Wednesday, December 28, 2011

Police deaths jump in 2011; guns are the leading cause

Preliminary estimates from the National Law Enforcement Officers Memorial Fund (NLEOMF) tragically indicate that the number of police officers killed so far in 2011 exceeds the total for the same period last year by 13 percent and that the number of police officers killed by gunfire was the leading cause of death.
According to preliminary data from the National Law Enforcement Officers Memorial Fund, 173 officers have been killed during 2011 — up 13 percent from 153 line-of-duty deaths in 2010.

For the first time in 14 years, more officers died from firearms-related incidents than traffic-related incidents. Sixty-eight officers were shot and killed in 2011, up 15 percent from 2010 when 59 officers died from gunfire. The number of officers killed by firearms has now risen during each of the past three years.
The number of gun-related fatalities in 2011 substantially exceeds the average from the 2000s and is slightly higher than the average for the 1990s. Gun-related fatalities among law-enforcement officers are down though from the very high levels recorded in the 1980s and 1970s.

The statistics are a grim reminder that a society awash in guns poses deadly risks even to those who are armed, well-trained, and often wearing protective vests.

Tuesday, December 27, 2011

Armed and dangerous

Advocates of gun anarchy like to proclaim that stricter gun laws only serve to keep guns out of the hands of law-abiding citizens. However, a New York Times investigation of North Carolina concealed weapons permit holders shows that those armed "law-abiding" citizens can become very, very dangerous.
...The New York Times examined the permit program in North Carolina, one of a dwindling number of states where the identities of permit holders remain public. The review, encompassing the last five years, offers a rare, detailed look at how a liberalized concealed weapons law has played out in one state. And while it does not provide answers, it does raise questions.

More than 2,400 permit holders were convicted of felonies or misdemeanors, excluding traffic-related crimes, over the five-year period, The Times found when it compared databases of recent criminal court cases and licensees. While the figure represents a small percentage of those with permits, more than 200 were convicted of felonies, including at least 10 who committed murder or manslaughter. All but two of the killers used a gun.
The story relates a number of cases where permitted hot heads flip out and then use the close proximity of a weapon to assault or kill, going from "law-abiding citizen" to dangerous felon in the blink of an eye.

The Times also reports that felons often get to keep their concealed guns and their ability to purchase more.
The review also raises concerns about how well government officials police the permit process. In about half of the felony convictions, the authorities failed to revoke or suspend the holder’s permit, including for cases of murder, rape and kidnapping. The apparent oversights are especially worrisome in North Carolina, one of about 20 states where anyone with a valid concealed handgun permit can buy firearms without the federally mandated criminal background check. (Under federal law, felons lose the right to own guns.)

Ricky Wills, 59, kept his permit after recently spending several months behind bars for terrorizing his estranged wife and their daughter with a pair of guns and then shooting at their house while they, along with a sheriff’s deputy who had responded to a 911 call, were inside. “That’s crazy, absolutely crazy,” his wife, Debra Wills, said in an interview when told that her husband could most likely still buy a gun at any store in the state.
A sensible proposal would be be for anyone accused of a violent crime in North Carolina to immediately have their gun rights (including any special gun permits) suspended and weapons impounded until their criminal case is adjudicated. Courts would revoke all gun rights and dispose of the weapons upon conviction but allow people to petition for reinstatement of their rights some period after completing sentences.

If North Carolina can suspend driving privileges for some accusations of traffic offenses and impound vehicles for some accusations of crimes, it can surely do the same for guns.

Wednesday, December 21, 2011

After 20 years, EPA finally issues mercury rules

Um, no not that Mercury.

After 20 years of delays, the EPA has finally announced rules to curb mercury and other toxic materials from large (25 megawatt and larger) coal- and oil-powered electrical plants. The rules were mandated by the 1990 Clean Air Act Amendments. An initial, weaker set of mercury rules was issued in 2005 by the Bush administration, but those rules were vacated by a federal court because they specifically exempted electric utilities. The new rules fulfill the court's instructions.

When fully implemented, the EPA estimates that the long-delayed Mercury and Air Toxics Standards will prevent each year
  • 4,200 to 11,000 premature deaths,
  • 2,800 cases of chronic bronchitis,
  • 4,700 heart attacks,
  • 130,000 asthma attacks,
  • 5,700 hospital and emergency room visits, and
  • 540,000 missed work days.
To put the numbers in perspective, the numbers of deaths and illnesses that would be saved each year would likely exceed the deaths (4,484) and casualties (32,200) that the U.S. suffered over the eight and a half year course of the Iraq war.

The EPA estimates that the annual health benefits are worth $37 billion to $90 billion, while the cost to implement the changes is just under $10 billion. Much of that $10 billion will go toward construction and equipment operations jobs.

Hmm, a set of cost-effective, life-saving, and health-inducing rules. Cue the predictable screams from the Radical Right, including notable coal-apologist Rep. Ed Whitfield.

What me hungry?

After a wait of far too many years (maybe a topic for another post), a study that Craig Gundersen and I conducted on "Food Insecurity and Insufficiency at Low Levels of Food Expenditures" has been published in the Review of Income and Wealth.

In the fall of each year, the U.S. Department of Agriculture releases a report on food insecurity in the U.S. that describes the prevalence of food problems. News outlets take this report and publish stories on the extent of hunger. For example, this year MSNBC reported
The percentage of U.S. households where adults sometimes go hungry or are unable to put enough food on the table declined last year, United States Department of Agriculture figures released on Wednesday showed.
The food insecurity measures are also used by advocacy groups and the government to describe the needs of households and the effectiveness of assistance programs.

The primary food insecurity measure is constructed from responses to 10 to 18 survey questions that people are asked (10 questions if no children live in the household, and 18 questions otherwise). The questions ask about problems of increasing severity from
We worried whether our food would run out before we got money to buy more.” Was that often, sometimes, or never true for you in the last 12 months?
the least severe condition to
In the last 12 months did any of the children ever not eat for a whole day because there wasn’t enough money for food? (Yes/No)
the most severe condition. People who answer three or more of the questions affirmatively ("sometimes" or "often" to the frequency questions and "yes" to the yes/no questions) are classified as food insecure, "meaning that they had access at all times to enough food for an active, healthy life for all household members."

Craig and I were interested in how well the measures actually captured food problems. In particular, several of the questions leave room for subjective judgements (for example, how often is "often"). Respondents may also be embarrassed to report problems to interviewers. In addition, respondents may simply forget about problems that they experienced several months ago.

The survey that USDA uses to measure food insecurity also asks people about other, more objective, and more recent food outcomes, including the amounts that they spent on food in the previous week and in a usual week. Craig and I figured that the amounts that people spent on food should be correlated with their reports of food insecurity and that people with very, very low levels of food spending should report high (actually nearly ubiquitous levels) of food insecurity.

What we found was surprising.

Food insecurity and food expenditures are negatively related, as you would expect. However, the correlation is astonishingly weak. Among people in low-income households, the absolute value of the correlation between food insecurity and weekly food expenditures scaled by household size or food needs is less than 10 percent.

More surprising still, when we focus on households with low incomes and very low levels of food expenditures (e.g., expenditures below half of what the USDA says is the minimum recommended healthy amount for a household), less than 40 percent report being food insecure. In fact, at no point along an objectively-scaled food expenditure distribution do people report food insecurity rates much above 50 percent.

We run some follow-up analyses that indicate that the food expenditure and food needs measures are reliable. We also re-examine the relationships for groups where we can rule out other types of reporting problems. The analyses lead us to the conclusion that the weakness lies in the food insecurity measure itself.

The particular problem is the food insecurity is much likely higher among some especially disadvantaged groups than the reported statistics indicate. As we state at the end of the article,
Our findings that food hardships are under-reported at the low end of the expenditure distribution should be disquieting to researchers and policymakers. The data may be masking genuine distress among the disadvantaged households, and the modest relationship with food expenditures may mean that the food insecurity and insufficiency measures will have difficulty registering increases in well-being from policy innovations and economic improvements.
Hopefully, this will give USDA something to chew on.

Tuesday, December 20, 2011

Big fat nothing-burger in state job growth

Another month, another state employment report, another month of waiting for significant job growth in the Tar Heel state.

The U.S. Department of Labor reported today that the number of non-farm jobs in North Carolina grew last month on a seasonally-adjusted basis by only 3,800. Despite modest increases last month and the month before, the total number of non-farm jobs in November remains below the numbers recorded in February through May.

The Republican plan of cutting taxes and getting the government out of the way was supposed to lead to a jobs renaissance. Instead, state employment is struggling to get to recover to the point where it was when Republicans took over the legislature.

