Governing America in the Age of Political Polarization

this program is presented by university of california television like what you learn visit our website or follow us on Facebook and Twitter to keep up with the latest you see TV programs also make sure to check out and subscribe to our YouTube original channel you see TV prime available only on YouTube the center today is sponsoring the program entitled governing America in the age of political polarization our speaker is Dean Henry Brady who has taught at Cal for more than 30 years Dean Brady needs no introduction and he was appointed dean of the Goldman school

in 2009 and the director of the Center for stability and democratic engagement Dean Brady's latest book is was published in may the unhappily course unequaled political voice and the broken promise of American democracy with co-authors cash lots Minh and Sydney verba now please welcome Dean Brady it's great to have so many people here thank you I'm sort of surprised actually I figured it this early hour very few people would show up so it's it's wonderful I think that says them about the topic which has many of us animated these days as we worry about political

polarization what I want to do is say a little bit about what is political polarization what's happened in America in politics in the last 30 or 40 years and then towards the end I want to talk turn towards the fiscal cliff this problem it's going to occur basically right now but certainly in january-february as a whole lot of tax cuts that had it been put into effect will essentially end and a process called sequestration might come into effect and I want to talk about how polarization is going to interact with that and what the likely

outcome will be and as I go along I'll say a little bit about what I think the outcomes of the election might be okay polarization in America this is the picture I use in my own mind to think about polarization it's an alexander calder gosh from about 1967 called her of course is a great American gosh sculptor artist there's a wonderful Calder in front of the art museum over on bancroft he did the great stables and mobiles and things like this I love this one especially although I have to admit if you look at where

the signature is I turned it around a little bit using a program i found on the web and i did that for a purpose and it's this if you think about an election night they show you maps and the states that go republican or read the states that go Democratic go blue and by the way when the network's decided on this coding scheme they had a debate over whether the Republicans should be red or the Democrats should be read and they agreed that the trouble with making the Democrats red is that would play to type

in other words the Democrats are red for those of younger people may not realize that there was a period in America were being read amantha you're a communist and so in order not to seem to be partisan in any way they made the kratz blue and the republicans red I have colleagues by the way who when they do pictures resolutely these are conservative colleagues who resolutely refused to use that convention and cast the Democrats as red in the Republicans as blue okay so what's neat about this well what's neat about it is ok there's the

Liberal Democrats over on the left right left to you there in blue there's the Republicans the big red spot to the right and what's between them that great big dividing line and so I think it's sort of a nice pictorial representation of polarization in America and also it turns out that i'm going to show you some pictures in which i'm going to argue there's sort of two dimensions of argumentation of politics in america one dimension is economics and you can think of that as the horizontal dimension and the parties differ on economics with the conservative

views on the right liberal views on the left and they also differ on social moral issues cultural issues gay rights abortion and so forth you can think of that as the vertical dimension and you can see that they're nicely separated along both dimensions and so this picture really does called or didn't know it but he was a political scientist as well as a great artist I think captures polarization in America and gives us a sense of what it's all about and so so I really love this picture let me give you a little more detail

about this this shows you on the bottom five socio-economic quintiles that is to say groups of Americans split up into groups according to their income and their education on the left are low income and low education people on the right are high education and high-income people five quintiles we just break the population into five equal groups so one two three four five then we look at the percentage of each party in each quintile the thing you notice immediately is there's a lot higher percentage of Democrats in the lowest quintile then in the highest quintile see

the line the blue line it slopes down the second thing you'll notice is Republicans there's a lot higher percentage of Republicans actually not been Democrats because there's actually more Democrats than Republicans in toto in the population but relatively speaking there's more Republicans in the upper income quintiles than in the lower income quintiles and you'll also notice that Republican line is much steeper than the Democratic line what does that mean that means the Republicans are a much more homogeneous party than the Democrats that is to say they're much more composed of their groups that are sort

of their mainstay like high income high educated people Democrats are more of a catch-all party they have people of all income groups although they tend towards the lower income groups so that immediately tells you some things about American politics the Republicans are homogeneous they're more representative of the higher SES groups the more the higher socioeconomic status groups that means they can be more pure in their policies and can decide that they've got a position it's positioned their constituents like and they're going to hold to it no matter what no new taxes would be an example

