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The Homicide Rate, Race and Poverty

In my last post, I noted a positive correlation between the homicide rate in a state and killings by the police in the same state. In states where the risk of homicide is higher, police killings also tend to be higher. But there is a mitigating race component, and one which (not surprisingly for those who care about data) goes against conventional wisdom:

for the same state homicide rate, people are less likely to be shot by cops in states where Black people make up 10% or more of the population than in states where people make less than 10% of the population.

Looking at homicides, and accounting for race, it seems there are different dynamics at play among different population groups:

Figure 1
(Click to embiggen.)

I can’t find murder rates (whether victimization or offender) by race at the state level, but I do note that the data appears to show a clear relationship between the overall murder rate and the ethnic makeup of a given state:

Figures 2a and 2b

 

Relative to the rest of the population, there is an elevated homicide rate (both offense and victimization) in our Black population. Thus, if we want to reduce the homicide rate, perhaps the opportunity is greatest in understanding why the homicide rate is as high as it is in the Black community.

Poverty is often mentioned as a factor driving crimes in general, and sometimes homicides in particular. To examine whether that is the case here, the next graph shows the percentage of a state’s population that is Black on one axis, and the homicide (victimization) rate on the other axis. States with fewer than 3 million than people are omitted. Additionally, states with a Black poverty rate in excess of 22% (which is approximately the median poverty rate for the Black population, measured by state) are colored orange:

Figure 3 - header changed

While the homicide rate is lower in states with less poverty (median of 42 murders per million v. 58), there is no clear pattern that would indicate that poverty rates the Black community are a primary driver of the murder rates according to the above graph. If that isn’t clear to you, the graph below includes the same information but from a different perspective.

Figure 4

 

So the data seems to indicate that reducing poverty in the Black community, while a laudable goal for any number of reasons, is probably not going to have a strong influence on the homicide rate.

This post is getting long so it’s time to wrap it up. I note, however, that I have collected other data (e.g., pop density, measures of segregation, education levels, single parenthood, etc.) which hopefully I can put into similar graphs in later posts. Perhaps among these variables will be an indication as to what can be done to reduce the homicide rate and reduce the number of victims, particularly in the Black community.

One final note… if anyone knows where I can get data on the homicide rate by different population groups by state please let me know.

Update, 7/31/2017, 5:21 PM PST

As should be obvious from the wording of the post, I was concerned that someone might misconstrue the second to the last graph.  To make the homicide relationship more obvious, I included the last graph as a companion piece. However, a habitually rude offender claims to believe that the states with a relatively low level of Black poverty (i.e., the blue points on the second to the last graph) have a different relationship between Black poverty and homicide rates than the states with relatively high levels of Black poverty, and all of that is being somehow masked by the existence of Maryland. So… below please find the same graph, redone, including only the states with low levels of Black poverty, but leaving out Maryland. (Note that the slope of the graph below is actually steeper than the slope of the graph with a broader set of data though the fit isn’t as high.)

Figure 5 - for update

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The Masters Always Deal Themselves the Trumps

More Feargus O’Connor (1844) on labour’s objections to machinery:

And now, sir, let me state my principal objections to the unrestricted use of machinery. First, it places man in an artificial state, over which the best workman, the wisest man and most moral person, has no control. Secondly, while it leads to the almost certain fortune of those who have capital in sufficient amount to command those profits, made up, as you admit, by the reduction of wages; upon the other hand, it leads to uncertainty in the condition of the employed, against which he is incapable of contending. Thirdly, it disarranges all the social machinery of which formerly individuals were necessary items, families formed branches, and small rural districts important sections of the one great whole. Fourthly, the present fluctuations give rise, in good trade, to an augmentation of artificial classes, if I may so call them, who have no natural position in society, but are merely called into existence by present appearances, trade upon nothings, traffic in fiction, and, like your order, speculate upon what they may retire upon when trade begins to flag. Hence we find each fluctuation in trade followed by a new race of shopkeepers, who are grasping in prosperity, compound when appearances change, and retire when adversity comes, leaving a vacuum to be filled up by the next alternation from panic to speculation. 

… 

And now, as the thread of our dialogue has been somewhat broken, I beg to submit a summary of my objections to machinery. Firstly, the application of inanimate power to the production of the staple commodities of a country must inevitably depreciate the value of manual labour; and every depreciation of the value of man’s labour in an equal degree lowers the working-man in the scale of society, as well as in his own esteem: thus making him a mere passive instrument, subservient to any laws that the money classes may choose to inflict, to any rules the owners may impose, and satisfied with a comparative state of existence. I object to machinery, because, without reference to the great questions of demand and supply, the masters can play with unconscious labour as they please, and always deal themselves the trumps. I object to machinery, because it may be multiplied to an extent whereby manual labour may be rendered altogether valueless: I object to machinery, because under its existing operation you admit the necessity of emigration, better ventilation, education, improved morality, manners, habits, and customs of the working classes, thereby showing that a slate of recklessness, ignorance, want, and depravity exists; which, as I before said, you admit to be consequences of the present system.

