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

When the Law is Part of the Problem

Whether it be by legislative intent, or due to some interpretation of the law by a judge or by the supreme court; behind each incidence of police brutality, shooting of an unarmed person, or other unwarranted police behavior in America, lies the question of how is it the law of the land allows law enforcement officers to act with relative impunity? Of course, there is the question of whether the law does indeed allow law enforcement officers to use unnecessary, excessive force? While there can be no doubt that they should be be allowed to use necessary force; does it not follow that any force beyond what is necessary is unnecessary force? And, that anything beyond necessary is excessive? Should a routine traffic stop warrant a police officer pointing a loaded weapon at the traffic violator? It does seem that the limits for the force used by law enforcement, should be matters of the law. There are, after all, strict restrictions on things like wire tapping and other means of surveillance.

Given our nation’s history of abusive policing: the fugitive slave laws, the notoriously cruel early Texas Rangers, Wyatt Earp, et al, one might have expected the court to have acted to curb abuses by law enforcement. But, this isn’t what has happened. Why not?

Voter fraud in black and white

The battle to save democracy continues.

White man commits intentional voter fraud:

A Marple Township man who illegally registered his dead mother as a Republican and cast a vote on her behalf in the 2020 presidential election has been sentenced to five years of probation, Delaware County prosecutors said.

Bruce Bartman, 70, pleaded guilty to felony counts of perjury and unlawful voting last December after investigators discovered he had successfully cast a mail-in ballot for his mother, who died 12 years ago. He also attempted to obtain a mail-in ballot for his dead mother-in-law, but the request was flagged by state officials. 

Bartman used an old driver’s license number to request the mail-in ballot for his mother and sneak through Pennsylvania’s Statewide Uniform Registry of Electors system. He used the ballot to cast a vote for former President Donald Trump on Oct. 28. 

Black woman accidentally violates arcane voting rule:

A Texas appeals court on Thursday upheld a five-year prison sentence for a woman who was convicted of illegally voting even though she didn’t know she was ineligible when she went to the polls in 2016. The punishment for the Fort Worth woman, Crystal Mason, stirred national outrage because of its severity, prompting accusations that prosecutors were trying to intimidate Texans from voting.

Four years ago, Mason was on supervised release, similar to probation, for a federal felony conviction related to tax fraud. She didn’t know that  Texas  prohibits felons from voting until they finish their sentence entirely. Mason voted in the last presidential election at the urging of her mother and cast a provisional ballot when poll workers couldn’t find her name on the voter registration rolls. The ballot was never counted because Mason was not an eligible voter.

During her 2018 trial probation officials testified that they never told Mason she could not vote, but the appeals court said that didn’t matter. Mason was guilty, the court said, because she knew she was on supervised release. “Contrary to Mason’s assertion, the fact that she did not know she was legally ineligible to vote was irrelevant to her prosecution,” Justice Wade Birdwell wrote for a three-judge panel on Texas’ second court of appeals.

Seems fair.

Weekly Indicators for April 26 – 30 at Seeking Alpha

by New Deal democrat

Weekly Indicators for April 26 – 30 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

Right now a lot of YoY readings are not very helpful, because the comparisons are against the worst of the pandemic. So I have been adding some comparisons with 2019 as well. The sum total of the outcome is that, while a (perhaps short lived) economic Boom is underway, there are no persuasive signs of overheating at this point.

As usual, clicking over and reading will bring you up to the virtual moment, and reward me with a penny or two for my efforts in putting together the information.

The politics of research: parental incarceration and child welfare

The American Economic Review is publishing an article by Samuel Norris, Matthew Pecenco, and Jeffrey Weaver that suggests parental incarceration has benefits for children:

Every year, millions of Americans experience the incarceration of a family member. Using 30 years of administrative data from Ohio and exploiting differing incarceration propensities of randomly assigned judges, this paper provides the first quasi-experimental estimates of the effects of parental and sibling incarceration in the US. Parental incarceration has beneficial effects on some important outcomes for children, reducing their likelihood of incarceration by 4.9 percentage points and improving their adult neighborhood quality. While estimates on academic performance and teen parenthood are imprecise, we reject large positive or negative effects. Sibling incarceration leads to similar reductions in criminal activity.

