Category: Law
Which European financial centre would win at London’s expense?
Paris recently made a bold pitch to woo City of London bankers in the event of Brexit. But, HSBC aside, most banks scoff at the idea that Paris would be a natural venue. Frankfurt, home of the European Central Bank and the financial capital of Europe’s biggest economy, is also problematic. As a small city with a population of less than 700,000 people, it is seen as provincial and unpopular with staff. Dublin is English-speaking and attractive on tax grounds, but it is a relative backwater. The most likely outcome is that foreign banks with large operations in London would shift their staff to a spread of eurozone locations where they already have operations — including Frankfurt, Dublin, Paris, Warsaw and Lisbon. That would fragment the financial services industry in Europe, potentially weakening the continent’s ability to compete internationally.
It’s not Europe, but of course we have to add New York City to the list of alternative cities. The Patrick Jenkins FT article is interesting throughout.
Universal background checks plus privacy?
I found this discussion of interest:
I believe I’ve sketched out an idea that enables all transfers to verify the recipient is not a prohibited person without communicating any distinguishing information to the government while optionally leaving an audit trail useful for prosecution.
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When an individual applies for state-issued identification, let them choose a public-private key pair. Make the public key part of their identification card, and the private key remain private. Not even the issuing state would know it. Add their public key to a whitelist.
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At the same time, perform a background check to determine if the individual is a prohibited person. If so, add their public key to a blacklist.
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Publish the blacklist in bulk and make updates available daily. We all have access to the Internet. We can do this. Regularly update the blacklist according to adjudicating events associated with the definition of “prohibited person.” For example, at the time of conviction of a felony, and individual’s public key gets added to the blacklist.
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Firearms sellers, private and commercial, must maintain a copy of the blacklist up-to-date at the time of sale. Perhaps use a blockchain of sorts and/or share via BitTorrent or some other distributed service.
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At the time of sale, the recipient provides their public key to the seller. Seller verifies the public key is not on the blacklist. The seller constructs a secret cryptographic nonce and encrypts it with the recipient’s public key. Recipient decrypts with their private key and returns the nonce in plaintext to the seller to confirm their public-private key pair is valid. This form of handshaking is common place and may be automated.
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If the recipient is on the whitelist and not on the blacklist, the transfer may proceed.
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Optionally, the seller may record a log of the recipient’s public key, perhaps encrypted with their private key. On the event of a warranted search, the seller may choose to decrypt their log entry to reveal the identify of the recipient.This leaves the audit trail which we may be legislatively require.
Thus, no direct communication with the state on the event of a transfer is needed which prevents the creation of a registry. Prohibited persons cannot acquire firearms without unlawful behavior from the seller which satisfies the aims of universal background checks. We already have all the cryptographic primitives and communications infrastructure needed to implement this and verify its integrity.
Thoughts?
That is from kermudgeon on Reddit, via N. Some of the comments are quite good as well.
The top American coal companies have lost 99% of their value since 2011
…the market cap of four of the largest coal companies was more than $35 billion in 2011. After a flurry of regulation, it’s now a smudge on the graph below, a decline of 99 percent.
That is from Sam Batkins, via Rick Newman and Joanna Bryson 2.
Why banning AR-15s and other assault weapons won’t stop mass shootings
That is the new article by Michael Rosenwald, here is an excerpt:
From 1976 to 1994, there were about 18 mass shootings per year, according to Fox’s data, which is drawn from federal statistics. Between 1995 and 2004, a period covering the ban [on assault weapons], there were about 19 incidents per year. And from 2005 to 2011, after the ban expired, the average went up to nearly 21.
Fox makes an important point about what probably happened during the ban: Mass shooters can rather “easily” come up with “alternate means of mass casualty if that were necessary.”
In other words, if they can’t get an AR-15, they get a Glock.
Assault rifles are used in only about 27 percent of mass shootings, see Alex too.
Here is an additional piece worth reading: “common state and federal gun laws that outlaw assault weapons are unrelated to the likelihood of an assault weapon being used during a public shooting event. Moreover, results show that the use of assault weapons is not related to more victims or fatalities than other types of guns.”
There is more here.
