Streetwise Professor

December 30, 2012

For Me But Not For Thee, You Bitter Clinging Bloody Peasant

Filed under: Politics — The Professor @ 5:16 pm

If you want a perfect illustration of the MO of the insular, for me-but-not-for-thee government elite, take a quick look at David Gregory’s week.

Gregory engaged in a prima facie violation of DC’s gun laws by brandishing an illegal 30 round magazine (NOT A CLIP!) on last week’s version of Meet the Press.

If you had done that, or if I had done that, then: (a) there would have been a hue and cry denouncing our actions, and (b) we would have been frog-marched by the local constabulary, fingerprinted, and arraigned.

But not our David.  He’s acting in the service of A Higher Cause.  That cause being disarming you and me.

He (and his producers at NBC) had attempted to get permission beforehand, but failed to.  They proceeded anyways.  After questions were raised, they received some sort of indulgence, and David is still at liberty.

That was an ironic statement.  Not only is dear David at liberty, this firearms felon was awarded with an interview with Obama, no doubt for his service for The Higher Cause.

The interview was even more nauseating than one would have usually expected.  Gregory-I sh*t you not-asked Obama if “this is your Lincoln moment?”  I’m only shocked he didn’t ask: “is this your Jesus moment?”

Questions on Syria?  Egypt?  Russia’s adoption ban?  Surely you jest.  The court jester David basically spoon fed Obama questions allowing him to bash Republicans for obstructionism.  Seriously.  Obama explicitly stated that he gave Republicans take-it-or-leave-it demands on the “fiscal cliff”, then bashed Republicans for failure to compromise.

How do you compromise with take-it-or-leave-it demands?

But dear David didn’t bat an eye, or dare question Obama on this blatant inconsistency.

But of course not! For first, David agrees. And for seconds, David is buying an indulgence from Pope Barack.  If he carries Barry’s water, legal troubles will just vanish.  Just watch.

The hypocrometer pegged when Obama opined that putting armed guards in schools was not the answer to Newtowns.  Barack and David send their children to Sidwell Friends School.  Sidwell Friends employs 11 armed guards.

Seriously.  11 armed guards.  Not counting the Secret Service people-well armed, I assure you-that protect Obama’s children.\

Did dear David say a word about this? Hahahahaha!

(Bonus bullshit: Obama said we should try anything-like banning the 30 round mags that dear David brandished-but not arming school employees.  Anything ain’t what it used to be.)

The motto of the prog elite: For me, but not for thee, you bitter clinging bloody peasant.

I want to extend my deepest thanks for David Gregory’s public service.  For in a single week he has done the service of demonstrating the fundamental inequity of American political life.  And no, it has nothing to do if whether you make more than $250K or $400K or $1MM or WTF defines “rich” at this instant.  Instead, it has everything to do with proximity to government power, and the willingness to do whatever is necessary to whore for the interests of that power.

December 29, 2012

Sweet Home Chicago-That Was an Ironic Statement

Filed under: Uncategorized — The Professor @ 7:20 pm

I grew up in Chicago, and still consider myself a Chicagoan, as my peripatetic academic life has not led me to put down roots in any particular place.  It therefore grieves me deeply to see the current state of the city.

In some ways it is much better.  When I was in college and grad school, even near the lake you could not go south of Harrison Street (600 south, or about .6 miles south of the N-S dividing line in Chicago-Madison Street) without taking your life in your hands.  Now there is upscale development near the lake all the way down to Cermak (2200 south).   When I first went to Hyde Park in the late-70s, it was sketchy at best.  Now it is unrecognizably upscale.

But outside of these pockets, the city is a dystopian hell.  The West Side,  especially the Austin neighborhood that my grandparents fled in the late-60s.  The South Side outside of privileged enclaves like Hyde Park.

My first day in Chicago after returning from the Naval Academy is etched in my mind.  I walked from my dorm (a/k/a The Roach Motel) at 54th and Greenwood to the AT&T store to set up a land line (there’s an anachronism for you).  The store was located at 47th and King Drive.  After crossing the corner of Cottage Grove and 47th I saw a blood trail on the sidewalk that led to a storefront clinic.  Then the racial epithets from the people on the street started.  When I got into the AT&T location, the woman behind the bullet proof glass stared at me like I was a space alien.  ”How did you get here?”  ”I walked.”  ”Maybe you should call a cab to get home.”  I took the bus instead, the #3, changing to the #55 at Garfield-again to the accompaniment of disbelieving stares of those on the buses.

Between my junior and senior years, I had a summer job going to pharmacies to count non-prescription medicines on the shelves as part of marketing studies for A.C. Nielsen.  Since U of C let out late (in June), I was hired last and was assigned the worst neighborhoods.  I remember going into (running into is more accurate) a pharmacy on 47th and Prairie Avenue where everything was behind bullet proof glass.  Everything.  Customers stood in a space about 5 feet by 5 feet, and asked the store employees standing behind the glass for what they wanted through a microphone-even a bottle of Excedrin.  (At the turn of the 20th century, Prairie Avenue was the most prestigious address in Chicago.  The shells of a few mansions remain, scattered among empty lots on dreary block after dreary block.)  Hell, even the cooks and clerks at Harold’s Fried Chicken on 53rd Street were ensconced behind a wall of bullet proof glass, including a bullet proof turnstile on which they put your order. Ditto Ribs & Bibs on 53rd and Dorchester.  I can’t imagine what the Harold’s on 63rd Street was like.