of that Democrats are more of a catch-all party certainly more representative than anything else of the lower income quintiles but nevertheless have a fair number of folks from the upper income quintiles and as a result they have a harder time of being tough minded about any particular position with respect to taxing and spending although unbalanced they tend to be on the left that is to say they believe that government spending is a good thing and the taxes are not necessarily the worst possible thing that could be imposed about people in a democratic political system so

that tells you something about the parties let me now just talk about what I think the two main issues of American politics are and this is not to say there's not other issues of foreign policy for examples conspicuously missing from my list here why well foreign policies and episodic thing it comes and goes this presidential election for example is not really much about foreign policy it's about other kinds of issues 2004 was to a large degree about foreign policy that was remember or the bush carry election and it was all about Iraq and Afghanistan and

the wars we were in at the time but that comes and goes a third issue you might say is missing or another issue that's missing is race in American politics race to a large extent has become an issue that's highly correlated with income and economic issues and so it's sort of captured by that right now that didn't always be it didn't use to be so it wasn't always so but it is now so these dimensions do a good job of capturing American politics and then I'm pardon how messy this is but I want to talk

a little bit about what's happened to the parties and their activists over time from about 1972 to the present and I've updated these data and other places but the pic pictures aren't so pretty that I've created so these are the ones i'm going to use they take you to 2004 but it's continued to be this way what this picture does is it says over time that's the horizontal axis what's happened to the average Republican versus the average Democrat in terms of their positions on economic issues where the vertical axis is those positions so do you

have a liberal position on economic issues or a conservative position well on average not surprisingly it turns out Democrats have a pretty liberal position and so they're towards the bottom there all three lines there's three lines because in a minute I'll break it out into just not the average democrat or republican but into the activists in the parties the people who give money the people who give time to parties by being campaign workers so the average Democrat is pretty liberal on economic issues this is a set of questions that are asked repeatedly in what are

called national election studies over time so we can track over time where people stand on these issues and they're about economics and it can be scored liberal conservative and not surprisingly Republicans are towards the top they're more conservative but what's really interesting here is this is the difference these bars show you the difference between the two parties in 1972 and the difference in two and for for just the average Democrat versus the average Republican and what you notice is those wedges between the parties have gotten bigger there's more polarization between the parties I gave this

talk by the way at the university of florida and i started making this motion and saying see what's happening these lines they're going like this and at the university of florida i got this great reaction from the crowd they love you they oh yeah yeah go gators they kept yelling right no idea what they're too it turns out that at the university of florida that's the gator that's what you do indicate you're a gator so what's happening is we've gotten in the grips of the gators i guess in american politics so that's true of the

rank-and-file we've had more polarization now it's really important to understand what this polarization is it's actually not the case that people in America in general have become more polarized you might so how can that be so well what's really happened is we've had a sorting of people into the parties according to their ideologies so whereas it used to be the case that there were Democrats who were moderates or conservatives even often Southern Democrats but not entirely and there were Republicans who were moderate or even liberal northeastern united states at jacob javits nelson rockefeller kind of

Republican and the rank and file like that those folks now are pretty much gone and what you've got is two parties which are much more homogeneous ideologically than they used to be so what's really happening is not so much a polarization of Americans but a polarization of the political parties as people have sorted into party according to their ideology furthermore as I'll show you later during this same time what's happened is the number of independence has increased so that's another way in which the parties have become more homogeneous because those people in the center of

the spectrum have left the parties leaving just the hard core so the parties increasingly look more and more polarized so that's true with respect to the rank and file the people in the mass public when we asked them on a survey are you Republican or Democrat this shows you what's happened to them but there's also the activists and what's interesting is that the other lines here show you what's happened to activists who are people who give money to political parties or give time to political parties as campaign workers and this is what's happened to them

and so let's just go back and forth not surprisingly to begin with they were more polarized more separated but what's really amazing is look how separated just go back again oops there's what it used that's what it is for the rank-and-file here's what it is for the activists the activists are really polarized really polarized so that means the folks who are most involved in the parties are really really much more extreme with respect to one another in the two parties than just the rank-and-file now there's another dimension of American politics this is a series of

