Category: Podcast

Ten Percent Less Democracy with Garett Jones

Garett Jones returns to the podcast to discuss his book, 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less.

During the 2016 presidential election, both Donald Trump and Bernie Sanders argued that elites were hurting the economy. But, drawing together evidence and theory from across economics, political science, and even finance, Garett Jones says otherwise. In 10% Less Democracy, he makes the case that the richest, most democratic nations would be better off if they slightly reduced accountability to the voting public, turning up the dial on elite influence.

To do this, Jones builds on three foundational lines of evidence in areas where he has personal experience. First, as a former staffer in the U.S. Senate, he saw how senators voted differently as elections grew closer. Second, as a macroeconomist, Jones knows the merits of “independent” central banks, which sit apart from the political process and are controlled by powerful insiders. The consensus of the field is that this detached, technocratic approach has worked far better than more political and democratic banking systems. Third, his previous research on the effects of cognitive skills on political, social, and economic systems revealed many ways in which well-informed voters improve government.

Discerning repeated patterns, Jones draws out practical suggestions for fine-tuning, focusing on the length of political terms, the independence of government agencies, the weight that voting systems give to the more-educated, and the value of listening more closely to a group of farsighted stakeholders with real skin in the game—a nation’s sovereign bondholders. Accessible to political news junkies while firmly rooted and rigorous, 10% Less Democracy will fuel the national conversation about what optimal government looks like.

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The President’s Economic Advisers with Simon Bowmaker

Today’s guest is Simon Bowmaker. The topic is his book, When the President Calls: Conversations with Economic Policymakers. The book features 35 interviews with economists who worked for the President of the United States.

What is it like to sit in the Oval Office and discuss policy with the president? To know that the decisions made will affect hundreds of millions of people? To know that the wrong advice could be calamitous? When the President Calls presents interviews with thirty-five economic policymakers who served presidents from Nixon to Trump. These officials worked in the executive branch in a variety of capacities—the Council of Economic Advisers, the Office of Management and Budget, the Department of the Treasury, and the National Economic Council—but all had direct access to the policymaking process and can offer insights about the difficult tradeoffs made on economic policy. The interviews shed new light, for example, on the thinking behind the Reagan tax cuts, the economic factors that cost George H. W. Bush a second term, the constraints facing policymakers during the financial crisis of 2008, the differences in work styles between Bill Clinton and Barack Obama, and the Trump administration’s early budget process.

When the President Calls offers a unique, behind-the-scenes perspective on US economic policymaking, with specific and personal detail—the turmoil, the personality clashes, the enormous pressure of trying to do the right thing while the clock is ticking.

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Maritime Policy and the Merchant Marine with Josh Hendrickson

Today, Josh Hendrickson joins the show to discuss his paper, “U.S. Maritime Policy and Economic Efficiency.” The paper discusses the controversial Jones Act, and how it (and similar policies) were designed to maintain a sovereign merchant marine for use in times of war. Te abstract reads as follows:

Critics argue that maritime policy is protectionist legislation that restricts competition and reduces economic efficiency. In this paper, I argue the contrary. I begin with the premise that the primary role of the state is to provide national defense. A country must be able to protect its wealth, and therefore its capital, from plunder and/or destruction. This implies that a sufficient level of defense spending is increasing in the capital stock. An efficient solution is to tax capital to finance defense. Nonetheless, there is reason to believe that capital devoted to shipping imposes a lower marginal defense cost than other forms of capital because ships can be used as a naval auxiliary. If so, then one would expect that the optimal tax rate on shipbuilding and the merchant marine would be lower than other capital-intensive firms. Put differently, maritime subsidies during peacetime can be understood as the result of a Coaseian bargain in which the government compensates shipbuilders and the merchant marine during peacetime in exchange for their services during wartime. I argue that the history of U.S. maritime policy is broadly consistent with my theory. I conclude by discussing the current state of the merchant marine and maritime policy.

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