Those parts of Chicago aren’t better, and are arguably worse.  This despite the dominance of Chicago politics and “governance” by “progressives” who pronounce to the world and the heavens their devotion to the poor and downtrodden.  Or, I should say, because of the dominance of Chicago politics the self-same, self-described progressives.

Yeah.  That gun control thing so beloved by the progs is working out great.  (Chicago has had some of the most draconian gun control laws in the nation-laws that the SCOTUS has struck down.)

Take a look at this John Kass interview on CNN.  Kass is the only prominent person in Chicago media who doesn’t have his head firmly implanted up his ass, or his lips firmly implanted on the asses of the progressive elite in Chicago-the elite that blessed the nation with Obama and Valerie Jarrett.

All the while proclaiming their devotion to the poor and minorities in Chicago, the progressive governing class of Chicago has looted the city and condemned its most vulnerable to a reign of terror.

As Kass notes, Chicago has always been a rough place. He mentions the gangsters of the 20s. (Family history: my great-uncle had a confrontation with a Capone lookout for the St. Valentine’s Day Massacre: he was fixing the pay phone the lookout wanted to use to call Capone’s men to alert them that Bugsy Malone’s men had arrived at the garage where the Massacre took place. My grandfather, another “telephone man” fixed Capone’s phone in the Lexington Hotel: Capone gave him a fedora to express his appreciation.) But for the most part, those conflicts were intramural. Yes, many (and arguably most) of today’s murders in Chicago are also intramural in nature, one gangbanger killing another. But the current situation is more anarchic than in the ’20s, and the spillovers more pronounced.

Chicago also has always been a very corrupt place. In the 19th century, it was the town of boodle and “wire workers.” In the 1950s-1970s, the Machine ruled, and raked off the proceeds of that rule. It was the Land of the Voting Dead. (My grandfather voted while dead.) Hence the Kennedy presidency.

The main difference is that there is a hypocrisy today that was absent in the 20s and the 1950s-1970s Indeed, in the Daley I years, there was an almost roguish pride in the thievishness of the machine. Richard the First did not have progressivist presumptions.

In contrast, those who rule over today’s dystopian Chicago are stalwarts of progressivism. They are oh-so-superior, and hardly shy about instructing the great unwashed about what is and what is not acceptable. Safe in their brownstones and high rises in the Gold Coast or other sanctuaries hard on Lake Michigan, far from the gunfire in Garfield Park or Humboldt Park, they preen in their moral rectitude.

All the while presiding over a bankrupt and violent city.

Kass scathingly refers to Obama’s failure to attend a single funeral in Chicago, whereas he makes highly publicized appearances in Tuscon or Newtown. Similarly, he made a big deal out of how Trayvon Martin could have been his son.

It rankles me that Obama has distanced himself from the neighborhood he represented in the Illinois legislature for years. He used it as a political springboard, but has left it far behind, never to be mentioned again.

Check out this website that tracks murders in Chicago. Take a little time, and see how many have taken place in Obama’s old state senate district.

Collectively, the toll is far greater than Newtown: in Chicago, the body count is about a Newtown every month. But Obama has attended not a single funeral. Indeed, he has spoken nary a word about it. He has left that world far behind. Could none of those killed have been his son? Could it be that to mention the holocaust there would be to draw attention to his failure, and the failures of the progressive “blue state” model he epitomizes?

Progressives continually assert a moral claim over the rest of us. I ask: On what basis? I look at Chicago, and see a yawning gap between the lofty asserted claims and the shabby, bloody reality.

December 27, 2012

The Real Sadomasochists

Filed under: Politics,Russia — The Professor @ 2:06 pm

In his familiar role as a gangsta demanding respect, Vladimir Putin exploded at a questioner at a recent press conference who had the temerity to criticize Russia’s just passed bill that would bar Americans from adopting Russian children.  Putin raged at the “humiliation” that the US had visited on Russia by passing the Magnitsky Act.  He demanded to know whether the questioner was a “sadomasochist” for questioning Russia’s decision to retaliate against the  Act by passing the adoption bill.

Insofar as humiliation is concerned, you would think that a head of state, and former head of government, would find the following sequence of events humiliating: government tax officials defraud the Russian government-the government/state he has led for 12 years-of $235 million in tax revenue; these officials conspire with law enforcement and prison officials to imprison, torture, and murder the man, Sergei Magnitsky, who discovered the fraud and attempted to go after those who perpetrated it; the perpetrators remain at large, and have been neither investigated nor prosecuted; and as a final touch, government prosecutors are trying Magnitsky posthumously, in flagrant violation of Russian law, not to mention basic human decency.