While the inevitability of each of O’Connor’s objections is subject to debate, the crucial issues at stake for him are the sociological and psychological effects of the unrestricted use of machinery on communities and individuals, under its existing operation. The specter of the “job-killing robot” plays a minor and only contingent role: “it may be multiplied to an extent whereby manual labour may be rendered valueless.” Even that objection can readily be interpreted as more significantly about a loss of social status and psychological esteem rather than a wholesale elimination of jobs.

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Wisconsin Buys Foxconn Facility for Kenosha

FoxconnI picked up this version 4 BS lies of Trump and Scott Walker’s Imaginary Foxconn Factory on Tom Bozzo’s facebook page where I stopped to see what he had to say as of late. While it is a great attention grabber, a link caught my eye in Wonkette’s article leading to this America and the Foxconn Dream . This morning Ken Thomas has his very thorough analysis Foxconn Cashes in for $3 Billion-Plus: Analysis up. The first being the wonkier, the 2nd is a Bloomberg discussion, and Ken’s is an analysis on a topic he pursues, government subsidizing business. And this one ??? I am not sure yet.

You look at the picture and you see Ryan smirking in the background, a smug looking Trump smug face, and Mr. Terry Gou in a slight bow looking directly at Trump. I have seen the look before. Typically, this look comes from an Asian associate when they have taken what they want at your expense. Trump has been beating the protectionist drum loudly these days when talking to our neighbors Mexico and Canada. He has threatened China and other countries as well.

Mr. Terry Gou the CEO of Foxconn said he would only come to the US if the chosen location met Foxconn’s demands, which of course Walker with the aid of Paul Ryan did do. The facility is located in Paul Ryan’s backyard. And the threat of having tariffs placed on Foxconn products has dissipated. Foxconn will invest $10 billion in a factory some say will be 20 million square feet and create 3000 jobs of roughly 6600 square feet for each US worker. Sounds more like a warehouse to me even if they stuck 160 foreign made robotic manufacturing cells (Tesla did such) in it. More than likely, this will be an assembly operation with components and assemblies coming from Foxconn and Foxconn suppliers. The value-add will be out of country.

So what does all of this get Wisconsin for shelling out $519 per Wisconsin constituent and the US also?

According to Bloomberg’s Tim Culpan; “Wisconsin is paying as much as $1 million per job, which will carry an average salary of $54,000. The state’s economic development corporation is selling the project to taxpayers with a claim that it will create 10,000 construction jobs for building the facility and another 6,000 indirect positions. It is expecting $3.3 million of investment per employee from the Taiwanese company”.

Foxconn does not have a history of doing what it says and agrees to do. In Pennsylvania, Foxconn pledged $30 million to build a plant and hire 500 workers. It never happened. A pledge of $1 billion to build a plant in Indonesia dissipated also. Foxconn’s division Hon Hai has not spent 10 billion in any single year on infrastructure nor has it spent as much if one combines the last five years. Walker’s boondoggle may be mostly hype and a way to insure he is reelected in 2018.

I wonder why Walker is not in the picture with Ryan and Trump? Maybe out building his used car business for when he is not reelected?

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Crowding Out and the Social Overhead Costs of Labor

Crowding Out and the Social Overhead Costs of Labor

Another strange twist in the convoluted lump-of-labor saga. Chartist leader Feargus O’Connor refuted the “Treasury View” — aka “crowding out” — in 1844. O’Connor’s tract is long-winded and sentimentalized an idyllic past but it also contains some cogent analysis of why workers were (and should still be) wary of the exploitative use of technology by capitalist firms.

O’Connor’s critique took the form of a dialogue, which parodied and refuted an earlier dialogue, “The Employer and Employed,” that had been published in Chambers’s Miscellany of Useful and Entertaining Tracts. In the Chambers dialogue, the mill owner, Mr. Smith explains to a worker, Mr. Jackson, how the immutable laws of economics harmonize their interests. Smith’s elaboration of the doctrine of wages was described elsewhere as “right orthodox, and admirably clear too.” I will return to O’Connor’s rebuttal in more detail later, but first I would like to set the stage by briefly reviewing the contemporary relevance and the historical background of the central argument in the two dialogues.