The authors have been criticized not for the substance of their conclusions, but because their findings will serve to legitimize mass incarceration.

Noah Smith has an excellent post discussing the controversy and arguing that scholars should not be constrained by political considerations when deciding what to publish. 

I want to make two different points.  First, I don’t think the main message of the paper is pro-incarceration at all.  My initial reaction reading the abstract (that’s all I’ve read) is that it adds to the growing body of evidence that children are very sensitive to their environments, and that we need to think hard about what we can do to help disadvantaged children have decent childhoods and reach their potential as adults.  You could read this article and think we need to make the Biden family allowance permanent.  You could read it and think that we need to provide paid family leave.  You could read it and think we need better schools.  You could read it and think that we need to make it easier for women to leave abusive relationships.

Second, I don’t think the paper will torpedo criminal justice reform efforts.  Democrats are certainly not going to change their views on the desirability of criminal justice reform as a result of this study.  More importantly, I doubt Republican politicians will either.  The fact is that there is modest support among some Republicans for criminal justice reform, based on years of advocacy and attitude-shaping by libertarians and fiscal conservatives.  Getting to yes on reform will be difficult, but that’s just politics.  One paper isn’t going to change the balance of forces; that’s not how politics works. 

What proponents of criminal justice reform really need to worry about is rising crime rates.  A rise in crime will not just destroy support for reform, it will help Republicans gain control of government at all levels.

So Much For May Day

So Much For May Day

 Today is May Day. An ancient point of the Gaelic calendar marking spring, it was long marked by pagan fertility celebrations and rites, dancing around May poles and the like, with many variations on this in different countries. The day became associated with the worker’s movement in 1886 when in Chicago a movement for the 8-hour work day involved many demonstrations and strikes and ultimately a riot in Haymarket Square in Chicago that culminated in a bombing and a massacre (with both police and workers killed), followed by trials and executions of various anarchists and activists. The actual date if the massacre was on May 4, but May1 became associated with the event, and it spread to become the leading International Worker’s Day, despite competition from rivals such as Labor Day in September in the US.  Ironically both of them were started by socialists and in the US, but somehow in the US Labor Day came to be favored by more conservative interests and was made the legal holiday, with May Day the day celebrated by socialists in other parts of the world.

1st Quarter GDP Grew at a 6.4% Rate on Government Stimulus Spending

1st quarter GDP; March incomes & outlays, and March durable goods

Marketwatch 666, Commenter R.J.S.

Our economy grew at a 6.4% rate in the 1st quarter, quite a bit stronger than during the fourth quarter, as stimulus supported growth in personal consumption of goods and increased federal government consumption outlays more than offset weaker private investment, shrinking inventories, falling exports, and the negative impact of rising imports…the Advance Estimate of 1st Quarter GDP from the Bureau of Economic Analysis estimated that the real output of goods and services produced in the US grew at a 6.4% annual rate from the output of the 4th quarter of 2020, when our real output grew at a 4.3% real rate…in current dollars, our first quarter GDP grew at a 10.72% annual rate, increasing from what would work out to be a $21,494.7 billion a year output rate in the 4th quarter of last year to a $22,048.9 billion annual rate in the 1st quarter of this year, with the headline 6.4% annualized rate of increase in real output arrived at after an annualized inflation adjustment averaging 4.1%, aka the GDP deflator, was computed from the price changes of the components and applied to their current dollar change…. 

As is usual with an advance estimate, the BEA cautions that the source data is incomplete and also subject to revisions, which have averaged +/-0.6% in either direction before the third estimate for the quarter is released, which will be two months from now….note that March construction, March trade in services, and non-durables inventory data have yet to be reported, and that the BEA assumed a $15 billion increase in exports of services, a $2.5 billion increase in imports of services, a $7.6 billion increase in residential construction, a $1.2 billion decrease in non-residential construction, a $2.9 billion increase in public construction, and a $34.5 billion decrease in nondurable manufacturing inventories for March before they estimated 1st quarter output (see the Key source data and assumptions excel file that accompanies this report for more specific details).