Yes, a normal country, and the normal head of state of a normal country, would find that history of official corruption and depravity to be exceedingly shameful and humiliating.  But we are talking about Russia and Putin, so the humiliation has nothing to do with corruption or depravity, and everything to do with the fact that a nation that Putin (and a strong majority of Russians) obsessively hates and fears exercised its sovereignty by choosing not to permit the entry of undesirables like those involved in the Magnitsky affair, and others who may be found to have engaged in similar gross violations of human rights.

In other words, the humiliation of a gangster outraged at being excluded from a polite society he simultaneously loathes and envies.

Lacking the means to implement a symmetric response, because nothing of the like is remotely possible in the US, and because no one in the US would be all that put out by being denied the right to travel to Russia, the Russian Duma hurriedly adopted a highly asymmetric response.  A response aimed not at anyone in an official position in the US, but at private American citizens.  And just because that’s who the target of this action is doesn’t mean that they will be the primary victims.

No.  It’s far worse than that.  Virtually all the damage here will be of the collateral variety, and all the suffering victims will be Russian children, and indeed, the most wretched and vulnerable Russian children: the hundreds of thousands of orphaned and abandoned kids, many of them severely disabled, emotionally damaged, and seriously ill.

The pretext for this action is that 19 Russian children adopted by Americans have died in the past two decades.  Every death a tragedy, to be sure.

But now that Putin and his main political supporters have gone all Christian on us, perhaps someone, like, I dunno, Patriarch Kirill of whom Putin is so fond, should whisper Matthew 7.3 in his ear: “And why beholdest thou the mote that is in thy brother’s eye, but considerest not the beam that is in thine own eye?”  (Luke 6.42 would also serve.)  (Fat chance of that happening, actually.  An official spokesman of the Russian Orthodox Church pronounced that Russians adopted by Americans would “not enter God’s kingdom.”  So apparently Russia is saving souls, as well as lives.  The Church’s only suggestion is that the bill include an exception for the seriously handicapped.  Do not the seriously handicapped have souls?  Are they not deserving of heaven?  Quite a theological contradiction here.)

The mote-beam difference is all too starkly clear: the rate of deaths of Russian children adopted by Russians is 39 to 40 times higher than the rate of Russian kids adopted by Americans.  If anything, this difference understates matters, because Americans disproportionately adopt high risk children.  And the situation is even worse in Russia’s appalling group homes and orphanages-Детский домов.  The unfortunates who live in them would pine for a merely Dickensian existence.  For those who survive to adulthood, rates of suicide, mental illness, drug abuse and premature death are obscenely high.

In brief: to punish private Americans who had nothing to do with the official act that outrages them so, Russia’s legislators overwhelmingly (and unanimously in the upper house) are condemning thousands of innocent Russian children to a brutalized, impoverished, and hopeless existence.  Many will not live to adulthood.  Those who do, will all too often have one that is solitary, poor, nasty, brutish, and short.

But they have their twisted justifications, which all too typically reek of projection.  Like this one, by State Duma Deputy Svetlana Goryacheva: “60,000 children have been taken to the U.S. from Russia. And if even one-tenth of these orphans were used for organ transplants or sexual pleasure, there will remain 50,000 who can be recruited for war against Russia.” Passing over in silence the absurd paranoid ravings about a war against Russia (Svetlana: we haven’t the slightest interest in your wretched manure pile), it is sick beyond measure to allege the sexual abuse of Russian children by thousands of American adoptive parents, given that Russia is the world leader in child pornography, and that Russian orphanages and group homes are the epicenter of a massive sex trade in children.  A trade in which Russians are the primary customers.

Russian nationalists and patriots declare their country to be exceptional.  In this I wholeheartedly concur.  For what the Russian legislature has done, and which a majority of Russians applaud, is thankfully a monstrous exception, even in this fallen world.

Putin has indicated that he will sign the bill, after a brief period of equivocation.  And now we see who the true sadomasochists are.  Putin and the Duma, with the approval of most Russians, are sadistically condemning thousands of innocent children to neglect, brutalization, and misery.  And in inimitable Russian fashion, they are masochistically harming themselves through actions that are causing millions around the world to recoil from them in disgust.

December 26, 2012

What’s Yours Is Theirs-That’s the Real Cliff

Filed under: Commodities,Economics,Energy,Politics,Regulation — The Professor @ 12:38 pm

It’s been known for centuries that comparative advantage and relative factor endowments should drive trade patterns.   The fracking revolution has led to a dramatic change in US comparative advantage and factor endowments.  Basic economics tells us that this should drive a change in trading patterns, and in particular, it makes it efficient for the US to export natural gas, once the requisite infrastructure is in place.

Prices tell the story.  There is a a yawning gap between prices in Europe and Asia, and prices in the US.  Price signals are screaming: invest in export infrastructure, and export gas.

But politicians are deaf to basic economics, and to policies that promote efficiency.  They listen to the importuning of organized interests, and these interests are often diametrically opposed to economic efficiency.

