Chris Christie and the Case Against Term Limits

Social science has proven that Congress is even less popular than Nickelback, so it’s easy to see why term limits for senators and representatives consistently poll well among Americans of all backgrounds and ideological persuasions. Would-be reformers of various stripes have touted term limits as an important good government initiative, and even many who have not championed the cause of formally enshrining them in law have offered up pledges to voluntarily leave office themselves after a fixed number of years.

Notwithstanding the legal setbacks that have been dealt past attempts to enact term limits at the federal level, the idea has always struck me as an overrated and potentially counterproductive “solution” to the problems it purports to solve, like legislative gridlock, political careerism, or corruption. To see why, one need look no further than RM’s very own Garden State, whose chief executive looks to me like a poster boy for the case against term limits.

In 2010, New Jersey Gov. Chris Christie unilaterally canceled a joint federal-state public works project known as “Access to the Region’s Core” (ARC) that would have involved construction of the first new rail tunnel under the Hudson River in over 100 years, citing the possibility of unforeseen cost overruns. As Rachel M. Cohen explains in an essay for the Winter 2015 issue of The American Prospect,

Many had expected New Jersey to raise its gas tax to meet its obligations for the ARC tunnel and other transportation investments. But Christie was emphatically opposed… [K]illing the ARC project had an additional advantage besides avoiding a gas tax increase. It also enabled him to redirect more than $3 billion that had already been put aside for the tunnel.

Christie’s Democratic predecessor, Jon Corzine, had set off a political firestorm in 2008 when he tried to pass a plan that would have used dramatic increases in highway tolls over a 12-year period to cut the state’s $32 billion debt in half and pay for transportation improvements. Although the plan was defeated, Corzine did succeed in doubling tolls on the New Jersey Turnpike. While the revenue wasn’t enough to resolve the state’s long-term fiscal problems, it included $1.25 billion earmarked for the future ARC tunnel… Christie took that money as well as $1.8 billion from the Port Authority’s ARC capital fund and used the more than $3 billion in total to pay for road and bridge projects in the state.

The existing Hudson rail tunnels suffered significant damage during Hurricane Sandy in the fall of 2012. According to Amtrak CEO Joseph Boardman, each tunnel will need to be closed for repairs for at least a year sometime within the next two decades. He has stressed that twenty years is an upper bound on the tunnels’ remaining life, and that they might need to be shuttered in as little as seven.

The closure of even one of the tunnels would be devastating, with New Jersey Transit estimating that the number of commuter trains able to traverse the Hudson every hour would be cut by up to 75%. The result would be utter chaos. Now-unthinkable measures like banning automobiles from using the Lincoln Tunnel would have to be implemented to deal with the loss of capacity. Put simply, the probability that New York and New Jersey could suffer Transitpocalypse within the next ten years is meaningfully greater than zero.

Chris Christie is constitutionally limited to two consecutive terms as governor and will leave office in January 2018. But if he were able to run for and win a third term, he could conceivably serve until 2022. Boardman’s statement was issued last year. Assuming, arguendo, that his most pessimistic prediction were to be the correct one, then the tunnels could be wheeled into surgery as early as 2021 – during the second half of a hypothetical third Christie term.

Of course, Hurricane Sandy had not yet taken place when Christie pulled the plug on ARC, and an accurate assessment of how much damage it had inflicted was not available until some time afterward. But a third-term-eligible Christie might have been galvanized by Boardman’s prognosis to prioritize the development of a funding mechanism for an alternative project like Amtrak’s Gateway proposal that would increase trans-Hudson capacity, knowing that the worst could very well happen on his watch. As it is, Christie was probably correct to gamble that the tunnels will manage to avoid flatlining for the remainder of his time in office.

This is one reason why I see him as an ideal poster boy for the case against term limits: Christie’s decision to raid the funds that had been appropriated for ARC in order to forestall a gas tax increase and have the state still be able to pay for an urgently-needed renovation of the Pulaski Skyway bridge between Newark and Jersey City is emblematic of an important way in which term limits affect political incentives. By guaranteeing that a politician who inaugurates an ultra-long-term public works project will no longer be in office when his constituents begin to reap its benefits, these limits nudge elected officials in the direction of advancing initiatives with more immediate payoffs or those whose costs can be postponed indefinitely.

As Benjamin Kabak of the transit blog Second Avenue Sagas put it in a post on New York City Mayor Bill de Blasio’s proposal for a new subway line down Utica Avenue in Brooklyn, “[o]ne of the reasons why politicians are so hesitant to embrace these ambitious plans concerns timing. If it’s going to take a decade or more from start to finish, those who appear at the ribbon cutting won’t be those who did the heavy lifting and secured the dollars.”

And if you know that you won’t be around for the ribbon cutting, it might start to seem like a better use of your time to focus on something else – like how to position yourself for your next job. Even politicians find unemployment stressful, so it’s only rational than term-limited officials would take steps to plan for the future when they know they’ll be sent home after four or eight years.

Which brings us to the second way in which Christie illustrates the unintended consequences of term limits: knowing that he will not have to face the voters again in his own state, he has devoted more and more energy to burnishing his national image in advance of a run for the White House. In his role as chairman of the Republican Governors’ Association for 2014, Christie frequently traveled out-of-state – and sometimes out-of-country – to campaign for GOP candidates and to promote key planks in the party’s platform. According to NJ.com, the peripatetic governor spent all or part of 137 days last year outside of the state.

The voting public seems to be growing irritated with these absences: a Monmouth University poll released in February found that about two-thirds of voters in the Garden State believed that a trip Christie took to the United Kingdom that was advertised as a “trade mission” was “mainly designed to boost his presidential prospects” (17 percent believed that the primary intent was in fact to strengthen economic ties). Of course, it’s not necessarily the case that someone who believes Christie’s globetrotting is designed to lay the groundwork for a presidential campaign is unhappy about that fact, but the same poll also found that a nearly identical percentage of voters “say he is more concerned about his own political future than he is about the state,” which suggests that his motives are viewed with a certain amount of cynicism.

In their 2012 book It’s Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism, political scientists Thomas Mann and Norman Ornstein express skepticism about the transformative potential of term limits for precisely this reason. They cite other scholars who argue that, in the twenty-one states that instituted term limits for state representatives between 1990 and 2000,

[i]f anything, the limits amplified the corrosive effects of ambition on the legislators, who focused from day one on how best to use their limited time as a springboard to their next post. That produced incentives to go for a big, short-term splash and leave the long-term mess to the next wave of their successors.

One possible counterargument could be that term limits might not actually “bind.” That is to say, ambitious politicians like Christie who believe they can be elected to higher office in the middle of their second term might still believe they could be elected to higher office at the same point in their service even if they were offered the possibility of a third or a fourth term. Perhaps they might feel they had already accomplished whatever they set out to accomplish, or at the very least that whatever accomplishments they had already racked up would make their resumé sufficiently attractive to the voters that they would be better off quitting while ahead (or quitting before their lackeys went rogue and closed down a bridge out of puerile spite, the time for which has, alas, already passed for Christie).

That’s certainly possible, but running for reelection as an incumbent is almost always easier than putting together a winning campaign for a completely new position. I would be surprised if term limits didn’t incentivize at least some politicians to take a leap they otherwise would not have or that they otherwise might have postponed, and in fact there is some research, in addition to the work referenced by Mann and Ornstein, suggesting this could be the case.

If the polling is to be trusted, a large chunk of the New Jersey electorate finds Chris Christie’s pre-campaign antics distasteful, and many of his detractors take pleasure in the fact that he’s guaranteed to leave office less than three years from today. But what those detractors may be neglecting is the possibility that his antics are in part the result of that very guarantee, and that, paradoxically, allowing him to hang around New Jersey a while longer would make him more dedicated to the people of the state and more attentive to their needs.

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A Q&A with Nick Ripatrazone

Nick Ripatrazone is an author, poet, and teacher living in New Jersey. He is a staff writer for The Millions and has had his work published in Esquire, The Kenyon Review, and Shenandoah. His new collection of short stories, Good People, will be published later this year.

Nick wrote or was featured in a number of insightful pieces over the last couple of months, including an essay about writing as a sacramental act, a beautiful list of reflections on teaching English, and an interview on the state of Catholic writing with The Jesuit Post. We reached out to Nick to ask a few additional questions about literature, art, teaching, faith, and New Jersey, and he graciously accepted our request.

In “Sacrament of Fiction,” you wrote: “The Garden State is a mixture of the real and the supernatural. We often cannot tell the difference.” Why did you return to New Jersey after college? To what extent does a sense of place influence or weave its way into your work? Given the political and economic tumult that our state seems to face rather consistently, what role (if any) do you believe art and literature can have in shaping public policy?

There are 565 municipalities in New Jersey, each with its own culture and power structure. That observation would apply to any state, but New Jersey is unique in that this fragmentation occurs in a small state with marked economic inequalities in bordering towns and counties. I grew up in a suburban area of the state, my family is from an urban section, and I live in a rural part–Sussex County–which looks like Vermont.

I came back to New Jersey after college for family, and for those geographic and cultural diversities. I actually think being from New Jersey forces one’s imagination to be on high alert, because of all these stratifications. But I don’t often write about this state in my fiction. Place is essential to my work, but not exactly this place. I’m attracted to fiction in which topography dictates culture, so I lean more toward pastoral writers like Ron Rash, Jayne Anne Phillips, Thomas McGuane and Cormac McCarthy. My fiction tends to be set in the West, Midwest, and Southwest, for those reasons. I can write essays about this state, but my fiction is set elsewhere. Our truths are strange enough, I guess.