Party of No run amok

Just when you thought the machinations over the payroll tax and emergency unemployment insurance extensions couldn't get any more ridiculous, House Republicans gave the whole dysfunctional saga a new twist, by using a procedural maneuver to block a vote on the Senate's compromise package.
Republicans on the House rules committee have voted to prevent a direct vote Tuesday on a Senate plan favored by Democrats and Senate Republicans to extend the payroll tax cut for two months.

By an 8-4 vote Monday night, the GOP-led panel rejected a Democratic amendment that would have held a vote on whether to approve the Senate plan, which is opposed by House Republican leaders.
This marks the second time that Republicans have stopped votes on Republican-supported versions of the tax cut and UI extension.

Recall that last week, Republicans in the Senate used a procedural maneuver to block a direct vote on legislation that had been passed in the Republican House (showing that they are equal-opportunity obstructionists, Senate Republicans also blocked votes on legislation submitted by Democrats).

Now it seems that House Republicans are returning the favor, while at the same time showing that the Party of No is incapable of negotiating in good faith.

Monday, December 19, 2011

Dearly departed

One of the world's most prolific mass-murderers has left the stage. North Korea's "Dear Leader," Kim Jung Il died this weekend. Few, other than the kleptocrats who continue to control North Korea, will mourn his loss.

Kim Jung Il's loathsome legacy includes mass murder at home and abroad. At home, he presided over political killings and government-abetted famines that may have taken two million lives and possibly a great many more. The death toll places him with Stalin, Hitler, Pol Pot, and Mao Zedong among history's most notorious mass murderers. Abroad, he is accused of bombings that killed South Korean officials in 1983 and that brought down a South Korean civilian airliner in 1987. This last March, his regime torpedoed a South Korean corvette, consigning another 46 people to death.

Murder was only one of Kim Jung Il's crimes. Human Rights Watch described his system.
There is no organized political opposition, free media, functioning civil society, or religious freedom. Arbitrary arrest, detention,lack of due process, and torture and ill-treatment of detainees remain serious and endemic problems. North Korea also practices collective punishment for various anti-state offenses, for which it enslaves hundreds of thousands of citizens in prison camps, including children. The government periodically publicly executes citizens for stealing state property, hoarding food, and other "anti-socialist" crimes.
Human Rights Watch estimates that up to 200,000 North Koreans continue to waste away in the country's concentration camps. North Korea's economy remains in ruins, and its people continue to starve and suffer.

The world's fondest hope should be that Kim Jong Il's death extinguishes Stalinism on the Korean peninsula. Sadly, the gears of the regime's succession appear to be grinding forward.

Saturday, December 17, 2011

Onward Christmas Soldiers!

The holiday display on the courthouse lawn near (one of the places) where I grew up has become much more diverse than I remember.
For the better part of 50 years, a creche and a Christmas tree were the only holiday displays on the Loudoun County Courthouse grounds.

Then came the mannequin Luke Skywalker and signs celebrating the winter solstice. This month, a skeleton Santa Claus was mounted on a cross, intended by its creator to portray society’s obsession with consumerism. A pine stands adorned with tinsel — and atheist testimonials. (“I can be moral without religion,” one declares.)

Members of the Church of the Flying Spaghetti Monster are scheduled to put up their contribution this weekend. It’s a banner portraying a Nativity-style scene, but Jesus is nowhere to be found. Instead, the Virgin Mary cradles a stalk-eyed noodle-and-meatball creature, and the manger is surrounded by pirates, a solemn gnome and barnyard animals. The message proclaims: “Touched by an Angelhair.”
It's heatwarming to see some new holiday traditions, although some older ones, like a Festivus pole, would have been nice too.

Thursday, December 15, 2011

The War on Christmas (continued)

Maybe it's the unusually warm weather this December, but the "war on Christmas" letters to the local paper were late in arriving this year. One more thing to pin on global warming I suppose.

Finally, though this morning, they arrived, and Greensboro is bathed in the fresh scent of holly, mistletoe and intolerance.

One, lamenting that the Jaycees' parade held on December 5 was called a "Holiday Parade," asks "Why don’t we have a Christmas parade? ...What has happened to this country? The majority should rule."

I'm not quite sure how Christmas describes much of anything occurring on December 5. Calling it a Faunalia or St. Nicholas Eve parade would have more apt.

The other, writing about Greensboro's Community Tree Lighting, asks
It is really a shame that in order to be politically correct the word “Christmas” has been absent from most advertising promoting the event. What would be wrong with Community Christmas Tree Lighting?
A nice Christmas tree, just like Joseph set up in the manger?

The author might consider that the Community Tree putter-upper-namer-givers were actually being sensitive to more Biblically-minded Christians who remember that Jeremiah 10:2-4 instructs
This is what the LORD says: “Do not learn the ways of the nations or be terrified by signs in the heavens, though the nations are terrified by them.

For the practices of the peoples are worthless; they cut a tree out of the forest, and a craftsman shapes it with his chisel.

They adorn it with silver and gold; they fasten it with hammer and nails so it will not totter.
Happy Holidays!

Wednesday, December 14, 2011

Just kidding

It turns out that the Republican plan to privatize Medicare wasn't so serious after all. The Washington Post reports
House Budget Committee Chairman Paul Ryan, who has been castigated by Democrats and hailed by Republicans for his plan to privatize Medicare, will on Thursday unveil a new approach that would preserve the 46-year-old federal health program.

Sort of reminds me of when Johnny turned out the runway lights in Airplane.

Boundaries for sustainability

Bloomberg has a fascinating slide show on nine so-called "planetary boundaries." These are biophysical thresholds, such as the amounts of greenhouse or ozone-depleting gases in the atmosphere or the acidity of the oceans, beyond which scientists believe we risk catastrophic environmental change.

A 2009 article by Rockström and colleagues from Nature explains the concept more and argues that the planet has already passed the safe thresholds for greenhouse gases, species extinction rates, and nitrogen loading.

The thresholds are speculative. Scientists can't say for sure where (or in some cases even whether) there are points at which environmental systems tip from one set of dynamic relationships to another. The authors of the Nature article admit to being overly cautious in setting boundaries a safe distance within the catastrophic thresholds (sort of the way that the empty warning light on your dashboard indicates that you at risk of running out of gas but still have some time to get some).

The concept of boundaries fits well with economists' standard methodological approaches of constrained optimization and suggests a formal, practical approach for accommodating sustainability into growth modeling.

Little dynamism in employment

Earlier this week, the Bureau of Labor Statistics released its monthly Job Openings and Labor Turnover report. Consistent with the recent modest growth in employment, the report showed that hiring rates slightly exceeded separation rates and that the job opening and hiring rates were substantially better than they were in the depths of the recession.

Rates of job openings are close to where they were near the end of the last "employment recession," which suggests that employment might be ready to pick up.

However, rates of hiring and separations remain far, far below their pre-recession values. In the mid-2000s, there were generally 5.0 to 5.5 million hires per month and slightly fewer separations. Over the last year, hiring has come in at around 4.0 million per month (again, with separations slightly lower). There has been only a slight trend upward in hiring rates since the bottom of the recession.

Much of the difference in job dynamics appears attributable to a fall-off in voluntary separations. In the mid-2000s, about 3 million people quit their jobs in an average month; currently, fewer than 2 million are quitting their jobs.

The changes indicate that the job market is much less dynamic than it used to be. Fear plays a role; in a weak economy, people are less likely to quit jobs unless they have something already lined up. The housing collapse may also be contributing; people who are underwater in their mortgages may not be able to move to places where there are better opportunities. The fall-off in wealth from the housing collapse and a weak stock market may be leading older workers to put off retirement.

Tuesday, December 13, 2011

Gov. Romney shamed by "Bob the Veteran"

Campaigning in New Hampshire, former Mass. Gov. Mitt Romney had an uncomfortable encounter with his own support of bigotry.
It started out as a seemingly safe situation. Mitt Romney, working a friendly room at a the Chez Vachon diner here, approached an older man wearing a Vietnam Veteran cap and sidled up next to him.

After some friendly banter about their ages, Bob Garon asked the former Massachusetts governor whether he supports repealing New Hampshire’s same sex marriage law.

...With that, it started to become clear that a routine campaign conversation could become hostile. Though Romney had no reason to know it, Garon – a 63-year-old from Epsom, N.H. -- was sitting at the table with his husband.

Visit for breaking news, world news, and news about the economy

Ben Smith reports further
Romney aides, meanwhile, reminded reporters that the former governor is running in a Republican (italics original) primary.

"We'll take that pistol-whipping," an aide said.
Someone might remind the former governor that although he is running in a Republican primary, he is seeking to be President of the entire United States.

You would think that someone who came from a faith tradition that suffered as much government-supported persecution as Mr. Romney's would be more understanding of this issue. So long as Mr. Romney is running in a Republican primary, you'd be wrong.

Monday, December 12, 2011

One issue at a time?

