Stu's Views

The Red Sox caught a big fish (actually a Diamondback) yesterday when they traded four prospects for Curt Schilling. The move's impact on the 2004 pennant race is difficult to evaluate since there is probably much more yet to happen this offseason but there is no question that the Sox are more formidable today then they were yesterday.

They took care of their primary need, starting pitching depth by getting one of the most dominant starters from the past five years. There are some questions however. Schilling is 37 years old and was injured much of last year and not as dominant when he was healthy. Signing him for three years almost guarantees he will be paid large sums of money beyond the date when he is worth it. Also Pedro is not likely to be happy when a 37 year old gets three years and he is given no contract extension next season (and I'll be shocked if the Sox do give him an extension). Whether that unhappiness translates into clubhouse problems remains to be seen.

Where does this leave the Yankees? If the rumors about what Arizona was demanding from the Yanks are true, I'm glad that they didn't give up Soriano and Johnson for him. They appear ready to sign Sheffield which is not my preferred move given his age (35) and the fact that he doesn't fit their most acute needs (pitching and help up the middle). Still he is a great hitter and is likely to be so for another year or two. If I had my druthers, the Yankees would sign Petitte and one other pitcher, trade Soriano for Carlos Beltran and sign Kaz Matsui and convince him to play second.

More likely they will sign Sheffield, Petitte and Colon or trade for Vazquez. If they do all those moves the Yankees and Sox should be close to even again in 2004 and we may have 26 more great games between them.

(If the Sox trade for A-Rod then we will have to revisit all of this).

With the holiday keeping things quiet on the political (save for Bush's surprise visit to Iraq which doesn't merit an entry) and sports fronts I figured I would return to my area of research, the regulatory process.

About a month ago I posted a defense of cost-benefit analysis in the regulatory process. I taught my Economics for Public Policy class the most basic controversies of cost-benefit analysis on Monday and figured it was worth revisiting that defense. As with most groups that favor government intervention, it was clear from the expression on some of my students' faces that the ethical questions associated with cost-benefit analysis argued against it in their minds.

My counterargument is two fold. First of all, more information is always better when making policy. What cost-benefit analysis does is force decisionmakers to look at all of the information in a systematic way before setting policy. We can have disagreements such as how to treat uncertainty, how much to discount benefits occuring in the future, and whether to monetize lives saved without compromising the fundamental use of benefit cost analysis. As long as those disputes are held in an honest fashion and assumptions are varied and disclosed, then analysis can only lead to better decisions.

Second, cost benefit analysis is going to be used by opponents of regulation to make regulation look bad. A refusal to use it by advocates of regulation is essentially depriving oneself of a weapon in the debate. Supporters of regulation have relied upon the ethical arguments that cost benefit analysis should not be a part of policymaking. However if one side has numbers to make its case and the other says, "well the numbers look bad but we should ignore them," I'll give you one guess as to who has the advantage.

And the numbers for regulation look good. The recent OMB report on the costs and benefits of regulation pointed out that over the past ten years, regulations have yielded over $100 billion in net benefits. Even excluding the four EPA regulations which make up the bulk of the benefits, regulations have had over $7 billion in net benefits. These numbers should be front and center of any debate on regulation.

What if they held a debate and nobody noticed? Well when even I missed the fact that there was a debate last night, you know that not many people are paying attention. Therefore my only reaction is based on news articles but I can couple that with a few other observations of the past month in what the Daily Show calls "The Race from the White House."

-- Dean's union endorsements have cemented his front runner status. My worries about him as a candidate have grown however over the past month. I don't worry about him because he might appear too liberal, I'm fairly convinced that on economic issues he is to the right of most of the field (except for Lieberman and maybe Clark). My concern is his personality. He is getting increasingly prickly with each attack, which apparently continued in last night's debate. The attacks now are nothing compared to what Bush will unleash next fall. Dean needs to learn to take them with wit and grace. He is also prone to the gaffe and unfortunate choice of words (his recent support of "re-regulation" while probably not a bad idea, sounds horrible).

