is concerned.

The book ends with a warning not to focus on populist social issues as he bemoans of his native India, and he strongly emphasizes in an extensive analysis of British decline starting not with the First World War but the Boer War that economics drives history (not the first time we've seen a UK-US model for the US-China relationship in place of a USSR-US model). The US is in an economically stronger position than the British Empire ever was, and has been in it for far longer. My favorite statistic in the book is that in 1907 Britain produced more bicycles than the U.S. by a factor of 4 to 1; the U.S. outproduced Britain in automobiles 12 to 1. Possibly bicycle revenues in 1907 were a greater portion of both country's domestic product than automobiles, but of course the trend would have quickly made that fact obsolete, and I hope the point here is clear. We can't afford to become distracted and lose sight of the heart of our economic strength, our universities, which will continue to be the launching pads for innovation that drives the global economy, not just our own, and continues to tie other economies to us.

A Little Black PhotoShop Humor Courtesy Wired

Friday, November 28, 2008

India: Do Net Let This Attack Damage the Detente With Pakistan

Walid Phares at counterterrorismblog states the aim of the terrorists in Mumbai succinctly: "...the goal is to sink the Pakistani-Indian rapprochement."

India: do not give in to populism to score short-term points at the expense of long-term growth and regional stability. India's continuing economic success and the future of democracy in South Asia is in your hands. Do not hamstring your response to this act by a knee-jerk assumption that Pakistan's government must be involved, just like the Spanish stumbled in their immediate insistence that the Basques were involved in the 2004 Madrid bombings. Accepting the Pakistani government's offer of assistence will not only continue to diminish the influence of the militant anti-civilization extremists who benefit from India-Pakistan tensions, it will reinforce the conviction of the smarter elements in the new Pakistani government that they're doing the right thing by pursuing detente.

Mumbai native Fareed Zakaria points out in The Post-American World that beginning with the September 11th attacks, the financial markets recovered faster after each successive major attack. Tragic though the death of innocent people is, civilization must continue to brush aside these last-ditch rear-guard efforts by vanishing tribes of fundamentalists.

Wednesday, November 26, 2008

Regression Analysis: Demographics and 2008 Election Results

This article began as a little game I was playing to see if I could derive election results from a regression analysis of basic demographic variables. Plugging back in the relation derived in my strongest one-variable regression (see below for what that variable was), and retrodicting election results at the state level, I underestimated Obama's returns by 19 votes. Oddly, plugging back in the second strongest variable (state-level population density), I overestimated Obama's returns by only 1 vote.

I didn't expect any big demographic surprises: I think we all knew well before the election that Manhattan was more likely to vote for Obama than a Mormon county in rural Idaho. Furthermore, if what you're looking for is some algorithm for predicting presidential elections in general, then a) what Nate Silver does over at fivethirtyeight.com is more useful because he based his predictions on pre-election poll outcomes and b) no one knows what the landscape will look like in 2012. The GOP and Democratic parties are brands that get different spokespeople every four to eight years, and if circumstances give the GOP a better spokesperson and better conditions in '12 then all these trends could be out the window. (For some idea of how middle voters shifted, see Andrew Gelman's Democrat-to-Democrat scatter-plot comparisons between elections to see how the brand changes with conditions.

Because we don't know what the 2012 zeitgeist will mean in terms of Americans' political affinity, we can only base our predictions on demographics. Still, there are many Americans who are "ethnic" Republicans or Democrats and would probably physically die if they voted for the other party, regardless of their values or demographics. Therefore, I think the real value of my analysis is for Republicans who want to see the folks in the middle who voted for Obama, and whether there will be more of them or less of them four years from now.

This is my longest blog post ever, so if you're easily bored skip ahead to the end ("What This Means for the GOP"). But I think the analysis is interesting on its own merits. The variables are listed below in decreasing order of importance.