Now, that’s an interesting question about art and literature in relation to public policy. I worked in a county elections office one summer, and watched all of the handshake agreements and constant “meetings” between local officials and election officers. That made me incredibly skeptical of politicians, and the idea of parties, especially. Unfortunately, I think New Jersey is a place of endless squabbles and backstabbing (or frontstabbing?), so a scene from Hamlet might be most appropriate for what happens at the Statehouse.

I think art and literature can help people transcend the ephemera of the political world. That doesn’t result in the governor’s administration actually making a pension payment, nor does it lower our property taxes, but it might give some solace. More practically, art and literature adds nuance and texture to single-column, talking-point style reporting. There is a great political and social novel to be written about the theater that is Chris Christie’s New Jersey: from Xanadu to closed lanes, we’ve got high drama for low reasons. I tend to think writers and artists do better helping make sense of policy rather than directly shaping or building it.

In what ways is teaching similar and/or dissimilar to writing as a vocational, devotional endeavor?

Although I get paid to teach, if done well, it is also a selfless pursuit, focused on helping students discover themselves intellectually, socially, and emotionally. Teachers are only a part of this process, but they are an important part. At some level, teaching is a kenotic activity. Writing is an inherently selfish activity. I hope that my teaching somehow evens-out my tendency to write (since I think writing for publication is, effectively, the claim that my words are somehow worth the time and money of an audience). There is certainly a penitential aspect to the teaching-writing equation.

Both endeavors require an absolute attention toward an audience, which includes mediation between performance and genuine feeling. Since I write two essays a month for The Millions, an online magazine that covers books, writing, and publishing, I need to craft pieces that are worth reading on the screen. We have a wide audience, but they are a discerning one. When it comes to teaching, I have had students who took several different courses with me, say that I seemed like a different person in each course. I’ll take that as a compliment. When Thomas Merton said “what we have to be is what we are,” I think he was more concerned with our internal than external selves. As a teacher, I play to the audience while trying not to get played (Flannery O’Connor said if a student doesn’t find a teacher’s methods or content to his taste, “Well, that is regrettable. Most regrettable. His taste should not be consulted; it is being formed.” She’s funny, but she never taught high school English. There needs to be some compromise.). There’s a difference between being emotionally raw, wearing your emotions on your sleeves and slacks, and being genuinely interested in the well-being of your students. Many teachers leave the profession because they take it too personally. The same goes for writers.

You’ve published novellas, nonfiction books, poetry collections, and essays. Does your writing and composition process differ for each of these forms?

Yes. My novellas have been pared down from novels. This Darksome Burn, which was published last year, is more than 200 pages less than its longest version. I’m a big fan of almost maniacal line-revision on the printed page (with as sharp a pencil as possible). I like to pare away, clear the chaff, and add more.

I take the same approach to short essay writing. My book of literary criticism, The Fine Delight, was a different beast. That required so much research and sourcing and comparing that I held-off on worrying about the prose until the content was finalized. It was a weird feeling to not write a paragraph and then revise it, but the book was meant to impart information, not be lyric.

I can draft a poem very quickly, but I always put those manuscripts in a desk drawer and let them sit for a few weeks before thinking about revision. I print one poem per page at 14 point font (the errors jump out a bit more there, and it also forces me to make sure my lines aren’t too long). After a line-edit, I do one more run-through since I sometimes am too heavy on concision. I have to resuscitate the rhythm of a line before the poem is finished.

If you had to choose one writer and/or theologian who most influenced the way you think about belief and your craft, who would you select?

This is such a difficult question! Let me start with the runners-up. The only theologian who has really formed me is Fr. Teilhard de Chardin, but he has not had as much influence as Flannery O’Connor, Andre Dubus, Thomas McGuane, Ron Hansen, and Don DeLillo. If I had to pick a runner-up, it would be DeLillo. Raised Catholic, he attended a Jesuit high school and university. His work is profoundly Catholic, but he does not appear to have practiced the religion as an adult. We differ in that sense, but I often learn best from writers who are not quite like myself.

I would choose DeLillo over Dubus and O’Connor because, ultimately, even though I write about the West and Southwest, my soul is from Newark. I’m a Northeast guy with that sensibility, and it’s a sentiment DeLillo captures in everything, from Underworld to Point Omega to my favorite work of his, End Zone, which is set in Texas but is narrated by a character from New York.

The writer who has lived a life of faith that I try to emulate is Ron Hansen. I love his range: he moves from historical fiction like The Assassination of Jesse James by the Coward Robert Ford to a postmodern theological thriller, Mariette in Ecstasy. His collection of essays, A Stay Against Confusion, has helped me as a writer, and has been a spiritual document for me as a Catholic. He’s been the model of a Catholic writer who publishes in the secular world not to proselytize, but to widen the cultural conversation.

The Church has seen a significant amount of change since Francis became Pope. You’ve written about your youthful aspirations to become a priest; do you think we’ll see more substantial changes in Church policy or doctrine in the coming years on subjects such as married priests? Would these kinds of changes be good for the Church?

I think we have seen changes in delivery and tone under Francis, more so than we have seen doctrinal shifts. He appears to be more self-aware of the theater of his role than Benedict. Outside observers, particularly lapsed Catholics or those who have never had a faith, expect swift dogmatic moves. His humble gestures are in the tradition of the name he has taken, and have certainly improved the face of the Church. Fr. James Martin, one of America’s most known Jesuits, has been in magazines, on websites, and on television and radio stations with a consistent refrain: Pope Francis is a brilliant, compassionate man who will likely not deviate from traditional church teachings.

In regards to married priests, I think Francis’s presence will hopefully create more reasonable dialogue about priestly celibacy (and, really, the emotional and physical identities of priests overall), but I do not think the Church will shift its stance here. While still a Cardinal, Francis said that celibacy is “a matter of discipline, not of faith. It can change.” Some media markets have run with that statement, but to again echo Fr. Martin, it is important to remember that Francis is both a theologian and a Jesuit, prone to extemporaneous thinking. I think that is a positive trait. He is open-minded and dynamic. I don’t think it means he is necessarily malleable. It’s not my place to say whether priests should be married are not. There are instances of Lutheran pastors (and those of other rites) converting to Catholicism and remaining priests, but this gets into theologically murky territory that I don’t have sufficient background in to comment. I think the best thing for the Church is to view the laity as “their people,” not a separate entity. That seems to be happening more under Francis.

In response to Dana Gioia’s essay “The Catholic Writer Today,” you noted the following in an interview with The Jesuit Post:

The ultimate problem is that we are lacking a Catholic critical infrastructure…. Without this critical infrastructure–without conversation and contradiction–we are left with a provincial literature. Catholic stories published in Catholic magazines for Catholic readers, or Catholic books reviewed on Amazon by Catholic reviewers who gauge the writer’s fidelity to Catholicism as you would rate a vacuum.

This quote suggests an aversion to literature that falls in an exclusively “Catholic” genre. Would you say that “Catholic literature” should instead be more of an approach, a movement to interpret and discuss all secular art from a faith-based frame? What steps could we take to initiate conversations on a broader scale? What kind of infrastructure would you want to see created?

I do have an aversion to literature that forcefully identifies itself as Catholic in a genre sense, as if self-identification is an affirmation of aesthetic quality. I like the idea “approach” much better, for the reasons you mention; articulating Catholicism as a worldview. I happen to think it is a wonderfully nuanced worldview. Catholic faith and Catholic Mass are intrinsically analogical and performative. Catholic schooling and upbringing are excellent preparations for sensitive artists. As Catholics, we are taught close reading, the power of song to transform story, the possibility of something being simultaneously a symbol and a real thing, the wealth of community, the models of saints, and more—all experiences that translate well into the creation of, and appreciation for, art.

In order for a return to a significant presence of Catholic arts and letters in the wider secular discussion (as in the time of Flannery O’Connor), we need a recognition of certain aesthetic standards, and the acceptance that not all work written by Catholics (or about Catholics) is necessarily good. There is a difference between private and public literature. Private literature is cathartic, personal, immediate. It does not need an editor. Public literature needs an editor, a publisher, an audience. It needs distribution and discernment. In order for these Catholic conversations to reach a “broader scale,” we need men and women writing from a Catholic worldview articulating that aesthetic sense in the largest and most influential markets, magazines, and locations. I think of Mary Karr, Dana Gioia, Gregory Wolfe, and Paul Elie. But four is not enough.

The infrastructure component you discussed was well-covered in “The Catholic Writer Today” by Dana Gioia, but I would add that we need to bring the private versus public conversation to the undergraduate and graduate classrooms in creative writing. We need top-notch writing programs at Catholic universities, training young writers to also write criticism for wide audiences, not simply peer-reviewed journals (which are excellent, but don’t reach enough readers beyond the academy). These movements will be slow, but they are necessary. Catholicism is a tremendously misunderstood and misrepresented religion, culture, and intellectual space. Catholic writers need to do the work of correcting these errors while inspiring adherents to look at their faith with new eyes.

Thanks again to Nick for responding to our questions. Check out his latest novella, This Darksome Burn, here. For more information on Nick, visit www.nickripatrazone.com.

