Category Archives: Economic Policy

Survivorship Bias, Sample Sizes, and the Oregon Medicaid Study

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I think most coverage of the Oregon Medicaid Study [gated] has been bad. Very bad. I wanted to flag one way that it has been especially bad.

We don’t do very much U.S. domestic politics on the Smoke-Filled Room but I think the broader methodological issues are worth highlighting. So, for those that don’t obsessively follow wonkish U.S. policy debates, a bit of background. When Oregon expanded Medicaid coverage a few years back, it did so via a lottery. That allowed researchers to compare outcomes between those who received Medicaid and those that did not. And they found no statistically significant improvement on several metrics of physical well being (cholesterol checks, blood pressure checks, etc.). They did find statistically significant improvements in terms of mental health (principally depression) and financial health (apparently from not having catastrophic health expenditures). In general, physical metrics moved in the expected direction (lower blood pressure) just not sufficiently in that direction to be indistinguishable from zero. This could either be true evidence of a null relationship between insurance and health outcomes, or it could be a sign that the study was too small to capture changes in those outcomes. If you look at the study, the fact that something like 22 out of 25 metrics move in the expected (healthier) direction, even if they don’t move far in that way, suggests to me that Medicaid does improve health outcomes. But that’s a separate issue.

Two conservative, smart writers are Ross Douthat of the New York Times and Megan McArdle of the Atlantic. Both are forced to acknowledge that the Oregon Medicaid Study shows Medicaid coverage generates strong financial and mental health benefits for Medicaid recipients, but argue rhetorically: Wasn’t this about saving lives? Douthat asks, “The health care law was sold, in part, with the promise (made by judicious wonks as well as overreaching politicians) that it would save tens of thousands of American lives each year.” McArdle, drawing on the same rhetorical playbook stresses, “[W]e heard that 150,000 uninsured people had died between 2000 and 2006.” See, classic liberal over-promising and under-delivering. You told us poor people would live, not that they would be less depressed and more financially secure.

The important thing is that the Oregon Medicaid Study was a “post-treatment” survey. I’m using “treatment” in the jargon-y way. I just mean assignment via lottery to either the “treatment condition” of receive Medicaid for two years or the “control condition” of continuing insurance free for two years. It’s right there on the first page of the article: “Approximately 2 years after the lottery, we obtained data from 6387 adults who were randomly selected to be able to apply for Medicaid coverage and 5842 adults who were not selected.” To be even more precise, and requiring Douthat and McArdle to turn to the second page of the article, they collected this data via in-person interviews.

Let’s just stop right here. Dead people tell no tales. Hence they were not included in the study. The study occurred only on those people that lived to talk at the end. Medicaid could have saved 1000 lives in Oregon and this research design would not have noticed. Or Medicaid could have killed 1000 people. Same thing. This is what we like to call survivorship bias. It’s so simple, I don’t see the need to belabor the point.

But let’s imagine the study had been designed differently. At this level of power, would we have noticed? A little quick math: about 20% of Americans are uninsured, studies suggest being uninsured is associated with about 20,000 additional deaths a year nationally (U.S. population ~300m), and the control group was about 6000 people. The expected value of uninsured “excessive” deaths in this study is this rate of “excessive” deaths caused by lack of insurance per uninsured person per year times the total number in the control group. I think that gets us about 2 excessive deaths per year, or 4 excessive deaths for the period under study. I’d be very surprised if this study would be able to discern, in a statistically significant way, if Medicaid saved lives. (The death rate in the United States is 799.5/100000, meaning out of our 6000 folks, we’d expect about 96 deaths in these two years.) Even without survivorship bias.

My point: the Oregon findings in no way impugn the possibility that 20,000 Americans a year die from lack of insurance, and that Medicaid might save them. This is true solely because of survivorship bias, though sample size problems make it doubly true.

