How does a stop for jaywalking turn into a homicide and how does that turn into an American town essentially coming under military control with snipers, tear gas, and a no-fly zone? We don’t yet know exactly what happened between the two individuals on the day in question but events like this don’t happen without a deeper context. Part of the context is the return of debtor’s prisons that I wrote about in 2012:

Debtor’s prisons are supposed to be illegal in the United States but today poor people who fail to pay even small criminal justice fees are routinely being imprisoned. The problem has gotten worse recently because strapped states have dramatically increased the number of criminal justice fees….Failure to pay criminal justice fees can result in revocation of an individual’s drivers license, arrest and imprisonment. Individuals with revoked licenses who drive (say to work to earn money to pay their fees) and are apprehended can be further fined and imprisoned. Unpaid criminal justice debt also results in damaged credit reports and reduced housing and employment prospects. Furthermore, failure to pay fees can mean a violation of probation and parole terms which makes an individual ineligible for Federal programs such as food stamps, Temporary Assistance to Needy Family funds and Social Security Income for the elderly and disabled.

Ferguson1new report from Arch City Defenders, a non-profit legal defense organization, shows that the Ferguson municipal courts are a stunning example of these problems:

Ferguson is a city located in northern St. Louis County with 21,203 residents living in 8,192 households. The majority (67%) of
residents are African-American…22% of residents live below the poverty level.

…Despite Ferguson’s relative poverty, fines and court fees comprise the second largest source of revenue for the city, a total of $2,635,400. In 2013, the Ferguson Municipal Court disposed of 24,532 warrants and 12,018 cases, or about 3 warrants and 1.5 cases per household.

You don’t get $321 in fines and fees and 3 warrants per household from an about-average crime rate. You get numbers like this from bullshit arrests for jaywalking and constant “low level harassment involving traffic stops, court appearances, high fines, and the threat of jail for failure to pay.”

If you have money, for example, you can easily get a speeding ticket converted to a non-moving violation. But if you don’t have money it’s often the start of a downward spiral that is hard to pull out of:

For a simple speeding ticket, an attorney is paid $50-$100,
the municipality is paid $150-$200 in fines and court costs, and the
defendant avoids points on his or her license as well as a possible
increase in insurance costs. For simple cases, neither the attorney nor
the defendant must appear in court.

However, if you do not have the ability to hire an attorney or pay
fines, you do not get the benefit of the amendment, you are assessed
points, your license risks suspension and you still owe the municipality
money you cannot afford….If you cannot pay the amount in full, you must appear in court on that night to explain why. If you miss court, a warrant will likely be
issued for your arrest.

People who are arrested on a warrant for failure to appear in court
to pay the fines frequently sit in jail for an extended period. None of the
municipalities has court on a daily basis and some courts meet only
once per month. If you are arrested on a warrant in one of these
jurisdictions and are unable to pay the bond, you may spend as much as
three weeks in jail waiting to see a judge.

Of course, if you are arrested and jailed you will probably lose your job and perhaps also your apartment–all because of a speeding ticket.

As a final outrage, consider this story which ties together Ferguson, the courts, and the arrest of parents, often minority parents, for leaving their kids to play in parks (just as my parents did).

According to local judge Frank Vatterott, 37% of the courts responding to his survey unconstitutionally closed the courts to non-defendants. Defendants are then faced with
the choice of leaving their kids on the parking lot or going into court. As Antonio Morgan described after being denied entry to the court with his children, the decision to leave his kids with a friend resulted in a charge of child endangerment.

When do economists matter?

by on August 21, 2014 at 2:05 am in Economics, Political Science | Permalink

Christopher D. Johnston and Andrew Ballard have a new paper on this neglected topic, the abstract is this:

Given an increasing presence in the public sphere, what role do economic experts play in shaping public opinion on economic issues? In this paper, we examine the responsiveness of American public opinion on five economic policy issues to real information regarding the distribution of opinion on these issues among economists. We also examine the extent and role of trust in economists within the public. On average, we find meaningful changes in public opinion in the direction of expert consensus when citizens are given explicit information about expert opinion. However, we also find heterogeneity in citizen responsiveness across issues, such that aggregate opinion change is smaller on symbolic policy issues relative to technical ones. Further, on symbolic (but not technical) issues we find that citizens use judgments of the trustworthiness of economic experts in a motivated fashion, as a means of reinforcing prior opinions.

