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

People Killed by Police, 2016

As a follow up to my post on homicides in 2016, I decided to combine homicide data from the FBI with figures from the police shooting database from the Washington Post. The only difficulty is that the FBI classifies people as being from Black, White, Other, or Unknown races, whereas the Washington Post breaks out other groups, such as Hispanic. Because Hispanic people can be Black, White, or Other (as per FBI classfication), it is necessary to assign Hispanic deaths at the hand of the police to Black, White, or Other to match the FBI figures.

One approach would be based on the percentage of Hispanic people who are Black, White, etc. According to the Census, 2.5% of Hispanics are Black. On the other hand, it has been noted that Black people are disproportionately likely to have negative interactions with Police. In the past few years, that has been the subject of protests. Lacking a perfect way to allocate the Hispanic figures, I assigned them to Black, White, and Other based on their share of the population that were victims of homicides. Its not perfect, and would, if anything, inflate the number of Black people killed by police. But… given the magnitude of the numbers involved, the choice of how to allocate Hispanic deaths among Black and White people will not have much of an effect on the graphs below.

With that said, here is a graph showing the percentage of Black people killed by police v. the percentage of Black people killed by someone other than the police.

(click to embiggen)

Here’s the equivalent graph for White people.

(click to embiggen)

 

Edit:  9:29/2017, 4:07 AM – added “(click to embiggen)” under each graph.

Tags: , Comments (9) | |

Wow! Yellin confirms 2% inflation is the Fed’s ceiling

Wow! Yellin confirms 2% inflation is the Fed’s ceiling

You may have already seen this elsewhere, but in case you didn’t, Janet Yellin all but officially confirmed the other day that 2% isn’t in fact the Fed’s target, it’s their ceiling. Per the New York Times:

Given that monetary policy affects economic activity and inflation with a substantial lag, it would be imprudent to keep monetary policy on hold until inflation is back to 2 percent,” Ms. Yellen told the National Association for Business Economics .

Let me just remind you one more time that in the past 50 years, during recessions the inflation rate has typically fallen by more than 2%.   That means that if the Fed is “successful,” the next recession will tip over into outright deflation, including deflation in even nominal wages.

Now imagine a wage-price deflationary spiral beginning with Donald Trump as president and the GOP in control of both houses of Congress.

Comments (1) | |

2016 Homicides

The FBI just released data on homicides for 2016. In light of the various protests by the BLM and now football players, I thought I’d provide a a graph.  It breaks out population, homicide perpetrators and homicide victims by race.

(click to embiggen)

Note… the number of offenders exceeds the number of victims. This is a result of some homicides involving multiple perpetrators. This can happen, for example, if both the shooter and the getaway driver in a drive-by shooting are charged with the crime. The race breakdown comes from the FBI, and the population comes from the Census. Data sources are shown in the graph itself.

The key driver of the graph is the large percentage of perpetrators of unknown race. This happens because not all jurisdictions report on the race of offenders, but perhaps more importantly, because many crimes are not officially solved. I believe this is particularly true in urban areas with a lot of homicides where nobody wants to cooperate with the police. For example, through August of 2016, the clearance rate for homicides in Chicago was 21 percent. In Baltimore, its about a third. Nationally, its about two thirds.

Tags: Comments (5) | |

Will October 1 Bring Another Repeal Effort?

It could . . .

With the Senate vote tomorrow canceled on the Graham – Cassidy ACA defunding bill, the effort to defund and repeal the ACA will cease for the rest of this budget year ending September 30, 2017. With the passage of a new budget and a new resolution the effort could go onward in an attempt to repeal the ACA.

As I have said, there can only be one resolution per year. Let me clarify the one reconciliation per budget year statement. Unless the Senate passes more than one budget resolution, there can be only one Reconciliation per year for each of three subjects; spending, revenues, and debt limit in one or multiple bills. Since there was no budget passed last year, the Republicans had a unique opportunity to do two Reconciliations . . . one to defund the ACA and the 2nd one to do Tax Reform. The present Reconciliation affected Spending and Revenues thereby killing those two subjects for Reconciliation in 2017.

If one bill covers spending and revenue, Reconciliation using a budget resolution is expended for those two subjects. Budgets end September 30 of each year.

2018 is a different year and again Congress could take up the repeal of the ACA. And why not when they can get 49 votes to pass it any time they wish to do so. Maybe one of the remaining three Republican Senators will side with them or a Dem may have a weak moment. Since Republicans want to do tax reform, they will use Reconciliation again as it only requires a majority vote and defund the ACA to provide the revenue for it. The opportunity to do two Reconciliations due to two budget resolutions will not be available for Republicans. It may end up being both ACA and Tax Reform in one Reconciliation of just one meaning the ACA or Tax Reform.

Martin Longman at Washington Monthly does a good job of explaining Reconciliation. I believe I beat him in predicting a new run at Reconciliation which can be found in the comments section in early September. I was happy he did write on it as few people have done so till the very end. If still interested, here is a detailed primer on the topic also.

