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

Friday, September 29, 2006

Angry and depressed

I have generally tried to avoid being explicitly political here, but there comes a limit.

To the best of my knowledge, we have become the only country with a democratically-elected government to embrace torture as an instrument of policy.

We now allow one person, unhindered by any review, to determine what punishments may be imposed on virtually anyone.

We can now seize almost anyone, confine that person secretly, without access to a lawyer or to a court.

We can confine those persons, apparently indefinitely, without allowing them to plead their innocence, their wrongful seizure and imprisonment, before an independent judiciary.

We can now expose almost anyone to charges that might result in imposition of a death sentence, before a tribunal within which their rights are not protected. Hearsay evidence. Coerced testimony. Secret evidence. No opportunity to cross-examine one's accusers. This is not a trial. This is not the rule of law.

We have now exposed our soldiers, our intelligence agents, to similar treatment--and we cannot sensibly object--because what may be done to our soldiers and our intelligence agents, is what we claim the right to do to others.

And that's the best case I can make.

Both my Senators voted for this. One, Richard Lugar, is a man for whom I have had some respect, for his intelligence, for his independence. No longer.

We are all complicit in this. The only question, now, is what we will do about it.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these rights are Life, Liberty, and the pursuit of Happiness.."

No longer.

Monday, September 18, 2006

Where productivity growth lags

Over the last seventeen (1987 - 2004) years, the slowest growth in labor productivity has been in the funeral parlor business. Make of that what you will.

From Mark Thoma's Economist's View.

Monday, September 11, 2006

Where people save

Apparently A.G. Edwards has done a study on savings, and has created a map in which states are labeled as "above average" and "below average" in their savings rates. Indiana ia an "above-average" savings state, ranking 17th in savings rate out of the 50 states. Most low-savings-rate states are in the south and the mountain west. It's not clear from the web site exactly what they are measuring.

Just for kicks, I decided to regress the Saving Score (SS) (even though I'm not sure what it means) on per capita income by state (PCI) (in thousands of constant (2000) oallars, in 2004). There are the results:

SS = 51.752 + 1.580*PCI

R-sq = 0.196

F = 11.69

So, oddly enough, while the savings score is related to income, there's a lot of unexplained variance.

There's also a community-by-state report with a clickable-link from the study site. Apparently northwest Indiana doesn't exist for Edwards--the following cities are not on their list:

East Chicago

Michigan City


Although other, smaller cities are.
(Hat tip to Craig Depken at Heavy Lifting for the link.)

The coming pension shortfall?

In a paper by Alicia Munnell Mauricio Soto, Jerilyn Libby, and John Prinzivalli, findings that suggest that defined-benefit pension plans out-perform 401(k)s or IRAs:

"The bottom line is that over the period 1988-2004 defined benefit plans outperformed 401(k) plans by one percentage point. This outcome occurred despite the fact that 401(k) plans held a higher portion of their assets in equities during the bull market of the 1990s. Part of the explanation may rest with higher fees, which are deducted before returns are reported to participants. But the one percentage point shortfall understates the investment problem in 401(k) plans, since an aggregate number does not reflect the fact that more than half of participants in 401(k) plans do not follow the prudent investment strategy of diversifying their holdings. Finally, the available data suggest that IRAs produce even lower returns than 401(k) plans, which, if true, implies trouble ahead given the massive amount of money that is being rolled over into these accounts."

This is a highly cautionary finding for those who propose a major movement from defined-benefit plans to defined-contribution plans. (Hat tips to Brad deLong and PGL at Angry Bear.)