Relevant and even prescient commentary on news, politics and the economy.

Taking the CEO Salary Fight Local

Portland, Oregon’s government will be the first to test the legislative waters on excessive CEO pay by companies if passed the city board December 7, 2016. If the pay of a CEO exceeds 100 times of what a typical company employee makes, a surtax will be assessed the corporation. More than 500 corporations do enough business within Portland to be affected by the new tax. Since the Republican led Congress has failed to act on CEO excessive pay based upon Risk, many states and cities are looking at taking it upon themselves to assess companies who pay their executives in stock options and similar performance methods as it is taxed at a lower level than regular income. With the new tax, Portland is expected to generate up to $3.5 million, which will be used to care for the homeless.

Firms that do business in Portland would owe a 10 percent surtax on the city’s existing business tax if they pay their CEOs more than 100 times what their workers receive. For example, if a large company owes the city $100,000 and has a pay ratio of 175-to-1, its surtax would be $10,000. Other cities such as San Francisco are considering taking similar action.

Peter Drucker had strong feelings on the subject and he once termed sky-high CEO compensation ‘a serious disaster,’ which was well worth revisiting in light of the news that the men who sat atop Fannie Mae and Freddie Mac (FRE) (BusinessWeek, 9/10/08) could be eligible for as much as $24 million in severance and other benefits after being ousted from their positions. Last week the federal government was forced to step in and rescue the faltering mortgage giants in a move that could cost taxpayers billions.”

Around that time CEO’s had income packages worth $10.5 million or about 344 times what the average worker was making. Peter Drucker felt a CEO’s pay should not exceed 20 times (1984) what the average worker was making in income. As of 1993 the problem has worsened as companies dodge corporate income tax by paying their CEO is stock options which can be deducted from corporate income tax and are tax at a lower rate than ordinary income tax at ~39%.

References:

“Put A Cap on CEO Pay” , Rick Wartzman, Bloomberg, September 12, 2008.

“Take The CEO Pay Fight Local”, Sarah Anderson, US News, October 21, 2016.

Institute for Policy Studies — Talking Points —, Sarah Anderson, October, 2016.

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Wall Street CEO Bonus Loophole

Sarah Anderson at Institute for Policy Studies writes about how the 1993 reform to rein in runaway CEO pay by capping tax deductions of executive compensation at $1 million created a loophole as it did not apply to stock options and other performance pay methods. More-performance-measured-income to executives paid out, the lower the company income tax presently.

What was the impact?

CashingInOnTheCrisis-Graphic-1-1[1]
$2 billion in fully deductible performance bonuses by top 20 U.S. banks to their top five executives over the past four years at a 35 percent corporate tax rate resulted in a taxpayer subsidy of > $725 million or $1.7 million per executive per year.

CashingInOnTheCrisis-Graphic-2-1
On-the-hot-plate Wells Fargo Bank between 2012 and 2015 received $54 million in tax subsidies for CEO John Stumpf bonuses. During those years, CEO John Stumpf’s bank faced $10.4 billion in misconduct penalties.

CashingInOnTheCrisis-Graphic-3-1-400x200[1]
The same top 20 executives received ~ $800 million in stock-based “performance” pay, before stockholders were out of the red and the bank’s stocks returned to pre-2008 levels.

CashingInOnTheCrisis-Graphic-4-1[1]
Jamie Dimon CEO of JP Morgan cashed in fully deductible $23 Million in bonuses in Feb/March 2010 while the nation was still reeling from the crisis. Since 2010 JP Morgan has received $28 billion in penalties for mortgage misconduct.

The same as Main Street bailing out Wall Street for their malfeasance, Main Street was also subsidizing Wall Street Executive bonuses. Some potential solutions:

Implement Sec. 956 of Dodd-Frank: Rigorous limitation by regulators of Bank excessive risk taking and the banning of excessive bonus based upon risk – “not yet been implemented and this proposal does not go far enough to prevent the type of behavior that led to the 2008 crash.” Sec 956 allows lenient bonus deferrals, weak stock-based pay restrictions, and discretionary enforcement left to bank managers.