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Foxconn cashes in for $3 billion-plus: Analysis

Foxconn hit the jackpot with Wisconsin on Wednesday, when CEO Terry Gou and Governor Scott Walker signed a memorandum of understanding for the company to invest $10 billion in southeastern Wisconsin in return for $3 billion in state subsidies and an undetermined amount of local incentives in the form of tax increment(al) financing (TIF).*

The basic outline of the deal, sent to me by John Haynes of the Milwaukee Journal-Sentinel, is pretty simple: Foxconn is required to invest $10 billion and employ 13,000 workers within six years at an average pay rate of $53,875 a year plus benefits. In return, the state will give Foxconn $1.5 billion in tax credits for the 13,000 new jobs, $1.35 in tax credits for the $10 billion investment, and $150 million in sales tax breaks on construction materials for the plant. The tax credits are refundable, so Foxconn will receive a check if it doesn’t owe much or anything in state income tax in any given year. The state credits will total $200-$250 million a year for up to 15 years, or until Foxconn has received the entire $3 billion. All this must be approved by the state legislature by September 30. According to the state, if Foxconn does not create all the jobs or make the entire investment, it does not get the full subsidy.

In addition, the legislature must also amend the state’s TIF law by lifting the 12% cap on the ratio of TIF’d property value to a municipality’s total property value, and extending the allowable life of TIF bonds. Together, these would make larger TIFs and greater municipal debt possible. It is unclear exactly how much more this will add to the subsidy package, since a final site hasn’t been chosen in the Kenosha-Racine area. But Kansas City has certainly managed to give hundreds of millions of TIF dollars to companies in the past, so a large local component to the incentives package is certainly possible.

Is this a good deal for Wisconsin? As the state’s press release points out, it’s better than the deals Boeing has gotten in Washington state, including a much lower cost per job — but that’s a pretty low bar. As I discussed last time, Foxconn wanted desperately to locate in the United States due to its fear of U.S. protectionism, so the country as a whole was actually in a very strong bargaining position. However, the possibility of a bidding war between different states negated this, even though the individual states (Wisconsin at 3.1%) had very low unemployment rates and thus greater bargaining power than otherwise. Without EU-style rules to restrict bidding wars, there was a high probability of Foxconn hitting the jackpot.

With EU-type rules, it would be impossible to give a $3 billion investment incentive, since $9.9 billion of the $10 billion would only be eligible for 34% of any region’s maximum aid intensity. The maximum conceivable subsidy would be a little over $1 billion.** We might say this consideration is the high bar, but it’s worth knowing what is already achievable with a different set of rules.

On a strict cost basis, if the deal works out as claimed, you still have a cost per job of $231,000 and an aid intensity of 30%. These would be normal numbers for an automobile assembly plant, but Foxconn will only be paying a tiny bit over the Wisconsin average wage, certainly less than auto assembly pays. So these are basically just average jobs getting a lot of money. Many average jobs, certainly, but there is a good argument that you have diminishing returns. The more jobs there are, the more pressure that gets put on schools and infrastructure as people move to southeast Wisconsin, and the greater the number of jobs that will likely go to Illinois residents (indeed, Greg LeRoy of Good Jobs First says Illinois is the biggest winner of this deal after Foxconn itself). So you really shouldn’t be spending 10 times the incentive dollars for 10 times the jobs.

What seems worst to me is that not only did Foxconn definitely need to be in the United States, but it probably wanted to locate in the Congressional District of House Speaker Paul Ryan all along. This was a very short bidding war. Wisconsin municipal officials were only notified about two months ago, and we have seen no stories about competing bids, nothing about other governors making a pilgrimage to Asia. This seems like it was never much of a competition. If that’s true, Wisconsin got taken to the cleaners. Even if there was a genuine competition, the deal was way too rich.

 

* In Wisconsin and a few other states, the program is known as tax incremental financing, but in most of the country, it is simply tax increment financing.

** According to EU rules, the maximum aid intensity of 50% of investment is only allowable in regions with less than 45% of EU average per capita income. These areas are unlikely to be the site of an advanced manufacturing facility. The next highest maximum is 35% (down from 40%, such as Dresden, Germany, which has quite a bit of high-level manufacturing, such as microchip fabrication), and 34% of that is 11.9%. 11.9% of $10 billion is obviously $1.19 billion, which is why I say the maximum conceivable subsidy is just over $1 billion, and $3 billion is simply impossible under these rules.

Cross-posted from Middle Class Political Economist.

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Lack of Hope in America: The High Costs of Being Poor in a Rich Land

(Dan here…I found Yves intro more appealing than the research…)

Yves here. While this article gives a very good high-level summary about how inequality is becoming institutionalized in American and the costs to those who see themselves as having lost the most, I wonder about the emphasis on hope as a remedy. Perhaps this is such a strong cultural bias in the US that there’s no escaping it as a motivator for most people. But I take to heart the interpretation of the Pandora’s Box myth that Hope being at the bottom of the box of all the evils she let loose was not a show of mercy by the gods, but simply a torment in disguise.

