Political Entrepreneurs

The Economic Engine of Political Change

Dear New York: Are Term Limits Worth It?

February 25th, 2017 by Edward Lopez

Note: Initially published in The American Enterprise, Jan. 3, 2002.

Dear New York: Are Term Limits Worth It?

Many New Yorkers are wondering whether the term limits law they passed by referendum in 1993 is worth it. In pondering this question, New Yorkers join in one of history’s great democratic debates. The ancient Greeks grappled with this question, and term limited certain offices. America’s Founding Fathers also wrestled the pros and cons on the issue: the Continental Congress was term limited, but term limits were dropped when our present Constitution replaced the Articles of Confederation.

The Constitution’s framers dropped term limits partly for the same reason many New Yorkers are now reconsidering the idea: because they realized that sometimes term limits would oust a politician who has simply been in office too long, while other times an official would have to leave office when the people wished he could stick around another term or so. Like a sledge hammer in mid-swing, term limits pulverize incumbents even when the people realize that perhaps all they want is a little smoothing around the edges. Voters can feel trapped, as many New Yorkers do now, into getting rid of the right person for the job.
In the mid 1990’s, a rush of term limits activism sped across the American political scene. Particularly at the state and local levels, term limits were seen as the solution to all that was wrong in American politics: corruption, nepotism, gridlock, and the fact that challengers never seemed to get a fair shake at the voting booth. It was a refreshing change, an easy way for voters to say “We’re fed up.” When the dust settled: voters in 23 states passed term limits on their Congressional members; 21 of these limited their state legislative terms; nearly four in five governors were term limited; and some 3000 municipalities—including New York and seven of the other ten most populous cities in America—had term limits on their city councils or mayors.

The reviews are, to no surprise, mixed. Term limits supporters cheered when, four years after passing in California, the speaker of the California Assembly was in his second term in office—a political neophyte compared to the previous speaker’s 16–year stranglehold on that office. California also has lower campaign expenditures, which may help challengers, and a more diverse legislature. But many in state legislatures such as Michigan, where the term limits were the most stringent, complained of too many inexperienced members. There was concern that budget deadlines would fly by while schooling huge and consecutive classes of incoming freshmen about legislative intricacies. Also legislative staff and bureaucrats, who weren’t term limited, increased in importance, while lobbyists spent more time and money seeking out legislators with whom to get cozy.

At the municipal level, data are scant, but there were clear pros and cons. Long tenured “scoundrels” and “scalawags,” who were highly visible catalysts for passing term limits, were gone. And unions no longer “owned” their own city council members. But as out went the old, new council members came in droves. This created mass inexperience, as it is about to in New York with 35 of 51 council members in their first term. It also further prevented leaders from accumulating experience once in office.

One result of inexperience was policy instability. Policy proposals from building codes to union contracts to grant making vacillated nearly every term. Voters in many cities sensed problems. But city councils were obscured, even further than they normally would be, by the lack of name recognition among the members. Of course, term limits would remove them before they could do too much damage. But such an attitude, by ignoring the fact that even newer members would replace them, belies the problem.

Here’s an irony for you. Even though September 11 has placed everything in perspective, mundane matters of electoral competition have re-emerged to occupy our attention. We’re still a democratic people. No terrorist will ever change that. And as a democratic people, we still face one of the same problems that our Founding Fathers did. How do we balance the need to have skillful and familiar lawmakers with the need to have attentive and responsive ones? Term limits laws bluntly pursue the latter.

With or without term limits, a sluggish electorate chooses to sit back and hope for the best. But sometimes, like over the past few months, a democratic people is awakened. And an awakened electorate would have its say, if not for term limits.

Edward López teaches economics at the University of North Texas and has studied term limits extensively in his research.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.189, ch.7)

The most successful entrepreneurs know what they do well, they know the market and the opportunities within it, and they choose those activities that create the most value. This is true in economic as well as political markets.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.178, ch.7)

[W]hen the right elements come together at the right time and place and overwhelm the status quo, it is because special people make it happen. We call them political entrepreneurs.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.176. ch.7)

While we started this book with Danny Biasone saving basketball, we end it with Norman Borlaug saving a billion lives. These stories are not that different. Both faced vested interests, which were reinforced by popular beliefs that things should be a certain way—that is, until a better idea came along.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.174, ch.6)

Because there was a general belief that homeownership was a good thing, politicians found the public with open arms.... Everybody was winning—except Alfred Marshall, whose supply and demand curves were difficult to see through the haze of excitement at the time, and except Friedrich Hayek, whose competition as a discovery procedure was befuddled... In short, once politicians started getting credit for homeownership rates, the housing market was doomed.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.166, ch.6)

Everyone responded rationally to the incentives before them. In short, the rules that guided homeownership changed over time, which in turn changed the incentives of these actors. And bad things happened.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.153, ch.6)

They understood the economics. The ideas had already won in ... the regulatory agency itself. All that remained to be overcome were some vested interests and a handful of madmen in authority.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.146, ch.6)

If the idea for auctions of spectrum use rights had been part of the public debate since at least 1959, why didn’t the relevant institutions change sooner? What interests stood in the way?

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.121, ch.5)

When an academic scribbler comes up with a new idea, it has to resonate well with widely shared beliefs, which in turn must overcome the vested interests at the table. Many forces come together to explain political change, even though it may seem like coincidence of time and place.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.120, ch.5)

It’s the rules of the political game that deserve our focus, not politicians’ personalities or party affiliations.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.119, ch.5)

In short, ideas are a type of higher-order capital in society. Like a society that is poor in capital and therefore produces little consumer value, a society that is poor in ideas and institutions will have bad incentives and therefore few of the desirable outcomes that people want.

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