Mining Poverty

Recall Senators McConnell’s and Graham’s strong opposition to the first COVID relief package? Said it was because they feared it might reduce the incentive of workers in their states to work for low wages; that’s really low wages as in less than a living wages. Mitch and Lindsey, and most of the present day republican party, are miners of poverty. Miners as in get every last possible cent possible out of the working class and personally wheelbarrow it up to those living in the big houses on the hill. Being as they are professionals, Mitch and Lindsey don’t come cheap.

Right to work states are right to mine states. With few exceptions, right to work states are red states. A living minimum wage is an anathema to the miners of poverty.

The miners’ motto: Get every last drop of blood. Though a hand full of democratic members of Congress (think FL) do prenez l’argent, most of the support for poverty mining comes from republican politicians. Faced with regulation or restriction, lenders of payday loans, cash advances, title loans, low wages, and such, turn first to the the republican party.

Another way of obtaining the very last drop is on the spending end. There are stores that deliberately take advantage of poor people. They may do this by way of taking advantage of the customer’s inability to compute price per unit in real-time, their innumeracy, senility, etc. Major grocery chains avoid low-income areas. Dollar stores move in and sell inferior goods for less.

Payday loans take a big cut of the working poor’s wages without hardly lifting a finger beyond signing a political contribution check. Car title loans are a great way of getting at any asset/savings the working poor might have.

Peonage, as practiced in say Alabama, is the cruelest of all the various means of mining poverty. Arrest someone for little or no reason, brand them a felon, then throw them in prison. Once incarcerated, the great state peddles their labor as a source of revenue. Local turkey/chicken/pork processor, general contractor, furniture manufacturer, … hires the the prison labor for a few dollars a day so as to better compete with turkey/chicken/pork processors, general contractors, furniture manufacturers who pay their workers a living wage. Meanwhile, across Alabama, the working class poor are competing for jobs with prison labor. Fine economic model you have there, Mitch and Lindsey.

Alternatively

The executive increases the return to shareholders, in return they increase the executive(s) salaries; and so it goes. The Trump tax cuts were used by corporate executives to buy back shares; increasing the stock value, sending more along to the shareholders who then reward the executive(s) with bigger salaries. What’s missing? The workers. Time was when industrial work forces were huge and unions were strong; when the unions had lots of clout with the democratic party, ergo with government; when they could leverage their clout into a fairer share. Having little leverage, workers are left to suck hind teat. Consequently, more and more of the returns from business go to the shareholders, bondholders, and executives.

If workers were guaranteed a fair share, we wouldn’t be in the disparity we are in. Time was when the unions could ensure that some of the work force got something approximating a fair share. That was then. Needed today are laws that guarantee the workers a fair share of all profits. Corporate accounting, subject to rigorous review, or tax filings could be used. All corporate and business licenses would be subject to compliance.

In the case of start-ups, in lieu of, until, profitability, the workers would receive some minimum wage, plus stock and/or stock options.

As for workers having a say: Workers would have at least 30% representation on all corporate boards and means of input to management in sole proprietorships.

For the from partial to fully automated production facilities, an assessment as to the return on investment in automation would be made and a generous allowance for return on such investment would allowed. Return beyond that allowance would taxed separately a high rate. The revenues from this tax would be dedicated to the enhancement of the social safety net, to provide guaranteed income, etc.

Jobless claims: pandemic progress continues

Jobless claims: pandemic progress continues

[Note: I’ll comment on the Q1 GDP report later today or tomorrow.]

New jobless claims will almost certainly continue to be the most important weekly economic data for the next 3 or 4 months, as increasing numbers of vaccinated people and outdoor activities lead to an abatement of the pandemic. Seven weeks ago I set a few objective targets for new claims: to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. This week showed that the first target is clearly in reach.


On an unadjusted basis, new jobless claims declined from 9,486 to 575,350. Seasonally adjusted claims declined by 13,000 to 553,000. The 4 week average of claims also declined by 44,000 to 611,750. All of these were new pandemic lows, after slight upward revisions to last week’s numbers. 
Here’s how the trend looks since last August: