Monthly Archives: February 2012

Against Prohibitionist public policy

I have an op-ed in the Missouri Record today discussing the proposed payday loan ban ballot initiative and why I think that this prohibition undermines the ability of society to order itself through the rule of law:

I am suggesting that as a society we evaluate carefully the kinds of prohibitions we are willing to tolerate. Alcohol prohibition is a classic example of when black markets created a society at war with itself, unable to tolerate the shackles of its own laws. This was not just because people chose to continue producing and consuming alcohol; it was also because the enforcement of alcohol prohibition further fractured society by creating black markets, places where no government can hope to long retain the consent or the good will of its own citizens.

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Against epistemic closure

Really superb article in the New Yorker, you should read the whole thing:

According to Nemeth, dissent stimulates new ideas because it encourages us to engage more fully with the work of others and to reassess our viewpoints. “There’s this Pollyannaish notion that the most important thing to do when working together is stay positive and get along, to not hurt anyone’s feelings,” she says. “Well, that’s just wrong. Maybe debate is going to be less pleasant, but it will always be more productive. True creativity requires some trade-offs.”

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Typical CA GOP

From a Tim Cavanaugh piece at Reason:

Meanwhile, the party’s hostility to freedom-oriented politics was best embodied by attendee Craig Newton, a retired prison guard on full pension who told this reporter he’d like to “punch” a Ron Paul supporter or a Democrat “in the face.”

Against Jon Sessions on the Columbia Enhanced Economic Zone

My friend Jon Sessions, a member of the Columbia School Board, recently published an essay defending the choice to declare Columbia “blighted” as part of the decision to designate much of the town an “Enhanced Economic Zone” (henceforth EEZ) under state law. Declaring Columbia an EEZ would allow the allocation of tax credits for “Businesses moving to the designated area or expanding within it can qualify for state income tax credits worth as much as two percent of payroll and property tax abatements worth half of the expanded or new facility.”

While the incentives would be “targeted at manufacturing firms”, “many other types of industries can qualify, including those focusing on arts, entertainment, recreation, information services, telecommunications and more”. However, “Retail businesses, gambling establishments, restaurants, educational services and religious organizations are not eligible.”

Is this in any way coherent? What is the justification for targeting “manufacturing firms” as opposed to retail businesses or restaurants? Why not target retail or restaurant establishments? In fact, why not just give everyone a tax credit? Certainly, that would stimulate employment as businesses looking to expand suddenly have extra cash to finance it with. Indeed, Sessions gives no warrant for targeting specific sectors and prioritizing certain kinds of employment and business above others. America is a country founded on the notion that everyone has equal opportunity to succeed; I propose we adhere to this notion by stimulating economic growth through broad-based changes in the tax policy, rather than by carving out special or protected industries that can’t survive on an equal playing field.

Moreover, the entire concept of competing for investment and growth through the use of targeted tax credits is fundamentally unsound. You often hear politicians or tax credit advocates argue that other cities and communities are offering this tax credit or that economic development program and if we don’t do that too we’ll miss out when companies come looking to expand. This “race to the bottom” mentality is corrosive, because it allows companies to pit city against city.

An economist might turn to auction theory to share some insight here. When cities look to attract investment and growth, they face a variety of choices, some good, some bad, some of uncertain value. Hence, there is a penalty when a city incorrectly decides a bad opportunity is in fact a good opportunity, and successfully offers a package of tax credits and incentives to chase that opportunity. Such overestimation is known as the “winner’s curse” and is on particular display on TV game shows like the Price is Right. While Sessions touts the assumed benefits of his strategy, he does not explain what happens when the city makes a bad decision, or why he thinks that the political nature of the decision-making process allows fair decisions.

Fundamentally, Sessions needs to articulate why he thinks Columbia’s “experts” in the government can always pick the right projects, offer the right packages, without making substantial mistakes. I challenge his implicit contention that policymakers can accurately gauge the future of economic growth, decide that they only want to promote certain industries, and decide what businesses should or should not succeed in Columbia. It would be better policy to keep a level playing field, and offer all people and businesses who wish to do business in Columbia a reduced tax burden.

Addendum: An astute reader notes this April 2010 post where I defend the school nutrition stance advocated by then-candidate Jon Sessions from a (very) spurious attack from Show-Me Institute policy analyst Sarah Brodsky.

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Perspectives on San Diego

“I’m always envious of people who live in San Diego, where history barely exists.”

That’s from an excellent article on Jerusalem Syndrome in Wired.