The Moderation Conversation: Gambling in the Jersey Swamps

This is the fourth installment of “The Moderation Conversation,” an RM feature in which Matt and Chris meet for a live chat and completely rewrite the subsequent transcript so as to appear significantly more eloquent than they actually are. The conversation topic for this edition was gambling in New Jersey. What is the likelihood of casinos opening in North Jersey? Is the proliferation of online gaming throughout the state a good thing? Are there national implications for the Garden State’s current gambling policies? Read on for RM’s thoughts.

Gambling in the Tri-State Area

Chris: So Matt, we’re in a Starbucks. It’s a Saturday night. And we want to talk about gambling in New Jersey.

Matt: I like how you set the scene.

C: Yeah. There’s warm lighting… nice music…

M: It’s almost like a casino!

C: [Laughs] So yeah, in Atlantic City [in southern New Jersey], gambling has been going on for quite a few years now, and recently there have been proposals to move gambling to the Meadowlands [in northern New Jersey]. And online gambling was legalized in Jersey in 2013.

We wanted to talk about how this is going to affect the region and whether it’s a good idea for expanded gambling to come to New Jersey. What are your thoughts?

M: I’m in general opposed to a significant expansion of gambling. Historically speaking, legalized gambling had been restricted to Atlantic City and Las Vegas, and then some people started to argue that that was unfair because New Jersey and Nevada could reap the benefits of legalized gambling while other states couldn’t. They said we should try to expand it further so all states could share equally in the benefits. But I’m not so sure there are a lot of benefits. And I’m not so sure that the states that have legalized gambling are actually any better off than the states that don’t.

C: Okay.

M: I don’t think that it’s a boost to local economies; in fact, I think in a lot of respects it’s a drain on local economies. I think that the tax revenue that comes from legalized gambling is not so much the result of any new economic activity that’s generated as it is just a redistribution of wealth from low-income communities to the government. What are your thoughts?

C: I would tend to disagree with you. I think a limited expansion of gambling, specifically in North Jersey, would make sense, and I’ll go into specific reasons why in a little bit. But to address what you said about local economies: I take your point about gambling revenue, but I don’t think that’s the whole story. I don’t have any data on the extent to which revenue from Atlantic City gambling has been benefiting the state, particularly over the last decade or so, but my understanding is that since revenue has been declining in recent years there has been a decline in the quality of services that are offered by Atlantic City. And that decline has been hurting merchants that are down there, too. You see a lot of problems with restaurants and tourism more broadly.

M: But if the goal of legalizing gambling is to stimulate other kinds of economic activity, then why not try to stimulate that activity directly? Why not create tax-free zones to incentivize restaurants to move into an area? I mean, if your priority is not so much collecting tax revenues off of the gambling itself as it is trying to grow these other businesses, then why not just go directly for that?

C: Well, the reason people come to these restaurants, at least in Atlantic City, is because gambling is the main attraction. They go there for a week or however long for the purpose of gambling and the money they spend on restaurants is ancillary to that purpose. And I’d say that’s the reason why legalizing gambling in the Meadowlands would be beneficial: you have the entire New York City market right there. So you would have people coming out to New Jersey then not only to spend money on the casinos – say, perhaps, around MetLife Stadium or wherever else in the Meadowlands – but also on any other local attractions and businesses.

M: Didn’t New York have some sort of limited expansion of casinos last year?

C: They did in northern New York, but nowhere in the New York City area. I think there might be some legalized gambling on Long Island, and there is definitely a casino in Yonkers, just north of the Bronx. But given you have a target market there that’s very, very large, it would make sense to provide an easy access point for those consumers to get to.

 

Casinos, Market Competition, and Online Gambling

M: Do you think that at some point, though, the market would just become oversaturated? Part of the reason why Atlantic City was so lucrative for casinos was that it was virtually the only place east of Las Vegas where you could gamble legally. And if we start to expand gambling so much that we have casinos all across New York state, all across New Jersey, wouldn’t that sort of diminish the value to a casino owner of building a casino? How much of the market am I really going to claim if there are already casinos all around me?

C: Possibly, but I think more competition would be good in this case. I would think having more casinos would be better for making sure that they’re paying out well and/or not encouraging negative behavior on the part of their customers. That is, they would actually try to take steps to make the experience better, and there could be heightened checks to prevent problem gambling.

M: Well, I think that one of the cruxes of the disagreement here is whether casinos would actually have reason to curb negative behaviors. It seems like casinos have a financial incentive for people to continue gambling as much as possible. It seems like the business model of a casino is built around people not exercising a lot of self-control. So I’m not sure how having legal casinos would do anything to address people having gambling problems.

C: I’d posit that having physical gambling establishments is actually more conducive to solving this problem, especially in light of the concurrent rise of online gaming in New Jersey. You’re definitely right – legal casinos don’t necessarily have the incentive to help people limit their gambling addictions. But any potential rise in online gambling would exacerbate this problem significantly because it involves people being able to gamble basically any time of the day at any place. There are very few ways to get people to consider their actions through an online system, right? You have no way to really tell people that they should take a break or get help.

So in that regard, an increase in brick-and-mortar gambling locations instead of expanded internet gambling would be more likely to temper problem gambling. Physical establishments present greater barriers to that kind of destructive gambling. There are costs associated with going out to gamble, like taking transit, staying at a hotel, etc. There’s also the ability for people on site to monitor the behaviors of people gambling. The state could probably step in and say, “If you open a site, you’re going to have to adhere to very specific restrictions on what you can allow your clients to do.”

M: Mhm, that’s true. It could be more tightly regulated. So am I understanding you correctly that you’re generally opposed to internet gambling?

C: Yeah, very much so. I think that’s much more of a problem, and I actually wish New Jersey would take steps to roll back online gambling while it’s still in its infancy. The revenues generated in its first few months have been way, way below expectations. I think it was like a tenth of what New Jersey originally anticipated.

Which I think is a good thing, at least in the short term. We don’t want that to get to a point where a lot of people are consistently gambling and losing money. And given the possibility that online gambling continues to grow in popularity, now would be the time to limit its accessibility.

M: Right. Okay. So I guess that’s our first point of agreement – we both believe that internet gambling is problematic. I would agree with you that it’s potentially insidious because of the fact that it’s very easy to become addicted, and it’s very easy to unwittingly lose a lot of money without really realizing that it’s happening – especially if you’re disposed to some kind of gambling problem in the first place.

But I guess I’m just skeptical that having physical locations really does that much to attenuate those kinds of problems. There’s research which suggests that people who live within a certain radius of a casino are many times more likely to have gambling problems than people who don’t live near casinos. And obviously, as with any kind of social science research, correlation is not causation. It could be the case that people with gambling problems move close to casinos so that they can always be near the casinos. But I think it’s suggestive of the fact that by creating this new form of entertainment (I don’t know if entertainment is the right word), by creating this new outlet for people, you sort of hook them into becoming more frequent gamblers. And it worries me that these corporations have an incentive to prey on people and to encourage the worst kind of self-destructive behavior.

C: Yeah, that’s a very fair concern. I don’t disagree with that; I’d be worried about that as well. I guess I’d propose two things. The first is that if you do have casinos come to the Meadowlands, I’d hope there would be a way to track trends in how people gamble and really incorporate that into the running of the casino. In doing so, you’re able to monitor how people are gambling and the specific decisions that they’re making and you can basically cut them off if they’re at a point where they’re really in danger. And the other point I’d make is that if gambling ever does come to New York City, New Jersey is immediately going to be behind the curve. Given that there are revenues associated either with casinos directly or the secondary businesses they support, I think it’d be better to try to get ahead of the trend, because casino gambling in Atlantic City has been on the decline for 20 years now or so. Revenues have dropped 40 or 50%, I think…

M: Why do you think that is? Why have revenues been dropping in Atlantic City?

C: Well… that’s a good question. I don’t know why people have stopped visiting the city. I’m guessing partly because of all the other casinos that have opened up in the tri-state area and partly because it’s really out of the way. There’s really nothing there besides the casinos, so there’s really nothing to attract people down to that part of the shore.

M: I think part of the issue is probably that there are casinos in eastern Pennsylvania now – I think in Bethlehem there’s the big Sands Casino?

C: I think so. Connecticut, too.

M: So New Jersey’s facing more competition. That’s the problem I was alluding to earlier, that even now, when we don’t have all that many casinos, the market is already getting somewhat saturated. I’m not necessarily saying that’s the sole reason why there’s been a decline in revenues in Atlantic City, but it seems like the more casinos you have, the less lucrative any one casino is going to be.

C: That’s true, but especially considering the Meadowlands is so much closer than anything in Connecticut or Pennsylvania, which is a good hour and a half away, I’d think you’d have more than enough money coming in to make up for declines in Atlantic City traffic. And if anything did open in NYC, I mean, New Jersey would pretty much be shut out completely. That’d be a death knell for Atlantic City, period.

 

Lotteries and Sports Betting vs. Casinos

M: One argument that’s been raised in favor of casinos is that we [in New Jersey] already have a lottery.

C: Ah, yeah.

M: I mean, almost every state has a lottery. If the state were really all that concerned about people profiting off of gambling (or even about the state itself profiting off of gambling!), then they would ban lotteries too. So some say this shows that people who are opposing casinos don’t have any principled objection to casinos per se. They just don’t want there to be a lot of traffic in their neighborhoods, they don’t want these big corporations to be setting up shop near them. There’s really no social harm that comes with casinos.