Natural gas is a case in point.  Rep. Ed Markey (D-MA) has long been beating the drum to restrict natural gas exports.  And now he has company, Senator Ron Wyden (D-OR):

New discoveries of natural gas are beginning to transform the U.S. economy, and energy companies say exporting it is the next logical step. But a call for restraint is coming from Sen. Ron Wyden.

The Oregon Democrat, who will have a powerful perch in Congress to influence the debate, has been fielding substantial home-state opposition to such exports. The brewing fight illustrates how energy abundance can be just as divisive in Washington as a shortage, a theme likely to play out in coming years as the U.S. deals with growing energy supplies.

. . . .

Hours after the report came out, Mr. Wyden was sitting at Bistro Cacao, a French restaurant a few blocks from the Capitol, with Andrew Liveris, chief executive of Dow Chemical Co.,  one of the largest natural-gas-consuming companies in the U.S.

. . . .

“I want to make sure we look for the opportunities…to the greatest extent possible, to export value-added products rather than the raw material,” the senator said in a recent interview.

“Natural gas is a strategic American advantage,” he added. “We’ve got it. The whole world wants it.”

And the market is the best way to determine the most efficient way to exploit that advantage. But Sen. Wyden, thinks he is Goldilocks, and knows the price that is just right:

That is one reason Mr. Wyden hasn’t proposed an outright energy export ban. Instead, he suggests softer restrictions such as a cap. “How can policy makers look to find a sweet spot where you can allow exports to keep wells in production without letting exports drive prices so high that they hurt the American manufacturers?” he said.

This is an illustration of the Peltzman-Becker theory of regulation in action.  Politicians buy political support by balancing between competing interests.  Wyden is trying to buy support from domestic gas consumers by proposing to restrict exports, thereby keeping prices lower.  But he doesn’t want prices too low, because that would lead to fierce opposition from energy producers.  So he is looking for “softer restrictions.” He wants to take, but not too much.

How generous of him.  But it’s not generosity, really.  It is the logic of the stationary bandit, and the optimizing politician balancing support and opposition.

Distributive effects drive politics and regulation, not efficiency.  Efficiency is not irrelevant, because politicians like to have a bigger pie to divvy out, but they are willing to incur substantial efficiency penalties in order to achieve distributive goals.  Here, Wyden is proposing to deliver a big gift to Dow and other chemical producers (and other major industrial consumers of gas).  But for every dollar Dow gets, somebody else loses a dollar, and crucially, some cents are destroyed.  There will be deadweight losses.   Too little gas will be produced.  Too little gas will be exported.  Too much will be consumed domestically.

This is just one example of how politics and regulation destroys wealth.  Multiply this thousands of time over, in just about every good and service you can think of.  Everything from haircuts to energy to medicine.  These things kill income and growth, by a thousand cuts.

The amazing-and disturbing-thing about the Wyden article is the very matter-of-fact treatment Wyden’s threatened intervention gets in the article.  It’s the natural order of things that a senator can just arrogate to himself the power to shift around billions at a whim.

And the whim part is important.  Any investment, and plan, is vulnerable to the whims of politicians looking to redistribute wealth to favored interests.  You do something that creates a substantial amount of wealth, you attract those who believe it is their God given right to redistribute it.  In essence, politicians have an option on innovation and the fruits of hard work: tails you lose, heads you share .   This uncertainty, this risk, and the innovators’ short option position are drags on investment and hence growth.  Moreover, management of this risk involves the direction of valuable resources-including the time of top management-into rent seeking activities.  More waste, another drag on growth.

All the yammering over the “fiscal cliff” is a distraction, a near irrelevance.  All the fear mongering is predicated on Keynesian mumbo jumbo, so it will be more of a pothole than a cliff.  The real threat is the accumulation of interventions like those that Wyden is proposing, that collectively serve to reduce wealth and income, and sap growth.   That is the real cliff we have to worry about.  All of the budgetary and fiscal issues become far more more intractable, the lower is growth.   The sclerosis that results from the overbearing interventions in matters large and small will make a fiscal crisis far more likely, because our ability to create wealth will not be able to accommodate the insatiable demands of the entitlement state.

December 24, 2012

Between the Logic/Math Challenged and the Opportunistic Statists, We’re Screwed

Filed under: Politics — The Professor @ 4:22 pm

If Newtown illustrates anything, it is that tragedy is the father of numerous idiocies, and the greater the tragedy, the more numerous, and more idiotic, the idiocies.

I understand completely the desire to do something to prevent Newtown from ever happening again.  But that very desire leads to inane proposals-some adopted, unfortunately-that will do more harm than good.

Case in point: the NRA’s proposal (brought to my attention by commentor paul) to mandate a creation of a national database of the mentally ill.

Another case in point: this recommendation for a “three strike” mental violence law.

Or all of hue and cry to crack down on violent computer/video games.

I was planning to write on this anyways, but paul’s comment got me to put my thoughts down in writing.  In my reply to him, I pretty much said what I wanted to say, so I’ll just repeat it here.  (Warning-wonkiness ahead!  But rigor is needed, precisely to show how flabby and unrigorous these arguments are.)