Did the effort to repeal the ACA hurt it going forward? Trump’s threats to kill the CSR which funds out-of-pocket expenses for those between 100% FPL and 250% FPL would not be impacted by this move. For those between 100% and 250% FPL, healthcare insurance premium increases would be picked up by the ACA. Those above 250% to 400% FPL would have premiums limited by the a ratio of ~9% of income. Above 400% FPL, some of our readers and everyone else would take on the full impact of the premium increase. Trump has done everything possible to cause issues with the ACA and this would include lying to the public as well.

Tags: Comments (20) | |

Worse Than The Usual Hypocrisy: Trump, Puerto Rico, And The Jones Act

Worse Than The Usual Hypocrisy: Trump, Puerto Rico, And The Jones Act

The Jones Act was passed 97 years ago to protect US shipping within the US from foreign-made ships.  I doubt I ever would have supported such an act, but at least back then there were plenty of US-made ships to fulfill the demand. Despite the Jones Act, the US shipping industry has collapsed in the last century so that the number of such ships is far below demand in normal circumstances, so that intra-US shipping costs are far higher than those outside the US.  Puerto Rico was covered by he Jones Act and remains so.

After Hurricanes Harvey and Irma the Jones Act was temporarily suspended for Texas, Louisiana, and Florida on orders of President Trump, going through the Department of Homeland Security.  The Jones Act is not being suspended for Puerto Rico in the wake of Hurrican Maria, although damage to PR seems to be far greater than what happened on the mainland during Harvey and Irma (with those areas also accessible to supplies and aid by ground transportation, not relying nearly as much on ocean shipping).  The supposed reason is that PR’s ports are damaged, which is certainly the case, but even if suspending the Jones Act will only slightly speed up deliveries, it will certainly reduce the costs of supplies, allowing cheaper natural gas from Pennsylvania in place of more expensive oil from Venezuela, for example.

Which brings us to the worse then usual hypocrisy on the part of our president.  While he has been all worked up over football players kneeling and moved to get aid to Texas and Florida as rapidly as possible while expressing lots of sympathetic sentiments for the victims in those states, his initial reaction to Hurricane Maria, after several days delay, was to talk about how bad their infrastructure was before the hurricane and how they have a massive debt situation.  Of course, if he were really concerned about helping them, he could suspend their debt, but at a minimum, given that he is aware that they are poor and debt ridden, on top of having 80% of their crops destroyed and all their power out among other problems, he is insisting that they pay top dollar on supplies brought in by water, where almost all supplies will come.  His refusal to suspend the Jones Act for Puerto Rico after having done so for mainland US territories is far worse than the usual hypocrisy from any president, even this far more hypocritical than pretty much all others one.

Barkley Rosser

Comments (9) | |

Self-Driving Cars

Being a parent of a child under 16 means trying to figure out ways to get said child from here to there, say from school to home, and from home to after school activities, and then back. There is often a fair amount of juggling involved – one or more, er, “caregivers” are typically involved in the process To an economist, therefore, being able to put a child in a self-driving car means, potentially, more output in the economy. That’s a parent or grandparent that doesn’t have to take time away from something else (work?) to traipse across town, pick up the kid, drop him/her off, etc.

And of course, its not just kids. Other people or things that sometimes can’t drive themselves include some of the elderly, women in Saudi Arabia, and packages. And for those who do drive, I wouldn’t be surprised, for instance, if typical commutes become longer, but time spent on the commute will be “more efficiently” used – for instance, in a self-driving vehicle, one can eat a leisurely breakfast and read the morning news while on the way to work. So, what changes do you anticipate we will see as self-driving cars spread?

Comments (7) | |

Healthcare Insurance History

Last 21 Days ACA Healthcare History

On September 7th and shortly after Pelosi and Schumer decided to be nonpartisan and help Republicans who still had an ounce of decency to pass hurricane Harvey aid and set a new National Debt Limit, I wrote about the inherent dangers of being so magnanimous. Lets face it, during the Obama 8 years, Republicans made it a vow even before he took office to oppose everything coming from the other side of the aisle even refusing to participate in committee meetings. The ACA passed by Democrat votes only.

The danger with being nonpartisan with Republicans and passing good things which are beneficial to the constituency is you allow Republicans afterwards to concentrate on issues which will not favor the constituency or Democrats. Passing hurricane aid and a new debt limit did allow Republicans to get back to the more partisan effort of defunding the ACA and more money for the already rich through tax reform. The two are interlinked. The repeal passes funding for tax reform.

Angry Bear wrote on September 7 about the danger inherent in helping Repubs, wrote again on September 13 about Republicans being confident on defunding the ACA and its impact, again on September 15 about trusting Trump and Republicans with a hand-shake-deal, and last week on September 21 when Kimmel called Cassidy out as a liar and Krugman, other columnists, and blogs finally woke up to the impending danger of the Graham – Cassidy Bill.

