Comments on economics, mystery fiction, drama, and art.

Monday, July 24, 2017

All those meetings

I am tired of hearing that the famous meeting between the team of Junior, Kushner, and Manafort and the Russian lawyer wound up being about Americans adopting Russian children.

The reason no adoptions are occurring is a Russian law prohibiting them. If Russia wants to resume adoptions, all it needs to do is *repeal that law.*
But, it might be objected, that law exists for a reason.

And what, we ask, is that reason?

It's that the US has a law restricting investments by American companies in Russian oil & gas extraction projects. And Russia insists that the US end those restrictions *before* it will *consider* resuming adoptions.

So that meeting? It was really an attempt to get the US to end economic sanctions against Russia. Nothing more.

Friday, June 09, 2017

"Representative" Government in the United States

I've wondered about this for a while, and the election in the UK finally stimulated me to do the math.  The 5 most populous countries in western Europe are France, Germany, Italy, Spain, and the UK, with a total population of about 316 million.  The US has a population of about 320 million.  So about the same population base.

In the national parliaments of the European countries, each parliamentary member represents, on average, about 112,000 people (ranging from a high of 131,000 in Spain (46.1 million people, 350 MP) to a low of 95,000 (Italy: 59.8 million people, 630 MP.

In the US, the average member of the House of Representative represents about 720,000 people, or abut 6.5 times as many constituents as in Europe.  (The US would been a Congress of about 2,700 members to have the same constituents-to-representative ratio as the US does.)  Just for comparison sake, here are some numbers for the US through its history:

..............Number of
..............Members of................People per

Year......Congress................Representative
1900..........357........................213,479
1910..........391........................235,879
1920..........435........................243,727
1930..........435........................283,224
1940..........435........................303,827
1950..........435........................347.875
1960..........435........................412,237
1970..........435........................467,361
1980..........435........................520,795
1990..........435........................571,747
2000..........435........................646,947
2010..........435........................709,769

Compared to countries in Europe, this suggests that for at least 100 years US member of Congress have represented significantly larger constituencies that has been the case for European members of parliaments.  We are, in that sense, a "small government" country and always have been.  It seems to me to be impossible for any Member of Congress to know any significant number of the people s/he is representing personally--today, that would mean knowing over 7,000 in some sense personally.  It's even more difficult to believe that a member of Congress knows personally very many people who actually support the other party.


Clearly a Congress of 2,700 people is preposterous (unwieldy, impossible to manage effectively, and way too expensive).  But a Congress of 435 people, it seems to me, is increasingly creating the reality of a Congress composed of people who are literally incapable of knowing whom they represent.  (And, no, I don't have a solution.)

Monday, May 29, 2017

Robert Heinlein, Concerning Stories Never Written: A Postscript to Revolt in 2100

As for the second notion, the idea that we could lose our freedom by succumbing to a wave of religious hysteria, I am sorry to say that I consider it possible.  I hope that it is not probable. But there is a latent deep strain of religious fanaticism in this, our culture; it is rooted in our history and it has broken out many times in the past. It is with us now; there has been a sharp rise in strongly evangelical sects in this country in recent years, some of which hold beliefs theocratic in the extreme, anti-intellectual, anti-scientific, and anti-libertarian.

It is a truism that almost any sect, cult, or religion will legislate its creed into law if it acquires  the political power to do so, and will follow it by suppressing opposition, subverting all education to seize early the minds of the young, and by killing, locking up, or driving underground all heretics.  This is equally true whether the faith is Communism or Holy-Rollerism; indeed it is the bounden duty of the faithful to do so.  The custodians of the True Faith cannot logically admit tolerance of heresy to be a virtue.
Nevertheless this business of legislating religious beliefs into law has never been more than sporadically successful in this country – Sunday closing laws here and there, birth control legislation in spots, the Prohibition experiment, temporary enclaves of theocracy such as Voliva’s Zion, Smith’s Nauvoo, a few others.  The country is split up into such a variety of faiths and sects that a degree of uneasy tolerance now exists from expedient compromise; the minorities constitute a majority of opposition against each other.
 
