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

Guns, Murders, and the Rule of Law: Running the Numbers

When I was eighteen years old, I went down to the government office in Olympia, Washington with my friend Steve (no, not that Steve) and signed as the character witness on his application for a concealed carry permit for his handgun. I was probably stoned at the time; I often was back then. (FYI, I grew up with guns in my house — stored in the gun locker up in the attic, but we took them out and shot targets now and then, cleaned them, took care of them. I went hunting several times as a kid.)

Steve and I are still buds, and he still carries. He even stays at my place sometimes when he’s working up here in Seattle, but he leaves the heat in his car. I guess he doesn’t feel the need to scare off the dangerous girl gangs that are forever threatening to invade my houseboat and have their way with us. (Yeah: wildest dreams.)

You won’t be surprised to hear that Steve and I have been going at it on Facebook since the Newtown horror (cordially, if you can believe that). I point to the numbers — less guns, less murders — and he points to countries like Mexico, which have gun control laws but still have high levels of gun homicide. I point out: those countries don’t have strong rule of law; corruption and criminal intimidation is rampant in the police, the judiciary, and the legislatures.

Those countries’ problem is not that they don’t (try to) control guns. It’s that they can’t control guns.

Curious as always, this led me to wonder: in countries like ours that do have a strong, well-institutionalized rule of law — countries that can control guns if they choose to — do less guns mean less gun killings?

Short answer, Yes:

firearms 3

CL is Chile. MK is Macedonia. FI is Finland. You know what US stands for.

The WJP index looked like a good measure among those I found on the web; you can choose others if you wish. I used .55 as the cutoff because it’s the line above which all European countries are included, and the resulting list seemed to consist of countries that (at least in aggregate) are fairly comparable to ours. Here’s the list:

Australia, Austria, Belgium, Canada, Chile, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Italy, Japan, Jordan, Macedonia, Malaysia, Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, Slovenia, Spain, Sweden, Turkey, United Kingdom, United States, Uruguay.

The firearms and homicide data is from the United Nations Office on Drugs and Crime, but it’s laid out in a conveniently sortable table with a linked Google spreadsheet at this Guardian page.

Steve also pointed me toward a blog that includes, among other things, a time-series analysis of gun violence and gun restrictions in the UK. I’ll simply say: if you live in the U.S. instead of the U.K., you are 43 times as likely to die of a gunshot.

So are your children.

Cross-posted at Asymptosis.

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Conservative ALEC Economic Policies Have No Benefit, Some Risks, for States

The economic policies proposed for states by the conservative American Legislative Council Exchange (ALEC) not only don’t work, but carry risks for states’ economies, according to new research by the Iowa Policy Project and Good Jobs First.

As we have seen most recently with Michigan’s passage of anti-union so-called “right to work” legislation (which lets people free ride on union contracts and makes union organization and representation more difficult), the legislative agenda of ALEC proclaims that states should follow a low-tax, low-wage, non-union route to economic prosperity. Now, you or I might wonder how creating low-wage jobs is supposed to create prosperity, but luckily for us ALEC has ranked the states by how “competitive” their economic policies were beginning in 2007, giving us the chance to see how well their recommended policies have done.

ALEC’s 15 recommended factors (p. 18) include taxes, debt service, public employees per 10,000 residents, “quality” of the legal system, “right to work,” minimum wage, and workers’ compensation costs. As pointed out by earlier commentaries, it says nothing about education or infrastructure, which have clear effects on a state’s economy. The new report by economist Peter Fisher with Greg LeRoy and Phil Mattera undertakes a statistical analysis of these policies, using the ALEC ranking of all 50 states as of 2007 to see how well their economies have performed since then. Fisher et al. also highlight the shoddy statistical work by Arthur Laffer in creating the ALEC index and reporting results.

Whereas Laffer frequently makes his points simply by comparing the top vs. bottom 8-10 states, Fisher et al. start with a full comparison of all 50 states via a correlation analysis, then proceed to the necessary addition of holding other potential causes constant in what is know as multiple regression analysis. Beginning with the correlations, here is what the new report finds. Correlation runs from -1 (perfect negative relationship) to +1 (perfect positive relationship); the closer to +1 below, the better the ALEC competitiveness index predicted the following outcomes. All changes are from 2007 to 2011.