In it's Pledge to America, the incoming Tea-Party Republicans pledged that they would
end the practice of packaging unpopular bills with “must-pass” legislation to circumvent the will of the American people. Instead, we will advance major legislation one issue at a time.
The extension of the payroll tax cut would seem to qualify as "major legislation," but the House Republican's bill definitely does not qualify as "one issue at a time." The bill's description "to provide incentives for the creation of jobs, and for other purposes" says it all.

The bill has six major sections (Titles), only the first purports to deal with job creation, and the second actually contains the extension of the payroll tax break. So what's in the bill?
  • Title I -- requires that the Obama administration act on the Keystone XL pipeline application, suspends several regulations from the Environmental Protection Agency, and gives depreciation tax breaks to businesses.
  • Title II -- extends the payroll tax break and emergency Unemployment Insurance (UI) payments through 2012 but also makes other changes to the UI program, applies the "doc fix" and other changes to Medicare, requires offsets for the costs of the "doc fix," and extends and modifies the Temporary Assistance for Needy Families (TANF or cash welfare) program.
  • Title III -- covers the Flood Insurance Program.
  • Title IV -- covers auctioning of the broadband spectrum and public safety communications.
  • Title V -- lists funding offsets, including increasing the fees that Fannie Mae and Freddie Mac charge borrowers, changing federal retirements, freezing the pay of federal workers, and and increasing Medicare premiums for high-income people.
  • Title IV -- contains "miscellaneous provisions.
That's a lot of issues at one time. That's also a broken pledge.

Charity begins someplace else

Apparently, beggars have had it too easy in Johnston County, but the Johnston County commissioners have an app for that.
Panhandlers could soon have to undergo a criminal background check and pay $20 a month if they want to continually ask people for money in Johnston County.

County commissioners voted 6-1 last week to set limits on people who beg for money in Johnston. Wade Stewart cast the lone vote against a new ordinance. A second vote is set to take place next month.

Under the proposed rules, panhandlers would be required to get a permit every 30 days through the sheriff's office. The first month's permit would be free, but panhandlers would pay $20 for each subsequent permit.
Lest you think the dissenting vote represented some soft-hearted squishiness on the part of the commissioners, that vote came because a commissioner feared the licenses would create an entitlement to beg.

Conservatives have long maintained that charity is undermined by government assistance. However, as the Johnson County commissioners show, charity is actually undermined by the lack of charity.

Friday, December 9, 2011

Joe Guarino goin' Hollywood

Some readers may be old enough to remember way back in the Fall of 2000, when many of Hollywood's dimmer luminaries were threatening to leave the country if George Bush were elected.

Others may remember Alexander threatening to move to Australia after his terrible, horrible, no good, very bad day.

Well, similarly childish Hollywood sentiments are now afflicting local conservative blogger Joe Gaurino.

Following the terrible, horrible, no good, very bad election day that conservative city council candidates had last month, Joe is telling folks to get out of Greensboro while the gettin' is good.
People are able to vote with their feet. And as far as I am concerned, they should be encouraged to do so-- to consider getting out.

Greensboro is a slowly sinking ship; and it might be best to find a life boat.
And earlier
...Greensboro residents concerned about the taxes they will be paying should justifiably look at alternatives-- especially in view of the lopsided tax/bond/spend majority the city's voters just elected. At some point, good people must decide whether they will allow themselves to continue to be exploited; or whether they will do what they need to do to protect their own property and income.
It's pleasant to imagine how much nicer Greensboro would be if Joe and his C4GC friends did up and leave. Heck, I'd offer to help them pack.

My prediction, however, is that when their pity party is done, Joe and his conservative cabal will show themselves to be like Alec Baldwin, Susan Sarandon, and the fictional Alexander in one additional way--they'll suck it up and stay.

Thursday, December 8, 2011

Some heartfelt economic news...

Yes, I'll fess up that after a couple-month hiatus, I did pay a "few" visits to McDonalds last month, but I didn't think I ate that much
Sales rose 6.5 percent at McDonald’s stores in the U.S. and also 6.5 percent in Europe. Analysts were expecting growth of 5 percent in the U.S. and 4.3 percent in Europe.
Thank goodness that Donut World doesn't have to report its sales figures.

Wednesday, December 7, 2011

Amnesty good for me but not for thee

Want to make a Republican apoplectic and to receive a stern lecture on incentives? Suggest a compromise that somehow involves a path to citizenship or permanent residency for some of the 11 million or so unauthorized immigrants aliens in this country.

Someone mentioned Newt Gingrich's musings about a pathway to citizenship for some long-term immigrants to Republican Representation Brian Bilbray, causing him to spew
They don’t understand that talking about amnesty to reduce illegal immigration is about as logical as somebody saying, ‘Let’s drill a hole in the bottom of a boat to let the water out.’ You’re going to cause a whole new wave of illegal immigration.
Rep. Bilbray even criticized the mere discussion of these proposals.
It’s sending a signal to the world that a candidate for president, or worse, the president himself, has announced that if you break the law and come to this country illegally — if you risk your life or be one of those who die along the border and try to come to the country illegally, we will reward you if you come in here ... Everyone who is given a job and any elected official who is announcing to the world that Washington and the federal government is going to reward illegal immigration are part and parcel to the problem of sending a clear and defining message. Even Newt Gingrich would say that our problem is that we’ve sent mixed messages in the past and that’s enticed people to come here and be here illegally.
Once you get past the spittle and snarling, Rep. Bilbray and other Republicans seem to be making the point that amnesties, even partial ones, create some awful incentives. While the policy addresses some immediate concerns, it also creates future problems if the next set of people considering whether to enter and stay in the country without authorization come to expect periodic amnesties.

So if amnesties encourage such bad behavior, why are Republicans (regrettably abetted by some "centrist" Democrats) advocating a one-year, no-strings-attached, "olly olly oxen free," tax amnesty for multinational corporations who have hidden their revenues in other countries?

Specifically, corporations are allowed to defer taxes on profits that are held abroad. The tax amount, which would generally equal the different between the applicable U.S. tax rate and what the corporation pays in the country where the profits are initially parked, is only due when the company brings the money back into the country. Instead of this eventual amount, Republicans are proposing a special low-low rate of as little as 5.25 percent if corporations rebate the money now. Rep. Bilbray (the same don't-you-idiots-understand-incentives guy) has even submitted a bill that would temporarily reduce the tax rate to zero.

Republicans main argument about the tax amnesty is which hostage to take to pass one--the payroll tax break that is due to expire this year or the broader set of Bush-era tax cuts that are due to expire next year.

Absent from those arguments, however, is any discussion of the bad incentives that tax amnesties create. One reason why corporations delay repatriating money to the U.S. is the possibility of a lower tax rates, including special amnesty deals, in the future. There's precedent for this thinking because a similar "one time" amnesty was granted in 2004. And consistent with the incentives argument, multinational corporations greatly increased the amounts of profits that they stashed overseas following the 2004 amnesty. If a similar policy were enacted today, the professional staff of the Joint Committee on Taxation predict that the bad incentives would lead to a net cost of $79 billion over 10 years.

When human beings are concerned, these policies are nasty "amnesties." When corporations are concerned, they're "holidays." Go figure.

Tuesday, December 6, 2011

Diminishing returns along the border

Arrests of people crossing the border with Mexico have fallen to historic lows. The Washington Post reported on Saturday
The Border Patrol apprehended 327,577 illegal crossers along the U.S.-Mexico border in fiscal year 2011, which ended Sept. 30, numbers not seen since Richard Nixon was president, and a precipitous drop from the peak in 2000, when 1.6 million unauthorized migrants were caught. More than 90 percent of the migrants apprehended on the southwest border are Mexican.

...“We have reached the point where the balance between Mexicans moving to the United States and those returning to Mexico is essentially zero,” said Jeffrey Passel, a senior demographer at the Pew Hispanic Center, whose conclusion was shared by many migration experts.
Yet the Obama administration continues to deploy 1,200 National Guard troops along the border, mostly for show.
President Obama’s decision last year to send 1,200 National Guard troops to the U.S.-Mexico border may have been smart politics, but a growing number of skeptics say the deployment is an expensive and inefficient mission that has made little difference in homeland security
The rules of engagement, rightly, limit the role of the National Guard to observation. The net effect, however, is that the troops increase the cost of securing the border by about $110 million per year but have little impact on security itself. The Post story continues
In an August report on the costs and benefits of an increased role for the Defense Department along the U.S.-Mexico border, the Government Accountability Office told Congress that it takes three people to do the job of one: two Guard soldiers to spot an illegal crosser and one federal agent to catch him.
Since 9/11, the United States has greatly strengthened its fence along the border. It has also doubled the number of Border Patrol agents, with predictable effects on border crossings and apprehensions.

At a time when the military is already strained and where the government is looking to save every penny that it can, an ineffective $110 million National Guard "troop surge" along the border seems especially wasteful and a bad return on investment. President Obama should end the deployment at the end of this year and allow the troops to return to their home states and bases.