 Could it be otherwise here?  Could any one sect obtain a working majority at the polls and take over the country? Perhaps not – but a combination of a dynamic evangelist, television, enough money, and modern techniques of advertising and propaganda might make Billy Sunday’s efforts look like a corner store compared to Sears Roebuck. Throw in a depression for good measure, promise a material heaven here on earth, add a dash of anti-Semitism, anti-Catholicism, anti-Negroism, and a good large dose of anti-“furriners” in general and anti-intellectuals here at home and the result might be something quite frightening – particularly when one recalls that our voting system is such that a minority distributed as pluralities in enough states can constitute a working majority in Washington.
 
I imagined Nehemiah Scudder [the first Prophet--DAC] as a backwoods evangelist...[who was left] several millions of dollars...on their wat to fame and fortune.  Presently they needed stormtroopers; they revived the Ku Klux Kln in everything but the name...Blood at the polls and blood in the streets, but Scudder won the election.  The next election was never held.
 
Impossible?  Remember the Klan in the Twenties--and how far it got without even a dynamic leader.  Remember Karl Marx and note how close that unscientific piece of nonsense called Das Kapital has come to smothering out all freedom of thought on half of a planet, without--mind you--the emotional advantage f calling it a religion.  The capacity of the human mind for swallowing nonsense and spewing it forth in violent and repetitive action has never yet been plumbed.
 
Written in October 1952

Wednesday, May 24, 2017

Personal history: Taxes and growing up

The other night, I was thinking about health care, and about the fairly common practice, as late as the 1950s, of primary care physicians (or, "family doctors," as they were called then) engaging in (informal, and mostly secret) price discrimination.  It was , as I say, common--doctors charged their low-income patients lower prices for office visits and often for simple, routine operations (tonsillectomies, for example), and their higher income patients higher prices.[1]  I was aware of this, even at the time, because my family was, in fact, a beneficiary of that price discrimination--we were low income, my father did not have health insurance through his employer, and my mother did not work outside the home for pay until around 1959 (when I was 11, and the youngest child in the family was 5 and in school half-days).

This led me to think, for some reason, about taxes.  In 1956/1957, my father was working as a credit manager for a wholesale plywood company.  The job was "white collar," but did not require significant skills; someone who could be employed as a bookkeeper could do the job.  At that point, he was 35/36 years old, with a BS (business, with a concentration in accounting) from a well-regarded local university.  He was making $300 a month.[2]  He was married, with four children. My mother, who at that time was not working, had a BA in music (with a minor in English) and an Indiana elementary/secondary teacher's license.  So what was the family tax situation?

He earned $3,600 per year.  At the time, the federal income tax provided personal exemptions of $600 per person for a family which was married and filing jointly.  Our family, then, had no federal income tax liability.  Indiana (where we lived) had a 2% personal income tax, applied to the family's adjusted gross income from the federal return.  Our AGI was $0, so we paid no state income tax.  The state had no sales tax until 1959.  Social Security tax was 2.25% per year, or $81 per year.

That leaves (besides excise taxes on cigarettes, gasoline, and alcohol) the property tax.  When my family moved to Indianapolis in 1952, my parents bought a fairly large 2 story house, for $9,600.  By 1967, the house was probably worth around $12,500, and the property tax rate (f my subsequent experience of living in Indianapolis is applicable) would probably have been (roughly) 2% of the market value of the property, or about $250 per year.  My best guess is that state excise taxes on gasoline, alcohol, and cigarettes probably cost our family another $150 or so per year. 

Adding that all up, I get something like $500 per year in federal, state, and local taxes, or about 14% of the total family income.  We were, in a very real sense, either very, very near the bottom of "lower middle income," or below that...we were most likely poor.  And our family doctor most likely knew that, and so we got a break on his rates.  (We were, I should note, a generally healthy family, so our health care expenses were probably quite low, but definitely not zero; I know that when my father broke his left thumb and wrist, paying the doctor and hospital bills were a big deal.)