Statistical sentences to ponder
A Washington Post review of federal campus safety data for more than 2,200 colleges that offer bachelor’s or advanced degrees found that more than 1,300 of the schools had no reports of rape on campus in 2014, the most recent year for which data is available.
Here is more from Nick Anderson.
Homicide Data by Weapon
Here is FBI homicide data by weapon for 2014:
In 2014, 248 people were killed by rifles. Rifles would include “assault weapons”. Thus, more people are killed by knives than by assault weapons. Indeed, more than twice as many people are killed by “hands, fists, feet, etc.” than by assault weapons. (Some of these numbers could change slightly with “Firearms, type not stated” although most of these are probably handguns).
The data may be uncomfortable to both left and the right. The left because banning “rifles” would obviously not save many lives even if one assumed no substitution effect towards other weapons and banning “assault weapons”, however defined, would do even less. The right because handguns are by far the primary weapon used to kill.
It’s not just repairing a bridge that takes longer than it used to
Remember the recent Op-Ed by Larry Summers on the difficulty of repairing bridges rapidly? Well, this problem has a new angle:
The Verrazano-Narrows Bridge, which connects Brooklyn and Staten Island, was named after an Italian explorer. There is just one problem: The man is widely known as Giovanni da Verrazzano, with two z’s.
More than a half-century after the bridge opened, some New Yorkers are calling for the spelling error to be corrected. An online petition taking up the cause has brought renewed attention to the enduring discrepancy.
“By rectifying Verrazzano’s name, we’re really saying to all Italians and Italian-Americans that we respect them and appreciate them,” said Joseph V. Scelsa, the president of the Italian American Museum in Lower Manhattan.
The Metropolitan Transportation Authority does not appear eager to tackle the issue. A spokesman for the authority, Christopher McKniff, said adjusting the bridge’s name would be an expensive and labor-intensive undertaking.
“At this time, we are not considering any name change for the Verrazano Bridge,” Mr. McKniff said in a statement that hewed to the one-z spelling.
Here is the full NYT story.
China sentences of the day
With less than 1% of China’s GDP, it [Wenzhou] has accounted for nearly a tenth of bankruptcy cases nationwide over the past three years. It established one of China’s first courts dedicated to handling such cases. “Other cities hear ‘bankruptcy’ and get scared. Here, we are tasting how sweet it can be,” says Zhou Guang, who heads the Wenzhou Lawyers’ Association.
Here is the full story.
Did the Medicaid expansion limit labor force participation?
I study the effect that expanding Medicaid eligibility has on labor force participation of childless adults. The Affordable Care Act provided federal funding for states to expand public health insurance to populations that had never before been eligible for the benefit on a large scale, among those are adults without dependent children. A 2012 Supreme Court decision allowed states to choose whether or not they wanted to accept federal funds to expand Medicaid eligibility, resulting in a situation where roughly half of the population resided in states that had expanded Medicaid eligibility in 2014 and half did not. I exploit this variation by conducting a series of difference-in-differences and triple differences analyses both at a local level within one labor market, and nationwide to determine the relationship between Medicaid expansion and labor force participation. I find a significant negative relationship between Medicaid expansion and labor force participation, in which expanding Medicaid is associated with 1.5 to 3 percentage point drop in labor force participation.
That is from a Georgetown thesis by Tomas Wind, via Ben Southwood. Given the possibility of paternalistic judgments in health care policy, the simplest question here is whether this class of individuals is better off as a whole, as a result of some of them choosing this trade-off. Work is good for most people, and it is even better for their future selves, and their future children too.
WTF™ Citibank?
I had to verify this on several websites because it seemed like an April Fool’s joke but it checks out:
Citigroup Inc sued AT&T Inc on Friday, saying the phone company’s use of “thanks” and “AT&T thanks” in a new customer loyalty program infringed its trademark rights to the phrase “thankyou.”
Yes, Citi trademarked thankyou. No space! What an innovation! Now they are suing because AT&T has a similar customer loyalty program using “thanks” and “AT&T thanks”.
The IP system is out of control.
Hat tip: Mark Thorson.
Murders per gun, which countries have the most and least
This is a lengthy email from an MR reader who wishes to remain anonymous. These are his words, not mine, everything which follows:
Back in December I asked you knew of any naive measures of “gun murders / # of civilian guns” per country, and seeing where the US falls in this distribution.