Monday, December 5, 2011

Profiles in cravenness

Juan Williams writes in The Hill about Mitt Romney and Newt Gingrich being for health insurance mandates before they were against them.
What do Newt Gingrich and Mitt Romney, the leading contenders for the Republican presidential nomination, have in common?

Long before President Obama, both supported an idea they now pretend to spurn — the idea of requiring people to buy health insurance.

As recently as 2009, Romney publicly supported, the “individual mandate” for buying health insurance. And as recently as last month one of Gingrich’s websites still endorsed the “mandate” for all Americans earning more than $50,000 annually.

...At the CNN debate this October in Las Vegas, Gingrich took a swipe at Romney over the former Massachusetts governor’s healthcare plan that requires citizens in the Bay State to buy health insurance. Romney shot back: “Newt, we got the idea of individual mandate from you.”

Gingrich responded: “You did not get that from me. You got that from the Heritage Foundation.”

They are both correct on this revealing point. The Heritage Foundation, the influential conservative think tank, first developed the idea of an individual mandate for healthcare in the late 1980s. That is how deeply this idea is tied to conservative thinkers.

Romney used the Heritage policy in developing his Massachusetts healthcare law. That reform contained the dreaded individual mandate.

And Gingrich supported the federal mandate as an alternative to Hillary Clinton’s healthcare reform package when he was Speaker in the 1990s.
There seem to be few former policy "stands" these two won't gainsay to appease the Tea Party crowd.

Solving thorny problems, like health care reform, requires the courage to lead and to stand up for potentially upsetting positions. The late Sen. Paul Tsongas' name for politicians like Gingrich and Romney seems apt--pander bears.

Sunday, December 4, 2011

Some perspective on Food Stamp fraud

Households that receive benefits from the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) usually fly under the radar, but recently they've received a lot of unflattering (and misleading) attention.

For example, an article in the Washington Examiner was breathlessly headlined "Maryland, Virginia at top of nation for food stamp fraud."
Maryland ranks second and Virginia fifth in the amount of taxpayer dollars wasted on food stamp fraud.

For every $100 in benefits, Maryland gave out $6.11 to people who weren't eligible -- amounting to about $60 million, according to fiscal 2010 data from the U.S. Department of Agriculture. Virginia gave out $5.04 to ineligible recipients, or about $70 million, and the District ranked 21st, doling out $3.76 in overpayments. The national average was $3.05.

But local investigators are examining a shrinking percentage of recipients for fraud -- and very few offenders are prosecuted -- even as government spending on the welfare program, which helps needy families pay for groceries, soars to record highs.

Analysts say fraud is increasingly going undetected, as most states have fewer resources to devote to the oversight of food stamps for more than 45 million Americans.
Earlier this week, Republican presidential candidate Newt Gringrich reportedly said
...more Americans today get food stamps than before. And we now give it away as cash -- you don't get food stamps. You get a credit card, and the credit card can be used for anything. We have people who take their food stamp money and use it to go to Hawaii. They give food stamps now to millionaires because, after all, don't you want to be compassionate?
The stories by the Washington Examiner and Mr. Gingrich suggest that there is rampant fraud in the SNAP program. It might surprise both of them to learn that administrative errors and fraud in the SNAP have decreased substantially over time and now appear to be at record lows. In 2010 the GAO reported
The national payment error rate reported for SNAP, which combines states’ overpayments and underpayments to program participants, has declined by 56 percent from 1999 to 2009, from 9.86 percent to a record low of 4.36 percent.
The administrative error rate for FY 2010 in the SNAP was lower still at 3.81 percent. The error rate is a problem, but it is much lower than other organizations. For example, improper payment errors in the Medicare fee-for-service program in 2011 were 8.6 percent, and errors in the Medicare Advantage program were 11 percent. And even these error rates are far lower than rates for major private health insurers, which the American Medical Association estimated were 19.3 percent in 2011.

In contrast to the implication by the Washington Examiner article, the fraud rate is different from and much likely lower than the error rate. Administrative errors occur for many reasons, including case-worker errors. In FY 2009, 843,000 suspected SNAP fraud cases were investigated by state authorities. Only about a quarter of these were determined to actually involve fraud, and the amount of fraud identified came to just over $100 million (compared to total overpayments of $1.8 billion).

Trafficking in SNAP benefits also has decreased; the 2010 GAO report indicated that
FNS estimates indicate that the national rate of food stamp trafficking declined from about 3.8 cents per dollar of benefits redeemed in 1993 to about 1.0 cent per dollar during the years 2002 to 2005.
Over this same period, the SNAP became much more efficient. In FY 2003, $5.0 billion, or 19 cents out of every dollar spent on SNAP, went to administrative overhead. By FY 2009 (the last year for which full figures are available), the overhead rate had fallen to just under 12 cents per dollar. The available evidence* indicates that the overhead expense rate is now closer to 10 cents. Again, some perspective is worthwhile. Private health insurers have complained that overhead caps of 15 to 20 percent (Medical Loss Ratio minimums of 80-85 percent) under the Affordable Care Act are too onerous.

The improvements in program performance have come at a time when the SNAP has expanded significantly. In the year before the expansions under the Republican-signed 2002 farm bill, the SNAP (then Food Stamp Program) served 19.1 million people. In FY 2010, it served 40.3 million.

It's questionable whether additional administrative expenses in the SNAP would be worthwhile. In FY 2009, the states and federal government spent $6.6 billion administering the SNAP, while the total estimated overpayments were $1.8 billion and the total estimated underpayments were about $0.4 billion. At this point, each additional dollar of administrative expenses seems to reduce the value of administrative errors by less than a dollar.

A program that serves 40 million people is going to turn up some problems, including some egregious ones. Indeed, errors and abuses in the SNAP cost taxpayers and potential recipients billions. Nevertheless, the available evidence indicates that the SNAP run with less proportional administrative cost, with fewer proportional errors, and lower rates of fraud than other private and public programs.

While we can't say for certain how many people are taking unfair advantage of the SNAP, we can identify two: the Washington Examiner and Newt Gingrich.

* States and the federal government share the expenses of administering the SNAP approximately 50-50. For FY 2010, we have the federal expenses but not the state expenses. The federal overhead rate was approximately 5 cents per dollar.

Friday, December 2, 2011

Santa came early with November's job report

For the first time in a while, the monthly job report was solidly positive. The estimated, seasonally-adjusted unemployment rate from the household survey fell to 8.6 percent, the lowest that figure has been since March of 2009. The proportion of the civilian, non-institutionalized population that was working rose to 58.5 percent, the best that figure has been in 8 months.

The improvement in the unemployment rate is a positive development. However, while many more people reported working last month, a portion of the drop in unemployment was due to an unexpected drop in the number of people in the labor force. The proportion of people in the labor force (people working or actively looking for work) fell to 64 percent, which keeps the number near 30-year lows).

The preliminary figures from the establishment survey indicate that 120,000 non-farm jobs were added on a seasonally-adjusted basis in November, while revisions to the figures for September and October added another 72,000 jobs. Altogether, the number of jobs in the current report was nearly 200,000 higher than the number reported in the previous report.

More working Americans is good news heading into the holiday season. Hopefully, many more people will be working before long.

Wednesday, November 23, 2011

Job-killing regulations

Want a great example of a job-killing regulation? Take a look at the new immigration law that Alabama Republicans enacted. Last week, the law's provision requiring police to detain undocumented foreigners netted an executive from Mercedes-Benz. CNN reports
Fierce critics of Alabama's controversial new immigration law -- and one of its staunchest supporters -- are pointing to the arrest of a German Mercedes-Benz executive last week to make their case.

Police in Tuscaloosa, Alabama, pulled the man over because of a problem with the tag on the rental car he was driving, and then detained him when he didn't have proper identification on hand, according to Alabama's homeland security director.
What could be more business friendly?

You better believe that foreign and multinational businesses are going to think twice before setting up shop in Alabama and other states with similar provisions.

Tuesday, November 22, 2011

North Carolina's job recession continues

Yet another month has passed, and we're left to ask "where are the jobs that Republicans promised with their tax-cutting austerity budget?"

This morning, the Department of Labor released its monthly report on state employment and unemployment. Compared to the rest of the country, North Carolina continues to under-perform.

The state's seasonally-adjusted unemployment rate edged down from 10.5 percent in September to 10.4 percent in October. In June, the month before the Republican budget went into effect, the unemployment rate was 9.9 percent. Also, a substantial part of October's decline was due to 3,500 North Carolinians leaving the labor market and thus no longer being counted as part of the unemployed.

On a seasonally-adjusted basis, the state added a measly 5,500 jobs in October. On net, private sector jobs were unchanged--the slight gain in jobs came from the partial recovery of state and local government jobs. The number of jobs continues to be substantially lower than this spring and to largely reflect net changes in public employment.