questions that asks about social moral issues over time these are things like abortion and women's role whether women should be out in the workforce and what's interesting about that question is Americans in general have become more liberal on that question but also there's been a tremendous sorting within the parties on that also a tremendous sorting with respect to the question of abortion it turns out that in 1972 or so this is before just before Roe vs. Wade the famous Supreme Court decision which basically decided how we deal with the question of abortion in America it's

just before that decision and at that time the two parties were pretty indistinguishable on the abortion question there really wasn't much difference and in fact Democrats were probably a little more conservative than the Republicans believe it or not so if you look early on there was very little difference between the two parties and indeed of anything the Democrats were more conservative than the Republicans and now look there's a bigger wedge but this wedge is not as surprising or maybe worrisome as this wedge which shows you the activists so the party activists are much more polarized

over time so the Gators mouth is much more open and there's a real difference between the two parties on the social moral issues so we've shown there's differences on the economic issues there's differences on the social moral issues activists especially being polarized okay let me show you another way to think of all this this is a work where we looked at different kinds of people folks who were just citizens people who voted or registered to vote people who're campaign workers campaign givers amount of campaign giving and so forth and this is a very busy picture

for which I apologize I didn't have time to clean it up but what it shows you is the box in the middle well let me just explain the axes first each axis is a dimension of American politics think of the called or picture again so along the bottom our question is a question about redistribution of income should the government redistribute income liberal positions are on the left conservative positions are on the right and by the way the numbers don't mean very much because we've just scored these questions in a pretty arbitrary way but the ordering

does mean something on the vertical dimension there's a bunch of social issues which included questions about abortion and gay rights and this is from a 2008 study that was done in the United States and we look at where the average Democrat stands in the average Republican and so forth and basically what you see is let's start with the average citizen that's the box up there citizens and voters are in the near the middle of the picture so and I've constructed it really basically that way so they would be at the middle then over down on

the left are Democrats and you can see the the sort of light blue oblong is different definitions of Democrats that we have are there people who are democratic voters are they people who when asked a question are you a Democrat a Republican or what they immediately say Democrat or they somebody who when we live push a little more and say well do you lean democratic they say yeah I lean democratic and that's a more inclusive definition but the point is no matter where you put them there down there to the left same thing with Republicans

up there on the right that circular kind of light red circle then we've got activists in each party and that's people who are democratic workers people who work for political campaigns are democratic dollar givers that's the lowest left-hand very solid thicker blue oblong and they're more extreme as I just showed you a moment ago and you shouldn't be surprised that they are notice they're more extreme actually on the social issues not so much more extreme on the economic issues for the Republicans it turns out there activists are much more extreme on the economic issues and

by the way this is the Tea Party the two parties even further to the right and by the way occupy is down there to the left so I've done this with 2012 data which I can't release yet because of an embargo because of the group that I worked with but we're working on getting a report done but I can say that occupy and Tea Party are way far even further to the left and down there and Tea Party way out there to the right and also if you look at this picture for a while and

if you look at lots of other data including the 2012 data I just described one thing you'll find that repeats and repeats and repeats is the Republicans are further away from the average citizen than Democrats are so it's Republicans who have become more polarized than the Democrats that's not to say the Democrats haven't become somewhat polarized during this period but the Republicans have become really polarized and the Tea Party is especially far and the Tea Party in the sample for 2012 was people who said they identified with the Tea Party was about seventeen percent of

the american population the people who said they identified with occupy and thought it was a good movement were thirteen percent so that means thirty percent of the american population set those more extreme positions that's a lot of folks I'm actually beginning to worry that in fact we're not only seen sorting we may actually be seen actual polarization in the population I don't have the evidence to quite show that to show that approve it but we there's indications it might be true okay so polarized politics polarized along these two dimensions and Republicans more extreme than Democrats

that's not surprising by the way given what I showed you before about the Republicans being the more homogeneous party ok so this summarizes what I just said two dimensions of polarization increased dramatically especially among activists ok let's now turn to elites the people who are in Congress there's work that's been done to look at roll call votes over time and we've looked to see how can we score these liberal conservative and with some very sophisticated statistical methods we can do this kind of thing and then we can get scores over time and so we can

look at particular Congress's or we can look over time right now let's just look at the 2007 data for the hundred and 10th congress and what this shows you is liberal conservative along a horizontal axis so liberals on the left conservatives on the right oh and by the way this is from one of my colleagues who believes ardently that Democrats should always be put in red he used to have a chair at the University of Houston which was who was the guy who was head of Enron I'm trying to think of his name Ken Lay

