Monthly Archives: June 2010

Lalas on Americans

For fans, yesterday’s US victory over the plucky Algerians to qualify for World Cup outrounds was tremendously emotional. Many pundits have discussed the different factors at work in American soccer, including the different kinds of athleticism and attitude that have sustained American soccer on the world stage. Here is a good thought on the subject from today’s NYT:

Midway through the second half, while watching Howard rush the ball toward his mates, I thought about something Alexi Lalas told me more than a decade ago when he was playing for Calcio Padova in the Italian Serie A. Some players on that weak team would give up if they fell a goal behind on the road, Lalas said, but American athletes would never give up.

It was an interesting point of view, and I was reminded of it again on Wednesday when Tim Howard sent the ball downfield, and a whole track team of runners sprinted after it for the goal that did, at least for three days, change everything.

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Roethke on Faulkner

In a letter to Kenneth Burke, dated Feb. 8, 1949, Ted Roethke notes:

…Hope you like the kid’s piece. Off-hand, I don’t know anyone who’s tried this before, with any success. Joeyce is something else. (Yearh, yeah, and a slackened tension, often). Also Faulkner in As I Lay Dying isn’t the same, and doesn’t hold up so well on re-reading.

The “kid’s piece” is in reference to a poem Roethke had out for submission at the time, written from the perspective of a small child. The poem is titled “Where Knock is Open Wide”; the only place I can find it is on JSTOR, here.

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No budget? No Problem!

Found this brochure for an asset forfeiture conference aimed at state and local law enforcement. The location of the conference is Hollywood, Florida during April 15-16 2009. The brochure advertises a variety of seminars designed to educate local law enforcement about the forfeiture process and how to turn seizeable property into money that goes to law enforcement budgets.

Most tellingly, the brochure starkly proclaims that law enforcement can become self-funding free of legislative constraints:

In last twenty years economists from Oliver Williamson to Ronald Coase famously declared “Incentives matter”. And we are learning that they do matter very much, particularly in terms of how institutions and structures function. If structures like representative democracy need clear and distinction separation of powers to function well (if at all), then they need to happen through incentive-compatible channels. Democracy itself breaks down when executive branch agencies conduct their affairs in obscure and impermeable fashions, obtain funding without regard for legislative stipulation and judicial mandate, and lose the incentives to listen to the communities that they serve.

Because when the federal government helps law enforcement pay their bills free of our consent, we lose the ability to shape the policies that guide our law enforcement. Now federal dollars incentivize law enforcement to prioritize cases and methods that result in property they can seize, rather than prosecute crimes of violence that are less lucrative. We serve search warrants on people who have never been implicated in the least hint of violence with paramilitary squads in the land where Patrick Henry once declared “Give me freedom or give me death”. In Missouri, our legislators and judges told us that crimes where fines or forfeiture happened would be prosecuted fairly and the money given to schools, to help the young do greater things that we can. This is no longer the case, and we are incalculably poorer for it.

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From the referrals, re: Rand Paul’s naive libertarianism

Saw an incoming link from a site called AesopsRetreat to my posts earlier about Rand Paul and racism. They excerpt this line:

“I could say alternatively that racism by businesses has serious negative externalities in practice and I’m ok with government regulation on those grounds.

A commenter on the thread notes:

Rand Paul will win on REAL ISSUES that are of concern to the voters.

Racism is not an issue in 2010. This is not 1964.

Well, perhaps racism is not an issue in 2010, if you are white and live in Kentucky. If those two stipulations don’t apply, perhaps it is more obvious that racism and the violence that accompanies overt displays of racism are pretty scary prospects.

Perhaps I should restate my argument for clarity. I point out that a transaction between an individual and a business not not just implicate the property rights of the individual and the business. The city or governmental entity that issues a business license on behalf of its citizens has a property right interest in ensuring that business is transacted in ways that do not reflect badly on the community and ensure the public safety.

Hence building codes, health codes, etc. Libertarians rarely challenge building codes or health codes from a philosophical point, but if they want to argue that businesses should be allowed to conduct racist business practices, they should maintain consistency and advocate for the abolition of all ground-level regulations that come with obtaining a business license.