After overriding the Governor's veto of their budget in June, the Republicans bragged
In November 2010, the people of North Carolina used the ballot box to send a message to North Carolina lawmakers: State government must reduce costs and regulation on the people, so that they can create jobs and prosperity. Years of overspending by Democrats had given North Carolina the highest tax rates in the Southeast and a budget shortfall of at least $3 billion. High taxes were killing jobs.

...Our budget contains the largest tax rate cut in the history of North Carolina. It makes our state more competitive with our neighbors again. It puts almost $1.5 billion back in to the hands of hard working North Carolinians.
Funny thing about those job-killing high taxes, they were associated with thousands more jobs than the low-tax, competitive Nirvana that Republicans created.

Businesses and wealthy North Carolina households now enjoy lower taxes than they did last year, and they are using that bonanza to create...well, not much of anything at all.

Friday, November 11, 2011

$12.4 million grant sits unused while state Republicans dither

North Carolina recently received a $12.4 million federal grant to help set up its health insurance exchange, but the grant is going unused because Republicans refuse to meet to provide the go ahead.
Millions in federal money has gone unspent for weeks because legislators have put off talking to the state Department of Insurance about how a national health insurance grant will be used.

Lawmakers dropped discussion of the $12.4 million grant from the Oct. 27 agenda of a high-powered group called the Joint Legislative Committee on Governmental Operations. Agencies must consult with the committee, which House Speaker Thom Tillis and Senate leader Phil Berger run, before spending grant money in certain circumstances.

The money is for the state to do prep work for a health benefit exchange that the federal health insurance law would require of all states by 2014. With no grant money to support it, most of the work at the state Department of Insurance and the N.C. Institute of Medicine on the exchange has stopped.
Health insurance exchanges were a feature of both the Republican and Democratic proposals on health care reform and rightly so because the exchanges will increase the availability, transparency, and efficiency of health insurance. There is no good reason not to begin planning for how to set up the state's exchange.

The approach is also counter-productive to Republican goals because it increases the chances that North Carolina will have to operate under a possible federal exchange program rather than a North-Carolina-run and tailored program.

In addition, the delay hurts North Carolina economically. The $12.4 million would provide an economic boost to a state that sorely needs it. Over the last year, North Carolina has effectively had no job growth, and last month, the state had the dubious distinction of leading the nation in job losses. Given that sorry record, you would think that the Republicans would feel some urgency to get the money into the economy.

Instead, much like they did with the federal unemployment money, Republicans are engaged in a senseless, self-defeating, job-killing delay.

Thursday, November 10, 2011

Insider trading by Congress?

An article earlier this year by a Georgia State University researcher and colleagues in the electronic journal, Business and Politics, uncovered evidence that suggests that Congressional representatives may have been financially benefiting from insider information.
We measure abnormal returns for more than 16,000 common stock transactions made by approximately 300 House delegates from 1985 to 2001. Consistent with the study of Senatorial trading activity, we find stocks purchased by Representatives also earn significant positive abnormal returns (albeit considerably smaller returns). A portfolio that mimics the purchases of House Members beats the market by 55 basis points per month (approximately 6% annually).
As the blurb indicates, the study produced results that were consistent with an earlier analysis of Senators' stock returns, and some of you may recall an earlier insider financial transaction by a panicked Sen. Burr.

The evidence from the latest study is suggestive but far from convincing. First, the evidence is indirect; the authors don't examine insider trading directly but instead try to infer it from stock returns.

Second, the study includes evidence that counters the insider trading argument. For example, the authors found that stock returns were high for junior members of Congress but not for senior members. To the extent that insider knowledge and influence increase with seniority, we might expect the opposite relationship to hold.

Thursday, November 3, 2011

Diminishes us all

The New York Times reports on the disreputable and fraudulent actions of a Dutch researcher.
A well-known psychologist in the Netherlands whose work has been published widely in professional journals falsified data and made up entire experiments, an investigating committee has found. Experts say the case exposes deep flaws in the way science is done in a field, psychology, that has only recently earned a fragile respectability.
The identified offenses may have occurred in another discipline and another country, but they damage the scientific enterprise everywhere.

In principle, all of the studies that scientists conduct and publish should be replicable. In practice though, replication rarely occurs, is often impossible, and seldom gets attention or credit if it is conducted. Because of this, the modest amounts of credibility and respect that scientific conclusions muster owe greatly to scientists' reputations for reporting research accurately. Put another way, much (possibly too much) of science relies on trust.

Sadly, researchers like this particular Dutch psychologist treat science as a confidence game. Equally sadly, the psychologist has a lot of company in the scientific community.

Friday, October 28, 2011

We're number one! (in killing jobs)

The austerity budget of North Carolina's Republican-led General Assembly continues to kill jobs. The Bureau of Labor Statistics reported today that on a seasonally-adjusted basis North Carolina's unemployment rate rose in September to 10.5 percent and its nonfarm payroll employment fell by 22,200 jobs. North Carolina had the dubious distinction of leading the nation in job losses.

In March of this year, unemployment was at 9.7 percent, and there were 3.890 million jobs in the state. Through September, three months into the Republicans' fiscal-year 2012 budget, unemployment has now climbed to 10.5 percent, while nonfarm payroll employment has dropped to 3.863 million jobs.

North Carolina continues to underperform relative to the rest of the county. In September, the national unemployment rate was 9.1 percent, and the country added just over 100,000 jobs. Since March, the country has added nearly 600,000 jobs. National job growth hasn't been spectacular, but there has been steady job growth for more than a year. In contrast, North Carolina's job situation has deteriorated.

Wednesday, October 26, 2011

One way a local crisis pregnancy center misrepresents medical risks

The NARAL Pro-Choice North Carolina Foundation has recently conducted an audit study of crisis pregnancy centers in North Carolina. The study found that that the centers tend to give inaccurate and incomplete information, that few had medically-trained staff (though that didn't stop staff from dressing up like medical professionals), and that some encouraged women who might still be considering terminating their pregnancies to wait to see if a natural miscarriage occurred. The report has sparked a lively conversation at Ed Cone's blog.

To get some perspective on how these centers are presenting themselves, I thought that it would be worthwhile to look at the web-site that is run by the local Greensboro Pregnancy Care Center (GPCC). The web-site encourages women to "consider their choices" and says specifically to women considering abortion that "it is good you are taking the time to do some research before you make your final decision because there are risks, just as there are with any other medical procedure, and you are wise to weigh them."

Below is the information that the GPCC offers about the abortion pill, Mifepristone, and about drug-induced abortions.
This drug is only approved for women up to the 49th day after the start of their last menstrual period. Some doctors may prescribe this drug up to 63 days after the last menstrual period, but this is not an FDA approved method of use. The procedure usually requires three office visits. On the first visit, the woman is given pills to cause the death of the embryo. Two days later, if the abortion has not occurred, she is given a second drug which causes cramps to expel the embryo. The last visit is to determine if the procedure has been completed. The abortion pill will not work in the case of an ectopic pregnancy.

An ectopic pregnancy is a potentially life-threatening condition in which the embryo lodges outside of the uterus, usually in the fallopian tube. If not diagnosed early, the tube may burst, causing internal bleeding and in some cases, the death of the woman.

Women are being instructed to use the abortion pills in a manner not approved by the FDA. This includes using it beyond 49 days of pregnancy and using it vaginally. A number of women who have used the abortion pill have died due to sepsis (full body infection).
The information, while scary and intimidating, is factually accurate and is similar in a lot of respects to the more detailed cautions on the Food and Drug Administration's (FDA's) web-site.

The GPCC, however, omits one crucial bit of context--the risks are exceedingly rare. How rare? According to the FDA, the risk of any complications whatsoever is about 0.15% (about 150 in 100,000), and the risk of dying is about 0.001% (slightly less than 1 in 100,000). Put another way, about one woman per year dies shortly after taking Mifepristone.

Numbers like this can be hard to interpret, so let's compare them to some other risks.

For instance, what are the risks associated with popping an aspirin or another NSAID pain reliever? A 1998 study in the American Journal of Medicine reported
Conservative calculations estimate that approximately 107,000 patients are hospitalized annually for nonsteroidal anti-inflammatory drug (NSAID)-related gastrointestinal (GI) complications and at least 16,500 NSAID-related deaths occur each year among arthritis patients alone.
Without information on the number of people who take aspirin, it's hard to re-express this number as a rate. But even if we use the entire U.S. population as a base, the risk of death from taking aspirin is at least 5 times higher than taking Mifepristone.

A more relevant comparison is the risk of death from child birth, that is, maternal mortality. The independent and nonprofit health care accreditation and certification organization, the Joint Commission, reports
According to the National Center for Health Statistics of the Centers for Disease Control and Prevention, in 2006, the national maternal mortality rate was 13.3 deaths per 100,000 live births.