Yes, the NRA’s proposal is . . . insane. So will those who thought it up be in their database?

But they are not alone. Everyone has their pet theory, their hobby horse. Most of these are based on the observation that certain traits, behaviors, and activities are prevalent among mass murderers. Mental illness and intense involvement in violent video games are two examples.

But even if it is possible to identify a set of traits/behaviors that most mass murderers have, this information is almost totally useless in predicting who is a likely mass murderer.

How do I know that? Bayes’ Theorem.

All of the observations about common traits are of the form: “conditional on someone being a mass murderer, the probability they played a violent video game or are mentally ill is high.” But what we’re really interested in is: “what is the probability of someone being a mass murderer, conditional on his being a player of violent games or mentally ill?” Even if the first probability is nearly 1, the second probability-the one we’re interested in-is almost certainly very low. For the second probability is the first multiplied by the ratio of the unconditional probability of someone being a mass murderer to the unconditional probability of someone being insane, or a player of violent videos.

The prevalence of mass murderers is far smaller than the prevalence of people with mental illness. Meaning that this ratio is near zero. Meaning that conditioning on mental illness tells you virtually nothing Put differently, the rate of false positives is near one for virtually any set of conditioning variables you choose.

It all boils down to this: even if all mass murderers are mentally ill, very few mentally ill people are mass murderers. Which means that information about mental health is essentially useless for predicting ex ante whether a particular individual is a potential mass murderer. You can substitute pretty much any other conditioning variable or set of conditioning variables for “mentally ill” and draw the same conclusion.

Which means that the NRA’s proposal is not just creepily draconian, it is a complete waste of resources. Complete. Tarot readings would be about as effective, and a lot cheaper.

There is a tragic truth in all this; a truth that people hate to acknowledge. Things like Newtown are extremes of the extreme. They are difficult to explain ex post, and virtually impossible to predict ex ante. I understand perfectly the intense desire to do something, but every something that has been proposed-including the NRA’s proposal-will have no impact on the likelihood of such events. As I said in my first post-Newton post, the rates of false positives and false negatives will both be quite high. Both types of error are very costly.

We live in a fallen world. Sometimes there’s just nothing you can do about that, and trying to do something is often the worst thing you can do. But that is something that people are loath to concede.

To reiterate.  Real math, real statistics-Bayes’ Theorem, to be precise-demonstrates that proposals to identify people based on characteristics common to many mass murderers are completely counterproductive.   Conditioning on these characteristics provides virtually no useful information.  There are huge rates of false positives.  False positives are costly.

Indeed, there are other costs.  Consider the three strike proposal: great way to get people to avoid seeking help!

It’s bad enough when the NRA or Sarah Palin cheerleaders make these proposals.  It gets truly scary is when those in law enforcement or intelligence use this as a justification for expanding the surveillance state.  Like the NYPD, for instance:

In the wake of the Newtown massacre, the NYPD is examining ways to search the internet for potential “deranged” gunmen.

Police Commissioner Ray Kelly said that their searches would be similar to those being used to spot terrorist chatter online.

“And what we’re talking about is publicly available websites, chatrooms, that sort of thing,” Kelly said, adding that algorithms could be used. That will enable us to use, perhaps, commonly used terms that are used by people engaged in this sort of activity,” he said.

“The techniques would include cyber-searches of language that mass-casualty shooters have used in e-mails and Internet postings,” Kelly said

“Language that mass-casualty shooters have used.”  Again: even if all mass-casualty shooters use particular language, that is virtually irrelevant if many other people use the same language, but don’t commit mass murder.  Even if every haystack has a needle, treading every stalk of hay as a needle is idiotic.

Right Reverend Bayes, please give Chief Kelly a call from the Beyond.  Set him straight.

It’s one thing when the NRA spews such idiocy.  It is truly frightening when law enforcement and intelligence does.  These people can actually do things.  Dangerous things.  Things that violate the privacy of innocent people.

And here there is no real trade-off, to speak of.   The violations of privacy will be  real, and ubiquitous.  The police and legal harassment that harmless people incautious in their language will suffer will be real.  The time and effort that cops spend chasing down these people will be real.

And for what?  What is the likelihood that a real potential mass-shooter could be identified?  And even if one were identified, what could be done to stop him?  Is everyone caught in this crude screen to be followed constantly? Incarcerated? What?  And at what cost?

And it’s worse than that.  The resources being diverted for this snipe hunt are resources that could be used to prevent and deter other, more pedestrian crimes.  There are unseen lives and property that will be lost as a result of this diversion.  Will be.

What is truly disturbing about this is the opportunism.  Law enforcement and intelligence are always-always-of the “let no crisis go to waste” mentality.  They-as are governments generally-are notorious for their opportunism in seizing on tragedy to expand their power, their reach.