METHODS

I looked at returns in terms of percent vote for Obama at the state and county levels against six individual demographic factors: population density, racial make-up, religion (broken down by faith), income, education, and age. I did not look at individual voter poll data, only returns at the state and county level. Technical caveats for all results that you can skip if you want to get to the good stuff:

- I didn't have county-level data for every variable and the county-level correlations were often weaker anyway, so the multiple regression with all variables was performed at the state level. If you know where I can find county-level data for any variables where I don't already have it, please comment or email.

- Returns are expressed as percent of votes for Obama of all votes; I don't make the mistake that Obama + McCain = 100%, although I do assume in my discussions of left vs. right movement of voters that the percentage of votes for parties further left than Democrat are negligible.

- State-level: I pooled all Nebraska's returns; Nebraska reports as three separate districts

- County-level: I excluded Alaska from all county-level analyses. Alaska doesn't have counties and does not report returns by any sub-state level jurisdictions; Louisiana has parishes, but does report returns by them.

- County-level: I excluded Kalawao County, Hawaii; no returns reported



1. RELIGION

I had to rewrite the article partly because I was expecting population density, and not religion, to show the strongest correlation with voting. I was intrigued to find that I was wrong.

Most data for this part of the analysis came from the Pew Forum on Religion and Public Life Religious Landscape Survey 2008(1). The Pew paper provides data only at the state level, and not for Alaska and Hawaii. Consequently I only did the analysis at the state level, and for Alaska and Hawaii I estimated the figures from other sources(2).

I included any religion which has a share of at least 10% statewide in at least one state. This excluded all non-Christian religions. Religions which I did include were evangelicals, mainline Protestant denominations (reported as a single figure), black churches (reported as a single figure), Catholic, and Mormon. I also looked at the correlation between the total population of all these religions in a state and the percent voting for Obama in that state, as well as one combination between two religions (which I will discuss further).

Evangelicals had the strongest correlation of any individual religion (described by a second-order polynomial), but there was still a substantial outlier (low Obama returns, but also low evangelism). This was Utah. Indeed, although only 3 states have a Mormon population of greater than 10% of the overall population, they were all outliers on the evangelical curve (low evangelism, low Obama returns), and having only 3 states out of 50 with Mormons above 10% can't give a good signal on the Mormon-only curve. Because evanglism and Mormonism typically don't occur in the same state I created another group, "Evangelicals + Mormons", and found that it had the srongest correlation of all (R=0.831), described by a logarithmic function:

The logarithmic curve for Evangelical + Mormon was only slightly stronger than a linear relationship (0.828). This combined index is the strongest relationship of any variable I looked at, but in the end did not predict the electoral vote as well as population density.

What's immediately interesting is that some religions had strong negative correlations (evangelicals and Mormons, especially when taken together), some were flat or very weak (mainline Protestant denominations and black churches), while Catholic was actually positively correlated with voting for Obama (linear relationship with R=0.537). It's been known at least in the last two elections religion (defined by service attendance) was a good predictor for individuals voting Republican; here we have supporting data at the state level.

That said, there are no majority Catholic or black church states to test whether it's only religious dominance (and not the political aggressiveness of any specific religion) that affects voting patterns. I tried to create an index of religious dominance for each state by multiplying the standard deviation of religions in the state by the highest percentage of any one religion. This index had a negative correlation similar to or slightly weaker than Mormonism alone (which are only a majority in one state and only above 10% in 3). Therefore it appears to be specifically evangelicalism and Mormonism that are most strongly correlated with voting patterns.

It's worth pointing out in the discussion of religion and voting that there's an interesting article called "McCain's Atheist Problem" at fivethirtyeight.com stating that McCain trailed Obama in the atheist vote by 25% (and that's about 2.5% of the total electorate; a campaign strategist would tear his hair out if his candidate did something to lose 2.5% of the electorate). Anecdotal evidence: the day that Palin was announced, that number went up 0.00001% when I switched over myself.