...“Maternal deaths are the tip of the iceberg for they are a signal that there are likely bigger problems beneath – some of which are preventable,” says Dr. Callaghan. “It is important to consider the women who get very, very sick and do not die, because for every woman who dies, there are 50 who are very ill, suffering significant complications of pregnancy, labor and delivery.” For 1991 through 2003, the severe morbidity rate in the U.S. for severe complications and conditions associated with pregnancy was 50 times more common than maternal death. Understanding these experiences could affect how care is delivered as well as health policy.
Women who continue their pregnancies to term are 13 times more likely to die than women who take Mifepristone.

What does the GPCC say about pregnancy?
During pregnancy, your body goes through many changes. Some common symptoms of early pregnancy include a missed period, nausea, breast tenderness, frequent urination, tiredness and mood swings.
Other than listing some questions women might have, the GPCC mentions no other medical complications or risks with pregnancy. Medically, it all sounds like a refreshing walk through the park.

Readers can decide with the GPCC's highly selective reporting, which lists but does not quantify the mortality risks of Mifepristone but which omits the risks of pregnancy, is misleading.

If the GPCC really wants women to "weigh" the risk, why does it only put information on one side of the scale?

Wednesday, October 19, 2011

Will BofA lose money over its $5 debit card fee?

In introductory economics, we teach that when the price of a product goes up, the demand for that specific product goes down. When Bank of America (BofA) announced its new $5 debit card fee for certain types of accounts and effectively raised the price on those accounts, those well-known economic laws kicked in, though possibly to BofA's advantage.

This morning's Charlotte Observer reports on the predictable and intuitive result--customers are leaving BofA for credit unions.
Charlotte-area credit unions have seen an increase in phone calls and new members in the last two weeks as people upset about new fees at big banks look for new places to park their money.

Several credit unions have launched advertising campaigns promoting their fee-free offerings, hoping to capitalize on the wave of consumer discontent since Bank of America announced its $5 monthly debit card fee late last month.

"It's been wonderful," said Nicol Morris, chief operating officer of the Charlotte Metro Federal Credit Union, which has about 33,000 members.

She said the credit union saw a 350 percent increase in online account creation, along with a 90 percent increase in calls.

"They are extremely fed up with the continued talk about fees, whether it's in regard to checking or the debit card fee," she said.
The loss of customers is undoubtedly bad news for BofA and surely must have been anticipated by its management.

Nevertheless, the new fee might still improve BofA's bottom line and leave BofA laughing all the way to, well, um, itself.

Some of the other things that we teach in introductory economics is that the sizes of the responses matter and that you have to consider all of the responses.

To the first point, the loss of customers might not be that large--that is, the demand response might be inelastic. Some simple, completely made-up numbers can help to illustrate. Suppose that the new fee adds 20 percent to BofA's revenues from the average basic checking account but that the new fee also causes 10 percent of the accounts to close. In this (made-up) example, BofA's total revenues on basic accounts go up by 8 percent (it gets 20 percent more revenue on the 90 percent of accounts that stay with the bank but loses 10 percent of its initial revenue from the accounts that close).

With respect to the sum of responses, BofA appears to be steering its existing basic-service customers toward other more-profitable services. From another article in the Charlotte Observer
Bank of America CEO Brian Moynihan said Tuesday that a recently announced $5 monthly debit-card fee is a way to encourage people to bring more of their "banking relationships" to the Charlotte-based bank.

The comments were among Moynihan's first responses to the debit-card fee, which has drawn a significant outcry from consumers and politicians since it was announced late last month.

"When we look at the profile of customers who have their entire banking relationship with us and those that don't, a lot of people can qualify, will qualify and do qualify not to pay the fees...," Moynihan said on a conference call with analysts to discuss the bank's quarterly earnings report.

"The issue is when people split their relationship and use our convenience and our access and our 18,000 ATMs ... and our online banking products and all that and yet have their relationship elsewhere," he said.

"That is tough for us to afford to provide and... be competitive. And so the fees are to get people to bring more of their relationships, and we're comfortable that we'll end up in a good dynamic there."

Debit-card users will not have to pay a fee if they have at least $5,000 in a linked savings account, a mortgage or a substantial investment account with Bank of America.
The new fee will cause some people to substitute away from basic services toward other BofA services. Also, BofA's creepy "relationship" language is telling.

The "relationships" themselves not only represent additional streams of revenues but also represent ways of reducing future demand responses. It turns out that breaking up is hard to do, especially when those "relationships" are with your bank.

Each "relationship" that BofA establishes with its customers, is one additional "relationship" that would have to be terminated in order to leave for another bank or credit union. If a customer has set up automatic deposits and automatic bill-paying, he or she would need to go through the hassle of changing each of these "relationships" before leaving for good. Instead of one change in service, there would now be multiple changes. People aren't formally locked into an account. However, it becomes much harder to leave, especially given people's predisposition toward behavioral inertia.

In the end, the sizes of these responses--the loss of customers versus the gain of per-customer revenues and the tie-in effects--will determine whether BofA comes out ahead. At this point, it would be premature to count BofA out, and you better believe that other banks (and geeky economists) are watching carefully.

Monday, October 17, 2011

Farmer Stanley

If you you thought that Wall Street's pre-crash gambling binge couldn't get any kookier, you should read Bloomberg's story on Morgan Stanley's investments in Ukrainian farm land.
Iowa native Justin Bruch marveled at the opportunity when Morgan Stanley (MS) called in late 2007 to recruit him for an unusual assignment.

The New York bank, flush with $7.5 billion in fiscal 2006 profit -- the biggest in its history -- was going to be farming 11 parcels on the steppes of Ukraine. The commodities team wanted Bruch, a redhead with meaty hands who’d been farming all his life, to manage one of them.

...Morgan Stanley gave up on farming in Ukraine in July 2009, abandoning the initiative in the middle of a harvest. It bought out its local partner, Aleksandr Mamontenko, then sold Enselco to an investment firm based in Jersey in the Channel Islands, at what people familiar with the situation say was a loss. All told, Morgan Stanley put about $30 million into Enselco through loans, according to Igor Bobrov, who was hired in 2008 to be Enselco’s chief financial officer and later became its CEO. Hugh Fraser, a London-based Morgan Stanley spokesman, says bank officials declined to comment for this story.

Morgan Stanley’s failed gamble in Ukraine shows how Wall Street firms, in the last gasp of a debt-fueled bull market, strayed further from their traditional business of advising companies and underwriting stock sales to embrace diverse projects with unfamiliar risks.
The story is a great example of how Wall Street, enabled by its own creative debt instruments, pursued ever more speculative returns towards the end of the financial bubble. While conservatives continue to blame the Community Reinvestment Act, Fannie Mae and Freddie Mac for these types of shenanigans, Morgan Stanley's foray into Ukrainian farming shows that none of these were necessary. An under-regulated and over-leveraged Wall Street was quite capable of causing a financial disaster on its own, thank you.

Thursday, October 13, 2011

Thom Tillis, class warrior

North Carolina's Republican House Speaker Thom Tillis' recently had this to say to a Madison County audience about poor families on public assistance.
By gosh, we come back in 2013 ... I don't know if we'll go as far as Florida, but if you're receiving government assistance and every once in a while we want to do random drug tests, done on a fair basis, I think we should do it.

When you go in and you see a woman in a wheel chair, she's from here, she's from Asheville who's on the brink of losing her benefits and you know that Health and Human Services are sending checks to a woman who has chosen to have three or four kids out of wedlock, then at some point you need to say "first kid, we'll give you a pass; second, third, fourth kid, you're on your own."

And start, say what we have to do is find a way to divide and conquer the people who are on assistance. We have to show respect for that woman who has cerebral palsy and had no choice in her condition, that needs help, and we should help. And we need to get those folks to look down at these people who choose to get into a condition that makes them dependent on the government, and say, at some point, you’re on your own.
Rep. Tillis now claims that he made a "poor choice of words," but the entire statement was of a piece. Moreover, the statements that we need to drug test, "divide and conquer," and "look down at" poor people" were just some of the appalling comments that Rep. Tillis offered.

In the same talk, Rep. Tillis made these observations and policy prescriptions for the unemployed and work-disabled.
Folks, I don't know if any of you are out of work or have ever been out of work. Nobody spends 50 hours a week looking for a job. Now they may spend 50 hours a week thinking about looking for a job, and then they may go and apply, and then they may go and do an interview. My guess is that every single person who is out of work over a seven-day period has 10-15 hours they can give back to the community. And if they're an out-of-work teacher, that's a mentor in a school. If they're out-of-work healthcare provider, it is volunteering and having their time recorded in a health care clinic where they're certified and they can provide services. And if you're going to get government assistance, we know you have that time, and we think you ought to do it.