he had the kennel a chair at the University of Houston he had the kennel a chair so when you look at these data these are not data from a liberal academic these are data from a person who styles himself pretty conservative and had the kennel a chair at the University of Houston and what he shows is there's no question but that both parties are bunched so what you can think of these curves is meaning is how many Democrats in Congress are at each of those positions so we sort of laid them on top of one

another and seeing what kind of figure they'll make and they make these sort of Gaussian or normal shaped curves and what we've got there is red is the House Democrats dark red is the Senate Democrats and then on the right we've got the Republicans and so you can see both chambers basically have the same distribution in terms of liberal conservatism of the Democrats and Republicans so that shows you first of all notice there's basically no overlap between those distributions there's just a little bit there a few people but in fact the truth is the most

liberal Republican is more conservative than the most conservative Democrat and so in fact there's virtually no overlap between the two parties and as it always been so well using the methods I've described we can do that and what we find is in 1967-68 the distributions looked like the top panel there notice there's a lot of overlap between the two parties notice that as we move along the overlap is reduced and until we get to 2007 2008 there's essentially no overlap so these curves are moving apart so it used to be so everybody see the overlap

where the blue line and the red line cross at the top there's a lot of space under there that's a lot of people who basically turn out to be in the middle now we go down to the bottom there's virtually nobody where the curves cross so there's virtually nobody who's in the middle anymore we've got extremes and here I just do the same picture and sort of show you where Clinton and Obama would be located on this curve where McCain would be located notice what this means by the way is john mccain in 67 68

would have been a conservative in the Republican Party he's to the right of the mode of that distribution he sort of to the right of that curve but notice that by 2007 2008 he's on the left of his party and George Bush is on the right of his party but would have been on the extreme right in 1967-68 so the Republican Party has really changed its moved to the right and indeed recently there's a book that was published by Norm Ornstein who works the American Enterprise Institute which is a conservative think tank and Tom man

who works at the brookings institution which is more of a liberal think tank and for years they'd been complaining and writing about polarization in Congress and doing a sort of even-handed approach to it well both sides are getting more polarized it's really not good it's it's it's both sides are sort of causing the trouble but then they decided that's wrong it's actually the Republicans of the problem so norm Ornstein at the American Enterprise Institute needless to say has gotten into a lot of trouble with his compatriots there who are not happy by this characterization but

they finally came to the conclusion including norm that basically it's the Republicans who have moved further away from the center than the Democrats have moved away from the center and this is it's even worse than it looks is the title of the little book they've done it's very nice so it's been controversial but I must say the data support the conclusion that they come to and many of us have been saying this that it's really the Republicans who have moved further to the right than the Democrats to the left okay and so what we can

do by the way is plot polarization over time these are just sort of indices of polarization one way to think about it it's sort of the distance between the two parties over time how is that increased and you can see that's increased over time and it used to be that they were not that far apart and we have the house and the Senate on this so the house is the darker line the Senate is the lighter line so in the 40s in that era they weren't that far apart but now starting in the 70s polarization

just takes off and so the distance between the parties increases dramatically in the last 30 40 years and that's completely consistent with the I showed you earlier for the mass public well what is the one of the consequences or maybe causes of this it's hard to know which it's probably both one of the causes of it one of the consequences of it is that filibuster has been used more and more in the Senate of the United States cloture voting is an attempt to try to stop the filibuster so there's three things that can happen with

the cloture you can just file a motion it's the first step you take that indicates there's been a filibuster and somebody wants to stop it then there can be a vote ultimately on cloture that's the second step and the third step is it can actually be invoked and all three of these steps have increased dramatically in the last 40 50 years so what these three lines are is those three steps the number of times they occurred in each Congress going back to the 40s and you can see it was hardly used at all early on

and now it's just taken off and by the way notice the Democrats are pretty much as guilty as the Republicans of using this mechanism so cloture has been motions have been filed with increasing dramatic frequency this is the absolute number so notice we've gone from something like five or ten to something like a hundred cloture motions filed and so a ratio of ten to one so a lot more fractious pneus and disagreement within the Senate of the United States okay so elites are polarized polarization has increased and Republicans have moved further to the right than