C: Yeah, that’s a good point to bring up. To be clear: I would not say that casino gambling is an inherent good, and there are definitely dangers associated with it. You have to adhere to it in moderation, as is the case with anything else. But yeah, I’d agree with you that the government has no incentive to ban gambling outright. There are ways to profit from it. Clearly the lottery is doing that to a pretty good degree.

But again, I’m arguing in support of expanding gambling in New Jersey. I’m not arguing for gambling being a social good.

M: I think that my basic feeling about lotteries is that, yes, it probably is the case that lotteries and casinos have a lot of similarities. People could buy a ton of tickets, although it’s harder to become a problem gambler with lotteries that are only drawn once a week or so. I worry more about scratch-off cards, which it’s very easy to buy a lot of in one sitting.

This is similar to our marijuana discussion in that I’m arguing that there’s a difference between tolerating something and legalizing it and having the government or private individuals or firms make money off of it. But just as I don’t think law enforcement should be terribly aggressive in going after people who possess or are smoking marijuana, I don’t think by any means we should be penalizing people who are gambling with friends or anything.

C: Oh, yeah.

M: That said, I don’t think that we should necessarily be expanding gambling any further. When we were talking about marijuana, I think we both agreed that cigarettes are as problematic if not more problematic than marijuana, and so if you’re going to be a purist you could say, “Well, if you want to ban marijuana, why don’t you want to ban cigarettes?” And… maybe I do want to ban cigarettes! But the legality of tobacco and nicotine is not a live political issue right now. The contentious political issue is marijuana. Maybe it doesn’t make a lot of sense to oppose marijuana legalization while supporting tobacco being legal, but you know, that’s the reality of the situation.

So yeah, in a philosophical sense, maybe there is no difference between lotteries and casinos. But the political reality is that lotteries already exist and have existed for a very long time and casinos are what we’re debating right now.

C: Well, I think casinos, too, they are much more interactive, and the rapidity with which you can lose money at casino gambling is much greater than that associated with, say, scratch-off tickets. And there’s a specific stimulus associated with gambling, right? Like you’re pulling the lever, you’re seeing things pop up on the screen. I assume it hits a pleasure center in your brain that’s much more reactive than anything involved in playing the lottery.

M: That’s interesting. I would be curious to see if anybody’s done research on that. Is casino gambling more addictive than buying lottery tickets? I would think it is.

C: I would think so, without question.

M: The other thing I wanted to talk about a little bit was the idea of sports betting.

C: Oh, okay!

M: My understanding is that it’s currently illegal in the United States.

C: I think it’s legal in Las Vegas. I think. [NB: It is in fact illegal nationwide, although several states were exempted from the relevant statute because they had already permitted sports betting at the time it was passed.]

M: Okay. I know there was a ballot measure a few years ago to legalize sports betting in New Jersey, but it was very controversial because it was essentially trying to legalize it here while it remained illegal in the United States. You know, it was like California or Colorado legalizing marijuana while it’s illegal under federal law.

C: Is your position that you’re against sports betting?

M: So that’s what I wanted to get into. I don’t know. I’ve been thinking about whether there are – about the similarities and differences between sports betting and something like casino gambling or playing the lottery. It seems to me like sports betting is less problematic, again because it’s harder to – because the bets are tied to discrete events. It’s harder to become addicted and to be constantly placing bets. I mean, there’s an upper bound on how often you can place bets on sporting events.

C: I’m not sure if that’s true. There are a lot of different sporting events that you can place bets on, and my guess is that any sort of sports betting scenario would pretty much involve all of the major sports and then specific events within those games. You could probably go pretty wild with making bets on minutiae within the games.

But that also raises the question about betting on, say, horses or horse racing, which I believe is legal in certain states. I’m pretty sure it’s legal in New Jersey, actually. And you don’t really see any great debate about that. It’s a generally accepted practice.

M: I think horse racing is a pretty marginal sport to begin with. I don’t think the number of people who are betting on horse races is really all that large.

C: But it’s a precedent that’s set, that some sort of sports gambling is allowed.

M: Yeah, that’s true. But to tie this back to the issue of lotteries vs. casinos: yes, you can argue that once you’ve legalized lotteries, there’s no consistent case against legalizing casinos as well. You could also say, well, once you’ve legalized betting on horse races, there’s no principled case against legalizing betting on anything else.

 

Frolicking in the Swamps

M: So just to recap: my argument is that casinos have a business model that inherently tends toward encouraging addictive behavior on the part of their customers, and that their presence has an adverse effect on communities because they lower property values and don’t contribute anything of real economic value.

C: Well, to return to the case at hand, one benefit of having them in the Meadowlands specifically is that there aren’t as many houses around there. If you put a casino out by MetLife Stadium, it’s not going to be as directly impacting communities like in Atlantic City, which has a lot of surrounding suburbs and towns. I mean, obviously North Jersey has that too, but the Meadowlands is an area that’s defined by swamp lands.

And regarding gambling addictions, I think it’d be easier if you create a new casino hub to basically implement best practices to reduce problem gambling from the start. So you could make it the case that there is a mandatory delay time between playing one game and going on to the next, or you could say from the start that there’s no free alcohol being distributed on this floor.

M: So you’re saying that it would be a good idea to put casinos away from heavily populated areas, so that if the research that suggests that casinos have a negative impact on property values is accurate, then at least they’re in a swamp?

C: Yeah. Again, there are some towns nearby. There are towns like East Rutherford around there that might be affected.

M: Why couldn’t – instead of casinos, why couldn’t we just have people, like, play around in the swamp?

C: Just frolic in the swamps?

M: Frolicking in the swamps.

C: I’ve heard reports of convicts escaping into the swamps, and police do not like that, because they can’t find the convicts. So I feel like if you got lost in the swamps, the police would not be too happy.

M: So… [Laughs]… by putting the casino in the swamp, we could actually be creating some sort of lawless zone.

C: Yes… [Laughs]. Precisely. Outside any jurisdiction.

The other benefit is that since there are so many people in New York City and its surrounding suburbs who are potential customers, you could easily get the casinos in Atlantic City to agree to all of these best practices. If you tried to institute those now in casinos in Atlantic City, you’d get a lot of pushback. Casinos would either outright refuse or lose a lot of money because those changes could be quite expensive.

M: But if you make it a condition of opening a casino…

C: Right. Guarantee they’ll participate because the revenues from those casinos will still exceed the potential costs associated with instituting those best practices, only the costs won’t be perceived as a loss. So I’d say far and away that’d be a better idea than either trying to expand online gambling or trying to rehabilitate Atlantic City. Do you have any other thoughts?

M: I’m still unclear on the ultimate motivation here. We’re saying that it’s better to open casinos and require right off the bat that they adhere to these best practices, but why is it better to open casinos that adhere to best practices than to not open casinos at all?

C: I’d go back to the fact that casinos will probably be opening in the city or at least in other areas at some point in the future.

M: So by having NJ set the standard for what a well-regulated casino looks like, we put pressure on other states that might want to legalize them in the future to also adhere to those regulations?

C: Exactly. Pretty much take the initiative in making this the hub of gambling in the tri-state area and making it the most consumer-friendly, safe form of gambling.

M: Okay. So we have an opportunity to start a trend here. You may not be able to buy electric cars in New Jersey, but at least you’ll be able to gamble.

C: I mean, if you somehow win, you could then go to Pennsylvania and buy your electric car and bring it back to New Jersey.

M: Well, you need to win the lottery to be able to afford a Tesla anyway.

C: [Laughs] This is true.

 

The Moderation Conversation, Email Edition: Tesla Motors vs. Auto Dealers

This is the first installment of “The Moderation Conversation, Email Edition”, a spin-off of RM’s “Moderation Conversation” feature wherein Matt and Chris get together to record a discussion and then heavily edit the resulting transcript. The exchange took place in cyberspace this time, meaning a lot of their typical malapropisms never even made it into the text in the first place! The topic of the thread was Tesla Motors’ plan to shake up the world of car retailing, and the obstacles that have been put in its path as it attempts to launch its new model around the country.

Matt

I wanted to get your thoughts on an issue that I’ve been hearing about on and off for a while, but that’s recently become the subject of controversy in our own home state [of New Jersey]. The electric vehicle manufacturer Tesla Motors has been attacked by several state governments and by organizations representing auto dealerships over their efforts to sell their cars directly to consumers in their own company-owned showrooms rather than through dealer franchises.

Tesla is essentially trying to sell cars the way Apple sells computers: by managing a network of proprietary retailers where the corporation can more tightly manage the entire consumer experience. My understanding is that they’ve also been trying to give customers the option to order cars online and have them delivered Amazon-style (!).

Now, Tesla argues that they’re bringing efficiency to the whole car-buying experience by cutting out the middleman, and I’m inclined to agree. The arguments I’ve seen for why states should require autos to be sold through dealerships seem pretty weak; I read an article a while back that talked about how they play an important role in their communities by sponsoring things like Little League. Now, I consider myself a communitarian and all, but I don’t think restricting the market share of auto dealerships is what’s going to destroy civic life in America!