-- The Kerry campaign has imploded. I think he will be grouped with John Glenn and Phil Gramm as Senators who looked like very strong candidates two years before the election and were out of the running by the third week of the primary season.

-- The consensus about Clark is that he looks very good when talking about foreign and military policy and is a bore (probably because he is bored) when talking about domestic policy. Definitely a concern, but I think he is slowly improving as he campaigns more.

-- I don't think the Medicare bill will affect the nomination since all of the candidates opposed it. The effect on the general election is still uncertain, but right now, it looks good for W.

--I now think there are only three possible winners of the nomination, Dean, Gephardt, and Clark. Gephardt has to win Iowa or the field dwindles to two. If Dean wins both Iowa and New Hampshire, only Clark (now polling ahead in several states) has a remote shot to beat him. If Gephardt wins Iowa, it helps Clark by keeping the media from labeling Dean unstoppable, of course it also keeps Gephardt in the race.

-- My current preferences: Dean, Lieberman, Edwards, Clark, Kerry, Gephardt, the other 3.
-- My current estimate of likelihood of winning: Dean, Clark, Gephardt, everyone else.

I'm a few days late on this but it is arguably the biggest news in a while. Many of the thoughts below come from my wife and from Richard Cohen who had a great op-ed on Thursday in the Washington Post.

There is a bit of a paradox about the issue of gay marriage. On the one hand, the bold faced headlines and our instincts are that this is a really big deal. On the other hand, I'm not so sure why it should be a big deal. I particularly don't understand the Democratic position where civil unions giving homosexuals all the rights of marriage are okay but marriage is not.

Once we've made the (in my mind obviously correct) decision that homosexual couples are entitled to all the rights and benefits that come with marriage the decision is just whether to call it marriage or not. No one is suggesting that the government should force any religious organization to marry gay couples. The Catholics, Jews, Muslims, and whoever else can continue to say the only marriages that we will perform and recognize are those between a man and a woman. Most religous institutions don't recognize interfaith marriages yet no one thinks the state shouldn't call them marriages.

The argument against state recognition of gay marriage generally involves some piety about the sacred institution of marriage and its role in child rearing. Well with 50% divorce rates and single parents by the busload clearly the state's strict standards of who should get married have worked very well. If you think we shouldn't recognize gay marriage because it weakens the institution of marriage, you'd better be ready to impose much stricter standards on who can get married (maybe minimum ages, people who've dated for a certain amount of time) than we currently have. Here we have couples who are getting married presumably so they can spend their lives together and care for each other, isn't this the type of family value (if there are any such values) that the state should be encouraging?

Let gay people get married. Anyone who views marriage as a religious institution will continue to be able to do so. Anyone who views marriage as a lifetime partnership between two people who love each other will only see the institution strengthened by the commitment of more people to it.

p.s. a brief note on the politics of this issue. While the conventional wisdom is that this is an awkward issue for the Democrats given that strong majorities oppose gay marriage, I think it will cause just as many problems for President Bush. One of the strengths of Bush's 2000 campaign was his self portrayal as "compassionate." Nothing angers the conservative base as much as gay marriage, its like waving red meat in front of a dog. There will be a lot of uncompassionate rhetoric coming from the right as a result of this issue and this may turn moderate voters off.

p.p.s. David Brooks, usually a conservative writes a very good column on this issue in the Saturday New York Times.

The Senate is debating two bills this week which if passed will be the primary legislative accomplishments of this Congress. The prescription drug bill which does a lot more related to Medicare besides add a dubious prescription drug benefit is one. The other is the energy bill which reforms the nations energy system while giving more than $20 billion in tax breaks mostly to energy companies.

On strict public policy grounds, neither of these bills seems like a good idea. The prescription drug bill is quite ungenerous while at the same time opening up Medicare to challenges from the private sector and paying the private sector to improve its chances of looking good. It also passed up an opportunity to make it easier to import prescription drugs from Canada. The energy bill has tax giveaways by the busload and doesn't seem to do anything that meaningfully reforms our electricity delivery system or our dependence on fossil fuels.