Close the hedge and private equity loophole which allows private equity and hedge fund managers to pay a 20 percent capital gains rate on the bulk of their income rather than the 39.6 percent ordinary income rate. The Carried Interest Fairness Act of 2015 (HR 2889/S 1689) requires that the “carried interest” compensation received by private equity and hedge fund managers be taxed at ordinary income rates. Due to a lack of activity by Congress some states such as New York are implementing their own legislation to close the loop hole generating $3 billion in new revenue.

The Stop Subsidizing Multimillion Dollar Corporate Bonuses Act (S. 1127 and HR 2103) eliminates “performance pay” exemptions and caps the deductibility of compensation at $1 million for every employee.

Reference:

Executive Excess 2016: The Wall Street CEO Bonus Loophole, Sarah Anderson and Sam Pizzigati, Institute for Policy Studies, August 31, 2016. “The first report to calculate how much taxpayers have been subsidizing executive bonuses at the nation’s largest banks.”

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How Does Diversity Affect Economic Growth?  A Look at Data on Immigration, Tax Rates and Real GDP per Capita

Authored by Mike Kimel

In this post, I will explain the annualized growth rate in real GDP per capita using tax rates and the percentage of the population that is foreign born using data for the United States.  The data shows the following:

A. the tax rate that maximizes economic growth is higher than you think
B. immigration from countries with advanced economies whose population resembles the US correlates with faster economic growth over subsequent years
C. increasing rates of immigration from countries with diverse populations does not correlate with faster future economic growth

You can skip ahead to the results of the regression if you want.  Otherwise, if you care about the details, here goes…

I used to occasionally write posts where I would build models based on fitting models of the following form: 

growth in real GDP per capita, t to t+1 = f(tax rate at t, tax rate squared at t)

In that formulation, tax rate = top marginal income tax rate.  The quadratic form allows us to find a tax rate that maximizes growth rates if the real world has such a thing (which, happily, it does as we will see below).   

More recently, I have been looking at how immigration has affected the economy.  In particular, I had a few posts looking at this relationship:

job growth, t to t+10 = f(foreign born % at t)

Why the ten year look-ahead?  To be frank, I just got tired of arguing with readers about causality.  Comparing X today to Y over the next ten years puts a halt to chicken and egg arguments tout suite.  

I’ve also had a few essays speculating about the effect of changes in immigration law in 1965 on the economy but in those posts, I relied only on logical and not on data.  

In this post, I want to combine those three (well, really two and a half) issues. I will fit the following model:

1. Dependent variable:  annualized growth in real GDP per capita, t to t+10
2. Explanatory variables i and ii are tax rate and tax rate squared, both at time t
3. The next explanatory variable is the % of the population that is foreign born at time t.   But…  if immigration, and its impact on the economy, changed as a result of the 1965 Immigration Act as I’ve stated in earlier posts, what we really need is two variables:
3a.  Foreign Born as a % of the Pop Until 1965 (and zero otherwise)
3b.  Foreign Born as a % of the Pop After 1965 (and zero otherwise)

Tax rates came from the IRS’s historical table # 23.  The foreign born percentage was obtained from the Migration Policy Institute (MPI).  The MPI’s data originated with the Census, but they organized it a bit better so I downloaded it from them rather than the Census.  Data is available in ten year increments from 1850 to 2010, and annually from 2010 to 2015.   I annualized the decennial data by simply assuming a linear annual change between every tenth year’s figures.  

The entire set of data was organized in Excel, but the regression itself was run in R.  The output (click on figure for larger size) appears below:

OutputFromRGrowthTaxesForeignBorn

The first thing to note is that the model explains about half of the variation in the ten year economic growth rate.  Not bad for tax rates and immigration alone.  

Next, the coefficient on tax rates is positive, the coefficient on tax rates squared is negative, and both are significant.  (That’s the quadratic relationship mentioned earlier.)  If you do the math, it turns out that the rate that maximizes the ten year annualized growth in real GDP per capita is 55%. This is about what most of my previous estimates over the years have come up with as well.  

Moving on, the next variable is the percentage of the population that is foreign born in years prior to 1965.  That variable is positive and significant even at the 1% level.  In plain English, before 1965, more immigrants -> faster economic growth. 