There's no big point here, just a little family history...

[1] The practice is described here:
Reuben A. Kessel , "Price Discrimination in Medicine," The Journal of Law & Economics,Vol. 1 (Oct., 1958), pp. 20-53.

[2] The equivalent of about $2,600 per month today.

Sunday, May 21, 2017

Student Debt

I posted a snarky comment on a blog I read  about levels of student debt in the 1970s and decided to take a look at actual data, which are here:
file:///C:/Users/donco/AppData/Local/Microsoft/Windows/INetCache/IE/KWD7VJ0E/Baum.pdf

Inflation-adjusted (2012 prices) debt per enrolled student (in 4-year colleges and universities):

Year......Average Debt
1971.......$1,006
1976........$   883
1981........$2,186
1986........$2,356
1991........$2,485
1996........$4,046
2001........$4,597
2006........$6,626
2011........$7,407
2013........$6,928


This is the average level of student debt, across all students, and includes students with no debt. The increase is extraordinary--averaged across all students, (inflation-adjusted) debt was about 7 times as high in 2013 as in 1971. The same report from which I extracted the above data also reports:
"Most discussions of average debt levels focus on debt per borrower, setting aside the significant number of college students who do not borrow at all, or at least do not rely on education loans. In 2007-08, 34% of bachelor’s degree recipients, 52% of associate degree recipients, and 37% of those who earned postsecondary certificates did not have education debt. Including these students may obscure some of the potential problems facing borrowers, but it paints a clearer picture of how students finance their education. For example, in 2007-08,median debt for bachelor’s degree recipients who borrowed was $20,000 and 10% borrowed more than $44,500. The median for all bachelor’s degree recipients was $11,000 and the 90th percentile was $39,300."

So in 2007-2008, 2/3 of all bachelor's degree recipients had some student debt. I can find no data for the early 1970s, but my own experience suggests that less than 1/3 of degree recipients in the early 1970s had student loans. So the median in 1971 was probably zero, whereas the median in 2007-08 was, according to t his report, $11,000 (looking only with students with some debt, the median was $20,000).

Friday, March 17, 2017

Lance Kenworthy and the Declining Employment Status of Men

Lance Kenworthy has written a two-part essay appearing in Foreign Affairs (Part 1Part 2) discussing the argument that the employment prospects for prime working-age men (age 25-54) have deteriorated.  His Figure 1 shows a decline in the employment-population ratio for men age 25-54 from about 94% in 1950 to about 85% in 2016.  (Over the same time period, the employment-population ratio for women rose from about 33% to about 71%; overall, the employment-population ratio has increased from about 63% to about 78%.)  In general, his discussion of factors proposed as causes specifically for the decline in men's employment-population ratio is reasonably comprehensive (he leaves out one major factor, of which more below) and quite good.

But this discussion is only partial, and, when it touches on differences between with and black men, does not deal with those differences in depth.  Below is a chart showing the employment-population ratios for white and black men, ages 25-54; unfortunately, the available data go back only to 1994.  What this chart shows is something that one would not expect, based on Kenworthy's discussion (all data from the BLS web site):



(Click to enlarge)
 

The remarkable aspect of this, to me, is that between 1994 and 2007, both for black males and for white males, the employment-population ratio was remarkably stable--between 75% and 80% for black males and between 88% and 90% for white males.  Unsurprisingly, employment dropped sharply for both groups in The Great Recession, and began to recover in only in 2009 for white males and in 2011 for black males.  Perhaps surprisingly, the recovery has actually been greater for black males--up from 66.4% in January 2011 to 74.9% in February 2017 (for white males, the recovery began from a low of 81.4% in January 2009--two years earlier than for black men--but has reached only 86.1% by February 2017). 