One potentially more serious concern I’ve heard is that diluting competition among dealers will increase auto prices, but I wonder about this one too. Isn’t it competition among brands that keeps prices low? I would think that the cost of a Toyota is kept reasonable because there are guys selling Hondas down the street, not because there’s another Toyota dealership in the area. Or like, isn’t the price of a Chipotle burrito held in check by the fact that Taco Bell also sells burritos, not by the presence of other Chipotle locations in the vicinity? (Actually, we could just make this a discussion about Mexican food if you want. Apparently climate change is threatening Chipotle’s supply of guac inputs, which, not good.)

I certainly worry about large corporations engaging in monopolistic/oligopolistic behavior, and I’m all for trying to limit the power of any one firm or handful of firms to distort the market. But I think people are fixating on a red herring here. It seems to me that this is mostly a matter of auto dealers trying to protect themselves against disruptive innovations.

I’m eager to hear your thoughts. The Christie administration has taken regulatory action to keep Tesla from selling direct-to-consumer, but evidently there’s going to be a legislative debate about this in the near future. How do you think that might go down? (Feel free to also comment on [Tesla CEO] Elon Musk, and/or his ideas for using magnets to shoot humans through tubes at several hundred miles an hour.)

 

Chris

Thanks for sending your thoughts about this.  I’m inclined to agree that the crux of this debate is about how the current auto dealership lobby is trying to protect its livelihood in the automotive market.

A little context might be helpful in showing why this issue is important, especially because the facts indicate it should be a nonstarter.  Tesla offers only one model – the Model S sedan – and sells around 7,000 vehicles or so per quarter.  The Model S has a base price of $70,000 and climbs to over $100,000 with larger batteries and additional equipment.  Tesla’s production quantities are increasing monthly, but its total number of cars sold, and the market to which it’s catering, is miniscule compared to all other auto brands sold through dealerships.

On the surface, it seems like an undue amount of outrage is being expended over the slight increase in difficulty for a few really wealthy people to purchase a car.  But this matter is important for two main reasons:

1) Tesla is the most innovative carmaker around that actually has a chance to redefine how we drive.  It’s currently working on a $30,000 entry level electric car that, with federal tax credits, might dip to below $23,000.  A base price at that level would be a viable option for quite a few middle class or upper-middle class consumers.  Not only will consumers save money from the model, but the demand for gasoline will also drop.  Restricting its sales opportunities now makes it more difficult for these positive outcomes to be achieved in the near-term, if at all.

2) Tesla is working to revolutionize the maintenance and car care experience.  This speaks to your point above- it seems like car dealers are opposed to Tesla’s sales model because it totally eliminates the middleman.  Tesla’s model cuts out about $1500 per car sale that are directly related to dealer expenses, and its all-electric technology makes most dealer maintenance services irrelevant.  (All electric means zero repairs for the engine or transmission and no costs associated with oil changes and other maintenance fees.)  Making it tougher for Tesla to initiate this model means the benefits will take longer to be realized.

That said, this entire debate is getting a little out of hand because New Jersey residents can still purchase Teslas.  It’s not like this is an injunction against the ability to buy a car; the law only prohibits the transaction from taking place in one of Tesla’s New Jersey showrooms.  From Elon Musk’s own blog post:

Our stores will transition to being galleries, where you can see the car and ask questions of our staff, but we will not be able to discuss price or complete a sale in the store. However, that can still be done at our Manhattan store just over the river in Chelsea or our King of Prussia store near Philadelphia.

Most importantly, even after April 1, you will still be able to order vehicles from New Jersey for delivery in New Jersey on our TeslaMotors.com website.

What do you think?  It seems we agree that Musk should be able to sell his cars in NJ, but is the issue being unnecessarily blown out of proportion?  And how do you think any sort of legislative amendment process will go down, if at all?

(To answer your last thought- the Hyperloop looks simultaneously amazing and terrifying.  Suffice to say that I would not want to be one of its first test subjects.)

 

Matt

I think we’re in basic agreement about why this has become such a contentious debate. I also agree with you that stymieing Tesla in its efforts to upend the market is shortsighted, given its potential to steer the auto industry (pun certainly intended) in a more sustainable direction. The seriousness of the Christie Administration’s position here is also called into question by the fact that the Republican Party, at least at the national level, is always insisting that the government should refrain from “picking winners and losers” in the realm of alternative energy through subsidies, tax credits, etc. Christie’s stance is somewhat of a political aberration.

Recall that the Solyndra “scandal” was based on the GOP’s belief that extending subsidized federal loans to clean energy corporations is a form of cronyism that can lead to significant losses for taxpayers when those corporations go belly-up. But doesn’t this mean that putting up roadblocks to selling electric vehicles is an equally unwarranted form of market intervention? The opposite of picking winners and losers is not using state power to protect the status quo. Creative destruction sometimes entails destruction.

You’re right to point out that the immediate impact of this rule will be attenuated by the fact that you can still easily buy Teslas in New York or Pennsylvania, and of course by the fact that there are very few people buying Teslas in the first case. (I was surprised to hear that you can still order them online and have them delivered to New Jersey, though. A regulation requiring auto sales to be routed through dealerships seems to lose all of its bite if there’s a loophole so big you can drive a Tesla through it.)

But I think you’re overlooking the fact that this is not just an argument we’re having here in New Jersey. Restrictions on Tesla’s ability to sell its product directly to consumers in its own showrooms have already been enacted in states like Texas, Virginia, Arizona, Colorado, and Georgia as well, and limits have been proposed in North Carolina, Minnesota, New York, Massachusetts, and Ohio. This really is a nationwide battle. If Tesla were somehow backed into the same corner in Pennsylvania, potential Garden State customers would have even fewer options. This might be something Tesla could easily ignore if it were only coming up in one state, but if its hands are tied across the country the ramifications could be significant.

You asked about how I think the legislative debate might play out. I won’t pretend to know what the final result will be, but I can say that I don’t think this is going to split down party lines like you might expect. When similar restrictions came up for debate in the legislature in Washington state, they were defeated by an unlikely coalition of environmentalist Democrats and free-market purists on the Republican side.

Business Insider notes that the New Jersey Coalition of Automotive Retailers gave almost $700,000 between 2003 and 2009 to politicians of both parties, so opposition to Tesla is likely to be bipartisan in any fight that might break out in the State Assembly and/or Senate. This is not to suggest that money is the only thing driving support for dealerships – I mentioned last time around that skepticism of monopoly power and a desire to empower small businesses could be legitimate grounds for wariness about Tesla’s plans – but it does indicate that this likely won’t be your typical conservative-liberal skirmish.

 

Chris

Great find on that NJ Coalition of Automotive Retailers statistic.  Given that both parties are on the receiving end of its coffers, it does seem improbable that Tesla will have much support should an amendment battle occur going forward.

You question the Christie Administration’s seriousness on the issue and I second your skepticism.  My initial thought was that this decision was a logical reading of the law; the eight members of the Motor Vehicle Commission (all Christie appointees) voted unanimously to prohibit Tesla’s sales model, suggesting a consensus that Tesla’s current model is not compliant.  My amateur reading of the relevant parts of the law in question, N.J.A.C. 13:21, also suggested some seemingly obvious instances where Tesla’s sales practices are of questionable legality.  For example: I’ve visited the Paramus Garden State Plaza showroom and only one vehicle is on display.  N.J.A.C. 13:21-15.4 states that at least two vehicles must be present in any automobile sales establishment.

But the details of the proposed amendment suggest that Tesla was directly, and unfairly, targeted in this attempt to clarify the law.  The same law cited above currently mandates that showrooms have at a minimum of 72 square feet of office space, whereas the new regulations require 1,000 square feet – clearly a constriction against Tesla’s mall outlets.  Moreover, one can’t help but feel the amendment was unnecessarily harsh in redefining dealer requirements and imposing restrictions against Tesla’s selling ability.  It should be equally easy to redefine the established dealer requirements such that Tesla is simply allowed to operate independent of third party sellers.

Jim Appleton, President of the NJ Coalition of Automotive Retailers, told MSNBC’s Chris Hayes that “No one wants to see Tesla close their stores in New Jersey.”  He buttressed his claim with an argument for the consumer protection benefits of dealerships:

You have no choice when you buy from Tesla. You buy from a factory store, period, end of discussion. You buy from a new car dealership, you have the choice of buying from several. This is really a consumer protection argument. It`s not consumer choice argument.

Interestingly enough, the law cited above actually falls under “Law and Public Safety,” which suggests that there is some legitimacy to the argument that car dealerships were, at one point, important in helping consumers purchase a car fairly.  Clearly that’s not the case now, or at least it’s not categorically the case, as Josh Barro contends in the Hayes segment.  (Price and amenity competition among different car brands will still exist regardless of whether different car dealerships are around.)  That this is fast becoming a national issue, as you point out, suggests that NJ citizens should lobby for a new amendment that would maintain consumer safety standards but eliminate the mandate of having a dealership involved.

 

Matt

I thought it would be helpful to see if any hard research has been done on market structure in car retailing, and a quick Google Scholar search turned up an illuminating Journal of Economic Perspectives article from 2010 entitled “State Franchise Laws, Dealer Terminations, and the Auto Crisis.” The authors, Francine Lafontaine of the Ross School of Business at the University of Michigan and Fiona Scott Morton of the Yale School of Management, argue that

[t]he laws favoring car dealerships were put in place, according to a representative statement by the Florida state legislature, to “protect the public health, safety, and welfare of the citizens of the state by regulating the licensing of motor vehicle dealers and manufacturers, maintaining competition, providing consumer protection and fair trade” (Florida Law, §320.605). In our view, the current regulations tend too much toward protecting auto dealers from market forces and raising their profits; we argue that consumers would benefit if manufacturers could have much more leeway in experimenting with alternative distribution models than the web of franchise laws currently in place allow them to do.