2. POPULATION DENSITY

My first inspiration for this investigation was an observation on a network news website (which I can't now dig up) months prior to the election that population density is a major contributor to political leanings (same speculation here on FOXNews in 2004).

Of course, population density was only the second-best predictor at both the state and county level for percentage of Obama votes by county, although retrodicting using the regression equation did give a better electoral outcome than the evangelical+Mormon index. Data came from the 2007 Census estimates(3). Using an exponential model for both state and county levels showed a power function trend with R of 0.578 and 0.427 respectively.





Looking at fine-grained election maps, you can usually guess where the denser population is based on the blue vs. red returns:



However, sometimes the discontinuities have other causes. For example, notice the blue spots in the middle of South Dakota:



Every single one of those six mid-state blue counties is occupied mostly or totally by an Indian reservation, and the reservation counties all have densities lower than the state average and similar to surrounding counties, meaning that all other things being equal, they should be as red or redder. This is not surprising, since historically, Native Americans have voted Democrat. Similarly, you can compare the county-level voting results in Mississippi to the percentage of African-Americans in Mississippi counties:







Neither of these observations is surprising, but they have to be taken into a account in any model predicting American voting patterns based on demographics; this may also explain why the R for the county-level population density regression is lower than for the state-level, because states are much bigger, so race and other factors can differ much more within a county than within a state. Unfortunately, still in 2008 there's an income gap between whites and non-whites, so it's hard to disentangle race and income as influences on voting.

3. RACIAL MAKEUP - NON-WHITENESS

I thought the tendency of non-white Americans to vote Democrat would be more pronounced in this election given that the Democratic candidate was not white. Census technicality: my definition of non-whiteness at the state level includes Hispanic ethnicity/white race population. Data again comes from U.S. Census estimates for 2007 population(3). At the state level the trend is best described by a second-order polynomial with R=0.371.



Interestingly, at the county level but not including Hispanic whites as non-white, R=0.4 for a linear trend between non-whiteness and voting for Obama. (The reason I didn't include Hispanic as non-white at the county level is because of the annoying way the US Census tracks this data; if you know where I can get this data more easily, let me know; otherwise feel free to cut and paste for 3,115 counties yourself.) In any event, non-whiteness alone, at either level, did not predict outcome as well as population density.




4. Per Capita Income

The GOP used to be seen as the party of the rich, but following the Southern Strategy blue collar workers began voting Republican, becoming a force to be reckoned with in 1980s. County income data came from 2005 census estimates(4). I expected a polynomial trend with fewer voting for Obama on both ends, given that many upper-income people vote GOP along with rural lower- and middle-class whites (here's one source with links to more, disabusing us of the notion that these days it's only lower-class whites from rural areas voting GOP). Indeed the best fit for the county and state trends was a sixth-order polynomial with R of 0.290 and 0.552 respectively.






5. Average Years of Education

In the 2008 returns Albany County, Wyoming stands out blue against a background of red counties in the rest of Wyoming, and it's not a reservation. Perhaps not coincidentally it's where you'll find the University of Wyoming.

Average years of education is doubtless higher in rural counties with large post-secondary institutions than without (as in many land-grant state universities, like the University of Wyoming) but large American cities also differ considerably in their level of education based on the industries those towns depend on (the first two are Seattle and San Francisco - not surprisingly, since they're aerospace-tech-biotech central). The data for this regression come from the Manhattan Institute's 2001 education survey(5), which corrects some shortcomings from the Census data.

The correlation was weak; the best fit was with an exponential function with an R of only 0.067. One caveat for this variable: high school graduation rate is certainly not the best indicator of the average education of a state's adult population, given the mobility of modern American workers. If you work in DC or New York or Los Angeles, what percentage of your colleagues are actually from there? Percentage of state population with Bachelor's degrees would be much better, but I couldn't find this data. The disconnect between the two variables occurs because states with large influxes of highly educated workers may not have good native education systems. For example, Seattle and San Francisco may both have the most highly educated workforces, but Washington and California have graduation rates of 70% and 68% respectively, which in the bottom half of U.S. states.