Replication: The Heart of Science

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There are allegations that the Reinhart and Rogoff paper “Growth in a Time of Debt,” which has informed the current debate about debt and spending as much as any economic paper could hope, is wrong. And it’s wrong because of a data processing error, specifically what appears to be an MS Excel formula error (see here, here, or here). The original Reinhart and Rogoff working paper has over 450+ Google Scholar citations and that understates its influence in the three years since it was published.

Every dataset I have looked at has problems, and the only question is whether those problems when fixed lead the results to “break.” In practice, as a field, we seem to be okay with small fractures, things that get p-values to .07 or .11 instead of the magical .05. Journal editors don’t want to reward replication articles that merely fiddle with someone else’s hard work, though this gives authors an incentive to fiddle with their own work at the margins.

In part because replication work is rarely rewarded with journal articles, the hard work of replication, crucial for any sort of cumulative knowledge, is more or less left to graduate students in mid-level stats courses. The fact that Thomas Herndon, apparently a grad student at the UMass-Amherst Econ program, is listed as first author of this new critique makes me wonder if this sort of “replication paper” requirement is the source of this discovery.

David Cameron and Centrifugal Crises

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British Prime Minister David Cameron made waves in late January when he announced plans to hold a referendum on the U.K.’s continued membership in the European Union. Should the Conservatives win elections in 2015, Cameron promised a simple “in or out” referendum on E.U. membership by 2017.  The move seems to have roots in domestic politics. Cameron faces considerable pressure from the Eurosceptic wing of his own party as well as a challenge from the UK Independence Party, which has been surging along the Conservatives’ political flank.

This all raises the prospect that, absent Conservative defeat or a Europhilic turn on the part of the British public, one of the core members (and key funders) of the E.U. could make an ungraceful exit in the coming years. In the long term, this could prove a greater threat to the viability of the European project than the economic woes of more peripheral members like Greece and Spain.

Labour leader Ed Miliband sharply criticized the proposal and hardened his own opposition to such a step (though support from some of his backbenchers may be shaky). Nick Clegg, whose Liberal Democrats are members of the Conservative governing coalition, dissented sharply as well. Heads of state in Europe did not react warmly to the news, nor to the strong-arm tactics it represents. Former Prime Minister Tony Blair said Cameron’s brinksmanship could backfire: “It reminds me a bit of the Mel Brooks comedy Blazing Saddles where the sheriff says at one point as he holds a gun to his own head: ‘If you don’t do what I want I’ll blow my brains out.’ You want to watch out that one of the 26 [other EU member states] doesn’t just say: ‘OK, go ahead.’”

Extra points for the Mel Brooks reference, and for having the good sense not to repeat the quote verbatim.

Cameron’s move seems risky, but makes sense in light of both domestic and international factors. In addition to shoring up cracks in his governing coalition, his announcement seems designed to increase his leverage in upcoming negotiations over the E.U. budget. Cameron himself is not a hard Eurosceptic, but his support for a pro-Europe vote in any future referendum has now been made implicitly contingent on his receiving an acceptable offer from his counterparts on the continent. By publicly committing to a referendum, Cameron presents Paris, Berlin and Brussels with the choice of either buying British support for a “yes” vote or hoping that the Conservatives lose the next election. How palatable they’ll find either option remains an open question.

That being said, Brian Taylor points out that the Tories may be undermining their position on the question of Scottish sovereignty:

They have said that the [Scottish National Party] cannot guarantee Scottish membership of the EU, post independence.

The Nationalists have, of course, contested that vigorously but, at the very least, the issue gained some traction.

Now what do the Tories say on this topic?

Reject the SNP, stick with the UK – and we will offer you the prospect that a vote across the whole of these islands may take you out of the EU, perhaps in contradistinction to opinion in Scotland.

In a bid to reassert the economic and political autonomy of Britain, then, the Tories could end up actually weakening the British state.

Whatever the outcome, this episode highlights the contradictory and self-undermining nature of elite responses to the ongoing economic crisis in Europe. Years of austerity, some of it imposed at the encouragement or insistence of Brussels, have made the financial burdens of European integration heavier for the continent’s economic core. At the same time they have constricted recovery and led to anemic growth, high unemployment, and prolonged economic misery.