From a process standpoint both bills raise significant concerns as well. Both were largely developed in secret conference committees that were largely made up of Republicans. The mark of interest group giveaways are prevalent throughout both bills and while no bill is ever exempt from such giveaways, they seem particularly egregious here.

That leaves the politics of the two bills. The Democrats are in a precarious position on the health care bill because they have clamored for a prescription drug benefit for years and do not want to be seen as obstructing it. The AARP endorsement backs them further into a corner (although a lot of seniors appear unhappy with AARP). Passing it however allows Bush to claim that he passed a prescription drug bill in the election next year. The Republicans would like the politics of the energy bill to be similar, using Democratic obstruction to claim that the Dems have left the country open to the possibility of another blackout. I don't think it will play out that way though since the energy bill has so many giveaways and Bush and Cheney have made it easy for Dems to argue that the only beneficiaries of the bill are friends of the Pres and VP. And, unless a blackout happens, the public isn't and won't be clamoring for energy reform.

I therefore think that the Democrats should stop the energy bill in its tracks (they'll have help from a few deficit-hawk Republicans but will have to hold onto Senators whose States have been given benefits in the bill). The policies in the energy bill are awful and the politics won't hurt the Dems.

Health care is a much tougher call. If I knew the Democrats would have control of at least one branch of government over the next decade, I'd pass the bill as a first step to meaningful prescription drug reform. Without that assurance I worry that it is a first step to the privatization of Medicare. I guess the politics of the issue recommend passage but damn, it would be have to be done while holding one's nose pretty tightly.

The very disturbing news that 5-7% of baseball players tested positive for steroids came out last week. This finding will result in random testing next year and a series of cumulative punishments for each time a player tests positive. The punishments are pretty weak for the first few tests but this is a long overdue step in the right direction.

I am usually a big supporter of the baseball players union preferring their generally honest greed to the dishonest greed of the owners. However they dropped the ball big time on this issue. Baseball should have had steroid testing years ago like other sports. The regime the union eventually agreed to in the 2002 collective bargaining agreement is too weak (the weak punishments noted above and the fact that there is no testing in the offseason). The union should have had the health of their members at heart and supported meaningful testing before this got to be a problem of the size it has reached. The incentives for players to cheat are too great making the argument that testing is for their own good a reasonable one.

What does this change from the fan/analyst's perspective about the past few years. I guess that depends on what the testing finds. If as many people suspect, Bonds either tests positive or his numbers starkly start to drop, then history will never view him the same way. I think there are many reasons for the offensive explosion of the 1990's but it is now becoming clear that steroid use may be one of them. Analysts will never be able to cleanly separate the impact of the drugs from the many other factors at work so I think we are going to have to take the records at face value. That doesn't mean our perceptions of individuals who are eventually shown to have cheated shouldn't change.

In general all of this saddens me. The numbers in baseball have more meaning than in any other sport. Fans of other sports can live in the here and now but baseball fans are constantly comparing their current heroes to those of the past. Information such as the steroid epidemic tarnishes our ability to do that. If Bonds does get tarred by the steroid testing (and I very much hope he does not) then how do we compare him to Williams and Ruth? I know the answer of course, but I'm not happy about it.

What a difference a month makes. Just over a month ago, the Bush Administration were arguing that there was no way that we could turn over political administration of Iraq to its citizens quickly and the French and Germans were naive for suggesting we should do so. This week Bremer announced that we would be turning over political authority to them in June, well before a constitution can be written or elections held.

I think this is probably the right policy. But the rhetorical flourishes we can expect as the Bush Administration (as it always does) argues that it has had a consistent position should be entertaining. This is a political move pure and simple. Turning the administration over to the Iraqis in June means that Bush will be able to run for reelection as the liberator of Iraq and Afghanistan having turned out ruthless dictators in both countries and turned over power to the citizens.

The move carries with it considerable risks however. We will continue to maintain a large military presence in Iraq which means that casualties could continue to mount throughout 2004. If Saddam is not caught and what is basically a civil war with American victims continues, then the political gains from ousting him ring hollow. Finally as the Bush Administration noted when it was arguing against turning over power to the Iraqis, without a constitution and elections, the path to democracy may still veer off course.