6. Median Age

Referring to Guizot's (not Churchill's) famous quote about the proper age for liberals and conservatives, the college town effect could also be partly a result of age. There are also parts of the country whose median ages diverge considerably from the national average, for example the retirement haven Florida, and the large-family haven of Utah. Data is from the 2006 U.S. Census.(6)

Before I did the analysis I expected that if there were a strong relationship it would be polynomial, accounting for greater conservatism in late middle-age than in under-30 or post-retirement voters; one individual is more likely to vote Republican at 50 than 20, and the same person might be likely to vote Democrat at 70 than at 50 probably because of concerns about fixed income and healthcare. However, my initial guess turned out to be wrong (only a sixth order polynomial had a greater R but it was nonsensical in that it predicted a < 0% turnout for Obama for some median ages). The best R I obtained was 0.360 for a power function trendline, although excluding the outlier of D.C. gave an R of 0.452.




MULTIPLE REGRESSION: COMBINING VARIABLES

Once I had looked at each of these demographic variables in isolation I ran a multiple regression with all of them. I did not have all demographic variables by county, so the multiple regression is at the state level. I included separate variables as follows:

- Population density
- % non-white, including Hispanic white as non-white
- % Mormon + evangelical composite
- % Mainline Protestant churches
- % Black churches
- % Catholic
- Median household income
- Education (graduation rate)
- Median age

Multiple regression with these variables returned an R of 0.893 (compare to evangelism + Mormonism alone at 0.831 and population density alone at 0.578).

There are a number of factors that clearly influenced the outcome and that, while they could not have been predicted from demographic first principles, still were likely to have had an effect (BLACK SWANS). These include: home state voter loyalty, advertising, and campaign visits. On the second and third points, the campaign strategists do not believe demographics are electoral destiny or they wouldn't waste money sending the candidates around the country.

Another interesting question would be to try to detect a media effect for greater metropolitan areas that often lie across state borders. That is to say, is there a narrative created by local media afiliates which differs from that of the national media, and shows itself in vote returns? One way to quantify it would be to look at the difference in the number of positive vs negative stories run about a candidate in City X vs in the mainstream media and in local media of City Y, then compare the outcome in surrounding counties in X and Y to what to what your model otherwise predict. At fivethirtyeight.com they looked at a similar question, the effect of one state on surrounding states in the context of Virginia's effect on North Carolina.

Events earlier in the campaign also surely played a role. It seemed from the media buzz that social conservatives and evangelicals in particular were energized by the selection of Sarah Palin for Republican VP, and they were likely energized by Mike Huckabee's candidacy during the primary season as well. Of course, I could be wrong about the correlation, but take a look at this map, which shows the difference in voting from 2004 to 2008 (i.e., red means voted more GOP than last time).



In the general blue headwind blowing across the country from out of the imploding corridors of Lehman Bros (to name only one such low pressure system), it's hard to look at this map and not notice the this-time-even-redder stripe from West Virginia, through Kentucky and Tennessee and Arkansas to Oklahoma, bucking the trend. This is also the region with the highest rates of evangelism.

Finally, in my brief career analyzing elections, I've concluded there are just some counties that are liberal or conservative because they just always were and that's that. This observation doesn't help my model but my favorite is Sioux County, Iowa. I'm not the first person to notice this particular outlier and I've scratched my head over it since. They're not Mormons, there's no certain industry concentrated there, there's no televangelist based there, but they've consistently voted at least above 80% GOP for the last three elections, much higher than Iowa as a whole, and almost always more than 10% higher than the highest neighboring county. It would be one thing if they did it once or twice but it's been consistent.

While 2012 will be a different election, to some degree we non-professional- campaign-strategist-mortals who nonetheless care about the outcome of elections (we're called "citizens") might be able to adjust models like these to see for ourselves what's likely to happen, without waiting for the campaigns or the media to tell us.


Final Speculation About Population Density's Effect on Politics

The following is speculation, and I have no idea how to render it quantitatively or even how to get data supporting it; a demographer might. The question of how religion affects voting habits isn't that interesting because it appears straight ahead. The more curious one is the mechanism by which population density correlates with voting habits. It's a truism that if you rent, when you buy a home you should "be prepared to see your political ideology swing violently to the right" (courtesy The Onion). But I don't think that accounts for the entire phenomenon, since there are plenty of liberal homeowners on the coasts.

My theory is that members of the national racial majority (whites) who live in high density areas are more likely to come into social contact with non-whites. Non-whites, by virtue of being in the minority, are already required to critically analyze their own values where they differ from majority culture. Democrats traditionally have been the American labor party and as such appeals more to minorities (even easier to do in this election). This is probably one reason that they have been likely to vote Democrat, regardless of whether they live in densely populated Washington D.C., or on the open prairies of Shannon County, South Dakota.

Republicans have appealed to red-meat cultural conservative values associated with America's Christian, white cultural majority. At the same time, urban whites who frequently come into contact with non-whites similarly become more circumspect about their own (otherwise less-questioned) cultural assumptions and as a result urban whites are less likely to be motivated by those red-meat values. The density-leads-to-interethnic-contact-and-erodes-cultural-conservatism theory also explain why, although 38 of 82 counties in Mississippi are less white than all of the 58 counties in California, the Mississippi counties vote Democrat at substantially lower rates. The graph below is a stark illustion - in Mississippi, county non-whiteness very closely tracks voting, with an incredible linear relationship with R=0.973. In California it doesn't track as closely (linear relationship R=0.536, slightly better as third degree polynomial with R=0.561); and California counties clearly more often vote more Democratic. Why?



My theory is that this difference results from the higher degree of intermixture between ethnicities in California relative to Mississippi. With no history of segregation or slavery, the economic differences between whites and non-whites in California are less pronounced, and people mingle more; consequently, in California a white person is likely to be more circumspect about his or her own assumptions, just as non-white people elsewhere, whose social assumptions are challenged by having to adapt to mainstream American culture. Interracial marriage rates would be one indirect way to measure the level of inter-mingling. I would bet that most of the California counties have higher interracial marriage rate than the Mississippi counties (even though assuming independent assortment you would assume it to be higher in those first 38 Mississippi counties than in any county in California). Even though many of the Mississippi counties are more than 50% non-white, probably still today there probably aren't as many cases of whites living next door to non-whites, or working together, or spending leisure time together, as in a 25% non-white California county. I'm not a demographer or statistician, so I don't know if there's a better way to directly measure the degree of intermingling between whites and other ethnicities or if this data already exists, but it would also start to explain other demographic tendencies - for example, people are less religious in cities, especially multiethnic ones, and that port cities dependent on foreign trade and tourism tend to be more tolerant of different social norms.


What This Means For the GOP

In the US, evangelical and Mormon populations are not growing well in the fast-growing, ethnically mixed, well-educated, and economically strong cities on the coast. The number of atheists in the US is growing (6% of over-30, 12% of under-30 are atheists).(7) Population density, and the resultant admixture of people from different backgrounds, is increasing. The proportion of white voters in the US is dropping. Per capita income will (we hope) continue growing. Hopefully, Americans' average education will continue to increase as the economy increasingly depends on innovation in technical fields. The young voters who helped sweep in Obama will doubtless become more conservative as they age, but whether they will ever become as culturally conservative as their parents is in question. Note that I didn't deliberately set out to pick six demographic variables that are all changing in the Democrats' favor; I picked the six I thought were most clearly relevant to the election. This is not good news for the current incarnation of the GOP, either in California or anywhere else.

At a time when the global credit crisis is causing many inside and outside the US to doubt whether markets are the best mechanism to allocate wealth and promote growth, the GOP cannot afford to allow the Religious Right to continue steering. The market/strong-defense/evangelical alliance is broken, and one of the partners in that alliance has to go.