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A quick but revealing anecdote on productivity

I have a friend who is nearly done with his degree in mechanical engineering. He found a summer job writing contract specifications or something similar for an engineering firm bidding on a government contract. The firm contracted him for a lump sum, assuming that the writing the contract would take him 160 hours. Using Microsoft Word, he finished this task in 20 hours.

When I heard this story, I asked him to think about the aggregate inefficiencies in this economy that exist because people don’t know how to use word processors.

What do you think?

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Wise words from Tyler Cowen

From Marginal Revolution:

Macroeconomics really is just a theory.  Politicians are reluctant to spend more money, in tough times, on the basis of a mere theory.  Advocates of fiscal stimulus make it sound as simple as solving an undergraduate homework problem and I think they sometimes genuinely do not realize how much the rest of the world, including politicians, views them as simply being very convinced by their own theory.  There are plenty of historical examples with confounding factors and I’ve linked to some of them lately.  One default hypothesis is that the ranges of fiscal policy being discussed, whether looser or tighter, aren’t going to matter much one way or the other.

I would recommend anyone who takes theory out into the real world to read those words carefully. I find the sentiment is good grounding particularly for econ people who don’t understand why even intelligent politicians don’t make economically sensible policy choices.

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Columbia Public Schools decides to upgrade school lunch quality

Today the Columbia Public School board voted unanimously to raise prices on meals provided to students at Columbia schools with the intent of upgrading the quality of the food they serve children. The increased revenue will be used to purchase more locally-produced fresh foods and vegetables, which are usually produced by smaller, non-industrial farming operations and tend to have more nutritive value.

The Columbia Tribune reports that this policy decision was the result of a grassroots shift in consumer preferences regarding the quality of food in school cafeterias:

Belcher said the added revenue could pay for new equipment for more actual cooking to take place in the district’s kitchens.

He said he proposed the 35-cent jump as a response to the residents who have been demanding more local and healthier food in the schools.

“I keep getting pushed by the public and rightly so,” Belcher said.

School board members agreed. “One thing I hear the most about is school lunches,” board member Ines Segert said.

Belcher also said hiking prices now should help keep the district from going into debt to subsidize its nutrition services as other Missouri school districts have done.

“We have no opposition to bringing fresh foods and trying to increase the quality of foods,” Belcher said.

Addendum: Scott Rowson has more.

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Question of the Day, North Korea World Cup edition

How many North Koreans who have been permitted to attend the World Cup will attempt to defect? Alternatively, how difficult is it for the North Korean government to maintain tangible leverage on those attending?

For some historical parallels, consider defectors from the Soviet Union, many of whom were athletes or competitors in international competitions of some kind.

Here is one estimate of the number of North Koreans in attendance (~40).

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Li on judicial decisionmaking

Jimmy Li over at the worthwhile Traiberman-Li blog has this discussion on decisionmaking, from which I excerpt this section:

In one of their studies, K&E looked at the bail decisions of five San Diego judges (each of whom did not know they participating in a study when they made their decisions). As K&E mention, most states have explicit guidelines that judges are supposed to follow in making their bail decisions (a “bail decision” is a decision on whether to grant bail, and at what price). At the time of the study, for example, California’s guidelines emphasized factors like “dangerousness,” “risk of non-appearance,” and “community ties of the defendant.” To what extent did factors like these actually influence judges’ decisions?

To answer this question, K&E developed and tested many decision models, each of which took into account different factors, and to varying degrees. A simple model, for example, might make a decision based purely on the defendant’s criminal history (e.g. “If any criminal history, no bail”), while a more complex model might include four or more differentially-weighted factors.

When K&E compared their models’ predictions to the judges’ actual decisions, they found that judges’ behavior was “characterized by a remarkable (almost offensive?) simplicity.” In setting bail, for example, judges’ decisions could be fully predicted by just two factors: the recommendation of the prosecuting attorney and the recommendation of the defense attorney (with much more weight granted to the former). The two attorneys, in turn, based their recommendations off of just one factor: the severity of the crime.