The paper lists a number of examples of regulations that states have enacted regarding auto dealerships and car manufacturers beyond the one’s we’ve discussed so far, including some really galling ones. There are laws protecting dealers against “encroachment” (where a manufacturer opens another dealership close to an existing one without demonstrating “need”), laws mandating that manufacturers compensate dealers for repair costs, laws penalizing manufacturers when a franchise agreement is terminated even if the dealer terminates it, and laws forcing manufacturers who offer incentives to dealers for facility improvements to pay at least a portion of those incentives even to dealers who decline to improve their facilities.

What’s more, Lafontaine and Morton explicitly address the Little League argument! This must be a popular one:

As an article in an auto industry newsletter comments: “Even if it’s healthy for the auto industry long-term, Chrysler and General Motors closing thousands of dealerships will create a huge amount of collateral damage to Main Street institutions like Little League Baseball and local newspapers. Love them or hate them, car dealers are the go-to donors for local causes and local sports teams, not to mention keeping newspaper advertising in business almost singlehandedly.” Economists will recognize this argument as being overbroad. It could be applied just as well to restaurants and any other local business, and therefore does not provide a convincing economic justification for high profits for auto dealerships in particular. Moreover, if additional subsidies to Little League and local newspapers are desirable, artificially high profits for auto dealers would be a peculiarly inefficient way to provide such subsidies.

All of this feels a bit counterintuitive. How can it be that dealerships, which are – as they are quite eager to remind us – small businesses, have more pull with state lawmakers than the big automakers? How can they convince the politicians to enact so many laws that seem to benefit them at the expense of the automakers? Granted, the auto industry has taken a beating in recent years, but it still seems strange that some of the largest corporations in the world are in fact politically weaker than mom-and-pop car dealers. The authors actually offer a compelling explanation for this apparent incongruity:

States earn about 20 percent of all state sales taxes from auto dealers, and auto dealerships easily can account for 7–8 percent of all retail employment… The net result of all these laws is to raise profits for car dealers. State legislatures may be willing to do this because dealers represent an identifiable source of state employment and tax revenue, while even large manufacturers can site manufacturing plants only in a limited number of states. The result is that new car dealers have an advantage over auto manufacturers when it comes to political leverage in state legislatures, and thus states enact laws that extract rent from manufacturers and redistribute it to franchise dealers.

Aha! So while any individual dealership is economically miniscule, the fact there are a heck of a lot of them means that, collectively speaking, they tend to have a great deal of clout.

The remaining question is whether these regulations are actually bad. It may be the case that the interests of dealerships and consumers are aligned to a greater extent than we might think, and that our own skepticism about their motives (or at least about whether their actions will benefit the public) has been unwarranted. Or maybe not. After considering existing scholarly work on the subject – which they admit is sparse – Lafontaine and Morton conclude that these laws do not serve the common good:

In their review of the limited empirical literature on vertical restraints across different industries—namely exclusive territories, dealer licensing (protection from entry), and termination restrictions—Lafontaine and Slade (2008) find that that while privately imposed restraints seem to benefit manufacturers and consumers alike, when restraints such as these are mandated by the government, as they are in the case of car distribution state legislation, they lead to higher prices, higher costs, shorter hours of operation, lower consumption—and thus declines in consumer welfare…

The economic evidence thus suggests that the end result of the laws is a wealth transfer that benefits dealers at the expense of consumers (and post-bailout, at the expense of taxpayers as well). Moreover, as the European experience shows, the type of contractual restraints contained in state laws affecting car dealerships, if they were imposed privately, would likely be subject to antitrust scrutiny, and might well be prohibited. After all, these restraints limit entry and can be used, and in fact have been shown, to soften competition among existing dealers.

In economics, “common sense” can often be quite wrong. The notion that the government should have to balance its budget during hard times because middle-class families have to do the same is a fallacy that has a lot of intuitive appeal, but it’s a fallacy nonetheless. In this case, however, the limited amount of research that has been done in this area seems to support our initial reaction. The public will not necessarily suffer if Tesla is allowed to sell its cars directly to consumers – though we might not be able to go watch as many Little League games.

Christie’s Missing Coattails

Given New Jersey Gov. Chris Christie’s status as an early favorite for the 2016 GOP presidential nomination, it remains a mystery why the Democrats failed to challenge him more aggressively in this year’s gubernatorial contest. Even if he remained unbeatable, there were strong political incentives for them to have at least tried to deny him the blue-state landslide that will no doubt become his number one calling card should he make a run for the White House. But there’s another ostensibly puzzling fact about the outcome of the Garden State’s latest election: why couldn’t the Republicans pick up a single seat in the state legislature even in the midst of a Christie wave?

Actually, this fact isn’t all that puzzling. The current legislative district boundaries were drawn in 2011 by an eleven-member redistricting commission, and were widely seen at the time as a pro-Democrat gerrymander. In fact, the commission’s lone nonpartisan member, the late Rutgers professor Alan Rosenthal, claimed that he voted for the final plan because it would help to maintain “continuity of representation,” although he also stated that “[i]t is a map, I believe, that gives the minority party a chance at winning control of the Legislature.” In other words, a Republican legislative coup was bound to be an uphill battle, even against the backdrop of a Christie landslide.

Yet some commentators seem genuinely surprised by the fact that Christie’s 60-40 margin of victory over State Sen. Barbara Buono came at the same time the Democrats retained their 24-16 majority in the Senate and 48-32 margin in the Assembly. The Star-Ledger recently featured a piece entitled “Legislative map not to blame for lack of GOP progress, experts and Democrats say.” So what was to blame? Well, based on the evidence presented in the article, it sounds like it was… the legislative map:

This year, Republican Senate candidates overall got almost 65,000 more votes than their Democratic counterparts, but Democrats did not lose a single seat… Democrats won just 48 percent of the vote while taking 60 percent of the seats… On the surface, those are startling numbers, and Christie has not been the only Republican to mention it. But political experts and Democrats say they’re using a misleading method to explain the election results, one that implies Republicans should get more seats just because their voters are more likely to turn out to the polls.

“It would be like determining the winner of a baseball game based on stadium attendance,” said Bill Castner, a Democratic attorney who was a key architect of the Democrats’ legislative district map. “This is not Parliament. This is not Europe. We don’t allocate seats based on who shows up” [emphasis added].

Heavily Republican districts had higher turnout than heavily Democratic districts, even though all districts are roughly equal in population, according to the Census. The 24 districts where Democrats won had an average turnout of 41,000, and the winners had an average margin of 10,000. The 16 districts where Republicans won had an average turnout of 55,000, and the winners there won by about 19,000 votes. That is how Republican candidates got more votes overall. “That’s why the whole thing is false about the statewide vote,” said Monmouth University pollster Patrick Murray. “It’s a false comparison to what voters actually want…”

Assemblyman Jay Webber (R-Morris), who headed the Republicans’ redistricting effort, said it’s just common sense that the party that gets the most voters should get the most seats. I don’t think there’s any question that on Election Day this year, New Jerseyans went to the polls and voted more for Republican legislators than Democratic legislators,” [emphasis added] Webber said. “To me that means they should get a Republican-controlled Legislature. It’s a very simple concept.”

Republicans aren’t alone in using the vote total argument. In 2012, to Democrats’ chagrin, their House candidates across the nation got more votes than Republicans. Yet Republicans held on to a majority…

[Assemblyman John] Wisniewski said the governor’s claim fails to take into account the fact that he won 75 percent of the state’s legislative districts yet failed to bring the down-ballot candidates with him… “Christie’s saying, ‘Don’t blame me for the lack of coattails.’ But the only person to blame for the lack of coattails is the guy wearing the coat.”

That New Jersey and the United States do not have parliamentary systems in which seats are allocated on the basis of the aggregate votes received by each party is obvious. Those who are frustrated by the Republicans’ failure to recapture the majority in either house of the legislature understand this better than anyone, which is precisely why they are complaining about how the district boundaries are drawn. Reminding everyone that “this is not Europe” or that turnout was lower in the districts that lean Democratic does not prove that “the map is not to blame” for the Republicans winning a majority of the statewide vote but only a minority of the seats. All this amounts to is a claim that the map is to blame, but that this is a perfectly legitimate outcome given our system of single-member districts. The “experts and Democrats” cited in the Ledger piece are making normative claims, not descriptive ones.

Consider the reaction of many Democrats (and others) to the result of the 2000 presidential election, in which Al Gore won a majority of the popular vote but failed to win the presidency. Nobody argued that the Electoral College was “not to blame” for this counterintuitive result. Rather, everyone acknowledged that the Electoral College was entirely to blame for this counterintuitive result. What was debated was whether the College is on balance a worthwhile institution because it rewards the building of broad national coalitions over parochial appeals to the denizens of major population centers, or whether it is an outmoded, elitist, antidemocratic relic that ought to have been dispensed with many quadrennia ago.