It’s not hard to imagine that the psychological damage done by loss of mobility and the relative status decline of lower-middle class individuals, particularly in rural areas, is made worse by media. Not only does TV show how the better-off half lives, TV and the movies regularly depict characters living in better circumstances than the incomes that go with their jobs would allow. One reason is that it’s almost impossible to shoot a scene in anything smaller than a pretty big room, so Americans (outside those meant to be upper class) in movies and TV look better housed than they generally would be in their real lives. And of course they all have great teeth.

Lack of Hope in America: The High Costs of Being Poor in a Rich Land is worth a quick read but I agree it is only a conversation starter for this blog. However, how our expectations are set and what we ascribe to ourselves and others is telling.

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Extreme Contempt

Extreme Contempt

Donald Trump has engaged in so many outrageous statements and conduct that it has become very difficult to remember which of  those were really the most outrageous, the most morally contemptible, the ones that should have led his supporters to have abandoned but they did not, the ones that merited above all others the most Extreme Contempt.

The events of the last 24 hours have clarified for me what was the moment in 2016 when Trump crossed the line, when he committed an act of Extreme Contempt that should have lad to every Republican worth anything above a sewer of morally contemptible and disgusting garbage to have rejected this worst of all people to have occupied the White House.  That moment was when he dissed John McCain as a loser for having been captured by the North Vietnamese during the Vietnam War.  I think the only way fervent Trump supporters can justify their existence on this planet after that particular outburst is to simply ignore it and forget about it, which is what I am sure the vast majority of them have done,  But the events of the last 24 hours have brought this matter back into focus, and while I really do not know, I think that it is quite likely that when we get to the bottom line, and we are indeed now at a very serious bottom line, Donald Trump’s ultimate desecration of any moral  consciousness when he dissed McCain for becoming a deeply tortured POW has come back to haunt him and defeat his pathetic and incoherent effort to overturn the Obama health care legacy.

Let me be clear that I have many disagreements with McCain, and many things he has done personally.  But the man’s days are now shorter than most of ours.  Yeah, maybe it will all go away and he will still be a Senator a decade from now.  But more likely he will follow the late Ted Kennedy, who apparently had the same sort of “aggressive” brain cancer he has, and, well…

So, let me confess that I know John McCain.  About a decade ago I sat next to him on a long airplane flight and we discussed climate change.  He had a reasonable view in my mind, and indeed when he ran against Obama, his position was only marginally less progressive/reasonable than Obama’s.  I actually gave him my card offering to give advice, although I never heard from him later.  Of course he has gone silent on this issue more recently as his party has gone off the deep end on denying the very existence of global warming, on the  list of many others where, well, tsk tsk.

So, let us get to the really serious. McCain has been going back and forth on the heath care issue, a man about to die and having surgery on taxpayers money, a man who is by far the most serious Republican senator there is currently by several orders of magnitude, and not just because he is a former presidential candidate of the Republican Party in 2008.  No, he is serious beyond all of them for  his experience, much bragged about by his party in 2008, as a POW in Vietnam, where he experienced Extreme Torture, leading him to stand unequivocally and without a shred of doubt that torture is completely unacceptable, morally and practically.  I applaud his declaring and maintaining this position throughout the Bush admin when torture got approved during the Iraq War.  On this matter he has absolute and unassailable credibility beyond all critics, and I applaud him for this.  I shall add that this is a matter that is personal. My wife was tortured by the former Soviet government, and I have also been tortured in a distant land I shall not name and of which I shall not speak. Unsurprisingly, my wife and I have deep personal support for McCain’s unequivocal position on this matter to totally oppose torture in all circumstances everywhere period.

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LOOK AT THE BIG DIVERGENCE BETWEEN “SOFT” AND “HARD” DATA … Ummm ..never mind….

LOOK AT THE BIG DIVERGENCE BETWEEN “SOFT” AND “HARD” DATA … Ummm ..never mind….

Since this year the Doomers haven’t even been able to rouse themselves up enough to call for OMG recession imminent!!!, they have had to settle for how slow the growth in the economy has been.  Their favorite theme has been the alleged divergence between the “soft” consumer confidence and ISM survey data, and the “hard” data, like industrial production:

Oh, wait!  Never mind …

Well, then, how about durable goods?  Since it was just updated this morning, let’s take a look at that:

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Minimums of understanding

Update on Wells Fargo

Via Reuters Wells Fargo drags feet:

Wells Fargo last September settled with three regulators after revelations that branch staff set up as many as 2.1 million accounts without customer authorization in order to hit sales targets. Since then, the bank has replaced its CEO and other top executives have either resigned or been fired.

The bank has been hit with several regulatory inquiries and lawsuits.

“The extent of fraud at Wells Fargo was stunning,” Stringer said in a statement sent to Reuters on Thursday. “Executives have been held responsible — but now directors must answer for their part… This board needs to be refreshed — today.”

 

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