...I feel very strongly that, there, that, the, that people need to have that responsibility and that sense of obligation for if you're getting... We give people 99 weeks of unemployment benefits in this state, 99 weeks. And quite honestly if you're on workers comp, you may not be able to do the job that was physically demanding but you may be able to sit somewhere and be a mentor to somebody or something else. It's just giving people some sense of being more productive. That's how, that's how we become more competitive and more productive as a country.
Those lazy teachers and public health care providers that Rep. Tillis and his colleagues just fired, they're not really looking for work ("nobody spends 50 hours looking for a job"), and they need to pay us back for all the free time that they've been given. That lady from Asheville in the wheelchair, well, she can just "sit somewhere and be a mentor." "Every single person who is out of work has 10-15 hours (a week) they can give back to the community" and effectively pay back the rest of us who are lucky enough to still have jobs.

In Rep. Tillis' eyes, many of the poor--single mothers, the unemployed, the injured--are f***ing moochers who not only deserve every bit of misfortune that have received but also owe the rest of us for the meager crumbs that we, through the government, have thrown their way.

And Rep. Tillis has promised that when he and his reactionaries "come back in 2013," they'll be after those last few crumbs.

Wednesday, October 12, 2011

Texas consumers and taxpayers suffer after malpractice "reform"

Conservatives tout caps on malpractice awards as a good medicine for the health care system and for bringing down health costs. However, a new report by the consumer organization, Public Citizen, shows that many health care outcomes in Texas got worse after 2003 when that state capped non-economic damages in malpractice cases.

From the report
  • Medicare spending in Texas has risen far faster than the national average. Per-enrollee spending for Medicare’s two main programs ranked second-highest in Texas among the 50 states in 2009. In 2003, Texas ranked seventh. In light of the steep reduction in litigation that has occurred in Texas since 2003, these figures contradict the theory that medical malpractice litigation is driving health care costs.
  • Medicare spending specifically for outpatient services in Texas has risen even more steeply compared to national averages.
  • Premiums for private health insurance in Texas have risen faster than the national average.
  • The percentage of Texans who lack health insurance has risen, solidifying the state’s dubious distinction of having the highest uninsured rate in the country.
The report gives evidence that doctors and insurance companies benefited, but those benefits didn't get passed on to consumers or to taxpayers generally.

Monday, October 10, 2011

Greensboro's latest goodwill ambassador

Greensboro residents are spreading their good cheer far and wide. The city's latest goodwill ambassador received the following praise from the Hickory Daily Record.
Blind rage caused a Greensboro man to put three lives at risk while driving down a Hickory street.

Raymond Morris Patterson, 32, was arrested after he admitted to crashing his girlfriend’s car – on purpose – while she was driving. His 7-year-old son was in the back seat at the time. He was strapped into a child safety seat.
Way to pay it forward Greensboro!

Friday, October 7, 2011

A very solid jobs report

The headlines from today's monthly national jobs report are likely to focus on the unemployment rate stagnating at a still-too-high 9.1 percent, but a closer read of the report shows some signs for optimism.

The unemployment rate is defined as the ratio of (a) people who are not working but looking for work (the government's definition of unemployed) to (b) the sum of people who are working and people who are unemployed (the government's definition of being in the "labor force"). The rate changes as more people become employed. Over the last two months, the number of people who report being employed has increased by 364,500 a month. But the rate also changes as people decide to look for work. Over the last two months, the number of people in the labor force has grown by just under 400,000 people per month, which is twice as fast as population growth.

As a result of these changes, the percentage of the adult population that is now in the labor force has edged up over the last two months to 64.2 percent, and the percent of the adult population that is employed has edged up to 58.3 percent. However, when the numbers of adults who are employed and adults who are actively looking for work both grow, the unemployment rate can stagnate.

The modest growth in the percentages of the adults working and looking for work is a hopeful sign, while the fact that these percentages remain lower than a year ago is a discouraging one.

The other optimistic components of the monthly jobs report are the growth of just over 100,000 establishment-reported payrolls in September and upward revisions of job growth in July and August. Last month's job report estimated that jobs grew by 85,000 in July and were unchanged in August; this month's report estimates that July's increase was 127,000 and August's was 57,000. The growth in the number of jobs would have been even larger had it not been for the elimination of 65,000 public sector jobs over the last three months. The government reports that more than half a million local government jobs have been eliminated since September 2008, a significant drag on overall employment and on economic growth.

Overall, the job growth numbers, while far from outstanding, provide some hope that the country may dodge a double-dip recession. The country remains in a very deep hole, but for this month, at least, it doesn't seem to be digging any deeper.

Thursday, October 6, 2011

Corporate entitlement

Entitlement seems to start at the top.
Bank of America's CEO defended his bank's new $5 fee on debit cards on Wednesday, saying that customers and shareholders understand the bank has a "right to make a profit."

...Moynihan (BofA's CEO) said that the bank will talk to its customers, teammates and shareholders and "they'll understand what we're doing -- understand we have a right to make a profit."
I'm sure that BofA's CEO and some of its shareholders sincerely believe that their company has this right, but they should not expect any such understanding from their customers or "teammates" (especially the 30,000 "teammates" who are about to be kicked to the curb).

BofA has a limited right to pursue success and to pursue profits; it can't, for instance, pursue profits through restraints of trade or collusion. But even these rights are different from any rights "to make a profit."

BofA's entitlement attitude in this $5 debit card fee debacle has been clear from the beginning. The new regulations that cap debit card interchange fees leave plenty of room for reasonable profits from BofA and other large banks, while protecting merchants from the excessive fees that these banks had been able to charge because of their size and market power. Indeed, banks in other countries have remained profitable despite facing much lower caps on interchange fees.

These reasonable profits weren't enough, and BofA is now trying to reach into its poorer customers' pockets (the richer customers are, of course, "entitled" to free debit-card use) for an extra $5 a month.

BofA has every right to ask this sum from its customers. It also has a right to bad-mouth the government and to deflect attention.

Customers, however, have the right to change their behavior to avoid the fee. Given BofA's behavior, the safest route would seem to choose a less-entitled financial institution. Just avoiding debit-card purchases with your BofA card (paying cash) is another.

Changes in customer behavior might not be enough to cure BofA of its entitlement mentality (the entitlement force is strong with this one). Changes in customer behavior would though send an appropriate signal.

Wednesday, October 5, 2011

Yes, but how about the international ranking of education researchers

Civitas Review touts a recent study that allegedly "exposes the myth of suburban schools." But it seems that the study actually exposes the myth of competent George W. Bush Presidential Center education researchers.

The study in question, the Global Report Card sponsored by the George W. Bush Presidential Center, compares the test score distributions of individual schools and school districts to international distributions. However, because states don't all use the same tests, the study uses a normalizing procedure. The study's web-site describes its procedure
The calculations begin by evaluating the distributions of student achievement at the state, national, and international level. To allow for direct comparisons across state and national borders, and thus testing instruments, we map all testing data to the standard normal curve using the appropriate student level mean and standard deviation. We then calculate at the lowest level of aggregation by estimating average district quality within each state. Each state's average quality is evaluated then using national testing data. And finally, the average national quality is determined using international testing data. Essentially, this re-centers our distribution of district quality based upon the relative performance of the individual state when compared to the nation as a whole as well as the relative performance of the nation when compared to our economic competitors.

For example, the average student in Scarsdale School District in Westchester County, New York scored nearly one standard deviation above the mean for New York on the state's math exam. The average student in New York scored six hundredths of a standard deviation above the national average of the NAEP exam given in the same year, and the average student in the United States scored about as far in the negative direction (-.055) from the international average on PISA. Our final index score for Scarsdale in 2007 is equal to the sum of the district, state, and national estimates (1+.06+ -.055 = 1.055). Since the final index score is expired in standard deviation units, it can easily be converted to a percentile for easy interpretation. In our example, Scarsdale would rank at the seventy seventh percentile internationally in math.
This may be an example of the "new math," but it looks like the index number should be 1.005, not 1.055.

There are other problems with the methodology. A big one is that it normalizes standard deviations in the distribution of test scores across countries and states. Consider a hypothetical state that was successful in improving test scores and in "closing the achievement gap," that is, the state improved test scores among all students but improved them more for students in the bottom of the test score distribution than for students in the top. The standard deviation (measure of dispersion) for its test scores would fall. The Global Report Card, however, uses standard deviations as its unit of measure. The effect would be that school districts within this state would be evaluated on a different standard than school districts in other states.

Another problem is that the methodology does not account for the characteristics of students, such as numbers of students who enter with limited native-language proficiency.

So, beyond the obvious goof on the web-site, there's a lot about this report (and Civitas reporting) that doesn't add up.