Some time after I found this WaPo data set compiled in 2012 from the UN, Small Arms Survey, and others. (There is a “data caveat” I’ll point out after the plots below.)
Here’s what I did: dropped all data into a spreadsheet and calculated the number of homicides per 100,000 guns — simply (homicide by gun) / (total guns) * 100000. Call this “H” for simplicity.
This produces numbers in a ~0-20 range for “western countries. So “H = 2.5” –> 2.5 gun-caused homicides per 100,000 guns for the year in question (2005 I believe), by country.
Here are three very quick, ugly kernel density plots from R.
The raw data plots is pasted in the end of the email (apologies for messyness!)
The vertical lines are: mean=green, median=blue, USA=red.
Total world, as a limiting case:
US is below mean and median: US = 3.7, mean = 91.0, median = 6.0
EU countries (density excludes US):
US is just above mean, above median: US = 3.7, mean = 3.1, median = 1.9
“Post-WWII westernized” countries:
US is just above mean, above median: US = 3.7, mean = 3.1, median = 1.5
The “westernized” countries were somewhat arbitrarily those with a long “westernizing” history post-WWII. Chosen quite ad-hoc and off-the-cuff; largely it means Eastern European countries were replaced by Canada, Australia, Japan, etc.
Immediate data caveat: My earlier spot-checking against the cited sources turned up a number of discrepancies, which I couldn’t quickly figure out — mostly small, some large. Eg. I recall that some EU countries saw order-of-magnitude differences when I put in “direct from source” numbers, which is worrisome. Unfortunately I never had time to examine these further (hence the delay in reply), but perhaps some enterprising undergraduate student would be interested!
The broad strokes are still interesting. Here are some quick ‘surprises’ for me:
– The US is no longer a massive outlier, although still above average for “westernized” plots.
– Japan’s H-score is much higher I expected, ~10x the number in Norway (and higher than England, Northern Ireland, Czech Republic – the later has much less strict control and lower H).
– The Netherlands came out ~6-7x higher than median (of EU/”westernized”); ~3x the US
– Taiwan seems quite high: ~11x median of “westernized,” ~5x US. Was not expecting this (but not sure why).
– Ireland is ~4.5x higher than Northern Ireland
– Belgium is closest to the US in the EU states, Belgium=3.9 vs US=3.7
– All surprises, perhaps all data size related: Denmark, Netherlands, Japan, Taiwan, Ireland, Italy (higher than US, was not expecting that), Belgium, Luxembourg
There are many possible data concerns. Sample size is very important (the few data I spot-checked varied significantly over time). Measurement is almost certainly an issue, and I dread looking into differences in the definition of “homicide” for these countries. I suspect, however, that clever methods and data collection could still provide useful information about ranges of these values (an enterprising undergrad could probably make quite the impact with careful data examination/collection and some Bayesian “Locomotive Problem“-style work).
Because of data issues, I don’t think of this as “the final word” but rather an interesting first pass.
Drop the Ban on Supersonic Aircraft
WSJ: In the 1960s the future of aviation seemed bright. In 1958 Boeing had built its first jetliner, the 707, which cruised at speeds of up to 600 mph. The Concorde came along in 1969, flying at Mach 2—more than 1,500 mph. An age of affordable supersonic flight seemed inevitable, promising U.S. coast-to-coast travel in just 90 minutes.
Today, neither the Concorde nor any other supersonic passenger jet operates. And the 707, still in limited use, remains one of the fastest commercial jets operating in the world. What happened?
Regulation happened. In 1973, shortly after Boeing abandoned the 2707, its Mach 3 government-funded competitor to the British- and French-made Concorde, the Federal Aviation Administration issued a rule banning supersonic transport over the U.S.
And why did we ban supersonic transport? It seems almost like a joke–because we were worried about noise. What would Chuck Yeager say? (He’s still alive and re-enacted his 1947 supersonic flight in 2012 at the age of 89).
Moreover, the noise scare was overblown. Incredibly, it was only after the FAA banned supersonic transport over the US that a careful study was done at Heathrow airport and that study found that the Concorde taking off and landing was only modestly louder than a regular jet. Moreover, as the study reported:
Whenever there was a Concorde departure from Heathrow, subsonic jets recorded a higher or equal noise level at the relevant fixed monitoring sites on 2 days out of 3.