Ironically the best hope of the Bush Administration may lie with the international community reacting to this week's move by pledging support and troops, allowing us to withdraw greater numbers of our troops. Then we will have ended up doing what France and Germany have been asking all along. I'm sure we'll never admit it however.

Or Justice for Justice as the Republicans have called their 30 hour Senate session intended to highlight the "crisis" brought on by Democrats refusal to confirm Bush judicial appointees. Of course no one in the media is paying much attention to the Senate so the event has failed to achieve its ostensible purpose. The real purpose was more likely to throw some red meat out there for the conservative base. Since I don't know anyone in the conservative base, its hard for me to determine if it achieved that purpose.

Do the Republicans have a point? As numerous sources have noted, Democrats have confirmed 95% of (or more accurately acquiesced in the confirmation of) Bush's nominees so its hard to say that their refusal to confirm six of them constitutes a crisis. Furthermore there is the well noted hypocrisy of the Republicans who continually obstructed Clinton's judicial nominees to consider.

For me the bottom line is that federal judges make decisions that are inherently political in nature. The President, quite naturally chooses judges more likely to make those decisions the way he would like them made. There is no reason the Senate should give any carte blanche deference to the President when they disagree ideologically with his nominees. One hopes that this will eventually result in the President nominating judges that eschew extreme views or even consulting with opposition senators before making nominations.

Basically my take is that the Republicans are upset that they finally control both the Senate and the Presidency and they can't force every single nominee that they want through. Tough. Poll after poll and election after election make clear that the country is evenly divided between the parties. When the Republicans can make their argument in such a way that an overwhelming majority of the public supports them, then they will be able to appoint all of the judges they want. Until then, this is still a democracy and kudos to the Dems for ensuring that judges with views likely to be anathema to 50% of the public are not confirmed.

There is a great pullout section in today's New York Times regarding 25 important questions in the area of science. While nearly all of the articles were fascinating, the one that most struck me was the lead, "Does Science Matter?"

I am a big believer in the role of technology in the improvement of the human condition. The world is a better place than it was a century ago and it was better then than it was a century before that. Much of this improvement can be traced to scientific improvements particularly those in the areas of health/biology and technology/inventions.

Yes, there is the constant fear that science will unleash upon us a disaster which will destroy the world or render it inhospitable (countless movies are based upon this premise, The Terminator, Mad Max, 28 Days, The Matrix). However we cannot let the fears of this prevent us from reaping the gains that science and technology have to offer.

The United States has long been a leader in scientific innovation yet in many areas there are reasons to believe that we may not remain preeminent. As the article points out, one third of Americans believe in astrology and two thirds believe that alternative theories to evolution should be taught in high school biology. A population with these views is prone to electing leaders that put the fears associated with scientific advancement ahead of the potential gains.

The march of science cannot be stopped by governmental interference. If we do not take the lead in scientific advancement than other nations and societies will and science will be harnessed according to their values rather than ours. In the 15th Century an objective observer would have predicted a Chinese conquest of the world. However at a crucial time the Chinese emperors turned inwards and stifled science and exploration. The rest as they say is history. We must continue to be on the forefront of scientific advancement and not let fear and ignorance triumph over progress.

One of the best arguments for why baseball is the best sport is that no other sport is discussed as vehemently during its offseason. The various postseason awards come this week. Below are my choices.

NL Rookie of the Year

There are two choices to make here. Who is the better pitcher, Brandon Webb on Arizona or Dontrelle Willis on Florida? Then is the better pitcher better than Scott Podsednik on Milwaukee. Webb clearly was superior to Willis beating him in ERA and WHIP. The only area where Willis was superior was won-lost record, largely an artifact of run support. Webb vs. Podsednik is harder. I'm a bit biased against speed merchants but Podsednik did have a respectable OPS of .822. Still a starter with a full season ERA of 2.8 is hard to ignore. My ballot would read Webb, Podsednik, Willis.