But the next variable is problematic, and spits out a result that is, at a minimum, politically incorrect. That variable, the percentage of the population that is foreign in years after 1965 is negative though not quite significant.  If we are worried about being reported by the neighbors, we could with a straight face, stop here and state from this that immigration has not not affected growth since 1965.  For the moment, let’s do that.  

The coefficients and relative significance of the last two variables essentially restate what I have been writing in the last few weeks.  As a result, I can explain what is going on by more or less plagiarizing myself.  So, at a high level, why does pre-1965 immigration clearly boost economic growth and post-1965 immigration clearly not?  As I noted in earlier posts, from 1921 to 1965, about 70% of the immigrants came from Germany, Great Britain and Ireland.  The 1965 Immigration Act was designed to allow more immigration from the rest of the world.  

Before 1965 immigrants would have fit in more seamlessly. After all, the US had been strongly shaped by previous immigrants from the very same countries where the new immigrants had just left.  Furthermore, most of the people the immigrants would encounter in their new land would have experience with other immigrants from the same culture. Additionally, in the last century technology was an important driver of growth, and the countries which supplied the most immigrants before 1965 also happened to be fairly technological advanced countries.  One more thing to keep in mind – the percentage of the population that was foreign born shrunk steadily from close to 12% in 1929 to about 5% in 1965.

Since 1965, of course, the story is very different.  The foreign born population has been increasing, reaching 13.5% in 2015.  Post-1965 immigrants have been far more heterogeneous in ethnic composition and skillset than the earlier group.  May have come from poorer, less technologically advanced societies.  Some have cultural traits that are not entirely compatible with accepted norms in the US which results in a variety of frictions.   

My guess, from the results, is that if more granular data was available on post 1965 immigration (say, by country of origin, or better still, by education level and education quality), it would turn out that some subsamples of post 1965 immigration had positive and significant effects on growth, but proportionately larger subsamples would have negative and significant coefficients.  I will dig a bit harder to see if I can find data that can confirm or repudiate my guess.  

A few closing comments.  Given the election is coming up, it is worth noting that Hilary and Trump are on opposite sides of both the tax and immigration issues.  Hilary’s proposed tax changes are likely to generate faster economic growth, Trump’s proposed tax changes are likely to slow the economy.  On the other hand, Trump’s immigration proposals (to the extent that they can be coherently defined) suggest an interest in pre-1965 style policies.  Hilary, though, will probably accelerate the path we are already following.  

For what it is worth, both tax and immigration policies have consequences.  However, it is easier to change direction, or to reverse the effects of earlier policies if those relate to the fiscal rather than the immigration arena.  That’s why the Roman Empire could survive crazy behavior by madmen like Caligula and Nero, but one mistake by a dry technocrat like Valens led inexorably to the sacking of Rome.  

In future posts, I will try to understand what some of the impediments have been to integration of post-1965 immigrants.  I am also interested in whether and how those impediments can be reduced.    

Finally, as always – if you want my data, drop me a line at my first name (mike) dot my last name (kimel – and that’s with one m, not two) at gmail which of course is followed by a dot com.  I’d be happy to share my Excel spreadsheets and if you want it, the trivial amount of R code that went into this.  If you contact me within a month of this post going up, I’ll send it to you.  Beyond that, I will probably send it to you but no guarantees.  I reserve the right to have my computer stolen, go into a coma, move on with my life, etc.  But of course, the data is pretty easy to recreate.  

One postscript…  This post kind of reminds of me of Presimetrics, the book I wrote with Michael Kanell.  I like to think the book never found an audience because we went where the data took us, rather than towing either the Republican or the Democrat Party lines.  As a result, some of the results we presented were in line with Republican beliefs, and some with Democrat beliefs, but neither side could embrace the results.  Had we been smart enough to be partisan hacks, perhaps the book would have sold much better. 

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On the Malleability of Cultural Traits – a Look at Irish-British and German-Americans

Authored by Mike Kimel

The way the immigration process was structured from 1921 to 1965, 70% of immigrants to the US came from Britain, Germany and Ireland.  In a recent post I noted that the proportion of great writers to scientists in Ireland tended to be a lot higher than for Britain and Germany.  I also noted that these cultural traits persisted for a long time, and even survived immigration; the ratio of great Irish-American writers to scientists is higher than the ratio of great British-American or German-American writers to scientists.  I also noted some evidence that the same is true in Argentina among populations descended from Ireland, Britain, and Germany.  