This means that when it comes to setting bail, many of the factors that the California guidelines enumerated and all of the factors that the judges (when interviewed) claimed to consider didn’t make into judges’ actual decision functions. Instead, they took into account just one factor, and they did so indirectly, through their reliance on the prosecution and defense.
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Sentences that are rarely used

Romer’s prescription is not merely neo-medieval, in other words. It is also neo-colonial.

That’s from a great article in the Atlantic about Paul Romer and charter cities. H/T Greg Young.

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On the Columbia Police Department and the “silent majority”

Brennan David reports about the Columbia police department’s new customer surveys in today’s Columbia Tribune:

“I think the chief recognizes that most of the department supplies excellent customer service,” said police spokeswoman Officer Jessie Haden. “If someone has a bad experience, they are vocal about that. The people that are happy with service can be the silent majority. This is another way to get feedback.”

The charitable interpretation here is that the police department is delusional about precisely how to measure customer satisfaction and fail to recognize that citizen interactions with police often happen in the context of overwhelming displays of force. It is not disputed over the last several years there have been numerous incidents of police brutality and misconduct in Columbia that have only been publicized through a serious of fortuitous accidents and the emergence of modern video recording technology that can be deployed through cellphones. Often members of poor and politically weak groups, particularly black people, are the victims of police brutality and misconduct, and find their complaints stymied by police bureaucracy and the tendency of law enforcement to protect its own.

When citizens are the victims of substantial and forceful rights violations they are left with the belief that the system does not exist to protect them and that they are best served by dropping out and not participating. It is hard to convince people that after their doors have been kicked in by SWAT teams dressed in paramilitary gear for non-violent misdemeanor offenses that their complaints of rights violations will be met by a receptive officer at the desk or even by the Internal Affairs department. Moreover there is evidence that rights violations are systemic and underreported by the Columbia Police department. Check out this particularly egregious case where the Columbia police department is on video outright lying to an attorney waiting in their lobby to speak to his client; officers told his client, who was in the holding cell, that her attorney had gone home, and told the attorney that his client had not asked to see him yet.

So no. Officer Haden is wrong in saying that there is a “silent majority” that is happy with their “customer service”. People are silent because they have been silenced and fear reprisal, not because they are happy with their law enforcement.

Welcome to Soviet America.

Addendum: here is the link to the CPD’s customer survey, which can be presumably filled anonymously.

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On the Pigovian nature of cigarette taxes

Martha King at the Show Me Daily notes that Missouri’s cigarette taxes are the lowest in the nation and tries to make a rather interesting argument about liberty:

Although the majority of Americans don’t smoke, a new poll suggests that most voters would favor increases in tobacco taxes as an alternative to state budget cuts. This kind of discrepancy demonstrates one of the main problems with cigarette taxes — those least directly affected by the tax feel justified in imposing a tax on those most affected.

This analysis falls rather short. Here are some problems with it.

  • Martha provides no empirical support for the notion that those most affected by cigarette taxes don’t also think that these taxes are justified.
  • Cigarettes don’t exist in a vacuum. Like many goods and services, their production and use as intended create serious negative externalities that aren’t priced into the market price of cigarettes.That is to say, there are many costs of smoking that smokers don’t pay for when they purchase a pack of cigarettes.

The health costs of cigarettes are high and undisputed. This is particularly true when you include the victims of second or third-hand smoke. At some point government healthcare programs foot a substantial amount of the costs and generally everyone is worse off:

The data in this book are based on present value of loss for men and women who are smokers at the age of 24. One factor that is distinct in this study is the calculation of “quasi-external cost,” which the authors define as the cost of freedom of choice to the family members of smokers, including children who are nonsmokers. In their longitudinal analysis of lifetime smoking, the authors estimate that the social cost of smoking, which is a sum of purely private, quasi-external, and external costs (the latter determined by excise tax) for a 24-year-old person turns out to be $39.66 per pack of cigarettes. The cost to Medicare, Medicaid, and Social Security is substantial. The quasi-external cost of smoking to the spouse of a 24-year-old who smokes comes to a staggering $28 billion. After considering these numbers and the amount of people who turn 24 each year and smoke, the authors of this book have predicted that the national external and quasi-external lifetime cost per year is $13.8 billion for females and $32.8 billion for males. Thus, with each new cohort of 24-year-old smokers in the United States there is an additional $204 billion of lifetime costs. These staggering expenses in light of the high number of smokers in the country make a convincing argument for rethinking the issue of public health policy making. Federal and state cigarette excise taxes have increased dramatically over the years. The calculations made by Sloan and his coauthors provide an analytical reason for such increases.

This study is not a complete evaluation of the costs of smoking. There are many other studies that attempt to quantify the hidden economic costs of smoking and there is of course much debate on what methodology is best, etc. I would note that one cost that I’ve never seen computed is the harm done to the earth and our groundwater as toxic chemicals seep out of the millions of butts smokers casually toss wherever they can (4.5 trillion a year globally, according to one estimate).

My intuition is that cigarettes, particularly in Missouri, are underpriced. Raising Missouri’s taxes would be an excellent way to make smokers pay for the harms of using cigarettes; my only comment is that is it is probably true that we don’t have the political will to raise them high enough. As a matter of functional policy I would at least align Missouri’s cigarette taxes with neighboring states, as drastically lower prices in Missouri provide an attractive opportunity to cigarette smugglers, who buy cigarettes in Missouri on the cheap and market them in black or grey markets particularly in Chicago, where taxes are way higher.

Economists like Arthur Ceceil Pigou have approached this problem before and favor policy mechanisms that “internalize the externalities”. In real life this is often done simply by taxing the good or service that is implicated in the negative externality. Generally this is a concept addressed in introductory economics classes.

So if we’re going to make a John Stuart Mill argument about liberty and whatnot, I would say that yes, liberty is important, and it is also important to understand precisely where all the costs of cigarettes manifest themselves and be prepared to make an appropriate cost-benefit analysis.

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How the state of Missouri could save money in a tough budgetary climate

The view from Schmitt,Warner, and Gupta (2010):

The United States currently incarcerates a higher share of its population than any other country in the world. We calculate that a reduction in incarceration rates just to the level we had in 1993 (which was already high by historical standards) would lower correctional expenditures by $16.9 billion per year, with the large majority of these savings accruing to financially squeezed state and local governments. As a group, state governments could save $7.6 billion, while local governments could save $7.2 billion.

These cost savings could be realized through a reduction by one-half in the incarceration rate of exclusively non-violent offenders, who now make up over 60 percent of the prison and jail population.

Missouri Supreme Court Chief Justice William Price puts this into perspective for Missouri in a Feb. 3rd, 2010 speech:

Perhaps the biggest waste of resources in all of state government is the over-incarceration of nonviolent offenders and our mishandling of drug and alcohol offenders. It is costing us billions of dollars and it is not making a dent in crime.

Listen to these numbers. In 1994, shortly after I came to the Court, the number of nonviolent offenders in Missouri prisons was 7,461. Today it’s 14,204.  That’s almost double. In 1994, the number of new commitments for nonviolent offenses was 4,857. Last year, it was 7,220 — again, almost double. At a rate of $16,432 per offender, we currently are spending $233.4 million a year to incarcerate nonviolent offenders … not counting the investment in the 10 prisons it takes to hold these individuals at $100 million per prison. In 1994, appropriations to the Department of Corrections totaled $216,753,472. Today, it’s $670,079,452.  The amount has tripled. And the recidivism rate for these individuals, who are returned to prison within just two years, is 41.6 percent.

Here is a graph, again from CEPR:

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Are fewer people killed by cigarettes in a recession?

Increases in wages are associated with greater consumption of cigarettes.

That’s from this paper by Xin Xu and Robert Kaestler.

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Arbitrage in everything, Ebaying your Facebook friends edition

This fellow is auctioning his ability to suggest Facebook pages to his 3,000 friends for $10. He has other packages too; 500 friends for $3, and 1500 for $5.

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