the Democrats say that's the polarization story it's been exacerbated I think many others think by money in American politics to give you an idea about money in politics this is my favorite social science finding that I'm partly responsible for in a book that I wrote with two other authors suburban k schlossman and we found remarkably with the people with money give money takes a social scientist to come up with that remarkable result i must say that when i became dean the development officers in my school took me aside and said henry the people with money

give money so they knew it what you notice here though it what's really remarkable is here what we've got is again that SES percentile so on the left or the poor and uneducated on the right are the educated and well off and these are percentiles and what we've got is of those percentiles what fraction give money this is just whether they give money by the way not how much they give and what you notice that goes along and it not surprisingly it increases but it really increases dramatically as you get to the higher percentiles and

indeed these data are incomplete because it's almost impossible on sample surveys for us to get it the really highest income people we get very few high-income people but there's indications that there's a septum all number of people maybe 400 people who give a third of all the money that's given in politics in America okay and this doesn't capture that first of all really all it's saying is whether you give money not how much you give so if we add it on top of this well how much you give that would even go up steeper because

it turns out again big surprise people the lower end of the socio-economic scale they may contribute but they don't contribute that much whereas people at the upper end of the socio-economic scale both contributed very high rates thirty forty percent and give enormous sums of money by the way it's interesting to compare this with the percentage who work for campaigns which is the blue line there and that also goes up but you notice that doesn't go up at such a steep rate and what we've done in American politics with a lot of the court judicial decisions

we've come to as we've moved politics towards increasingly money based and not campaign worker based campaign workers are still important but basically campaigns really hunger for money that's what they want because you can convert that into a lot of other things and because we've made it easier and easier for the well-off to give money to politics it's really just flooded into the system and now become a really really important part of American politics and since the people who give money are folks at the higher levels of SES guess what they have more influence on American

politics not a big surprise and indeed this shows you something from the book we just published what we did is we went and looked at lobbyists in Washington who did they represent and we looked at the kinds of things groups in Washington did and what fraction of businesses for example were there and what fractions of other kinds of groups and we these pictures are really meant to focus on two things business groups which are the big white spaces versus the less privileged and the less privileged if you look at the top one there you may

not be able to read it it's so small there's just a little sliver of groups that represent the less privileged and by the way but less privileged we don't mean just poor people we mean working-class people so we're talking about unions who actually have lobbying organizations in Washington we're talking about groups that represent blue-collar workers are even white-collar workers who are not professionals or managers the fact is the less and we're calling those the less privileged that's a big group it's a large fraction of Americans those folks are much less represented in Washington in terms

of organizations they're much less represented in terms of what we call in-house lobbyists those are people hired by these groups to work in-house or firms that they hire a lot of what lobbying occurs by hiring an outside firm they're much less represented in terms of lobbying expenditures we went and got data on how much money each of these lobbyists spends they have to file reports and we redacted that data it is true the congressional testimony is a little bit more favorable towards the less privileged there's just a slightly bigger slice there but by and large

it's business groups which have a lot more representation the one place by the way we're less privileged actually have a fair amount of skin in the game it's with respect to pac donations down there you can see this privileged and often the debate centers on political action committee donations and people say well unions give lots of money it's not that much less than businesses therefore what's the problem here and what they completely neglect is there's this whole other realm which is lobbying and testifying before Congress and things like that where businesses do quite quite well

and the less privileged don't do so well so and even by the way in terms of pac donations it's not like the less privileged are actually very competitive with businesses so in fact i forgot that i done this you can see tells you so business groups are majority of all organizations they have majority of in-house lobbyists super majority of outside lobbyists spend super majority of lobbying dollars do plurality of congressional testimony submit small fraction of amicus briefs by the way the courts are one place where there's a little more equitable distribution who gets represented and

then they spend a plurality of pac dollars okay i'm going to skip this this is just a cartoon we have in our new book there's a lot of folks who say well but it's a level playing field anybody can give money and this cartoon we thought sort of captured what's going on it's the lion saying to the rabbit what are you complaining about it's a level playing field okay let me now turn to the fiscal cliff because polarization in america is making it hard for us to deal with a really fundamental problem that we have