ALEC Competitiveness Index ranking correlated with–

State gross domestic product:  .02 (not statistically significant)
Percent change in nonfarm employment: -.09 (not statistically significant)
Percent change in per capita income: -.27 (statistically significant)
Percent change in state and local government revenue: -.16 (not statistically significant)
Percent change in median family income: -.30 (statistically significant)
Change in poverty rate: .21 (“statistically significant” at the .1 level*)

What this tells us is that the states which were following ALEC’s preferred policies the most in 2007 saw worse performance in per capita income growth and median family income as well as a worse performance n poverty that we can almost be sure was not due to chance. The only thing ALEC’s top states did see as predicted was an increase was in  population (Fisher et al. did not report the correlation coefficient, but their discussion makes it clear that it was statistically significant). However, population growth per se is not an economic outcome, as the report points out.

The concluding regression analysis weakens the case for negative consequences, but provides no support for positive effects of ALEC’s state policies. Fisher et al. show that the most important determinants of 2007-11 GDP growth, employment growth, and per capita income growth are the components of a state’s economy, with the strongest determinants being the presence of extractive industry (primarily due to the higher price of oil during this period) and a large health care industry. Once these are controlled for, none of the ALEC variables are statistically significant, though the closest is that the top personal income tax rate is associated with higher, not lower, per capita income growth.

If none of ALEC’s policies work as advertised for job and income growth, what do they do? They are, in fact, a prescription for economic inequality. So-called “right to work” does not increase growth, but it reduces workers’ bargaining power. Reducing taxes on the wealthy increases post-tax inequality. And so on, down the panoply of ALEC policies. Fisher et al. (p. 11) put it well:

The ALEC-Laffer strategies are exclusively those that would lower taxes on corporations and the wealthy, reduce public sector revenues (and hence public investments in education, health and infrastructure), and lower wages by eliminating minimum wages and weakening the bargaining power of workers. Yet the book claims that all of these measures would make states, and their populations, richer.

The report is Selling Snake Oil to the States, and that is precisely what ALEC’s policies are.

* Technical note: I’m old school on when we should consider something probably not due to chance. For generations, the standard cutoff was that you have to be 95% certain a result was *not* due to chance to call it statistically significant. In economics, and now increasingly in political science, researchers have sometimes called a result statistically significant using a 90% cutoff instead. In my view, this shift has been due to what is called “publication bias”: it is easier to get your study published in an academic journal if you have some statistically significant result. But this is a big problem in areas like minimum wage research, where not finding a statistically significant negative effect from increasing the minimum wage actually tells you a great deal. The key analysis of publication bias in minimum wage research can be found in David Card and Alan Krueger’s book Myth and Measurement.

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Bruce Bartlett and Yves Smith on Overhyping the Fiscal Cliff

This video featuring Bruce Bartlett and Yves Smith on Overhyping the Fiscal Cliff is worth watching.

Independent political and economic analysts Bruce Bartlett and Yves Smith join Bill in a discussion that’s become as rare as it is necessary — why are Washington insiders talking about the deficit crisis and not the jobs crisis? Bartlett, former advisor to Presidents Ronald Reagan and George H. W. Bush, got into hot water with fellow conservatives when he aired concerns about the direction of their ideology and wrote critically of the second George Bush. His most recent book is The Benefit and The Burden: Tax Reform — Why We Need It, and What It Will Take. Yves Smith, who spent more than 25 years in the financial services industry, is the founder and editor of the popular blog Naked Capitalism, and runs a successful management consulting firm. Published on Dec 14, 2012

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The political-economy of water…all in auctions

From David Zetland comes this re-posting from  Aguanomics on addressing issues in the political economy for  water.

The political-economy of water…all in auctions

I’ve been working on this idea for 5-6 years, and I think it has great potential for reallocating water while respecting the rights of existing users. It just came out in the Journal of Environmental Management.

Abstract: This paper proposes a novel mechanism for reallocating temporary water flows or permanent water rights. The All-in-Auction (AiA) increases efficiency and social welfare by reallocating water without harming water rights holders. AiAs can be used to allocate variable or diminished flows among traditional or new uses. AiAs are appropriate for use within larger organizations that distribute water among members, e.g., irrigation districts or wholesale water agencies. Members would decide when and how to use AiAs, i.e., when transaction costs are high, environmental constraints are binding, or allocation to outsiders is desired. Experimental sessions show that an AiA reallocates more units with no less efficiency that traditional two-sided auctions.