That is a little bloodless and the paper is also poorly written and organized but nonetheless it is important work.  Here is one very interesting bit:

…strongly left-leaning citizens are about 12 percentage points more trusting of economists than strongly right-leaning citizens.

This part of (sort of) encouraging:

…all three groups of respondents show greater trust than predicted after exposure to consensus information.  This pattern is consistent with the notion that exposure to highly technical, means-oriented issues makes one’s lack of knowledge salient, and perhaps engenders greater respect for experts…

The full paper is here, I would say start reading on p.16 and return to the beginning later on if you wish.

There is a new paper out by them:

Thomas Piketty’s recent book, Capital in the Twenty First Century, follows in the tradition of the great classical economists, Malthus, Ricardo and Marx, in formulating “general” laws to diagnose and predict the dynamics of inequality. We argue that all of these general laws are unhelpful as a guide to understand the past or predict the future, because they ignore the central role of political and economic institutions in shaping the evolution of technology and the distribution of resources in a society. Using the economic and political histories of South Africa and Sweden, we illustrate not only that the focus on the share of top incomes gives a misleading characterization of the key determinants of societal inequality, but also that inequality dynamics are closely linked to institutional factors and their endogenous evolution, much more than the forces emphasized in Piketty’s book, such as the gap between the interest rate and the growth rate.

For the pointer I thank Nathaniel Bechhofer.

Here is an update from Leonid Bershidsky:

Among the 28 EU members, public spending reached 49 percent of gross domestic product in 2013, 3.5 percentage points more than in 2007.

There is more detail at the link, via Garett Jones, Humanist by way of Walt Whitman, Civilizationist by way of Jane Jacobs.

Assorted links

by on August 20, 2014 at 12:35 pm in Uncategorized | Permalink

1. Ferguson on Facebook vs. Ferguson on Twitter.

2. Brief survey of the literature on police brutality and use of excessive force.

3. Obamacare attacks are losing potency as a campaign weapon.

4. The advantages of dyslexia (very good).

5. “RegData is an innovative new way of measuring the size and scope of US federal regulation. It is currently in beta. We welcome your feedback.”

6. Excellent Francis Fukuyama piece on American political decay.

7. Brad DeLong identifies The Great Reset, although he does not name it.  Falling AD and hysteresis are important, but we need more tools in the current toolbox.

A Reason-Rupee poll asked

Do you think all kids who play sports should receive a trophy for their participation, or should only the winning players be awarded trophies?

Overall, an estimated 57% Americans said that only the winning players should be awarded trophies but there were big differences according to gender, race, politics, education and income. 62% of men, for example, said that only the winning players should be awarded trophies compared to 52% of women. These results are consistent with experiments in which women tend to shy away from competition (perhaps with long-run consequences in the workforce). Whites opt for trophies to the winners-only at 63% compared to African Americans at just 44% and Hispanics at 39%. A whopping 80% of libertarians say that trophies should go only to the winners compared to conservatives at 63% and liberals and progressives both at 53%. More educated respondents were more likely to opt for trophies for only the winners.  Trophies for the winners also increased strongly in income which could be because people with high income feel that they are winners or perhaps because people with high incomes are the types of people who enjoy competition.

Trophy1

Note that these are raw differences not betas from a statistical regression and since income, race, education etc. aren’t independent we don’t know which are the most controlling although the results point in directions consistent with other evidence. The data can be found here.

From Alison Flood at The Guardian:

A new study which found that readers using a Kindle were “significantly” worse than paperback readers at recalling when events occurred in a mystery story is part of major new Europe-wide research looking at the impact of digitisation on the reading experience.

The study, presented in Italy at a conference last month and set to be published as a paper, gave 50 readers the same short story by Elizabeth George to read. Half read the 28-page story on a Kindle, and half in a paperback, with readers then tested on aspects of the story including objects, characters and settings.