If anything represents a problem here, it  is not that the employment population ratio for prime-age men has continued to fall; it is that the recovery of employment since the trough of the recession has been so slow.  If there is an issue to discuss with men's employment, it is the contrast, during the same period, with women's employment-population ratios (also for blacks and whites, age 25-54:

(Click to Enlarge)
 

In contrast to men, women's employment fell much less (albeit more for black women than for white women) during the recession and recovered to their pre-recession levels by 2017 (while men's employment levels remained below their pre-recession levels).  The story, then, since 1994, is (1) relatively stable employment-population ratios for prime age men and women, disaggregated by race and (2) the recovery of women's employment, but not men's, to the pre-recession level. 

The policy challenge, then, might be something quite different from what Kenworthy focuses on (especially in part 2 of his discussion)--what needs to be done--or, perhaps, what should have been done during the recovery from 2009 to 2017--that would move men's employment prospects back to their pre-recession levels.  The number of jobs involved is large--about 1.860 million (3.9%) more jobs for prime-age white men, and 0.450 million (3.1%) more jobs for prime-age black men. 

An economy that had generated 2.3 million more jobs by February 2017 would look very different from the economy that we actually have.

Sunday, February 12, 2017

Is this any way to run a superpower? This is all--all--from one NYTimes article

 "And while Mr. Obama liked policy option papers that were three to six single-spaced pages, council staff members are now being told to keep papers to a single page, with lots of graphics and maps...“The president likes maps,” one official said."
One page, with lots of graphics and maps...and how much space does that leave for, you know, WORDS?


"Three weeks into the Trump administration, [National Security council] staff members get up in the morning, read President Trump’s Twitter posts and struggle to make policy to fit them. Most are kept in the dark about what Mr. Trump tells foreign leaders in his phone calls..."

"...what is happening under the Trump White House is different, officials say, and not just because of Mr. Trump’s Twitter foreign policy. (Two officials said that at one recent meeting, there was talk of feeding suggested Twitter posts to the president so the council’s staff would have greater influence.)"

"New Trump appointees are carrying coffee mugs with that Trump campaign slogan into meetings with foreign counterparts, one staff member said."

"Mr. Trump’s council staff draws heavily from the military...Many of the first ideas that have been floated have involved military, rather than diplomatic, initiatives."

"Last week, Defense Secretary Jim Mattis was exploring whether the Navy could intercept and board an Iranian ship to look for contraband weapons possibly headed to Houthi fighters in Yemen...But the ship was in international waters in the Arabian Sea, according to two officials. Mr. Mattis ultimately decided to set the operation aside, at least for now."

  "Paper flow, the lifeblood of the bureaucracy, has been erratic. A senior Pentagon official saw a draft executive order on prisoner treatment only through unofficial rumors and news media leaks. He called the White House to find out if it was real and said he had concerns but was not sure if he was authorized to make suggestions."

"Officials said that the absence of an orderly flow of council documents, ultimately the responsibility of Mr. Flynn, explained why Mr. Mattis and Mike Pompeo, the director of the C.I.A., never saw a number of Mr. Trump’s executive orders before they were issued. One order had to be amended after it was made public, to reassure Mr. Pompeo that he had a regular seat on the council."

"Two people with direct access to the White House leadership said Mr. Flynn was surprised to learn that the State Department and Congress play a pivotal role in foreign arms sales and technology transfers. So it was a rude discovery that Mr. Trump could not simply order the Pentagon to send more weapons to Saudi Arabia — which is clamoring to have an Obama administration ban on the sale of cluster bombs and precision-guided weapons lifted — or to deliver bigger weapons packages to the United Arab Emirates."
 My comment:  Cluster bombs are anti-personnel weapons. And in Saudi Arabia, that means they are intended for use against civilians.


"Several staff members said that Mr. Flynn, who was a career Army officer, was not familiar with how to call up the National Guard in an emergency — for, say, a natural disaster like Hurricane Katrina or the detonation of a dirty bomb in an American city."