Assume for this post that STEM has been as important to economic growth as it appears.  Then, as a country, we probably would have grown more quickly if there had been fewer immigrants from Ireland and more from the UK and Germany.  Alternatively, as a country, we probably would have grown more quickly if more immigrants arrived in the US with a STEM background, which of course would have required more vetting of the immigrants.  Another way we could have grown more quickly would be if immigrant children, as well as the native born population, grew up with increased likelihood of going into STEM vocations.  

Since the writer to scientist proportion is lower among Irish Americans than among British and German-Americans, the lower hanging fruit, so to speak, probably lies there.  At the margin, German-Americans are already picking STEM over writing, whereas their Irish-American counterparts are more likely to have gone the other way.   Even making an assumption that seems entirely unwarranted to me, namely that there is some intrinsic reason why the descendants of Irish will, on average, do more poorly at STEM vocations than the descendants of British or German people, it is still likely that Irish-Americans constitute the lower hanging fruit when it comes to STEM.  

To put things a different way, growth would have been faster had we, as a population figured out how to reduce the writer to scientist ratio, and doing so among Irish-Americans would have been more beneficial than doing so among British- and German-Americans.   

So what drives more people to do X rather than Y for a living?  Sometimes it just happens, courtesy of progress and technology.  For instance, the American labor force working in agriculture has gone from upwards of 90% around the time of the Revolution to below 2% today.  In turn, the share of American kids who plan to become farmers when they grow up has dropped at roughly the same pace.

But such changes can also be engineered.  Through the careful application of petro-dollars, liberally marinated over a few decades, our Saudi allies have gotten a lot of people to live a fundamentalist lifestyle.  They did so, in part, by creating a lot of employment for clerics throughout the Middle East and the rest of the world.  Similarly, the Soviet Union generated a fair amount of demand for political commissars (and at one point, for biologists steeped in the Lysenkoist school).  And in today’s world, when your reservoir of Juche runs low, just head on over to the, ahem, Democratic People’s Republic of Korea.  The DPRK has got plenty of experts who can fill absolutely all your Juche needs, from applied to theoretical. 

There are plenty of levers – money, time, religion, politics, outright decrees – that have been used to change cultures throughout the world.  Any and all of them can be used to change the ratio of writers to scientists among the Irish diaspora or in most any other group of people you can name.

In follow-up posts, I want to look at factors that affect whether a given attempted cultural change of this sort succeeds or fails.  After all, many such attempts have failed, and the consequences are often disastrous.  

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How Punctuality Affects Production

authored by Mike Kimel

Earlier this month, I wrote a post noting that countries where punctuality is more highly prized in the year 1999 tend to have higher GDP per capita in both the year 2000 and in 2015.   I would like to follow up with a bit about how that happens, which I had I intended to post in the comments to that piece.

My sister is currently in Northeastern Brazil, which is not unusual.  By my reckoning, she has spent between twenty and twenty-five years in the country and has a condo in Natal.  She loves the country and the people.  (As do I, I might add.)  At the moment, she is helping a Brazilian friend rebuild/expand a small hotel he owns close to the beach.  

I get periodic updates via “WhatsApp,” including videos of geese and pictures of monkeys.  A lot of her stories being told would surprise the average American.  To a Brazilian, or anyone with experience in South America for that matter; it is the usual litany:

1. Almost nothing happens on time.  Most of the crew is late every day.  Sometimes hours late. 

2. Less periodic events (e.g., delivery of materials) are also usually late.  Sometimes by more than 24 hours.
 
3. The result is there are always people standing around, which results in wasted capacity and resource.  You need the crew there in case the cement mixer rolls in; but in reality, it might not actually arrive until the day after it was scheduled.  Or maybe, it may arrive the day after that.  Of course you plan around it or have contingencies; but no matter what, the result could be less wasted time, energy, and resource if everything happened as planned.  Put another way, the lack of punctuality reduces the amount of work being done and production produced.    