It would be naive to say that say that such conditions “cause” nationalist or parochial backlash, but the economic crisis does seem to be having centrifugal effects on multiple fronts.

On the one hand, it puts sustained pressure on the political and economic bargains that make the E.U. viable. Though not a member of the Eurozone, Britain is a major net donor to the E.U. (see chart from Le Monde, below) and the third largest economy in Europe. Its departure would represent a major shock to the institution.

EU Contributions; Le Monde

On the other hand, the crisis has intensified sub-national fissures in a number of member states. Separatist and nationalist movements in Scotland, Catalonia and Flanders have all seen their fortunes improve since the onset of the crisis. They present an interesting twist on what Frederick Solt calls “new-nations” theories of economic distress and nationalism (see Brown, Hechter and Brass). In their simplest forms, such theories predict sub-national mobilization by groups that are materially deprived relative to society at large. Relative deprivation is key.  Here, though, nationalist grievances have coalesced around a different narrative. Separatist elites have made hay over the uneven financial burdens imposed by ‘society at large’ on local prosperity. As movements, they seek to protect the fruits of relative affluence rather than overcome relative deprivation.

Recent developments in the U.K. suggest how these super-national and sub-national crises of legitimacy could become mutually reinforcing. The specter of an E.U. exit undermines confidence in the national state’s position as a point of access to European markets and institutions. This in turn raises the stakes of regional separatist politics by sharpening the distinction between national and European alignment.

Cameron may well be able to balance these competing interests for the moment. Acute though the current crisis may be, the institutional roots of both the E.U. and the United Kingdom run deep, and continue to reflect considerable elite and popular consensus. That said, centrifugal pressures across the region seem unlikely to abate until Europe can return to robust and broadly shared growth, something which the broader policies of recent years have done much to forestall.

Re-Reading Juan Linz at the Fiscal Cliff, Contd.

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I just saw that another person–in addition to Matt Yglesias and me–thinks Juan Linz’s old writing on the crisis-prone nature of presidential systems is increasingly applicable to the United States, despite the United States being a notable outlier in the original analysis. His name is Juan Linz.

Dommage for Catalonia: Identity and Economic Crisis

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Since the beginning of the Euro crisis, there has been a substantial amount of analysis, and more than a bit of hand-wringing, over the (arguably counterproductive) resurgence of nationalism among the European Union’s constituent states. Nicholas Sambanis’s New York Times op-ed from a few weeks ago is representative: he suggests that the crisis has refocused the European populace on their parochial national identities at the expense of their (potentially) continental one, and that such socio-psychological (re)orientation is preventing concerted action to solve the problem:

As Europe’s status declines, the already shaky European identity will weaken further and the citizens of the richer European nations will be more likely to identify nationally — as Germans or French — rather than as Europeans. This will increase their reluctance to use their taxes for bailouts of the ethnically different Southern Europeans, especially the culturally distant Greeks; and it will diminish any prospect of fiscal integration that could help save the euro.
The result is a vicious circle: as ethnic identities return, ethnic differences become more pronounced, and all sides fall back on stereotypes and the stigmatization of the adversary through language or actions intended to dehumanize, thereby justifying hostile actions. This is a common pattern in ethnic conflicts around the world, and it is also evident in Europe today.

Indeed, the economic malaise plaguing Europe provides some interesting evidence for the interaction between crises, insecurity, institutions, elite behavior, and political identity. It has certainly provided a clarifying moment for those who argue that European identity is sufficiently well-developed to have coherent political meaning. The importance of identity is difficult to observe when peoples’ various subject positions (religion, regional identity, nationality, etc.) coexist in harmony. It is when identities are brought into conflict—via social unrest, economic crisis, political competition or war—that they become the most salient. Events of recent years have not boded well for the European project, and have arguably reaffirmed the primacy of the nation-state as the locus of mass political allegiance.