Anne Mangen of Norway’s Stavanger University, a lead researcher on the study, thought academics might “find differences in the immersion facilitated by the device, in emotional responses” to the story. Her predictions were based on an earlier study comparing reading an upsetting short story on paper and on iPad. “In this study, we found that paper readers did report higher on measures having to do with empathy and transportation and immersion, and narrative coherence, than iPad readers,” said Mangen.

But instead, the performance was largely similar, except when it came to the timing of events in the story. “The Kindle readers performed significantly worse on the plot reconstruction measure, ie, when they were asked to place 14 events in the correct order.”

The researchers suggest that “the haptic and tactile feedback of a Kindle does not provide the same support for mental reconstruction of a story as a print pocket book does”.

That is speculative, but consistent with my own intuition, and my own tendency to (sometimes) organize information by remembering physically where it was in the book.

For context, CAPE is the cyclically adjusted price-earnings ratio.  On that topic, 3rdMoment writes:

While I have great respect for Shiller, I don’t understand his confidence that the CAPE is likely to return to it’s historical average of around 16. There are several reasons why we might expect the average CAPE going forward to be higher than in the past:

1. The average levels of CAPE in most of the last century appear, with hindsight, to have been puzzlingly low. This is the well-known “equity premium puzzle.”

2. There has been a large shift in corporate payout mix, from virtually all dividends in the past, to a roughly equal mix of dividends and share repurchases today. This by itself will add a couple of points to CAPE even if nothing else changes, (as shown in this post by the anonymous blogger who tweets as “Jesse Livermore”): http://www.philosophicaleconomics.com/2013/12/Shiller/

3. Some other accounting changes to the definition of profits might raise the CAPE as well, again see the linked blog post above.

4. Lower information and transaction costs and the rise of index investing have dramatically lowered the cost of maintaining a globally diversified portfolio. This decreases the raw rate of return for any given required rate of realized returns. For example if the costs of investing in equities fall by just 50 basis points, this would allow the required raw earnings yield to fall from 5% to 4.5%, corresponding to a rise in CAPE from 20 to 22, without changing realized returns for investors.

5. The real “risk free” return on treasuries seems to be very low by historic standards. Real returns on other forms of debt also appear low. This lowers the return stocks need to be attractive by comparison.

6. Large corporate cash balances, a “global savings glut,” lower rates of real economic growth, possible “secular stagnation,” all seem to point to the idea that real returns are somewhat harder to get than the past.

Some of these reasons are more certain than others, but taken together they seem to show that we have good reason to expect CAPE levels significantly above the historical average going forward.

Are there any countervailing reasons offsetting the list above, factors that would tend to make CAPE lower than in the past? I can’t really think of any. And I haven’t seen anybody else offering any.

He brings new life to a much-covered topic, here is one good bit of many:

Inserts are one of the last sources of advertising to resist digitization. They are also the next to go. Businesses like Cellfire and Find & Save are working on digital coupons; stores like Kroger’s and Safeway already offer online coupons direct to customers. This digitization is progressing as print circulation decays. Back in Roanoke, the Times was on the market for 5 years before it was bought; in that time the paper lost a quarter of its Sunday readers — 106,000 to 85,000 — and a third of its weekday readers — 96,000 to 65,000. This story too is being repeated all over the country. The print audience continues to defect to mobile, abandon the local paper, or die.

As digital alternatives become attractive while print circulation withers, business will start to shift their money away from inserts. When the inserts go, Sundays won’t prop up the rest of the week. When Sundays turn bad, the presses will become unprofitable.

The full piece is here, and for the pointer I thank Hugo Lindgren.

Stephen Williamson on secular stagnation

by on August 19, 2014 at 1:13 pm in Economics | Permalink

Well, Eggertsson and Mehrotra have fleshed out a theory that they think captures what Summers and Krugman are trying to get at. The Eggertsson and Mehrotra chapter in this volume is a summary of a formal academic paper that I discussed in this post. The gist of that blog post is that Eggertsson and Mehrotra – as with Eggertsson/Krugman, which is closely related – focus on the wrong problem. The key inefficiency in their model arises from a credit friction, but they are focusing their attention on the secondary zero-lower-bound inefficiency that the credit friction creates. Basically, the problem is insufficient government debt, and the solution is straightforward.