Those of you with an academic subscription can download it here. Those of you without can download my author’s copy [pdf]

Here’s an earlier post that links to other presentations of the AiA.

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Adam Liptak, gun legislation, the Supreme Court

More on gun legislation and law:

…the bottom line is that Liptak’s spot-on, and that I think that the Supreme Court will use that Illinois case that Liptak discusses to make clear that the Second Amendment is not absolute. The Illinois statute bars carrying any weapons in public, even unconcealed ones.

I think that, 5-4, they’ll say that that is unconstitutional but that laws banning carrying concealed weapons in public are constitutional. I also think that, now, finally, Congress will pass laws against the sale of semi-automatic weapons and against the sale of ammunition clips of more than 10 bullets, and that once a constitutional challenge to those laws gets to the Supreme Court, the Court will uphold the laws.  

Beverly Mann, lifted from an e-mail to me

Gun plans don’t conflict with Justices 08 ruling by Adam Liptak reasons:

Despite the sweeping language of a 2008 Supreme Court decision that struck down parts of the District of Columbia’s strict gun-control law, the decision appears perfectly consistent with many of the policy options being discussed after the shootings in Newtown, Conn.

Legal experts say the decision in the case, District of Columbia v. Heller, has been of mainly symbolic importance so far. There have been more than 500 challenges to gun laws and gun prosecutions since Heller was decided, and vanishingly few of them have succeeded.

“Of the 12 deadliest mass shootings in American history, six have occurred since 2007” also caught my attention.

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Workers will have MORE money in their pockets AND will have paid for a longer retirement at a higher standard of living

There are a number of well thought out plans to handle the problems proposed by opponents of Social Security and also those concerned about its sustainability. To have our political and media debate confined to one item like chained-cpi should make any reasonable voter pause and wonder “Is that all? How dumb can we be?” Take a breath and a half hour to review trhe fact that there a a lot of alternatives…don’t let your politician quote you a bumper sticker slogan. There are plenty of alternatives that won’t cut benefits for a well functioning program that could deliver a decent result.

“Workers will have MORE money in their pockets AND will have paid for a longer retirement at a higher standard of living.”   Social Security cuts offered…why?

According to the 2010 CBO report Options for Social Security the chained CPI will “solve” about one third of the projected shortfall.
Since a tax raise of forty cents per week per year over the same time would solve the entire projected shortfall, it looks as though the chained CPI is going to save workers about 13 cents per week per year while their wages are going up eight dollars per week per year.
Of course the chained CPI is going to cost them a thousand dollars a year when they are too old to do anything about it.
Makes you wonder who the President’s financial advisor is.

The CBO report was from 2010. raising the cap to cover 90% of earnings would put the cap at about 150k, and their benefits would be increased.
This might be salable to them… if they figured the extra tax was a reasonable price to pay for the extra insurance… I am guessing their SS benefit would go from about 26k to about 35k. I don’t think they would be happy with that ratio.
In any case I would prefer to pay the extra 13 cents per week and keep Social Security “worker paid.”
You don’t want welfare. it’s ugly.

Dale Coberly

Everyone interested in actual SS numbers should read that CBO 2010 report ‘Social Security Policy Options’ or just refer to special figure 1. CBO scored 30 different policy options taken in isolation and although some would interact if enacted together for the most part you can treat the fixes as a cafeteria plan and mix and match to reach your 0.6 target. For example there is one fix that closes 0.9 of that 0.6 which makes room for proposals that shift benefits to the bottom in a way that still mets out at 0.6. Now in the event I agree with Dale that this particular combination adds up to ‘welfare’ and moreover that that would be a bad thing. But your views may vary.
The point being that most obvious changes to SS have already been scored, all you need to do is Google the cited document.