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Markets in everything, Medicare drug testing edition

Mark Collen has an important discussion of the profit motive that drives drug testing in America’s health system. Read the whole thing if you are interested, it is important:

Random drug testing of people being treated for chronic pain has become more common. Physicians may drug test patients on opioid therapy as a result of concerns over prosecution, drug misuse, addiction, and overdose. However, profit motive has remained unexplored. This article suggests profits also drive physician drug-testing behavior and evidence is offered, including an exploration of Medicare reimbursement incentives and kickbacks for drug testing.


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“Financial black swans driven by ultrafast machine ecology”

Today’s abstract:

Society’s drive toward ever faster socio-technical systems, means that there is an urgent need to understand the threat from ‘black swan’ extreme events that might emerge. On 6 May 2010, it took just five minutes for a spontaneous mix of human and machine interactions in the global trading cyberspace to generate an unprecedented system-wide Flash Crash. However, little is known about what lies ahead in the crucial sub-second regime where humans become unable to respond or intervene sufficiently quickly. Here we analyze a set of 18,520 ultrafast black swan events that we have uncovered in stock-price movements between 2006 and 2011. We provide empirical evidence for, and an accompanying theory of, an abrupt system-wide transition from a mixed human-machine phase to a new all-machine phase characterized by frequent black swan events with ultrafast durations (<650ms for crashes, <950ms for spikes). Our theory quantifies the systemic fluctuations in these two distinct phases in terms of the diversity of the system’s internal ecology and the amount of global information being processed. Our finding that the ten most susceptible entities are major international banks, hints at a hidden relationship between theseultrafast ‘fractures’ and the slow ‘breaking’ of the global financial system post-2006. More generally, our work provides tools to help predict and mitigate the systemic risk developing in any complex socio-technical system that attempts to operate at, or beyond, the limits of human response times.

Anyone remember Virilio’s critique of speed? Of course, Taleb is more relevant.

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Foucault seems relevant

Foucault 78 (Michel, Professor of Philosophy at the College de France, The History Of Sexuality: An Introduction, Volume 1, 136-137)
Since the classical age the West has undergone a very profound transformation of these mechanisms of power. “Deduction” has tended to be no longer the major form of power but merely one element among others, working to incite, reinforce, control, monitor, optimize, and organize the forces under it: a power bent on generating forces, mak¬ing them grow, and ordering them, rather than one dedicated to impeding them, making them submit, or destroying them. There has been a parallel shift in the right of death, or at least a tendency to align itself with the exigencies of a life-adminis¬tering power and to define itself accordingly. This death that was based on the right of the sovereign is now manifested as simply the reverse of the right of the social body to ensure, maintain, or develop its life. Yet wars were never as bloody as they have been since the nineteenth century, and all things being equal, never before did regimes visit such holocausts on their own populations. But this formidable power of death—and this is perhaps what accounts for part of its force and the cynicism with which it has so greatly expanded its limits—now presents itself as the counterpart of a power that exerts a positive influence on life, that endeavors to adminis¬ter, optimize, and multiply it, subjecting it to precise controls and comprehensive regulations. Wars are no longer waged in the name of a sovereign who must be defended; they are waged on behalf of the existence of everyone; entire populations are mobilized for the purpose of wholesale slaughter in the name of life necessity: massacres have become vital. It is as managers of life and survival, of bodies and the race, that so many regimes have been able to wage so many wars, causing so many men to be killed. And through a turn that closes the circle, as the technology of wars has caused them to tend increasingly toward all-out destruction, the decision that initiates them and the one that terminates them are in fact increasingly informed by the naked question of survival. The atomic situation is now at the end point of this process: the power to expose a whole population to death is the underside of the power to guarantee an individual’s con¬tinued existence. The principle underlying the tactics of bat¬tle—that one has to be capable of killing in order to go on living—has become the principle that defines the strategy of states. But the existence in question is no longer the juridical existence of sovereignty; at stake is the biological existence of a population. If genocide is indeed the dream of modern powers, this is not because of a recent return of the ancient right to kill; it is because power is situated and exercised at the level of life, the species, the race, and the large-scale phenomena of population.

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Sterling on Obama

Eric Sterling, who served as former Assistant Counsel to the U.S. House of Representatives Judiciary Committee (1979-1989), is interviewed by Phil Smith in an article today and has a number of excerpt-worthy quotes:

“It’s just the same old programs being funded through the same old stove-pipes,” said Eric Sterling, executive director of the Criminal Justice Policy Foundation. “In a way, it’s ironic. When Congress passed the legislation creating the drug czar’s office in 1988, the idea was for the drug czar to look at all the federal anti-drug spending and come in and say he was going to take the funds from one program and shift them to a more effective program. I think many in Congress hoped he would shift resources from law enforcement to treatment and prevention because there was evidence that those sorts of programs were more effective and a better use of resources. That didn’t happen,” he said.