and i'm not going to go through this whole thing but let me just tell you briefly what this is what i've done is i've gone and gotten information of the tax policy center which by the way has figured in some of the in the presidential debate the other day that's the center that Obama cited that had done the study which suggested that Mitt Romney's tax plan really wasn't feasible because if he intends to do all the things he says he's going to do and the big thing he says he's going to do is try to

not harm middle class taxpayers while he keeps taxes on the rich lower and he says he can do this by changing deductions and this report said well the trouble is there's not enough deductions that you can take away from rich taxpayers to make up the difference and not increase tax rates for middle class and lower class people and therefore it's got to be the case that you're going to take away deductions that are going to hurt middle-class and lower-class people and the tax policy center is pretty reputable group Urban Institute Brookings Institution and certainly they

tried very hard to figure out what is Mitt Romney's tax plan and of course he keeps claiming well but they're not going to do what I'm going to do but the sad thing is he hasn't told us what he's going to do we don't know and it sort of you have to imagine what he's going to do and they tried to do the best job of imagining and they came to the conclusion that in fact he couldn't do what he said he was going to do now maybe there's a way but it's not a way

that a bunch of really really talented tax experts can figure out and they tried very hard to do it so this is a report from them and they're they're very responsible source of information and what I've got here is what is the fiscal cliff and the fiscal cliff is basically the fact that we've got a whole lot of stuff that was put in place along the way and it's coming due in january-february that is to say a whole lot of tax cuts are going to be eliminated and as a result of the elimination of those

tax cuts taxes will go up in a whole variety of areas and I've listed a whole bunch of them with the amount of money that's involved and I'm not going to go through each one but it's things like eliminate the temporary two percent payroll tax deduction created by both parties so what I've done in this thing is I've told you what the program is that's going to be eliminated in terms of the tax cuts and then I told you which parties were responsible for that in the first place and then I've gone to the long

and told you how much money it involves and then I've said who is mostly affected because what you can do is look at the incidence of these taxes and ask who is it that's going to really care about this so for example payroll taxes fall more heavily because of the fact that they're just a proportional tax on low and middle-income taxpayers so the elimination of the two percent pushback or or rollback of payroll taxes is going to really hurt middle and low-income people and I've also in the final column told you which parties don't want

to do these things now it turns out on that one both parties thought of that payroll rollback is just a temporary thing they're worried in the long run about paying for Social Security so they're not sure they want to continue to do that so maybe both parties can agree that we shouldn't continue to do that but it does mean that will be more taxes on people especially hitting middle and low-income people then just to take one more there's the return to higher income tax rates and fewer personal exemptions and itemized deductions for groups and then

that's the bush-era and those are the some of the things that Obama is talking about that he wants to continue or that is to say not get rid of it's a little confusing here because the trouble is in January things go away the deductions and the exemptions and the cutbacks and taxes that people have are going away and so Obama is saying let's let them go away let's have the rich pay more taxes so what if you find here is on this first page this first bit which is the top of the page I've given

you there's 535 billion dollars in more new taxes some of them tax cut backs that are just going away that are going to be instituted in january-february yes yes going to get to that in a moment that's per year and indeed then if you go to the bottom there's a bunch of new taxes Obamacare for example will require a new tax that will be something like 20 billion and then which is small by the way compared to a lot of the other things we're talking about here and then there's a few little technical things I'm

not going to get into and finally there's this notion called sequestration because of concern about the long-term debt and the budget deficit which is the yearly difference between our revenues and our expenditures in 2011 you remember the big fight over what we were going to do about increasing the debt limit that led to an agreement between the two parties that in fact they would try to find a way to solve the debt problem the deficit problem but there was a committee set up couldn't come to any conclusion and as a result we have an automatic

set of cuts that are going to occur that's called sequestration basically it is it's automatic across-the-board cuts across federal agencies and that's about a hundred billion 95 billion dollars if you put all this together that's 675 billion dollars of new taxes or getting rid of expenditures now why do I put those together well both of those things are stimulative cutting taxes stimulates the economy spending money stimulates the economy so what we're going to get rid of in january-february if we're not careful is about six hundred and seventy five billion dollars in stimulus every year now

you may remember there was an enormous fight at the beginning of the Obama administration on a stimulus bill that was about eight hundred billion dollars so basically we're talking about d stimulating the economy by 675 billion dollars but not just once continuously and the experts in this area and this includes groups like this includes group by like the seek congressional budget office Moody's Analytics Morgan Stanley Goldman Sachs they all say this could lead to a d increase in GNP of four to five percent decrease that's a recession so there's a big worry about doing this