May I make the unsurprising suggestion to rank-and-file Republicans that you insist on throwing out the partner that, for the last eight years, has revealed itself as a kind of inept religious statist, that can sometimes win elections but has no real governing principles and in the end can't govern its way out of a wet paper bag. Until you do, I'm over here with the Libertarian Party, and a lot of other former Republicans don't know what to do, but they'll be damned if they'll continue voting on the basis of armband religion, as Kathleen Parker put it. The Southern Strategy is dead, it's 2008, and we need new ideas: we need somebody to speak up for the high tech economy that is America's strong suit in this new world, we need somebody to recognize the economic threat-cum-opportunity that is India and China, we need someone to take a principled stand on human rights abuses by our supposed allies and ourselves, and we need someone to show leadership on energy and market reforms and not just let lobbyists write legislation that benefits not just certain industries at the expense of taxpayers and troops, but certain companies. That our government should govern sounds radical, I know; but as an American, I demand the best government in the world. You want to hear it straight from the capitalist horse's mouth? In The Wealth of Nations Adam Smith said "The proposal of any new law or regulation of commerce which comes from [the owners of businesses], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the publick, who have generally an interest to deceive and even to oppress the publick, and who accordingly have, upon many occasions, both deceived and oppressed it." From Book I.

We don't need any more cheap grand-standing over time-wasting minor social issues - which is about all the GOP seems to know how to do in 2008 - issues that at best are distractions and affronts to privacy and human dignity (like Terri Schiavo) and at worst threaten American business competitiveness (like restricting stem cell research. Notice all those breakthroughs happening in Asia and not here? Surprise!) The strongest Republican governor in the country right now is the governor of California - a centrist who has denounced California's new gay marriage ban as ridiculous. Too bad he wasn't born in the US or I'd already be selling "Presidator 2012" buttons. Religious Right: you broke the GOP and the rationalists want it back - American demographic trends are your worst electoral nightmare, and they're getting worse for you every day. Go off and form the twenty-first century Republican equivalent of the Dixiecrats and win votes in rural Arkansas and Oklahoma if that's your thing. Frankly, after the last election, it seems to be your only thing.

Sun Tzu said the battle is won or lost before it begins; demography is destiny; and David Brooks says the Religious Right will be able to hold onto the GOP's steering wheel at least until 2012. If Brooks is right, fellow moderates and fiscal conservatives, then the battle is lost, and Obama is already a two-term president. For the sake of the country, I hope he's wrong, because I want at least two real American political parties back in action, competing on the merit of their ideas for the next 219 years of the Republic, just as has happened in the previous 219. The party of ideas, the GOP of Reagan and TR and Eisenhower has a golden opportunity here - but if the withered old hands of the Religious Right keep dragging it back, then it's time to consider defection to the Libertarian Party for 2012, or splitting off into the twenty-first century Bull Moose GOP like Teddy Roosevelt did (and kicked Taft's ass, too). And if that's the plan, then we may already have somebody in the wings.


REFERENCES

(1) Pew Forum on Religion and Public Life Religious Landscape Survey 2008
(2) For Hawaii and Alaska religion data I used the following links.
(2a) Adherents.com - for Hawaii and Alaska Mormon data
(2b)New York Times 12 April 2008 - For Hawaii and Alaska Catholic data
(2c) Hawaii and Alaska black church membership was estimated from a 2/3 membership rate for African-Americans in Arkansas and Alabama per the Pew Report, and US Census data for Arkansas, Alabama, Hawaii and Alaska.
(2d) Free Republic - For information on evangelicals and mainline Protestants in Hawaii and Alaska
(3) 2007 U.S. Census estimates.
(4) 2005 Census Estimates
(5) Manhattan Institute 2001 Education Survey
(6) 2006 US Census Median Age Estimate.
(7)The Pew Forum. Religion in American Life: The Political Landscape (2004)