Newtown is bad enough as it is.  Don’t make it worse by using it as a pretext to expand the already bloated surveillance state.  It’s bad enough that innocent children die in vain.  It’s all the worse if their lives are used to justify the expansion of an already intrusive and dangerous surveillance apparatus that squeezes civil liberties in the name of security, but which in fact gives us precious little real security in return.

December 23, 2012

All the Views That Are Fit to Spit Out

Filed under: Politics — The Professor @ 8:07 pm

The New York Times has published a hysterical-in the unhinged, illogical sense of the word-editorial about concealed carry, claiming that such laws are a “scourge.”  The evidence of this?:

Among the arguments advanced for these irresponsible statutes is the claim that “shall issue” laws have played a major role in reducing violent crime. But the National Research Council has thoroughly discredited this argument for analytical errors. In fact, the legal scholar John Donohue III and others have found that from 1977 to 2006, “shall issue” laws increased aggravated assaults by “roughly 3 to 5 percent each year.”

That’s it.  One study that claims to show that aggravated assaults rose 3-5 percent in the aftermath of the passage of concealed carry laws.  Murder? Not a word about that.  Manslaughter?  Uh-uh.  Rape?  Nope.  Battery?  Nope.

Scourges ain’t what they used to be.

Several comments. First, the BS test.  What is the mechanism by which concealed carry leads to increased rates of aggravated assault?  That is, perhaps there is a correlation here (but perhaps not-more on that in a bit), but what is the causal mechanism?  Is there any evidence that concealed carry permit holders are responsible for this alleged increase in assaults?  Zero.  Any theory that has as a refutable prediction that concealed carry should lead to higher rates of assault generally?  Not to my knowledge.  So this is an empirical finding, in one study, that is difficult to attribute to concealed carry per se.

A 5 percent rise in assault (with no evidence of a rise of murder or rape or battery) hardly constitutes a “scourge”, and is nonetheless very difficult to attribute causally to more relaxed rules on concealed carry.

But that doesn’t stop the NYT from recommending wholesale Federal intervention into state gun laws:

The federal government could help protect the public from lax state gun laws. For starters, the Fix Gun Checks Act, proposed last year in Congress, would close gaping loopholes in the National Instant Criminal Background Check System and make a huge [HUGE!!!!] difference in identifying many people who should be denied permits under “shall issue” laws yet slip through the state systems.

Similarly, Congress could require that states set higher standards for granting permits for concealed weapons, give local law enforcement agencies greater say in the process, and prohibit guns from public places like parks, schools and churches. It could also require record-keeping and licensing requirements in the sale of ammunition, and strengthen the enforcement capabilities of the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Any evidence whatsoever that people “who should be denied permits” commit crimes?  In HUGE!!!! numbers, no less? Not in the editorial, certainly, and the empirical evidence that I am familiar with shows that concealed carry permit holders are overwhelmingly law abiding, and commit gun-related crimes at a far lower rate than the populace at large.  So the insinuation that “many people” should be denied concealed carry permits because they represent some sort of danger to public safety is another baseless and slanderous claim.

Second, the NYT’s hysterical claim of a “scourge” is based on the slenderest empirical reed.  A debate on the effects of concealed carry has been raging for over 15 years, since the publication of the research of Lott and Mustard in 1997.   This was followed by Lott’s More Guns, Less Crime, and rejoinders by Ayers and Donohue, among others.  The debate has been extremely contentious, and has often been bitter and personal, and punctuated by both invective and lawsuits.

The original Lott-Mustard and Lott work claims to find that adoption of concealed carry has resulted in a drop in crime.  There is a plausible theory as to why this should occur.

Ayers, Donohue and others have presented empirical results that primarily find no effect of the adoption of concealed carry laws, or perhaps weak evidence of increases in some crimes (notably aggravated assault).

The debate has become a highly technical one, with disputes over specification (what variables to include or exclude, what observations to include or exclude) and techniques for adjusting for serial correlation in panel regressions (“cluster adjustments”, anyone?)  To be honest, I have reservations about the kitchen sink regressions that those on both sides of the argument employ, and think that there could well be an Ed Leamer “con in econometrics” issue here.  That, and a Deirdre McCloskey fetishization of t-statistic issue.  There are also issues about how to interpret one-time effects of the passage of CCL laws and their effects on trends.

To me, the evidence is on the side of a beneficial effect of concealed carry laws, especially since there is a plausible causal mechanism.  But the evidence is not overwhelming either way.  But certainly there is nothing in the empirical literature to support shrieking claims of a “scourge.”

Indeed, not even Ayers and Donohue are adamant about there being a negative effect of concealed carry laws: they mainly dispute that there is a beneficial effect. Indeed, they state explicitly that the adoption of concealed carry laws has not led to the widely predicted bloodbath.  I remember well claims that “every fender bender has the potential to turn into a gun fight”.  Quoth Ayers and Donohue:

We conclude that Lott and Mustard have made an important scholarly contribution in establishing that these laws have not led to the massive bloodbath of death and injury that some of their opponents feared. On the other hand, we find that the statistical evidence that these laws have reduced crime is limited, sporadic, and extraordinarily fragile.