Bruce Webb

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Fantasy: "If only someone had a gun". Reality: Lakewood Wash Nov 29, 2009

‘Horror scene’ as 4 Lakewood police officers shot, killed

LAKEWOOD, Wash. – Four uniformed police officers were shot and killed in a bloody Sunday morning attack at a Lakewood-area coffee shop, and investigators are seeking a person of interest in the killings, officials said.Pierce County Sheriff’s Office spokesman Ed Troyer said the person they are seeking is Maurice Clemmons, who is a fugitive from Arkansas with a lengthy criminal record.

Not to be flip but is there a more hardened target in America than a fricking DONUT SHOP known as a pre-shift COP SHOP? Are we to imagine that everything would have been fine if four kindergarten and first grade teachers/armed monitors from the nearest elementary school had been having some pre-school coffee and going over their paperwork just as the cops were? Or maybe if the girl behind the counter had been packing?

And if we didn’t need more irony we have this:

Huckabee Granted Clemency To Maurice Clemmons, Person Of Interest, In Ambush That Killed 4 Cops

A man with an extensive criminal past — whose 95-year prison sentence was commuted in Arkansas nearly a decade ago by then-Gov. Mike Huckabee– was being sought Sunday as a “person of interest” in a deadly ambush on four police officers who were gunned down inside a coffee shop.

Snip

In 1989, Clemmons, then 17, was convicted in Little Rock for aggravated robbery. He was paroled in 2000 after then-Gov. Mike Huckabee commuted Clemmons’ 95-year prison sentence. Huckabee, who was criticized during his run for the Republican presidential nomination in 2008 for the number of clemencies and commutations he granted, cited Clemmons’ age at the time of the sentence.
After his release from prison, Clemmons violated his parole and was returned to prison in July 2001. He was released March 18, 2004, according to the Arkansas Democrat-Gazette newspaper .

But even without the sickening hypocrisy of Huckabee blaming the Sandy Hook shooting on the failure of first graders to engage in state sponsored prayer, we have a case of four trained, armed police officers just minutes from going on patrol being caught mostly unaware by a shooter determined to kill. In light of that the suggestion that all would have been well if only that principal had a M-4 locked in a cabinet in her office ring pretty hollow.

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Social security cuts offered…why? Irresistible to Obama.


There is no crisis with Social Security. Social Security is not going broke. Social Security adds NOTHING to the deficit. Social Security is not welfare.

Update: Pelosi says she can live with it

There are many options to address issues for the program, which are not offered as part of Pres. Obama’s  insistence on keeping  Social Security on the table and front and center.  Perhaps the ‘chained cpi’ is abstract enough to look harmless, and trying to ‘fix’ a possible problem decades in advance doesn’t appear to be simply weird??   From comments comes this note from Dale Coberly.  There are several other plans  carefully thought out that fix things if needed…

A reader suggested I check the results of the “one tenth of one percent tax increase” against the recent bad news from the Trustees.

I looked at the result of increasing the tax one tenth of one percent for each the employee and the employer whenever the Trustees project short term actuarial insolvency. The results were the same as before the recession: an average increase of one half of one tenth of one percent increase on the combined employer-employee tax over the seventy five year actuarial window results in no insolvency whatsoever.

The effect of the Recession has been to move forward about six years the date of the first one tenth of one percent increase to about 2018.

By 2033 the tax would have been increased about one and a half percent for each, while wages will have gone up about 25%. Workers will have MORE money in their pockets AND will have paid for a longer retirement at a higher standard of living.

There is no crisis. Social Security is not going broke. Social Security adds NOTHING to the deficit. Social Security is not welfare.

Over the whole century and into the next, the SS tax would need to be raised another one percent, while wages will have gone up over one hundred percent.

What the bad guys have done is looked at the possible need for the tax raise, assumed that we will not be smart enough to raise the tax and called the difference “a huge debt.”

There will be no debt. But if people are not smart enough to realize that if they are going to live longer they are going to have to put aside a little more to pay for groceries after they can’t work any more, then they are going to have to learn to live on a little less .

They could even do that. It wouldn’t be wise, but at least it wouldn’t be as stupid as letting them “fix” Social Security in a way that destroys its value as insurance. And that’s all it is: a way to insure your own savings against inflation, market losses, and personal bad luck. Even against recessions.

But unless the people tell the president and the congress… that’s exactly what they will do” “Fix” it.. the way a two year old fixes his daddy’s watch.

David Duyan offers some ideas on the current issues:

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