As I noted last month, my wife is in a similar line of business . . . she buys, rehabs, and rents-out residential rental properties in Northeast Ohio.  She also deals with crews and the schedules she builds always have contingencies and room for such events as painters not showing up or electricians arriving stumbling drunk and belligerent.  The reason tor the contingencies is because it happens.  (In the post describing that, I contrasted with my own white collar world, where in twenty years I never once had to plan around whether someone was going to show up drunk, and my failure to plan for that eventuality has never mattered.)   

And yet, my wife alternates between horrified and humored by my sister’s stories.  For my wife, a person or delivery showing up late enough or material being defective enough to affect the workflow usually happens once per job. (As an FYI, it takes between two to six weeks to rehab a single family home in Northeastern Ohio, depending on the state of the house when we buy it.  I cannot imagine a similar timeline happening in Northeastern Brazil.)   

In my sister’s world, that’s how things are all the time.   It is the difference between standing on the pier and being a fish.

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 “Wrestling With Racism – Are These Questions Racist?”

Authored by Mike Kimel

Here’s a story widely reported in England from earlier this year:

A black former soldier is suing the Ministry of Defence after he was injured when his hands were exposed to temperatures of -30C during training.

Abdoulie Bojang, 30, is suing for £200,000 after he suffered career-ending injuries when he was exposed to below-zero temperatures in Banff, Canada during training.

He says the army ‘failed to take into account his ethnicity’, and is suing over non-freezing cold injuries…

A spokesman for solicitors Bolt Burdon Kemp said: ‘Service personnel of African and Afro-Caribbean descent, including those of mixed race, are particularly vulnerable in low temperatures.’

‘The MoD has acknowledged research indicating that these groups are 30 times more likely to contract an NFCI (non-freezing cold injury) than Caucasian service personnel.

Here is a similar story reported in 2009.  This is not a new issue.  And here is another story a Ghanaian-born soldier with a similar lawsuit

I assume that if the MoD has acknowledged such differences are real, they probably are, but beyond that, I will not pretend that I am qualified to have an opinion on medical issues.  However, I do have some questions:

1.  Given this article, is it racism to treat one group of soldiers differently in cold weather based on that group’s ancestry?

2.  Given this article, is it racism not to treat one group of soldiers differently in cold weather based on that group’s ancestry?

3.  Do answers to 1 & 2 change if the notion that a person’s ancestry affects that person’s vulnerability to the cold is true?

4.  Do answers to 1 & 2 change if the notion that a person’s ancestry affects that person’s vulnerability to the cold is not true?

5. If people of a particular ancestry are disproportionately likely to be affected by cold, what is the likelihood that groups of people with a different ancestry are disproportionately likely to be affected (positively or negatively) by other conditions? 

6.  Under what conditions would it be racist to account for issues described in question 5?

7.  Under what conditions would it be racist not to account for issues described in question 5?

Please share your answers in comments.

(Note – this post is not a follow up to this one, but the two posts do reside in the same world.)    

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Punctuality Today v. GDP per Capita Tomorrow; A Look at a Few Countries

Authored by Mike Kimel

In this post, I want to demonstrate the importance of a specific cultural trait, namely punctuality, on the economy.  The difficulty, of course, is coming up with a good measure of punctuality, and in particular, one that isn’t regularly gamed.

Digging around, I found a paper entitled The Pace of Life in 31 Countries by Robert V Levine and Ara Norenzayan in the Journal of Cross Cultural Psychology in 1999.  For the purposes of this post, the most interesting thing about this paper was this measurement:

As a sample of concern with clock time, the accuracy of 15 clocks, in randomly selected downtown banks, were checked in each country. The criterion for the correct time was that reported by the telephone company.

The 31 countries span the globe, and seem to encompass every inhabited continent, though it should be said, the list is Europe-heavy; unless I miscounted, 14 of the 31 countries are in Europe.  The clock accuracy results for the countries, as well as several other measures of less relevance to this post, are returned in a table in the paper.  I then compared those results (compiled in or before 1999, I remind the reader) with the real GDP per capita in US dollars for those same countries in 2015.  That data was pulled from World Bank tables.  The World Bank data excluded two of the countries in the Levine & Norenzayan paper, Taiwan and Syria.