The technology to produce quieter supersonic aircraft exists today but we won’t see really big investment in the industry until the outright ban on supersonic aircraft is lifted. As Dourado and Hammond write:
If the original ban was an overreaction, today it’s an outright absurdity—and remains in place due more to regulatory inertia and the FAA’s deeply precautionary culture than a sober accounting of costs and benefits.
I suspect that we will eventually lift the ban and get quieter and faster supersonic aircraft. But when we do so don’t make the mistake of thinking that it was wise to wait. As I pointed out in my earlier piece on Uber of the Sky, technological development is endogenous. If you ban supersonic aircraft, the money, experience and learning by doing needed to develop quieter supersonic aircraft won’t exist. A ban will make technological developments in the industry much slower and dependent upon exogeneous progress in other industries.
When we ban a new technology we have to think not just about the costs and benefits of a ban today but about the costs and benefits on the entire glide path of the technology.
How bad is rent control when housing supply is artificially restricted by law?
Many of you have been asking me about this NYT article on the pressures for rent control in Silicon Valley. If no (or few) new apartment blocks will be built anyway, what is wrong with rent control in that setting?
One effect is that rent control will limit the incentive for prospective builders to fight to overturn current building restrictions.
A second effect of rent control is that it will lower the quality of the apartment stock. This outcome has some second best properties, since a lower-quality, lower-price selection of apartments is probably what the market would have delivered under freer conditions. Still, quality will fall in inefficient ways. For instance sizes of apartments already are given, so landlords will cut back on maintenance. Rather than well-maintained but smaller apartments, we will see overly large but run-down abodes.
At rent-controlled prices there will be excess demand for apartments. The “plums” will go to those who bribe, those who are well-connected, those who are skilled at breaking the law, and, to some extent, those who have low search costs. The latter category may include well-off people who hire others to search for them.
So overall I still don’t think this is a good idea. Even if the current housing stock is fixed, rent control probably will create costs in excess of its benefits, and without significantly desirable distributional consequences.
Addendum: In the comments, Kommenterlein adds: “The rental housing stock isn’t fixed – it will decline rapidly with rent control as rental apartments are converted into Condos and sold at market prices.”
Why are many curry house owners favoring Brexit?
The support for Brexit from chefs and curry house owners, predominantly from Bangladesh, has come as a surprise voice in the debate, as the Leave campaign is widely perceived as anti-immigration.
Their argument centers around “freedom of movement,” one of the pillars of the European Union — meaning that citizens from across the community can essentially turn up in the country of their choice and try their luck at finding a job.
“It’s not that we think Europeans shouldn’t have a chance in Britain, it’s just that we feel the country should choose who it needs, what kind of skills they need, so that industries like ours are not short handed,” Khan told CNN.
Freedom of movement has put pressure on Britain’s migrant intake from outside the EU, prompting the government to almost double the minimum salary required for non-EU immigrants, from £18,700 ($26,610) to £35,000 ($50,000).
“This just doesn’t suit the industry. The average salary for a chef in the country is £25,000, so why should we have to pay a junior chef £35,000 to make curry? It’s just not affordable,” Khan said.
Call it the cheap channa argument, though note if this chain of reasoning were better known, it might help the prospects for Remain. The story is here, and here are my previous posts on Brexit (which I nonetheless oppose, cheap channa or not).
For the pointer I thank Brennan McDavid.
Nascent insurance markets in everything
…at least one insurer seems to sense an opportunity where others fear to tread. In what appears to be an unprecedented move, a British insurance company has begun offering a special policy designed for autonomous and partly automated vehicles. In theory, you could use this on your Google driverless car or your Tesla that’s equipped with autopilot.
Unfortunately, it’s only available in Britain. But the policy protects against all of the usual things you would find in your typical car insurance — damage, fire, theft. And it also goes further, covering accidents caused by malfunctions in the car’s driverless systems even if the passenger has failed to use a manual override. It covers any havoc that hackers may wreak on a car’s operating system. It applies to cars even if they haven’t been updated to the latest software. And it even covers mishaps that may occur if your car loses satellite or other crucial connectivity.
From Brian Fund here is the full story.