In other words: no scourge, but only weak evidence that concealed carry has reduced crime.

The National Research Council study, the composition of which was certainly not congenial to the More Guns, Less Crime hypothesis or Lott personally, arrived at a similar conclusion.  They found “no credible evidence that the passage of right-to-carry laws decreases or increases violent crime.”  Note: no evidence of increases.  Moreover, even the contention that concealed carry does not reduce crime is itself disputable, given that it is based primarily on one dubious specification.  It should also be noted that an eminent sociologist, the late James Q. Wilson, dissented from this conclusion, finding that concealed carry did reduce murder rates.

Even the study cited in the Time’s editorial is equivocal: “For every other crime category [i.e., other than aggravated assault], there is little or no indication of any consistent [right to carry] impact on crime.”  Again, no evidence that concealed carry reduces crime, but no evidence that it increases it either, except perhaps for assault.  Which again, is puzzling: why would that be?  How could more widespread concealed carry lead to greater assault, especially in the absence of any evidence that permit holders are committing the assaults?

In sum, after more than a decade of extensive empirical research and spirited and often acrimonious debate, there is: (1) virtually no evidence that concealed carry increases crime; (2) no plausible causal mechanism that could lead to this result; (3) some evidence that concealed carry reduces violent and property crime; and (4) a plausible causal mechanism that could produce this result.

One thing that is abundantly clear: there is no evidence of a “scourge.” None.  Zip. Zero. Nada.

If concealed carry was leading to a scourge, it would be easy to find evidence that more relaxed rules for granting concealed carry permits should lead to increases in crimes committed by concealed carry permit holders.  No evidence exists.  Given how far the times was willing to stretch the limited empirical evidence in support of its view, you know that it would have dug up something, if it existed.

There is no evidence for that whatsoever.  None.  None. None.  Again, as I noted before: the evidence is that concealed carry holders are extraordinarily law abiding.  Moreover, even those who criticize empirical research claiming that concealed carry reduces crime readily acknowledge that  no “scourge” of violence (by anyone, let alone concealed carry holders) has followed the adoption of “shall carry” laws.

In other words, the NYT editorial is completely baseless.  It is actually far worse than that.  Despite its complete lack of empirical or theoretical support, it makes incendiary and extravagant claims, without the slightest support for them.  It slanders a group of individuals that is overwhelmingly responsible and law abiding.  Despite its lack of factual support, it recommends expansive new Federal laws, including laws that trample on what are properly state and local responsibilities.

One last thing.  The editorial’s recommendation that the Federal government create gun free zones is dangerous and irresponsible.  (Not to mention the fact that in most states, shall carry laws already create such zones.)  Gun free zones are target rich environments for those intent on mass murder.  There is empirical evidence (by Landes and Lott) that gun free zones are disproportionately the sites of mass public shootings.  And again, this makes logical sense.  If you want to encourage a scourge of mass public shootings, expanding gun free zones is the way to do it.

In other words, just what you expect from the NYT.  All the news that’s fit to print?  Hardly.  All the views that are fit to spit out is more like it.

December 21, 2012

SWPalooza.

Filed under: Uncategorized — The Professor @ 5:04 pm

I had a freakishly large number of media hits today.  Mostly due to the ICE buyout of NYSE, with quotes in stories in the FT, NYTWSJ, and the Chicago Sun Times.  Also, a Matt Leising Bloomberg story on the potential systemic risks of clearing (in which my quote is the basis for the article title); a Reuters piece on power trading; and a WSJ MarketPlace blog post on the rising short interest in some inter-interdealer brokers, and the possible association thereof with the metastasizing Libor scandal.

December 20, 2012

VU and Lou Reed Don’t Believe Hillary. Should We?

Filed under: Politics — The Professor @ 7:32 pm

An independent review board released a scathing report about the State Department’s “systemic” failures in protecting the consulate and annex in Benghazi.  But it names no names.  It’s like the Monty Python Dead Bishop skit: “It’s a fair cop, but society is to blame.”  

But when “the system” is blamed, no one is accountable.  And when no one is accountable, the “system” will continue to fail, and people will die.

Hillary Clinton was scheduled to testify about the Benghazi catastrophe, but allegedly fainted due to dehydration, hit her head, and suffered a concussion that makes her incapable of appearing. But I’m confused. The Velvet Underground told me years ago “that women never really faint.” So whom should I believe? Hillary, or Lou Reed?

Don Vladimir Sends His Good Wishes. Be Afraid. Be Very Afraid.

Filed under: Energy,Politics,Russia — The Professor @ 9:33 am

One of the stock lines of a movie mafia don is the veiled threat, all wrapped up in an apparent expression of good will.  ”Nice little business (or family) you have here.  Would be a tragedy if something happened to it.”

Don Vladimir played this role to the hilt in his End of the World press conference.  (When it got to the 3 hour mark, I imagine that most of the people in attendance were thinking the end of the world  sounded like a good idea.)