Recent days have added another wrinkle to this narrative. Underreported in the American press, September 11th saw a colossal Catalan nationalist rally in Barcelona. Local police reported 1.5 million attendees. To put this into perspective, that’s nearly as many people as live in the city, and more than 20 percent of the total population of Catalonia. September 11th is Catalonia’s “national day,” commemorating the 1714 Siege of Barcelona that, according to the relevant national mythos, marked the end of Catalan independence. The holiday often draws a decent-sized crowd. This week’s demonstration, though, was orders of magnitude larger than usual. Reports indicate that protesters expressed grievances over their homeland’s disproportionate tax burden within the Spanish state, itself cash-strapped as it struggles with a balance-of-payments crisis originating in Brussels and Berlin.

There are a few points to be made here. The first is to reiterate that for European elites who profess such dedication to their continent-wide project of neoliberal cosmopolitan governance, austerity policies have been highly counterproductive. By requiring Europe’s periphery to deflate its way to renewed growth, Brussels (read: Berlin) is imposing scarcity and economic misery on the very populations it seeks to bind into a unified community of fate. Competition for a shrinking resource base is a poor breeding ground for mutual identification and positive fellow-feeling, yet rather than play savior by easing the damage done to places like Catalonia by international capital markets, institutional Europe has only exacerbated their ill effects.

The second is to note that the last few years provide a measure of support for the account of modern nationalism advanced by Karl Polanyi more than a half-century ago. For Polanyi, the overly-intensive identification with volk and fatherland that plagued midcentury Europe had roots in the collapse of the nineteenth century economic order and the incapacity of extant institutions to assert control over the fates of their societies. The renewed intensity of Catalan nationalism suggests that it continues to function as a kind of psycho-social defense mechanism through which people search for communities of fate with the capacity to control their own destinies. Madrid lies at the mercy of international creditors and lacks the institutional capability to address Spanish problems with any kind of decisiveness. In some ways it’s not surprising that the citizens of Catalonia search for other notions of community with the potential to do better.

Paul Ryan Doesn’t Want to Cut Medicare (Yet)

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In the often-maligned new Aaron Sorkin TV show, The Newsroom, news anchor Will McAvoy, played by Jeff Daniels, takes it upon himself to deliver objective news with Murrow-like commentary as a public service to his viewing audience. While it remains unclear what effect this show has had on real-life news anchors, Wolf Blitzer ostensibly heeded McAvoy’s call earlier this week. Democratic National Committee Chairwoman Debbie Wasserman Schultz appeared on Blitzer’s usually liberal-friendly The Situation Room to attack Paul Ryan’s budget plan, the Path to Prosperity, and more specifically, its consequences for Medicare. Wolf Blitzer questions her on some of the details of the plan and her critique and Wasserman Schultz fails to provide satisfactory answers:

While conservative blogs are already hailing Blitzer for his “take-down” or “destruction” of Wasserman Schultz, such language is missing the positively McAvoyian (Sorkian?) aspect of Blitzer’s interview. He deserves credit not for “destroying” a guest on his show but, rather, for increasing public awareness about a subject of critical importance to our democracy. In this coming election, Americans are effectively choosing between two radically different approaches to government. Although the final budget proposals will probably look slightly different than what we have already seen from either side, we do have an idea of the rough outlines of the debate. This is especially true in the case of specific policy areas (health care) or sub-areas (Medicare).

With that in mind, it is worth examining in greater detail the specific debate between Blitzer and Wasserman Schultz (I consider it beyond the scope of this post to consider the full health care debate). First and foremost, as Blitzer mentions and Wasserman Schultz presses, the Ryan plan (PDF/bullet-points) aims to combat the rising costs of Medicare by essentially replacing Medicare with a voucher program that allows citizens to purchase a “Medicare certified plan” on a private market place. Though vague on specifics, this voucher would begin at $11,000, adjust to inflation and rising Medicare costs, and be skewed toward those with lower incomes. However, as Blitzer emphasizes repeatedly, the plan does not affect anyone 55 or over. In other words, seniors remain unaffected by the policy.