Likewise, the real debate in NJ – and nationwide, given the fact that John Boehner is still Speaker of the House despite his party’s congressional candidates having earned fewer votes overall in 2012 – is whether a system that can produce such seemingly illogical results really has enough of other redeeming qualities to make it worth preserving. In light of the way in which divided government in an era of sharply polarized parties has been a recipe for gridlock (if at the national level to a greater extent than in New Jersey), reforming our political institutions to make them more responsive and more resilient ought to be a top priority.

I have to side with Christie and Webber on this one. A majority of the voters who turned out cast their ballots for Christie, and a majority cast their votes for Republican legislators. That should be reflected in the partisan makeup of the government that will convene in January. Assemblyman Wisniewski’s observation that Christie ran ahead of most Republican legislative candidates is a non sequitur. The GOP is not claiming that it should take 60% of the seats because Christie won 60% of the gubernatorial vote; it is claiming that it should take 52% of the seats because it won 52% of the legislative vote.

Christie has also claimed that at least some of the Democrats won their down-ballot races by emphasizing their bipartisan credentials. The same Ledger article quotes him as saying that “[t]hey ran on ‘We work with the governor.’ Okay, well time to work with the governor… Their mandate, to the extent they have one, is to work with me.”

I do hope that the Democrats can (continue to) look past Christie’s bluster and maintain a productive working relationship with him, rather than succumb to the temptation to gum up the works out of spite. (This is a two-way street of course, and Christie will also have to avoid some of the pettiness in which he indulged in his first term.) That said, the Democrats can cheer up! As Chris pointed out to me in a recent conversation, they may only have to deal with him for three more years!

Why Did Democrats Fold in the NJ Gubernatorial Election?

In the wake of Chris Christie’s 22-point drubbing of Barbara Buono in the New Jersey gubernatorial election, Matt posed a question on Twitter that is well worth asking:

“The mystery is not why Christie won. It’s why the Democrats (in NJ and elsewhere) never put up a fight.”

Indeed. As opposed to Terry McAuliffe in Virginia, Buono did not enjoy extensive campaign support from President Obama and other major Democratic players, and she was swept away by Christie’s fundraising, earning only $2.7 million to Christie’s $13.2 million. Over 50 Democratic mayors also broke party ranks and endorsed Christie, which bolstered his crossover appeal and suggested that Buono was too weak to even control her own party, as the Star Ledger pointed out in its endorsement of Christie. (See Matt’s excellent parsing of this endorsement for more.)

Was Buono hung out to dry by her fellow Democrats? Absolutely. Buono received a paltry $7,600 from two Democratic Governors Association groups this year, for example, compared to the $3 million that the DGA donated to ex-governor Jon Corzine’s reelection campaign. And Buono was not happy about this lack of support- at all. In her concession speech, Buono thanked her supporters who “withstood the onslaught of betrayal from our own political party.” Pretty vicious, venom-inflected stuff.

Buono’s disappointment with her party seems to be mutual. In an interview for NJTV News on November 7, state Democratic Committee Chairman John Currie gave a decidedly lukewarm evaluation of Buono’s campaign, suggesting the party had had little intention of providing her with substantive support. “Did her party let her down?” interviewer Mike Schneider asked Currie. “No… The party did not let her down. Maybe people let her down,” Currie said, an amusingly empty answer that elides the massive spending disparity and lack of party endorsements Buono received. “Did she run a bad campaign?” asked Schneider. “You know… she worked hard. She really worked hard,” Currie responded. Not exactly a ringing vote of confidence or approval.

On the one hand, it’s not surprising that Buono lost so heavily and failed to attract substantial support. Christie was enjoying double- and triple-digit leads months ago and it makes sense Democrat funders and party leaders would ultimately conclude the race was unwinnable. It’s also understandable why no other, stronger candidates entered the gubernatorial race, as it was a high-risk campaign with a low probability of victory that would only serve as a major career deterrent or even disruptor. That’s why Cory Booker opted for a relatively easy campaign for the late Frank Lautenberg’s U.S. Senate seat and why other Democrats, including state Senate president Steve Sweeney, opted to sit this one out. “It would have been tough for anyone to beat [Christie] at this time, right now,” Currie told Schneider, which is probably why so many Democratic mayors hitched their cart to his breakneck horse. It might have made sense for the party as a whole to try and defeat Christie, but no individual politician wanted to risk current job security to become a sacrificial lamb.

Although Democrats understandably backed down from direct fights against Christie, it doesn’t make sense why there was a total lack of national and state funding to oppose him, especially in light of his clear aspirations to run in the 2016 presidential election. If he’s able to make it through the Republican primary process unscathed, Christie will be an immense threat to Hillary Clinton or whomever the Democrats nominate- much more so than any other Republican currently in consideration. The NJ gubernatorial election would have provided the perfect opportunity for national party leaders to sow the initial seeds of doubt over Christie’s qualifications for holding a higher office. While it might have made sense for Democratic leaders to avoid lucrative support for Buono, this race was a good point to start making the case against Christie.

And what a case there was to be made. Mere days before the election, an excerpt from Mark Halperin and John Heilemann’s Double Down: Game Change 2012 provided a laundry list of Christie incidents or issues that, in total, convinced Mitt Romney’s team that Christie wasn’t fit to be a Vice Presidential candidate:

The vetters were stunned by the garish controversies lurking in the shadows of his record. There was a 2010 Department of Justice inspector general’s investigation of Christie’s spending patterns in his job prior to the governorship, which criticized him for being “the U.S. attorney who most often exceeded the government [travel expense] rate without adequate justification…” There was the fact that Christie worked as a lobbyist on behalf of the Securities Industry Association at a time when Bernie Madoff was a senior SIA official—and sought an exemption from New Jersey’s Consumer Fraud Act. There was Christie’s decision to steer hefty government contracts to donors and political allies like former Attorney General John Ashcroft, which sparked a congressional hearing. There was a defamation lawsuit brought against Christie arising out of his successful 1994 run to oust an incumbent in a local Garden State race. Then there was Todd Christie, the Governor’s brother, who in 2008 agreed to a settlement of civil charges by the Securities and Exchange Commission in which he acknowledged making “hundreds of trades in which customers had been systematically overcharged.” (Todd also oversaw a family foundation whose activities and purpose raised eyebrows among the vetters.) And all that was on top of a litany of glaring matters that sparked concern on Myers’ team: Christie’s other lobbying clients, his investments overseas, the YouTube clips that helped make him a star but might call into doubt his presidential temperament, and the status of his health.

While none of these “scandals” is by any means politically fatal, one can’t help but imagine a scenario where Democrats dug deeper to find this kind of information in early 2013 and started blasting it in sequential media blitzes throughout the year. It’s still probable that Christie would have won due to his popularity, his handling of Sandy, and the fact that all of these accusations could be defended against and swept under the rug. But it’s equally likely that Christie’s margin of victory would have been much narrower than it was in the end, given the potential for doubt these kinds of revelations would have raised in Christie’s character and preparedness for another term.

More importantly, broadcasting these attacks would have been a powerful and immediate offensive against a potential Christie 2016 run. It’s obviously too early to make any definitive predictions, but Democrats would be much better positioned if they end up facing a Rand Paul or Marco Rubio type instead of Christie, who combines a strongly conservative record (low taxes, anti-unions) with evidence of across-the-aisle compromise and practicality (not continuing to fight the gay marriage ruling). That Christie won 57% of the female vote and an astonishing 51% of the Hispanic vote has to have Democrat party leaders quaking in their boots. Investing in attacks on Christie now could have put a strong dent in these results and raised greater doubt about how successful a Christie presidential run could be.

And yet… nothing. National party leaders barely lent Buono a hand, and Christie rolled along all year with nary a challenge to his message of resilience against the storm and a record of bipartisan success. And that puts him in an excellent position for a presidential run. “Christie’s gigantic win positions him as one of the front-runners for 2016, and he came through this re-election campaign unscathed,” said Ed Rollins, who ran Ronald Reagan’s successful campaign for the White House in 1984. “He now gets a jump-start on any other potential opponents in lining up operatives and fundraisers.”

Perhaps the Democratic rationale was that it wasn’t worth spending money on a race that Christie was bound to win, given Buono’s lack of star power or ability to unite the state party. Or maybe it was based in the assumption that Christie will have a difficult time getting through the presidential primaries without doing major damage to his moderate standing, either through overabundant association with a tarnished GOP brand (Shutdown 2013, baby!) or through a fiery outburst that doesn’t play well with the folks in Idaho. Those are real concerns, and Christie could emerge with scars that leave him severely weakened for a fight with the Democratic nominee.

But it still seems like Democrats missed a golden opportunity to trim the governor’s wings and guarantee that he’ll have a harder time flying down the road. Christie’s reelection has launched him to the front-and-center of the 2016 race, and he’s now enjoying more recognition and national influence than ever before (see his upcoming ascendancy to chair of the Republican Governor’s Association). A greater anti-Christie campaign wouldn’t necessarily have made a substantial impact in the present, but it could have paid great dividends down the road if Christie’s current robust level of support is the engine to his continued rise in advance of the primaries. One has to wonder if Democrats will soon look back on the 2013 gubernatorial election and wish they could have done more to ground Chris Christie from the get-go.

The Duty to Endorse?

In one of those quirks of American politics, New Jersey and Virginia are the only two states in the Union that hold quadrennial gubernatorial contests in the year after a presidential election. I wrote the other day about some of the Garden State’s political paradoxes, which have led to likely landslides this evening for both Republican Governor Chris Christie and a ballot measure that he adamantly opposes. But the race in Virginia, where the Democrats have a decent shot at taking over all five statewide offices for the first time in forty years (in a swing state, in an off-year), is heading for an equally anomalous conclusion.