Here’s what the data looks like, graphed:

clock inaccuracy 1999 v gdp per capita 2015

I took the liberty of highlighting and labeling the three points at either end of the curve.

The figure shows that the correlation between the natural log of clock inaccuracy, as measured in average seconds of clock error in or before 1999 and real GDP per capita in 2015 is -0.56.  That is, countries with more accurate clocks in or before 1999 tend to be wealthier in 2015.  Note also that the correlation is a bit lower (-0.50) when data from the year 2000 is used.  This suggests that if there is a causation, it isn’t running from wealth to clock accuracy.

Frankly,  there are a few anomalies with the graph, and they tend to be where my intuition doesn’t match the accuracy ranking provided by Levine and Norenzayan.  Having stated that, I should note that my intuition is informed primarily from having lived abroad for about a decade and a half, and from having a fair number of interactions (professional and personal).  For example, Italy ranks second in clock accuracy, but my experience is that there are a fair number of Italians who tend to be relatively tardy to meetings, etc., relative to people from a number of other European countries.  My admittedly snide hypothesis is that the Italian post office’s clock is simply just as late as the clocks in private Italian banks.  Not surprisingly (to me, anyway), Italian GDP per capita is 9th among European countries included by Levine and Norenzayan, not 2nd.  

Nevertheless, despite the anomalies, at a high level, this data seems right to me, and it provides a bit of confirmation to the idea that punctuality is tied to positive economic outcomes.  

The backstory, for those interested:

A few weeks ago, I had a post showing that at the national level, over the past few decades, there is a negative correlation between immigration and subsequent job creation.  In a more recent post, I looked at state level data to determine whether states with a greater percentage of immigrants created more or fewer jobs for the native born population. The results showed that outside the old Confederacy, the more immigrants as a share of the population, the less jobs were created for the native born population.  In between the two posts, I tried to provide a few explanations for why the observed relationship exists.

In the “explanations” post, I mentioned cultural traits as issues that make a difference in whether immigrants contribute positively or negatively.  In the comments to the post, I mentioned timeliness (i.e., punctuality) as one such trait.  That statement met with resistance from other commenters.  It was even suggested that such a view might be racist.  This post is intended to support my comment.

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Hate Crimes, Plus a Question for US Senate Candidate Kamala Harris

Authored by Mike Kimel

Let’s start with the lede: from what I can tell, according to Kamala Harris (California State Attorney General and candidate for the US Congress), the ISIS-inspired massacre of 14 people in San Bernardino was not a hate crime.  

And now, the story, with some meandering around interesting facts.  The Los Angeles County Commission on Human Relations 2015 Hate Crime REPORT was just released.  

One interesting passage in the report is this:

The great majority of African Americans and Latino/as in Los Angeles County co-exist peacefully and are not involved in ongoing racial conflict. However, for many years this report has documented that most hate crimes targeting African Americans are committed by Latino/as and vice versa. This is particularly true in neighborhoods that have undergone rapid demographic shifts from being primarily black to majority Latino/a. The other factor driving this phenomenon is the large number of Latino/a street gangs which have ties to the Mexican Mafia, the largest and most violent prison-based gang. The Mexican Mafia has been feuding with black inmates for decades and has encouraged their affiliated street gangs to drive African Americans out of their neighborhoods.

Strictly from a data point of view, I wonder how many of the crimes described in the above paragraph are just turf wars.  Are these really any different from when two X gangs go at it, with X being any particular racial or ethnic group?

Another interesting factette:

Anti-Jewish crimes were followed by those targeting Muslims (19%), Christians (5%), Jehovah’s Witnesses (3%) and Catholics (2%). This represented a large increase in the number of anti-Muslim crimes, from to 3 to 19. As a percentage of all religious crimes, anti-Muslim crimes jumped from 4% to 19%. Four of these took place after the November 13 terrorist attacks in Paris that claimed the lives of 130 people and seriously wounded nearly 100 more. There were also 9 anti-Muslim/Middle Eastern crimes that occurred following the December 2 terrorist attack in San Bernardino in which a Muslim couple attacked a San Bernardino County Department of Public Health holiday party killing 14 employees and seriously wounding 22.

