- The Agenda Control Mechanism: The SC would have the privilege of bringing a package of spending reductions and tax increases to the floor of each chamber that would be subject to up-or-down votes. Consequently, any agreed upon bargains could not be undone by floor amendments.
- The Composition Mechanism: The SC might have a composition that is more conducive to reaching an agreement than Congress as a whole.
- The Procedural Mechanism: The SC might adopt internal procedures that were more conducive to reaching an agreement than the procedures used in standing committees.
From Peter Orszag on Bloomberg. Could not have said it better myself:
It is striking that both income inequality and political polarization began to rise sharply in the U.S. in the mid- to late 1970s. Yet many pundits airily dismiss this connection, arguing that because blue states are, on average, higher-income than red states, the link between income and partisanship must be weak. Instead, they attribute increasing political polarization to the gerrymandering of legislative districts. Both of these assertions are empirically false.
I did not get a chance to see the CNN Special Report on gerrymandering over the wekend. Maybe it is all for the best as Jamelle Bouie at American Prospect suggests that it was entirely typical of journalistic treatments on the topic. When it comes to the effects of gerrymandering on polarization, with few exceptions, journalists have focused on the talking points of reform activists without really engaging the now substantial social science literature on the topic.
A recent 60 Minutes segment and a new book claim that members of Congress from both parties have benefited financially from inside information obtained in the course of their legislative duties. Not surprisingly, the specific targets of these charges (Nancy Pelosi, John Boehner, and Spencer Bacchus) have denied doing anything illegal or unethical.
Of course, a major part of the story is that these legislators could not have done anything illegal, because there are no laws against insider trading by members of Congress. There are vague House ethics rules against profiting financially from their official positions, but the best I can tell the House ethics process has rarely if ever been used for allegations against congressional insider trading.
Obviously, I am in no position to evaluate the specific charges highlighted on 60 Minutes or the defenses offered by the individual legislators, but there is an excellent study by Jens Hainmeuller and Andy Eggers evaluating whether or not members of Congress earn excess returns on their stock portfolios. If insider trading were pervasive, one would expect congressional portfolios to outperform the broader market. But this is the exact opposite of what Hainmueller and Eggers find. In fact, legislators are generally bad investors. Their portfolios consistently underperform. My personal hunch is that members are often forced into weak investments for political reasons and that this works against maximizing the value of their portfolio. Hainmueller and Eggers find one important exception to congressional underperformance. Legislators do well with their investments in firms located in their districts. They find, counter to the presumed effects of insider trading, that these excess returns are not due to the timing of transactions, but to the superior selection of which local firms to invest.
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