“The people who run the bureaucratic fiefdoms at Justice, Homeland Security, Defense, State and Treasury have outmuscled the drug czar, and now the drug czar’s budget announcements are reduced to public relations and spin,” Sterling continued. “They take some $15 or $20 million program and bullet-point it as significant, but that’s almost nothing when it comes to federal drug dollars.”

“The hundreds of millions of dollar increases in funding requested for the Federal Bureau of Prisons is particularly outrageous,” said Sterling. “There are too many people doing too much time they don’t need to be doing. Obama has the power to save hundreds of millions of dollars by commuting excessively long sentences. He could reduce the deficit and increase the amount of justice in America.

“He could tell the BOP he was ordering a cap on the federal prison population that now has a sentenced population of 198,000, Sterling continued, on a roll. “He could order them that whenever a new prisoner arrives, they have to send him the names of prisoners who may have served enough time for their crimes for him to consider for immediate release from prison. He could ask all the federal judges to send him the names of people they have sentenced to longer terms than they think are just. If he had the heart to reach out to those prisoners who are serving decades for minor roles and their suffering families, if he had the brains to put in place the means to achieve those cost-serving measures, and if he had the guts to actually use the constitutional power he has to do it, that would be great.”

“We should be disappointed in the Obama administration,” said Sterling. “There was supposed to be change. This was the University of Chicago law professor, the Harvard-trained lawyer, who was going to bring in his own people and make real change. I’m very disappointed in his drug policies and criminal justice policies. My disappointment with his policy failures don’t have anything to do with the economic crisis or the geostrategic situation he inherited.

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New STL plan looks nice, but do we have to give out more tax credits?

My bro Asim sends me a link to the City to River blog, a website advocating for the revitalization of downtown Saint Louis. The plan advocated by the City to River folks seems like a good one to my non-expert judgement, but Asim suggests further that:

A signature, at-grade boulevard with some tax credits to bring in businesses, coupled with the subsequent creation of a special tax district to fund improvements to the Arch grounds would make much more sense, wouldn’t it?
As a matter of public policy, I think that using a special tax district and targeted tax credits sounds nice, but really is an implicit admission that it’s already too expensive to set up a business in downtown St. Louis. I’d rather want to see a focus on decreasing the cost of doing business in St. Louis across the board than see a process that will pick political winners or losers.
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American politics, part deux

Moreover, “fully 77 percent of liberal Democrats endorse the use of drones,” despite many resulting civilian casualties and its questionable legality.

It’s worth comparing the data to older polls.  Regarding Guantanamo, overall 70% of respondents agreed with President Obama on keeping Guantanamo open.  But in June 2009, more Americans favored closing the facility than keeping it open.  In 2006, only 57% of Americans supported using the Guantanamo detention center house accused terrorists.  Even in 2003, support was only at 65%.  Now, under the leadership of a President who campaigned with the promise to close the facility but reneged, support for the detention center may be at its highest level ever.

The Pew Research Center released a poll last year that demonstrated a similar shift of support by Democrats on the Patriot Act.  In 2006 under the Republican Bush, 25% of Democrats viewed the Act as a “necessary tool” and 53% thought it went too far.  Five years later under the Democrat Obama, 35% of Democrats said the Act was necessary, while only 40% thought it went too far.  Republicans, on the other hand, showed less support for the Act in 2011 than they did under Bush.

This is a very limited supply of information, ACED realizes, certainly not enough to draw firm conclusions.  However, the polling data suggests that a significant number of people who identify as belonging to a political party (a) change their values to conform to the policies of their party, and/or (b) change their values to oppose the leader of the other party.  Either is totally inconsistent with a citizen’s role in a democracy.

American politics in two sentences

From an article in today’s NYT:

But many older residents in Chisago say this problem belongs to younger generations. They paid what they were told; they want to collect what they were promised.

Will Claire regret indefinite detention vote?

In a KC Star article titled “New poll brings worrisome political tidings for McCaskill“, this quote:

But if nothing else, the numbers show that even in a weak Republican field, it’s – so far, anyway – not looking like a good year to be a Democrat.

I suspect the Democrats may come to regret abandoning the civil liberties constituency yet.

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