AL Rookie of the Year

There are four relatively closely matched candidates here. Hideki Matsui, on the Yankees, Jody Gerut, on the Indians, Angel Berroa on KC, and Rocco Baldelli on Tampa. I don't think Matsui should be eligible given that he played professionally in Japan but until they change the rules he is eligible. I think it comes down to Matsui vs. Berroa, both of whom played a full season (100 more ab's than Gerut) and had an OPS of around .780 (about 40 points higher than Baldelli). Berroa played the more important position but Matsui drove in 106 runs. A tossup. I'll go with local bias and vote Matsui, Berroa, Gerut.

AL Cy Young.

It comes down to Halladay (Toronto) vs. Loiaza (Chicago). With a month left in the season I would have given it to Loiaza but Halladay closed much more strongly and ended up with a better WHIP and strikeout numbers. Loiaza had the better ERA. Between Halladay's closing and the impression that he was more dominant I would vote Halladay, Loiaza, Tim Hudson.

NL Cy Young.

Not much of a discussion here. Eric Gagne had a season for the ages with Los Angeles and wins in a walkover. My ballot would read Gagne, Jason Schmidt, Mark Prior.

NL MVP

Bonds (San Fran) or Pujols (St. Louis)? Pujols or Bonds? Bonds has plenty of MVP's and is an unpleasant person. But when you come down to it, his numbers are slightly better than Pujols and his team won its division. Pujols does win in batting average and RBIs but those are less important than Bonds' 1.2 OPS. Its close but I go with Bonds to win his sixth.
My ballot:

Bonds, Pujols, Gagne, Sheffield, Thome, Smoltz, Helton, Schmidt, Edmonds, Prior.

AL MVP

The most contentious award. I put some weight into the argument that the winner should come from a winning team but two factors lead to me to pick Alex Rodriguez. He's been the best player in the AL for six years and hasn't won, and there is no clear cut candidate from a winning team to take it. Plenty of solid candidates but no one stood out as all of the top teams relied on team efforts rather than one individual carrying them. Meanwhile A-Rod put up his typical fantastic numbers for Texas. My ballot:

A-Rod, Posada, Manny Ramirez, Boone, Delgado, David Ortiz, Foulke, Halladay, Vernon Wells, and Frank Thomas.

I've noticed that a disproportionate number of my entries (at least the political ones) have focused on the Presidency and next year's still remote race for it. Putting that together with the fact that I've been called an "executivist" in the past had me wondering if I pay too much attention to the top of our political system and not enough to the rest of it.

Then I see a headline like the one in today's papers that EPA is dropping enforcement proceedings against a number of firms. This is one of the many things that has happened over the past 3 years that, simply put, would not be happening if Al Gore won in 2000. Yes, only Congress can create laws and the courts and bureaucratic agencies have unique sets of powers but the administrative and military powers of the Presidency have come to be preeminent on the political landscape.

A brief cataloging of a small number of the actions that the President has taken without any need to consult with Congress. Decreased EPA enforcement and changing the standards of when firms need to install pollution control equipment, relaxing of the medical privacy standards implemented by the Clinton Administration, detention of noncitizens without due process, backing out of the global warming treaty, abandoning the international criminal court, changing requirements to make unions report more about their financial activities, and requiring companies to label foods with trans-fatty acid contents. This doesn't even count the wars in Afghanistan and Iraq which were started with nominal Congressional assent.

During the Bush-Gore imbroglio in December 2000, I briefly lost my bearings and thought that it might not be a bad thing for the Democrats or the country if Gore lost and the party emerged stronger in 2004. I cannot have been more wrong. Rather, the Republicans had it right, pulling out all the stops to ensure a Bush presidency. Bush has made the Presidency even more powerful than it had been before he came into office. Now the stakes in next year's election are even larger and everyone in the country has a huge stake in who becomes the next President.

(all this and Bush hasn't even appointed a Supreme Court Justice yet)

Reagan and CBS

I cannot express how appalled I am that CBS has announced that it is transferring its Reagan documentary to Showtime. For those who missed it, the Republican National Committee complained about the documentary saying it unfairly portrayed the former President and that Barbara Streisand's husband (James Brolin) should not portray the Great Communicator. After waffling for about a week, CBS apparently agreed and moved the movie to Showtime.