There is more here, interesting throughout, for those who find this interesting that is.

Addendum: Scott Sumner has some more practical comments.

Assorted links

by on August 19, 2014 at 12:05 pm in Uncategorized | Permalink

1. David Zetland’s economics of water book is now free.

2. How Ira Glass works.

3. Did Medicare Advantage get better?  And where is “the pizza belt”?  Is this the most important theory about pizza?  I agree with the claims in that article.

4. Claims about deception detection.

5. Should robots have diverse personalities?

6. Which are the most correlated web searches with hard and easy lives?

7. More on RCT debates: is there a gold standard?

Nine million Americans took a week off in July 1976, the peak month each year for summer travel. Yet in July 2014, just seven million did. Keeping in mind that 60 million more Americans have jobs today than in 1976, that adds up to a huge decline in the share of workers taking vacations.

Some rough calculations show, in fact, that about 80 percent of workers once took an annual weeklong vacation — and now, just 56 percent do.

That is from Evan Soltas, there is more here.  And Evan offers a bit more here.

I did not know this idea was under consideration:

Los Angeles city leaders are considering a lottery system to reward citizens for casting a ballot in local elections, in a measure to combat low voter turnout that officials and outside observers say could be a first for any U.S. municipality.

The Los Angeles Ethics Commission voted 3-0 on Thursday to recommend that members of the City Council move forward with the lottery idea, either by putting it before voters as a local initiative or by adopting it on their own, said commission president Nathan Hochman.

The commission discussed a number of possible ways for the lottery to work, including the use of $100,000 to be split into four prizes of $25,000, or 100 pots of $1,000 for lucky voters who win the drawing, Hochman said.

The story is here, hat tip goes to long-time MR correspondent Daniel Lippman, who now is working for Politico.

File under The Polity that is California.

Neil Harbisson is a cyborg

by on August 19, 2014 at 2:16 am in Medicine, Philosophy, Science | Permalink

Or should that title read “Is Neil Harbisson a cyborg?”

Protruding from the back of Harbisson’s skull is a metal antenna that allows him to convert the frequencies for color into frequencies for sound and vice versa. He was born colorblind and the appendage has essentially given him a sixth sense to make up for what his vision lacks.

…Harbisson gets visibly dizzy when his antenna is off center. Moving it slightly to the left, he closed his eyes and said, “If I do this, I feel unbalanced…it does feel like a body part, an extension of a bone or something.” Even though the antenna is metal and has no nerve endings, Harbisson says he can feel when someone touches it, the same as a natural body part.

There is more:

Moon Ribas, Harbisson’s partner, has an extension she wears on her arm that makes her body vibrate when there’s an earthquake. (She plans to one day have it implanted under her skin.) As a choreographer, Ribas takes inspiration from nature and thought the extension would enhance her creativity. It syncs with an app that collects data on earthquakes around the world to make her body vibrate when there’s seismic activity (it happens frequently enough that she vibrated once during our interview).

But the appendage cannot be submerged in water, and neither can Neil’s. They are both hoping to update their devices so that in the future they can go swimming. “Then I will be able to perceive the colors in the ocean,” Harbisson says.

There is more here, including a photo.  It is noted that security guards are sometimes unsympathetic to Harbisson, who is moving from Spain to New York, where he feels he will be seen as less unusual.

For a related pointer, I thank Samir Varma.

Sentences to ponder

by on August 18, 2014 at 3:21 pm in Education, History, Philosophy | Permalink

“Always assume that there is one silent student in your class who is by far superior to you in head and in heart.” This is the counsel Leo Strauss, among the most consequential teachers and scholars of political philosophy in the 20th century, offered an advanced graduate student who had asked for a general rule about teaching.

In a short essay published in the early 1960s, “Liberal Education and Responsibility” (based on a public lecture he gave), Strauss elaborated on his exquisite advice. “Do not have too high an opinion of your importance,” he said, “and have the highest opinion of your duty, your responsibility.”

There is more here, by Peter Berkowitz, via Andrea Castillo.