Monday, October 3, 2011

Funding a Republican near you

In a development that would make Ronald Reagan proud, it turns out that some of the wealth that has bankrolled the Tea Party and other conservative causes comes from sales of petrochemical capital to Iran. Bloomberg reports
A Bloomberg Markets investigation has found that Koch Industries -- in addition to being involved in improper payments to win business in Africa, India and the Middle East -- has sold millions of dollars of petrochemical equipment to Iran, a country the U.S. identifies as a sponsor of global terrorism.

Internal company documents show that the company made those sales through foreign subsidiaries, thwarting a U.S. trade ban. Koch Industries units have also rigged prices with competitors, lied to regulators and repeatedly run afoul of environmental regulations, resulting in five criminal convictions since 1999 in the U.S. and Canada.

From 1999 through 2003, Koch Industries was assessed more than $400 million in fines, penalties and judgments. In December 1999, a civil jury found that Koch Industries had taken oil it didn’t pay for from federal land by mismeasuring the amount of crude it was extracting. Koch paid a $25 million settlement to the U.S.
The Bloomberg article goes on to describe how Koch industries has stolen, lied, polluted, bribed and killed. One of Koch's employees called it, "the Koch method."

KochPAC has been a major contributor to Rick Perry, Michelle Bachmann, and other Republicans. Don't hold your breath, however, waiting for any of them to give any of that money back.

Wednesday, September 21, 2011

Proposed electric monopoly wants customers to pay the costs of firing workers

There are stories that Chinese communists would execute prisoners with a gun shot to the back of the head and then charge the prisoners' families for the bullet.

Executives from the likely-to-be-merged Duke Energy and Progress Energy companies must have taken these stories to heart.

In a hearing yesterday by the North Carolina Utilities Commission, which is considering whether to approve the companies' merger, executives made this jaw-dropping admission.
The chief executives of Duke Energy and Progress Energy said Tuesday that their companies will have to raise electricity rates to cover the cost of severance payments that will be paid to employees who lose their jobs as a result of the utilities' merger.

Who pays for severance costs remains the single biggest unresolved issue related to the Duke-Progress merger, which was announced in January and is expected to close before the end of the year.
The merger, which would reduce the already meager amount of competition in power generation, is expected to cost 2,000 workers their jobs. Many of those jobs would be in North Carolina.

It's bad enough that this unnecessary merger will weaken a struggling economy. Now energy executives and the companies' shareholders want local customers to foot the bill for the companies' destruction of jobs.

Somewhere a Chinese communist is smiling.

Thursday, September 1, 2011

Austerity killed the radio star

The Washington Post reports
After more than a year of aggressive budget cutting by European governments, an economic slowdown on the continent is confronting policymakers from Madrid to Frankfurt with an uncomfortable question: Have they been addressing the wrong problem?

The campaign to reduce government deficits has come in response to a European debt crisis that could endanger the global banking system. And the budget cutting has been coupled with a reluctance by the the European Central Bank to stimulate economic growth like the Federal Reserve has in the United States; the ECB has instead raised interest rates twice this year to contain inflation.

Those steps have sucked hundreds of billions of dollars out of a European economy that may be edging towards recession.
American politicians sneer at everything "European," yet they swoon for this current European affectation like tween-age girls swooning for Justin Bieber.

Friday, August 26, 2011

Children's lives aren't priceless

The Washington Post has a great story that illustrates the quandary that regulatory agencies face when they consider new safety measures and that illustrates the use of cost-benefit analysis.

For years, safety advocates have been pressuring the federal government to require seat belts in school buses. The rationale behind this request is as sensible as it is compassionate--seat belts would save lives and reduce injuries among bus passengers.

The National Highway Traffic Administration (NHTSA) has considered the request and rejected it, mostly on cost considerations.

NHTSA found that "that an average of 19 school-age children die in school bus-related traffic crashes each year: 5 are occupants of school buses and 14 are pedestrians near the loading/unloading zone of the school bus." (p. 20). Thus, school buses are already incredibly safe (several times safer than traveling in an automobile), though fatalities still occur.

NHTSA also agreed that seat belts would increase safety and reduce the number of fatalities among passengers. In particular, the agency "estimated that lap/shoulder seat belts would save about 2 lives per year and prevent about 1,900 crash injuries, of which 97 percent are of minor/moderate severity (mainly cuts and bruises), assuming every child wore them correctly on every trip."

So why not require seat belts?

Saving those 2 lives and preventing those 1,900 crash injuries would require enormous costs. NHTSA estimates that seat belts would add $5,500-$7,300 to the cost of each new school bus. Adding up the costs for all new school buses, NHTSA estimates that "the benefits would be achieved at a cost of between $23 and $36 million per equivalent life saved."

Worse, those very high costs could lead to some perverse effects. In particular, the costs would likely lead to school districts using fewer buses and spending less on student and driver training. NHTSA calculates that the likely changes in school district behavior might actually lead to a net loss of 10 to 19 additional lives. Thus, school buses themselves would be safer. However, they would available to fewer children and would be operated in a less safe manner, leading to a greater loss of lives.

NHTSA's analysis not only shows the costs associated with the regulation but how those costs will affect behavior. Regrettably, those high costs will continue to cost some children their lives.

Tuesday, August 23, 2011

Look who Republicans want to tax

In recent weeks, Republican dogma against raising taxes has evolved. Republicans had previously been opposed to raising any taxes under any circumstances. Now, however, Republicans are complaining that 47 percent of American households pay no federal income taxes and are arguing that new taxes should be imposed on them. For instance, David Weigel of Slate writes
On Sunday, in an interview with the Wall Street Journal, Huntsman found himself in a virtual love-in with Rick Perry and Michele Bachmann over, of all things, taxes. The paper asked Huntsman if "the half of American households no longer paying income tax—mainly working poor families and seniors—should be brought onto the income tax rolls."

He agreed, crediting the GOP's current front-runner for vice president, Sen. Marco Rubio, with the insight that "we don't have enough people paying taxes in this country."

The Journal called this position the "new GOP orthodoxy," which it is. When he announced his presidential bid two weeks ago, Perry told a room of conservative activists and bloggers that "we're dismayed at the injustice that nearly half of all Americans don't even pay any income tax." He was following on Bachmann, who'd just told the South Carolina Christian Chamber of Commerce the very same thing.

"Part of the problem is today, only 53 percent pay any federal income tax at all; 47 percent pay nothing," said Bachmann. "We need to broaden the base so that everybody pays something, even if it's a dollar. Everyone should pay something, because we all benefit."
So who are these households that Republicans want to tax? The Tax Policy Center of the Urban Institute and Brookings Institution has recently conducted an analysis of "Why Some Tax Units Pay No Income Tax."

The Tax Policy Center found that of the households in the U.S. that pay no income taxes, about half do so because their incomes are so low that they fall below the standard exemption and deduction amounts. In 2010, the exemption and standard deduction for a single, non-elderly adult totaled $9,350; the exemptions and standard deduction for a non-elderly married couple filing a joint return totaled $18,700. The exemptions and standard deduction for elderly or blind filers or for households with children were somewhat higher. These income cut-offs are near or in some cases below the poverty threshold. For example, the poverty threshold for a single, non-elderly adult is $11,344; the threshold for a non-elderly married couple is $14,602.

Note that these exemptions and deductions can be claimed by nearly all taxpayers. Thus, most single, non-elderly taxpayers pay no federal income taxes on the first $9,350 of income, and most married, non-elderly taxpayers pay no federal income taxes on the first $18,700.

The other half of households that currently pay no income taxes do so because of special provisions and breaks in the tax code, which are sometimes referred to as "tax expenditures" or loopholes. One of the biggest tax breaks in the tax code is that a portion of Social Security benefits is excluded from taxable income. The Tax Policy Center calculates that special provisions for the elderly (the Social Security exclusion and the slightly larger standard deduction) account four out of nine households that owe no taxes because of tax expenditures.

There are also special provisions for households with children (e.g., the child tax credit) and the working poor (e.g., the Earned Income Tax Credit). These provisions account just under another third of the households that owe no taxes because of tax expenditures. Some means-tested cash transfers, such as Supplemental Security Income and Temporary Assistance for Needy Families, is not treated as taxable. These exclusions account for another six percent of households.

If we put these figures together, at least 90% of the households that are not paying federal income taxes are either have very low incomes or have somewhat higher incomes but are elderly or have children. Indeed, the Tax Policy Center calculates that 80% of the households that escape federal income taxation have incomes below $30,000.

Of the other households that escape federal income taxation, most do so because of policies that Republicans favor, including the mortgage interest deduction and the special treatment of capital gains and dividend income.

Taxes for some of these "no tax" households are scheduled to increase in coming years. In particular, the tax package that was approved last December extended some credits for working and poor families. Under the current law and under the Obama administration's budget proposals, the proportion of people paying some taxes would rise. So a tax increase is on the way.