Angry Bear called it early in the month on Republican treachery to defund the ACA. The vote will be this week before the 30th. I do not trust McCain. Hopefully, I am wrong on McCain.

Older Healthcare Insurance History

I thought this comment by a blogger was interesting to read as we wait for the Senate to take up the Graham – Cassidy Healthcare Insurance Bill which will defund the ACA if passed this week. I wander the blogosphere and I run into some interesting people from time to time. This particular commenter had a wealth of knowledge on healthcare insurance going back a ways. I have captured the commenter’s words to present them to Angry Bear. Hope you enjoy them.

“When, early in our adventures in managed care, I was marketing for clients like Sisters of Providence, who were attempting to set up their own managed care, non-profit PPO (which ultimately they did not see to completion), in the late 1980s, health care insurance was still non profit.

At that time ‘commercial insurers’ did not refer to health insurers at all. Commercial insurers provided for-profit RISK insurance — which health ‘insurance’ isn’t (and can’t be without defeating its original purpose; to help more people afford care while helping providers maintain expensive facilities and services). Health insurance was created as an additional way, beyond taxes and charity, to socialize increasing health care costs — to assure the healthy, self-interestedly, that the resources to meet their inevitable health care needs would be there when needed. And to ensure hospitals would have a revenue stream to help them maintain the increasingly sophisticated and varied resources to meet the modern care needs of their communities.

Although the first actual, modern health insurance program is credited to a hospital in Texas in the 1920 which contracted with school district employees to provide services to for a monthly premium (it was non-profit); proto-insurance schemes based on the same principle — asking healthy EMPLOYED people to contribute a modest monthly amount to cover care if and when they were injured or ill — were used long before. The Sisters of Providence, for instance, established the first hospitals in my part of the world, the Pacific Northwest, in the middle of the 19th century, offered loggers care for their not-infrequent injuries for a payment of $1 a month (this I understand having cut down trees while gaffing up them). The connection between health insurance and employment did not, as many people believe, just arise as a government idea with favorable WWII tax policies. It arose from a much older recognition of the reality that injury and illness compromise patients’ ability to work, earn and pay — and the recognition the employed, especially those in the more commonly dangerous occupations, had both the income with which to make regular payments and an incentive to make arrangements to provide for themselves, as eventual patients, with care when needed despite the economic vulnerability illness caused — while providing providers with resources that helped maintain facilities and services and workforce to provide that care.

Until the advent of ‘managed care,’ which deregulated the health insurance market in ways giving insurers a greater ability to limit who was covered and what was covered — to their own benefit (but not necessarily to the benefit of our social need for broadly available health care, or increasingly, premium payers’ needs either). In fact, commercial insurers avoided the health insurance market like the plague.

It was understood by everyone that there was no way to make a profit in it While still meeting policy holders actual needs.

Health insurance was created solely as a way to socialize costs for health care consumers.

It did and does not and can not work like a car, flood, or even life insurance where insurers work out, and profit from, fairly reliable actuarial probabilities about what percentage of policy holders are likely to ever make a claim, the likely length of time the average policy holder will be paying premiums before making a claim, and from those probabilities charge — and deny coverage — accordingly. People, the overwhelming majority of policy holders, will depend on health care coverage again and again and again — for services large and small — with more and more needs, and more serious needs, accumulating over time.

Inviting commercial insurers into the market as we did in the late 70s and 1980s, with managed care, was a big mistake.

But many countries, Germany, Switzerland, France, provide excellent, cost-effective universal systems that are not single payer — they rely in different ways on a networks of non-profit and public insurance. Although some countries allow for-profit insurers who provide some limited extra coverage, they are very limited.

I don’t think we should throw their examples out while looking for the best way for the US to provide universal coverage.

Especially considering how many Americans do receive coverage through insurance at work, and are happy with that coverage, and our long history with that method of socialization.”

Tags: Comments (17) | |

A hurricane workaround for industrial production

A hurricane workaround for industrial production

Last week I mentioned that the regional Fed surveys plus the Chicago PMI can be used as a workaround to account for the effects of hurricanes on Industrial Production. It isn’t pretty and by no means is it perfect, but for the (hopefully only) two or three months that we need it, we can use the workaround to give us the underlying trend in production, particularly for manufacturing.This is a two-step correlation.

The first correlation is between the regional Fed indexes and the ISM manufacturing index.  This is something Bill McBride, a/k/a Calculated Risk, has been keeping track of for years.  Here’s his graph going back all the way to 2000:

While the correlation isn’t perfect, most notably in the years 2010 and 2011, when the regional Fed average was high, and in 2015 and 2016, when it was too low, in general it holds, with the two rising or falling between positive and negative in tandem, even if we just use the Empire State and Philly indexes.

Comments (0) | |