The unfortunate truth about the current state of Medicare is that its costs are spiraling out of control. Reform is needed. Ryan’s plan provides one way; the Affordable Care Act, in effect, provides another. These are differences in ideological preference for reform, not in substantive efficacy of policy proposals. Democrats are not giving Ryan and the voting public enough credit by deriding his ideas for Medicare reform as overly radical. Matt Miller put it well in a Sunday op-ed in the Washington Post:

Ryan deserves credit [on Medicare]. Ryan leaves Medicare on its current outsized trajectory for the next decade, as spending soars from $560 billion to $950 billion. Because of our uniquely inefficient health-care sector, which leaves us spending twice per capita what other wealthy nations spend, the voucher he calls for thereafter would suffice to buy seniors terrific care everywhere but here. Even if his approach is imperfect, Ryan is right to challenge our Medical Industrial Complex to change.

To be perfectly clear, I don’t mean this post as an endorsement of the Ryan plan or even this small part of the plan. Indeed, there are many parts of the plan that I would question both ideologically as well as substantively. I am merely suggesting that we should debate Paul Ryan’s plan on the actual merits of its ideas, not on vague conceptions of what the plan does or does not do. My endorsement is of Wolf Blitzer and his contribution to the marketplace of ideas–keeping it honest and making sure we pay attention to the ideas our policymakers present.

For more of his thoughts on the Presidential race, follow William on Twitter.

Eight Observations from the Greek Election (Part 2)

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The Euro Strikes Back!

The Euro Strikes Back!

I devoted the first part of this post (the first four observations) to a discussion of the election results. In this second part, I explore the consequences of the electoral results. The immediate outcome was, of course, the formation of a pro-Euro coalition government between plurality winning center-right New Democracy and two center-left parties, Pasok and the Democratic Left. But what will this mean for Greece, Europe, and the global economy moving forward? On the eve of Antonis Samaras officially taking the reigns as Prime Minister and the “Troika” (the International Monetary Fund, European Central Bank, and the European Union) visiting Greece to assess its financial progress, I thought it would be appropriate to take a second post-election pulse of the nation.

5.) Greeks accept the euro but reject the terms of the bailout

Despite the electoral defeat of Alexis Tsipras’s anti-bailout Syriza party, the pervasiveness of anti-bailout sentiment in Greece is manifest. Over half the votes from the June 17th elections went to parties opposed wholesale to the terms of the 130 billion euro bailout. Greek and European leaders took notice. Although medical ailments prevented him from personally attending the EU summit in Brussels last week, new Greek Prime Minister Antonis Samaras sent a letter to European leaders asking for revised terms to the bailout. The letter was short on detail but contained guarantees that Greece would work hard at political reforms.

As the Troika descends upon Athens once again, it appears that the letter previewed a larger effort by the coalition government to negotiate more lenient terms. The current terms have made successive receipt of rescue funds contingent on Greece meeting a set of “fiscal targets” and enacting a series of austerity cuts, making this  deal wildly unpopular in Greece. While the government still hopes to meet the fiscal targets set by the Troika, they are expected to ask for greater leeway in the means by which they will meet them. That is, less forced austerity. Seeing as the current “austerity for growth” program has the Greek economy contracting a projected 6.7% in 2012, the Greeks may have a point.

At first, it appeared that Germany Europe would remain steadfast in its refusal to alter the terms of the original bailout. However, pressure from Spanish Prime Minister Mariano Rajoy and Italian Prime Minister Mario Monti for a new approach to dealing with the Eurozone crisis has left Greek observers hopeful that some terms may be renegotiated.  In the words of Deputy Finance Minister Christos Staikouras before meeting with the Troika,

The climate is becoming more favorable to changes and adjustments provided we meet our commitments and work towards implementing targets.

We will soon find out if he is right or not.

6.) International organizations affect domestic politics and domestic politics affect international organizations

In November 2011, then Prime Minister George Papandreou, of Pasok, proposed holding a public referendum on the newly renegotiated debt deal. As the June 17th elections showed, such a referendum would likely have failed. Sensing this outcome, European leaders summoned Papandreou to Cannes where he was “reproached” before an upcoming G-20 meeting.  Papandreou returned to Athens and promptly cancelled the referendum. Within weeks, his government had collapsed. Within months, his party had been reduced to its lowest vote share in decades. The impact of EU leaders on the Greek polity seem shocking, even months later. Not only did these international actors “convince” Papandreou to change domestic policy but they also effectively ended his premiership.

The aftermath of the June 17th election have demonstrated that the causal arrow can run in the other direction as well. As detailed above, the success of anti-bailout parties like Syriza has forced the Samaras government and, by extension, the European Union to rethink their approach to the bailout deal. The results of the upcoming negotiations of the terms may even shape how the EU deals with future states asking for aid. Finally, as I discuss below, these electoral results may even lead to structural change in the European Union itself.

7.) The EU finally suffers from its democratic deficit

For decades, the European Union has suffered from what critics have called a “democratic deficit.” With a few exceptions, EU integration has progressed without the approval of domestic majorities. However, up until very recently, the problems with the democratic deficit have been primarily theoretical.  To use a famous example, after the Dutch and French rejected the European Constitution, most of it was repackaged as the Treaty of Lisbon and approved in both countries.

This approach has more or less worked because the EU has provided member states with a plethora of tangible and intangible benefits without asking for much in return. Although states would lose national sovereignty, the loss was rarely so great that it would become objectionable to democratic majorities. Then came the euro.

The euro represented the greatest single sacrifice of national sovereignty in the history of the EU. However, it also held great promise, again, both in tangible and intangible ways, for the member states. In many ways, it reflected the “high risk, high reward” mindset endemic to the 1990s and early 2000s. Although domestic opposition was more pronounced, majorities either favored or began to favor the adoption of the euro, as they had with past measures of EU integration.

In 2012, however, the euro is in crisis. And, as these Greek elections show, support for the euro in individual member states is dropping. For Europeans, the only way to save the euro may be to proceed even further with EU integration. In this past week’s EU summit, European leaders agreed to permit the direct transfer of rescue funds to domestic banks from the ECB’s central bailout fund in exchange for direct supervision of the banks by the ECB. The deal essentially eliminates member state governments as the middlemen. Moreover, European leaders are discussing similar agreements that would establish debt pooling and Eurobonds (sold on the basis of German credit) in exchange for further central supervision of member state finances. In brief, European leaders have recognized that the only way to save the Eurozone, counter-intuitively, may be deeper fiscal integration.

However, European publics take erosion of national sovereignty quite seriously. In the past, they have been willing to accept it because of its gradual nature. However, the current Eurozone crisis requires swift action that may force European governments into deeper integration. While the anti-bailout parties were defeated in this election in Greece, a push for deeper integration with the EU by the Samaras government may spur a backlash that ultimately brings to power anti-EU parties. In this regard, Greece could be the harbinger for the idea that for the first time, the EU may finally suffer the consequences of its democratic deficit.

8.) The coalition government does not inspire confidence

The coalition government, meant at first to be a unity government of all major parties, is a coalition in name only. For all intents and purposes, it is a New Democracy government. Syriza refused to partake in the government altogether, preferring to be in opposition. New Democracy’s coalition partners, Pasok and the Democratic Left, refused to take cabinet positions. Syriza’s motivations are clear: they oppose the bailout wholesale and will not be minority partners in any coalition that accedes to the bailout terms. The motivations of the leftist coalition partners are less clear. It appears, however, that after failed negotiations for high cabinet positions, these parties are merely insulating themselves from the inevitable political damage that comes from enacting austerity protocols.

In an interview with the Guardian immediately following the elections, Dimitris Keridis, professor of political science at Panteion University in Athens said that

The secret to this government surviving will be trust among the three partners. If they fragment, the only beneficiary will be Syriza. It won’t be easy in a political culture that is, anyway, not used to coalitions and in a country that faces such tough decisions.

Almost on cue, the leftist parties refused cabinet positions and proceeded to distance themselves from the coalition government. While such behavior befits Syriza, an opposition party, it is befuddling from New Democracy’s coalition partners. Indeed, these developments do not bode well for the success of the coalition government. At any point, it seems, New Democracy could lose the parliamentary majority it possess thanks to the coalition. This will make tough political reforms very difficult to enact. New Democracy, fearing backlash, will be reticent to push for policies that would make it easy for their coalition partners to abandon them. Unfortunately, many of those policies might be the ones necessary to reform Greece and spur economic growth.

For more of his musings on politics, follow William on Twitter.

What If Greece Kicked Germany Out of the Euro?

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July 4th, 2004. Syntagma Square, Athens, Greece.

Syntagma Square following the Euro 2004 victory.

It’s a happy time for Greece. The 2004 Athens Olympics are barely a month away. Helena Paparizou is mere months away from assuring all Europeans that they are her secret passion and that she has no other. Few people know about Greece’s heavy borrowing and growing deficit.

Indeed, on this warm, perfect Sunday, thousands of Greeks have gathered in central Syntagma Square not to protest, but to rejoice. Greece, defying 80-1 odds, have won the 2004 Euro Cup. Greeks, a younger version of myself included, have gathered to sing, dance, wear an inappropriately little amount of clothing, and, above all else, celebrate. Dora Bakoyannis, the much-celebrated mayor of Athens and future national New Democracy politician, encapsulates the feelings of all Greeks when she says,

this is a unique moment for all of Greece, it is indescribable

Indeed, indescribable. Try as I might, it is difficult to describe the feelings of that celebration without just using the words “unadulterated national joy” over and over again. There is something about that moment that all Greeks will remember: times were good and the soccer was even better. After all, as Bakoyannis said, this was a “unique moment.” For a country whose inhabitants believe that it invented math, democracy, and everything in between, this is quite the statement.

Perhaps the best analogue for the Greek sentiment following the 2004 Euro Cup is the 1986 Argentinian World Cup victory. Although the Argentinians, unlike the Greeks, were not underdogs, the similarities are striking, right down to the future inevitable but still unexpected financial crisis. The 1986 World Cup victory was highlighted by a 2-1 victory over England in the quarterfinal, only a few years after the Falklands War. The much-celebrated victory boosted Argentinian national consciousness to its highest peaks in the post-Falklands era.

During the financial crisis of the late 1990s and early 2000s and the tough times that followed, the soccer gods offered the Argentine nation a reprieve: a chance to beat England at the 2002 World Cup, reliving the glory of 1986 and making the hardship ahead a little bit easier to bear. Argentina lost 1-0. The result was, for obvious reasons, devastating to a nation looking to their soccer team for confidence at a time when their economy and politicians inspired none.

Later this afternoon (2:45 EST), Greece is playing Germany in the 2012 Euro Cup. For Germany, the match is an important test for an untested and new generation of players. For Greece, it is a David-versus-Goliath struggle for national pride against an opponent from a country whose leaders many Greeks feel embarrass them on a daily basis. One of these leaders, German Chancellor Angela Merkel, will be in attendance.

For months, Greeks have searched for something, anything to give them hope as a nation in these troubling times. As the success of the far left Syriza and their invigorating young leader, Alexis Tsipras, suggests, Greeks are desperate for any shred of hope tossed their way. More tough times lie ahead for Greece. Even though it may not affect the actual policies, the mere national psychological benefit of a victory may be the Greek brandy to the German austerity medicine. A victory would remind Greeks of a time in which they were at their happiest and their most integrated with Europe—2004. The benefit of such a victory (and the damage of such a loss) for the psychological health of a country undergoing drastic socio-economic changes and tough political reforms can hardly be overstated. Just ask Argentina.

Update: Greece lost 4-2 to Germany. William can be found drowning his sorrows in tubs of moussaka…or on Twitter.

Rio +20: Discussing the Earth for Future Generations in the Perennial Country of the Future

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Rio +20, the United Nations Conference on Sustainable Development, which got underway on June 13th in Rio de Janeiro and will continue till the 22nd, has not yet made the headlines of major newspapers.  In The New York Times, most of the coverage has been featured in Energy and Environment (or “green”) blogs and a handful of op-eds. The Guardian has covered the conference, but relegated it the Environment section.   

Rio+20 did not make it onto the agendas of Barack Obama, David Cameron, Angela Merkel or Vladimir Putin. The apparent lack of full international impact was attenuated by the presence of Wen Jiabao, Manmohan Singh and François Holland who will soon be arriving in Rio. Naturally, the conference is not over and things may yet change as the negotiations evolve.

At the same time, in Brazil, environmental issues are more controversial and central than ever before. Since Marina Silva ran for the presidency with the Green Party and received almost 20% of all valid votes in the 2010 elections – more than any third runner since 1989 – environmental issues have been at the center of many political, economic and energy debates. The controversial Belo Monte dam generated a lot of debate, mobilizing a wide range of groups from actors of the all-mighty Globo to college students. Similarly, the Brazilian Forest Code, a piece of domestic legislation, has remained an enduring source of dispute between the so-called group of “ruralists”, on the one hand, and congressmen associated with social and green movements, on the other, with President Dilma’s pragmatic administration caught in the middle.

Brazil has changed considerably since the 1992 Earth’s Summit.  At the time, it was the world’s eleventh largest economy; now it is the sixth with a larger GDP than countries such as the United Kingdom and Russia. Brazil has achieved its lowest level of income inequality since 1960 (when inequality first began to be measured), with 40 million people having left poverty and entered the new middle class.  According to the well-respected higher education institution, the FGV, by 2014, 60% of the population will be in the middle class, and, according to the Institute of Applied Economic Research (IPEA), by 2016, extreme poverty will be no more in Brazil.

With such economic development, the impact on the environment has been no less impressive. The deforestation of the Amazon is greater than ever, even though the rate of deforestation has decreased since 2008. In fact, the current size of deforestation is 758.4 thousand  km2, an area larger than France and just slightly smaller than Turkey (see this map).

Is it precisely because Brazil is changing at such a rapid pace that environmental issues are becoming central to its politics, while the current economic downturn and looming stagnation in Europe and the United States have ensured that environmental concerns have lost center stage to issues such as jobs and fiscal balance?

If we look at Inglehart’s materialist-postmaterialist value change thesis, it makes sense that the more developed the country becomes, the more likely it is for postmaterial issues to become relevant, especially for upper-income people. Still, Inglehart explains at least part of this value shift through a “socialization hypothesis”, which assumes that values learned early on tend to be relatively resilient over one’s life. Even the staunchest optimist of the “arrival of Brazil’s future” would be hesitant to suggest that these instances of debate around environmental issues reflect a change towards new, postmaterial values. As many others have suggest, this model cannot really account for short-time events that can counterbalance or speed up this shift in values.

Moreover, as Limongi and Cortez argue here, conjuncture evidence can make you miss the forest for the trees, so to speak: Marina’s share of votes, despite being larger than expected, did not change the pattern of the past six Brazialian presidential elections in Brazil which remain a contest between the two main parties, the Workers’ Party (PT) and the Brazilian Social Democratic Party (PSDB). Furthermore, PT and PSDB hold different positions concerning recent environmental issues (see here for the parties’ positions on environmental conservation in the Amazon and the Forest Code). Perhaps then, the episodic centrality of environmental issues in Brazil is simply generated by big events, such as Rio +20, or is a result of straightforward political competition between the two main parties. At the same time, it would be hard to deny that the green movement has not grown in Brazil since 1992.

Regardless of the driving causes of the environmental debate in Brazil, one cannot but be left disappointed at the low regard shown by many rich countries towards Rio +20. For better or worse, these rich countries lead both the debate and the action concerning the environment, even pushing poor countries towards choices in periods of scarce resources. Now that the tide has (temporarily) turned, rich countries have lost an opportunity to show a less opportunistic commitment to the environment.