His first target: the AAR group of oligarchs, now flush with cash from their sale of  their stake in TNK-BP:

Putin said the TNK billionaires won’t be forced to invest the sale proceeds in Russia. “If we recognize the lawful, legitimate owners, if they earned their money legally, then it’s their business where they invest,” Putin said.

Government officials and executives from several Russian companies are in talks with “some participants in this deal” about investing the TNK-BP (TNBP) proceeds in the Russian economy, Putin said. “I hope they’ll decide in favor of investing in the Russian economy.”

If we [who is this we?] recognize”?  ”If they earned their money legally”?  Had there been any previous suggestion of illegality?  These guys have been in business since the 90s, with virtually no interference from the government.  Only now is the legality of their previous activities is questionable?

No.  The message is clear.  Invest in Russia.  Or else.  The else being “we” (i.e., Putin and Sechin et al) will find some reason in Fridman et al‘s past conduct to take away their money.   The most likely something being traceable to “loans for shares” in the Yeltsin years.

But he promises these measures will be “careful, civilized.”  I’ll bet.  Like the measures used against Khodorkovsky.

Speaking of whom, Khodorkovsky was the “beneficiary” of a truly creepy expression of Putin’s “goodwill.”

President Vladimir Putin today wished Khodorkovsky “good health” after his release and said he hadn’t influenced the courts on the former billionaire Yukos Oil Co. owner’s case. Khodorkovsky and his business partner, Platon Lebedev, had their terms cut to 11 years from 13 years by the Moscow City Court.

I mean, that is right out of the mouth of a movie mafiosi.  Translation: if you want to keep your health, keep your mouth shut and your money out of politics.

It’s pathetic, really (though in a different way than Medvedev is pathetic).  Putin is becoming a self-caricature.   This is another symptom of stasis, Putin’s purgatory.

December 19, 2012

Could Tom Friedman Be Any More Stoopid?

Filed under: Politics,Russia — The Professor @ 11:01 am

The Smart Set’s favorite idiot heaves up a chin puller about Russia. It starts out oh-so-pretentiously, with a reference to Chekhov.  (Note to Friedman: we don’t care.)

It then goes on at nauseating length expressing his befuddlement at Putin’s failure to transform Russia from the poster country for the resource curse and his zero sum, oppositionist foreign policy.  What’s so befuddling?  It’s like being befuddled at the fact that fish swim, rather than peddle bicycles.

The best-or worst, depending on how you look at it-comes at the end when Tool Time Tom describes his sit-down with Vladislav Surkov, the ominous political technician:

I am wrong to be so pessimistic, says Vladislav Y. Surkov, the deputy prime minister for modernization. I was in Surkov’s office in the Russian White House here a few days ago. As I was interviewing him, it was impossible to ignore the two posters on his wall. One showed the Google co-founder Sergey Brin and the other Vladimir Zworykin, who served as director of the RCA Laboratories in Princeton in the 1950s and helped to pioneer television. “O.K.,” I asked Surkov, “why are those two on your wall?”

“I want to send the message to the visitors to this office that Russia gave the world such geniuses,” said Surkov. “Their inventions have entered every household in the world, and the fact that these people, of our kin and our blood, managed to give such gifts to the world should fill our hearts with faith that Russia has a future as an innovative power.”

Uhm, does Tom immediately jump on the fact that both of these geniuses left Russia?  Did he ask Surkov what that says about Russia, in the 50s and today?  This oversight (or was it cowardice?) is particularly amazing given that one of the few sensible things that Friedman says in his column is that smart people can leave, and that this is a threat to the country’s future.

Then Friedman gingerly raises Pussy Riot, drawing this retort from Surkov:

But I couldn’t resist noting that innovative cultures don’t do things like throw the punk band Pussy Riot into prison for two years for performing a “punk prayer” in a cathedral. That sends a bad signal to all freethinkers. Surkov, who also keeps a picture of the American rapper Tupac Shakur behind his desk, pushes back. “Tupac Shakur is a genius, and the fact that he was in prison did not interrupt either his creative juices or the innovative development of the United States.” Pussy Riot is no Tupac Shakur, he added. “Being orthodox myself, I feel really sorry for the girls from Pussy Riot, but [their situation] has no implications for the innovative developments of Russia.”

Talk about a target rich environment-but again, Friedman doesn’t pull the trigger.  Is Surkov saying that jailing people for years for expressing political dissent is equivalent to jailing them for sexual assault (which is what Tupac went to jail for)?  Or is he just engaging in typical Russian whataboutism bullshit, insinuating that Tupac was some kind of political prisoner?  Even more offensively, what did Friedman say in response to Surkov’s dismissive remark that it’s no big deal to throw creative people in prison, because it won’t “interrupt their creative juices”.  Hell, maybe he even thinks it is a spur to creativity.

How much does this guy get paid?  Friedman, I mean.  And why exactly is he considered some kind of deep thinker?  You can read a lot about Russia, and come across a lot of truly superficial and silly analysis.  But it’s a rare day when you come across something as utterly clueless as what passes for Tom Friedman’s Deep Thoughts on Putin’s Russia.

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