Fortunately, the majority of those crimes took the form of vandalism, intimidation and disorderly conduct.  There were also 8 simple assaults and 4 aggravated assaults which are more serious, and luckily, no murders.  

With that said, two thoughts.  First, there is little information on the perps of anti-religious hate crimes, but one blurb says:

A Middle Eastern male entered a synagogue and shouted, “I’m going to kill all Jews”. The suspect attempted to use a stun gun to harm one of the members.

In keeping with explanation of anti-Black and anti-Latino crimes quoted above, it would have been interesting to know whether anti-Jewish or other anti-religious crimes are often perpetrated by individuals who can be described as “Middle Eastern.”   

My second thought also inolved the “Middle Eastern” angle.    I thought it would be interesting to see how the San Bernardino massacre was treated in official reports on hate crimes.  Of course, San Bernardino is not in Los Angeles County, so I went to the Hate Crime in California put out by California State Attorney General Kamala Harris.

So there’s no mistake in what information is reported, I quote:

Hate Crime in California, 2015 reports statistics on hate crimes that occurred in California during 2015. These statistics include the number of hate crime events, hate crime offenses, victims of hate crimes, and suspects of hate crimes. This report also provides statistics from district and elected city attorneys on the number of hate crime cases referred to prosecutors, the number of cases filed in court, and the disposition of those cases.

Also, in the appendix, we learn:

California Penal Code section 422.55 defines a hate crime as “a criminal act committed, in whole or in part, because of one or more of the following actual or perceived characteristics of the victim: (1) disability, (2) gender, (3) nationality, (4) race or ethnicity, (5) religion, (6) sexual orientation, (7) association with a person or group with one or more of these actual or perceived characteristics.”

Now, table 6 on page 17 lists hate crime “events,” “offenses,” victims and suspects by jurisdictions, including those that occurred in the city of San Bernardino.  Those numbers are, respectively, 4, 5, 4, and 4.  Additionally, we learn from Table 2 that a total of three of the Hate Crimes in the state of California in 2015 were hate crimes.  So it is safe to assume that the San Bernardino massacre does not qualify for inclusion in the report.  Since it also was too significant to ignore or simply misplace, one can only conclude that it wasn’t a hate crime according to the authors of the report.

Kamala Harris, whose name appears on the front cover of this report, is running for the US Senate.  I wish someone would ask her why 14 people being killed by radicalized, ISIS inspired individuals engaging in what they would call jihad doesn’t qualify as a hate crime.  

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A Lesson from Project and People Management

Authored by Mike Kimel

I straddle a couple of economic worlds.  In my day job, I run the Pricing and Market Analytics group for a foreign manufacturing company.  But I also retain at least an ear to the ground in a small business my wife and I started about seven years ago.  We buy, fix up, and rent out residential properties in Northeast Ohio.  My wife runs day-to-day operations.  In the past few years, we’ve also taken on a long time family friend as business partner.  Like my wife, he has a lot more daily involvement than I do, though like me, he has a white-collar job. 

The juxtaposition between the three of us got me thinking about the difference between what my wife does and what I do at my job.  To a large extent, I manage people and projects.  My wife does the same thing.  But if I have scheduled someone to do X, I don’t have to worry about whether they will show up falling-down drunk, or even whether they will show up at all.  In two decades of work, those issues have never come up.   My wife, on the other hand, deals with that kind of thing regularly.  Not with every plumber or electrician or construction worker, mind you, but it happens a lot. 

None of this is to say that Blue Collar work is worse than White Collar work, but my experience is that more Blue Collar people would trade places with White Collar workers than vice versa, all else being equal.  However, where people end up in life owes a lot to luck, ambition, desire, willingness to work and presentation.  The inability to keep one’s vices in check, however, can and often will  negate everything else, and there are a lot people who have demons they cannot control.

One more observation.  People who get fired from a work site because they are drugged or inebriated enough to threaten themselves or others can get belligerent.  The boss who fired them, even if it comes after the second or third “second chance” is always, to them, an expletive. 

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