by the way there is an oddity in the fact that the Republicans are really worried about this recession occurring with a 675 billion dollar decrease in government stimulus but their claim as the 800 billion didn't really have any impact you can't have both I mean you can claim the 800 billion has no impact but then you should claim this will have no impact as well you can't have both I think most economists almost all economists will tell you it's going to have an impact so what's going to happen what's going to happen something has to

we can't really be doing this but but note that's a really difficult problem because it turns out by the way that if we did let these tax cuts expire if we did have sequestration and great cuts in the budgets we could in fact help solve our deficit problem very quickly within a few years we would have gotten rid of most of our deficit so that's one path to getting rid of the deficit but it's the European path it's the one that's been tried in places like Britain which have been massive reductions in government expenditures and

the result has been d stimulation of the economy and lack of growth so we've been growing much faster than the European countries right not great growth is not great right now but it's been better than Europe right now in America so there's a tough problem here what do we do do we worry about the long-term deficit problem or do we worry about the short-term stimulus problem and furthermore then I show you on this in the last column there's differences of opinions about which things should be done or not done and of course one of the

big issues in this campaign is Obama says let the tax cuts for the rich expire because that will help us get revenues that can solve our deficit problem yes it will have some D stimulating effect it certainly will hurt a little bit but that's better he says than taking the money out of middle and low come hands because his argument is and the argument of many economists is those folks are much more likely to spend the money and not just to save the money which means that it doesn't really help stimulate the economy and if

you want a short-run stimulus the argument goes you want to keep money in the hands of middle and lower-income people not just give it to high-income people the Republicans say no that's not fair they should have their tax cuts continued and furthermore there the job creators and they're the folks who are going to help stimulate the economy that argument might work better if we didn't have billions of dollars in profits in the coffers of corporations right now that are not being used to expand economic output but there's obviously arguments among economists about these kinds of

things there are some economists who think that Romney's right someone would think that Obama's right on this issue but notice where polarization takes you if you go down my chart a lot of this difference in the parties has to do with which groups are affected is it low income groups and middle income groups or is it high income groups and you'll see that Republicans want things that will make sure their constituency high income groups are protected Democrats want things that make sure that their constituencies middle and lower-income groups are protected so the battle is going

to be over which groups are protected and furthermore it's going to be over whether we have taxes to try to help solve some of the long-term budget deficit problems and and or not Obama says taxes in a balanced way or not a bad idea Republicans say no and in fact you may remember the famous scene in the primaries where they were asked a group of them including Mitt Romney if you were asked to have one dollars in taxes for ten dollars in spending cuts would you take that deal so that means mostly spending cuts a

little bit of tax increase every member on the stage of the Republican primary contenders including Mitt Romney said no they wouldn't take that deal they would say absolutely no new taxes under any conditions so that's where we are we've got a polarized situation and we've got deep differences of opinion about how to solve our problems now let me just speak briefly about the outcome I think it's most likely Obama will win although his debate deform performance the other day was not good it was really poor I actually went into my class the next day and

I I went and I said look at what he said here he had some setup for a really good rejoinder to Romney and then he got lost and time again he got lost in that debate Romney was exceptionally good he stayed on message he said the same thing again and again and again which is the right thing to do probably in a debate like that and he did not say much about the details of what he would do it's basically a Richard Nixon I have a plan to end the war in Vietnam kind of strategy

it's a strategy a challenger can use because the Challenger doesn't have to give details and Obama did not draw him out on those details so I think it's most likely you'll get obama winning although as I say the debate makes that problematic I'd say there's about a sixty percent chance sixty-seven percent chance actually I go up to that Obama will win the presidency the Senate will remain Democratic and the house will remain Republican I think it's highly unlikely the house will change from Republican to Democrat I think it's somewhat possible that the Senate could change

from Democrat to Republican although not with a 60-vote margin for the Republicans so they would have to deal with the filibuster and I think it's possible that Mitt Romney could win I'd give him about a twenty to thirty percent chance right now it's going to depend I think partly on what happens in the next few debates the job numbers yesterday we're good for Obama they weren't great they were good that people in the White House are probably frustrated over the fact that there were revisions and some of the numbers for the preceding two months that