And there's much more.

Did 14% on non-citizen residents vote? Not just no, but there is no evidence that any significant number of non-citizen residents voted.

If you keep hearing about an "academic study" which concludes that 14% of the non-citizen residents of the US voted, here's what the people who do the survey on which that study is based have to say about it:
"We found that NONE of the 85 individuals in the 2010-2012 panel survey who indicated that they were non-citizens in 2010 and again in 2012 in fact voted."
http://www.factcheck.org/…/10/trumps-bogus-voter-fraud-cla…/

They use a panel study approach, in which the sample consists of a fairly large group of people who are interviewed or fill out a survey response form repeatedly over time. They can then identify some response errors (e.g., someone who checked the "citizen" box in one year and the "non-citizen" box in another). And the sample of non-citizens is really small--85 in the repeated sample (none of whom claimed to have voted, you will note).

The people who maintain the database allow other people to use it for research purposes, but they are not the ones who did this research, about which they say: “The Richman and Earnest study is an incorrect use of the survey that we manage, and a false claim of evidence of non-citizen voting. It’s a dangerous, stray false-fact.”

12 February




The Second Inaugural Address

Fellow-countrymen: At this second appearing to take the oath of the presidential office, there is less occasion for an extended address than there was at the first. Then a statement, somewhat in detail, of a course to be pursued, seemed fitting and proper. Now, at the expiration of four years, during which public declarations have been constantly called forth on every point and phase of the great contest which still absorbs the attention and engrosses the energies of the nation, little that is new could be presented. The progress of our arms, upon which all else chiefly depends, is as well known to the public as to myself; and it is, I trust, reasonably satisfactory and encouraging to all. With high hope for the future, no prediction in regard to it is ventured.

On the occasion corresponding to this four years ago, all thoughts were anxiously directed to an impending civil war. All dreaded it—all sought to avert it. While the inaugural address was being delivered from this place, devoted altogether to saving the Union without war, insurgent agents were in the city seeking to destroy it without war—seeking to dissolve the Union, and divide effects, by negotiation. Both parties deprecated war; but one of them would make war rather than let the nation survive; and the other would accept war rather than let it perish. And the war came.

One-eighth of the whole population were colored slaves, not distributed generally over the Union, but localized in the Southern part of it. These slaves constituted a peculiar and powerful interest. All knew that this interest was, somehow, the cause of the war. To strengthen, perpetuate, and extend this interest was the object for which the insurgents would rend the Union, even by war; while the government claimed no right to do more than to restrict the territorial enlargement of it.

Neither party expected for the war the magnitude or the duration which it has already attained. Neither anticipated that the cause of the conflict might cease with, or even before, the conflict itself should cease. Each looked for an easier triumph, and a result less fundamental and astounding. Both read the same Bible, and pray to the same God; and each invokes his aid against the other. It may seem strange that any men should dare to ask a just God's assistance in wringing their bread from the sweat of other men's faces; but let us judge not, that we be not judged. The prayers of both could not be answered—that of neither has been answered fully.

The Almighty has his own purposes. "Woe unto the world because of offenses! for it must needs be that offenses come; but woe to that man by whom the offense cometh." If we shall suppose that American slavery is one of those offenses which, in the providence of God, must needs come, but which, having continued through his appointed time, he now wills to remove, and that he gives to both North and South this terrible war, as the woe due to those by whom the offense came, shall we discern therein any departure from those divine attributes which the believers in a living God always ascribe to him? Fondly do we hope—fervently do we pray—that this mighty scourge of war may speedily pass away. Yet, if God wills that it continue until all the wealth piled by the bondman's two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said, "The Judgments of the Lord are true and mighty altogether."


With malice toward none; with charity for all; with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in; to bind up the nation's wounds; to care for him who shall have borne the battle, and for his widow, and his orphan—to do all which may achieve and cherish a just and lasting peace among ourselves, and with all nations.