This action of course makes no sense. If the movie is actually libelous then is it less so if it is on cable? More likely, if it is not libelous, then what the hell is CBS doing bowing to political pressure to avoid negative portrayals of partisan figures. OK, maybe it is in poor taste to make a movie about a man severely afflicted with Alzheimers. But the Republicans haven't objected to the scores of books and documentaries that are "fair and balanced" so they shouldn't be objecting to this.

Here is a little mental exercise for those who think the documentary shouldn't be aired. What if it was about Clinton and portrayed him engaging in illegal land deals in Arkansas and whispering to Vernon Jordan to get Monica a job out of the White House? I sure hope that all of those who pressured CBS to take the movie off the air would be equally offended by such a Clinton movie. And to the cowards at CBS, I hope you got some promises of damned good interviews at the White House in return for backing down here.

Rocking the Vote

I just watched most of the Democratic "Rock the Vote" event in Boston (a phone rang during the middle of it so I missed about 15 minutes). It was entertaining as we learned that Kerry, Edwards, and Dean smoked pot (exactly the ones I would have guessed), that Kerry would have lifted Pedro in game 7, and that only Dean and Kucinich know how to make an effective 30 second video.

The only substantive highlight was the near coming to blows over Dean's comments about seeking the voters with Confederate flags in their windows. Sharpton and Edwards attacked him vociferously. I thought that on pure analytical grounds, Dean gave a good answer (needing to attract all voters and that those with such flags may have them because Republicans have played on race to get them to ignore their economic plights) but made a political mistake. He should have given the same answer but prefaced it with, "I chose the wrong image to reflect this view since the Confederate flag is such a symbol of hatred and oppression to descendants of slaves or victims of Jim Crow." Probably his biggest slip of the campaign so far and it will cost him with black voters and in the south.

Politcal Compass

For an assessment of where you stand politically check out www.politicalcompass.org. The questions are silly but there are worse ways to waste 10 minutes. I came out strongly libertarian and just left of center on economic issues.

I just finished reading last weeks New York Times magazine article on women and the workplace. The main arguments of the piece (and there seemed to be several) were that women are opting out of the workforce out of their own volition to raise families. Some wanted to go back in eventually and others saw it as a permanent change. This is a good or bad thing depending on who is talking although the article concludes by suggesting that this may reflect the start of another revolution in the workplace toward firms that treat workers more flexibly.

The statistics that the article presents regarding women leaving the workforce are convincing. The argument as to why is only partially so. Yes, women are choosing to raise families rather than work insane hours. However isn't that at least partially due to a system that forces them into that choice? Any woman (or man) who spends time in a law firm or investment banking company (or the White House or a university), knows that whatever the rhetoric, putting in long hours is part of the expectation. These organizations may have generous leave policies but those who take advantage of them are without a doubt falling behind in the rat race.

At one point in the article one woman wonders if we will ever reward merit (or talent) over working hard. The answer is that at most high powered organizations, most of the people are very talented. Therefore those who spend more time on the job are going to accomplish more and are going to have better arguments for promotions.

If we accept the implicit argument in the article that women are more nurturing and more likely to want to spend time raising children (and I am not convinced necessarily of that) then this leaves women with the choice of a career that will result in power and wealth or one that will be a sidelight to raising a family.

Can this be changed as many feminists thought possible 30 years ago? Not without fundamental changes in our economy and society. In a market based system, private firms will always have the incentive to rely upon and therefore promote the people that work the hardest. Government will likely behave similarly. If women are on average more reluctant than men to make the choice to do so then there will be fewer of them at the top levels of organizations and of government.

Discrimination against women still exists. However the phenomenon described in the article is not going to be curtailed even if discrimination is eliminated. Our system which rewards the combination of effort and talent (and luck, but I'll save that for another time) has biases against those wishing to devote time to family that are inherent within it. Changing it to eliminate that bias is a lot harder than anyone imagined when the feminist movement gained steam four decades ago. Even reaching a consensus about whether we should do so is something that may take a generation.