There is much armchair psychologizing of the New Jersey and Virginia electorates in which we could indulge to try to explain why a socially and fiscally conservative Republican is cruising to victory in a state that reelected Barack Obama by 18 points, while a mediocre Democratic candidate has clung to a stubborn lead in a state that is still quite purple, albeit trending blue. That said, I’d like to leave the baseless speculation to Politico and its ilk, and turn instead to an interesting anecdote about newspaper endorsements in the two races.

On Sunday, October 20th, the Richmond Times-Dispatch and the Newark-based Star-Ledger, the most widely-circulated newspaper in New Jersey, both published editorials weighing in on their states’ respective gubernatorial showdowns. Or rather, one of them weighed in, and the other explained why it wouldn’t. From the Times-Dispatch:

The words that follow should not come as a surprise. During recent months, numerous editorials in The Times-Dispatch have lamented the gubernatorial campaign. The major-party candidates have earned the citizenry’s derision. The third-party alternative has run a more exemplary race yet does not qualify as a suitable option. We cannot in good conscience endorse a candidate for governor [emphasis added]. This does not gladden us. Circumstance has brought us to this pass. This marks, we believe, the first time in modern Virginia that The Times-Dispatch has not endorsed a gubernatorial nominee.

The paper criticizes Republican Ken Cuccinelli, the current attorney general of the state, for holding “objectionable” positions on “social issues such as abortion and homosexual rights,” and for pursuing his “divisive agenda with a stridency that was unbecoming in an attorney general and [that] would be unbecoming in a governor.” At the same time, it savages Democrat Terry McAuliffe for his lack of experience, claiming that “[h]is ignorance of state government is laughable and makes Rick Perry, the notorious governor of Texas, look like a Founding Father.” Nor do they find much to like about the long-shot third party candidate Robert Sarvis, who they declare “has no experience applicable to the governorship, period.”

Up in Jersey, the Star-Ledger editorial board found itself frustrated with the major-party candidates as well. It maintains that Chris Christie is “overrated” and that “[h]is spin is way ahead of his substance”:

[H]is achievements have been only modest. He signed an important reform to contain pension and health costs, but it was mostly done before he arrived. He signed a useful tenure reform last year, but it is a weak version that still protects bad teachers with seniority. His reorganization of the higher education system is promising, but untested. Balance that against his measurable failures, and you have to conclude he is much better at politics than he is at governing.

The property tax burden has grown sharply on his watch. He is hostile to low-income families, raising their tax burden and sabotaging efforts to build affordable housing. He’s been a catastrophe on the environment, draining $1 billion from clean energy funds and calling a cease-fire in the state’s fight against climate change.

The governor’s claim to have fixed the state’s budget is fraudulent. New Jersey’s credit rating has dropped during his term, reflecting Wall Street’s judgment that he has dug the hole even deeper. He has no plan to finance transit projects and open space purchases now that he has nearly drained the dedicated funds he inherited from Gov. Jon Corzine.

His ego is entertaining, but it’s done damage as well. By removing two qualified justices from the Supreme Court without good cause, he threatened the independence of judges at all levels, and provoked a partisan stalemate that has left two vacant seats on the high court. This was a power grab gone wrong.

Meanwhile, State Sen. Barbara Buono, who ran unopposed for the Democratic nomination, is, in the judgment of the board, a “deeply flawed candidate”:

Buono’s close alliance with the teachers union is a threat to the progress Christie is making in cities such as Newark and Camden. She is hostile to charter schools, which now educate nearly 1 in 4 kids in Newark.

An authoritative national study showed that students in the charters are learning more… [y]et Buono cannot bring herself to acknowledge that the charters have helped. She sponsored a bill that would basically slam the brakes on new charters by requiring voter approval of each one. She is making a status quo argument in the face of persistent failure.

Buono opposes the Newark teacher contract, which freezes the pay of the worst teachers and grants bonuses to the best. She wants a traditional union deal, in which no distinction is made… Her alliance with the unions would also threaten progress made in containing the cost of public workers. She voted against the pension and health care reform, and supports the practice of allowing public workers to accumulate pay for unused sick days. She would cap the total at $7,500, but even that reveals a mindset that is discouraging.

Another big concern: Buono lacks the strategic savvy to be a successful governor. She commands little respect among fellow Democrats, who have abandoned her in droves, with nearly 50 elected officials endorsing Christie. She is a loner in the Senate who derides political bargains as “back-room deals.”

I mentioned earlier that one of the two newspapers weighed in on its state’s race, and the other explained why it wouldn’t. I’ve already identified the Times-Dispatch as the one that refused to endorse. Yet how could the Star-Ledger have chosen between a state executive who is “better at politics than he is at governing” and a challenger who “lacks the strategic savvy” to do the job? Somehow, it did:

[O]ur endorsement goes to Christie, despite the deep reservations. He has refused to speak with The Star-Ledger editorial board for four years, the first governor in either party to do so. But we are shaking off that insult because our duty is to the readers, and our goal is to help them decide which button to push. In her editorial board meeting, Buono simply did not make the case.

If this is an endorsement, it’s one of the most tepid endorsements that I’ve ever seen. Moreover, it’s astonishing that it comes despite the acknowledgment that the candidate being endorsed “refused to speak with the editorial board for four years.”

It isn’t as if the board had no other option. It could have chosen to endorse one of the half-dozen minor-party candidates for governor (although presumably not LaRouche supporter and Glass-Steagall enthusiast Diane Sare, who appeared as a heckler at the second gubernatorial debate, or perennial candidate and noted paranoiac Jeff Boss, who I spotted last week working the crowds in Port Authority). Such a move would be far from unprecedented: in 2009, the board endorsed independent Chris Daggett, who ultimately garnered less than 6% of the vote. To be sure, there is no alternative this time around polling as well as Daggett, who had hit 20% in some pre-election surveys. But fears about encouraging people to “waste” their vote by aiding and abetting a potential spoiler clearly didn’t factor into the Ledger’s decision last time; why should they have done so now?

All of this led me to wonder: do newspaper editorial boards have a duty as journalists to endorse candidates? Is opting to sit out a race an abdication of their responsibility to keep the electorate informed? I suppose even non-endorsements can keep people informed, by making them aware of the specific reasons why neither candidate deserves their vote. But in the long run, won’t this simply reinforce voter frustrations, and cause even fewer people to want to participate in the democratic process?

I don’t have a definite opinion about whether such a duty exists. Obviously newspapers shouldn’t intentionally behave in ways that make disillusionment with American politics even more widespread than it already is, but who is to say that anyone should urge others to vote for a particular candidate if they cannot themselves do so “in good conscience,” as the Times-Dispatch put it? I’ll refrain from making a judgment about whether the editors in Richmond handled their dilemma (or rather, trilemma) better than the editors in Newark, but I will say this: the Times-Dispatch marshaled far better arguments in support of its decision.

The Ledger, immediately after arguing that Buono is a hopelessly weak challenger, vitiates its own case by laying the blame for her lackluster candidacy on the powers that be in the NJ Democratic Party and by emphasizing all of the issues on which it believes she has the upper hand:

If this is the end for Buono, remember that she didn’t lose this on her own: The Democratic Party punted on this race. Its major players were scared to challenge Christie, and only Buono showed the conviction to stand up to him. If anyone should be ashamed in the wake of the crushing defeat the polls predict, it is the lethargic and compromised party establishment, not the lone woman who took up the challenge.

Buono has long been a sturdy voice for progressive causes. She was a key player in establishing paid family leave, protections against bullying and revamping the school aid formula. As governor, she would allow gay couples to marry, raise the minimum wage and stop the baseless attacks on the courts. She would raise taxes on incomes greater than $1 million, and restore at least some of the property tax rebates that Christie cut. She would also restore funding for Planned Parenthood, and sign strong gun legislation. On each of those issues, we are with her.

Doesn’t this contradict, or, at the very least, seriously problematize, the claim that Buono lacks “strategic savvy”? The motivation for endorsing Christie becomes even more of a puzzle when the board admits that it’s pulling for a man who holds positions that it hopes are never translated into policy:

The endorsement of Christie comes with the hope that Democrats hold control of the Legislature to contain his conservative instincts. It is especially important that Democrats hold the Senate to block him from remaking the Supreme Court in his image, a move that would doom urban schools and affordable housing efforts.

I actually agree with most of the Ledger’s substantive critiques of Buono, especially on education policy, and I would never claim that the decision to endorse Christie was an indefensible one. Yet the evidence the editors present does not support the case being made – and might even support the case that no case should have been made at all. I’ve quoted liberally from the article because I really do think it’s a remarkable piece. By the end, its main thesis comes to look like a complete non sequitur.

It’s hard to say whether newspaper endorsements really matter all that much anymore, given that we live in a time when journalism has been radically disrupted by smartphones and the Internet and when few media outlets are able to speak loud enough to be heard over the cacophony. But as the media become more self-consciously political and the echo chambers of right and left become further isolated from one another, the need for reporters and editorialists who will straightforwardly present the facts and guide the voters in making an educated choice – even if they don’t do so in the form of official endorsements – becomes perhaps more vital than ever before.