up them by forty thousand jobs for each month and that unfortunately what people will remember was the low job numbers when they were first announced and not recognized that they were actually changed 115 14 whatever the number was it was 14 18 something like that 114,000 let's say jobs yesterday that's not a right number but it's better than what he had been getting and in there better thing of course with the unemployment rate going down seven point eight percent that's good for Obama that will allow him to get by the rhetorical statement the Republicans have

been using which is unemployment is still over eight percent and has not declined he can say it's declined they rightfully point out that a lot of that decline is due to the fact that people are so discouraged from working they're not even trying anymore so that seven eight percent seven point eight percent is among people who are still trying and a lot of people have been discouraged so both sides have arguments on those numbers I'd say on balance that was a good day for Obama especially given the debate performance that he had the other night

but he needs to do better in the other debates if he's going to win and that's remains to be seen so with that let me end and take questions thank you yes yes I mean there are studies which show that basically the stimulative effects are greater for middle and lower-income people than for high-income people you know I i wish i had an economist have another stripe here to sort of put arguments on the other side but i think most economists would say that stimulative effect is much greater for middle and low-income people than it is

for high-income people because they go tend to save the money they would also say that in fact the initial obama stimulus to please the republicans had a much bigger tax cut that had initially been thought of and that was not really probably the right way to go because that gave a lot of money to folks who promptly turned around and saved it when you wanted them to go and spend it so I'd say yes unbalanced there's a lot of evidence to show that the stimulative effects are mostly for lower and middle-income people yes this function

and you didn't touch on that can you repeat the question the question is whether the unionization of government workers has led to polarization and dysfunction and there's no question but the unions have certainly represented workers quite diligently the data I showed you i think suggests that the notion however that unions are these all powerful entities and that poor business quakes in front of them it's just not true so that well but i'm talking about government i'm talking about lobbying and who has lots of lobbyists certainly we have problems with pensions in the state of california

a problem we've got to fix no responsible person it seems to me would look at the numbers and say we don't have to find a way to deal with that however I think it is important to remember that we've stripped people in the private sector of defined benefits pensions and so now you have to rely upon your own investment strategy and hope you're lucky and if you're not lucky you're going to be in trouble in retirement do we really want to do that to the public sector as well we might I mean that's certainly one

way to approach it and say everybody should be on a level playing field and and everybody should be screwed to put it bluntly on that topic but you know there's another way we could go as we could say what we really need to do is to find pensions in America that make sure there's a floor for people and that we a hybrid system might make some sense where we have defined benefits to a certain level but above that you have to put in your own money and that that is going to be based more on

defined contributions it seems to me a hybrid method would be one that would be better for the people of America than just saying let's just get rid of any kind of defined benefits programs my personal taste but we do have a problem there's no question about that by the way the problem is to a large extent in the protective services it's the corrections officers its police its fire who have gotten extraordinarily good deals and who have options to retire at 50 get disability spike their incomes that is too get higher incomes the last year and

therefore end up with extremely lucrative retirement benefits teachers also have a problem but it's they've put in bigger contributions than the protective services by and large especially in California and they don't typically retire at 50 and furthermore they can't spike their income the last year the way those other folks can so it really have to differentiate among different groups yeah basically is he was saying that I talked about socioeconomic status where we put together high and low income I'm sorry high education and high-income people what we do is we just basically count them equally you

can do the analyses separately by the way and we have done them and you get the same kinds of results so you can do them just by education or just by income and you get essentially the same results there's somewhat different but not so much that it's really worth the trouble which is why we put them together way in the back there yes yes in fact I I suspect Congress will get into big fights they're going to kick it down the road as much as they can we're not going to really solve the problem and

we're going to be in really unhappy circumstances january-february march april may june july august way in the back yes when they're younger versus how they vote ending it all people tend to become somewhat more conservative as they get older but there's also the fact there's cohort effects that is to say people certain generations tend to be more liberal or more conservative than other generations but typically you get older you become somewhat more conservative not remarkably but somewhat more conservative but right now that's masked by the fact that a lot of the older people are people

from the New Deal era and therefore they tend to be more liberal that's a cohort effect not an age effect and I think we have to end actually don't we Peter and I'm sorry you