Category: Law
Banning credit checks harms African-Americans
But a new study from Robert Clifford, an economist at the Boston Fed, and Daniel Shoag, an assistant professor at Harvard’s Kennedy School, finds that when employers are prohibited from looking into people’s financial history, something perverse happens: African-Americans become more likely to be unemployed relative to others.
…What’s surprising is how that redistribution happened. In states that passed credit-check bans, it became easier for people with bad credit histories to compete for employment. But disproportionately, they seem to have elbowed aside black job-seekers.
I can’t say that mechanism makes me feel better about the world, but there you go. Consider this:
A powerful study published last year in the Review of Economics and Statistics shows something of the opposite happening: When employers began to require drug tests for job applicants, they started hiring more African-Americans.
“The likely explanation for these findings is that prior to drug testing, employers overestimated African-Americans’ drug use relative to whites,” the study’s author explained in an op-ed. Drug tests allowed black job applicants to disprove the incorrect perception that they were addicts.
It’s possible that credit checks were playing a similar role to drug tests, offering a counterbalance to inherent biases or assumptions about black job-seekers.
Here is the Jeff Guo Wonkblog piece, here is one version of the original study. Here is related earlier work by Daniel Klein.
Humiliation, the soda tax, and deadweight loss
Catherine Rampell’s excellent column considers the case for a soda tax in Britain. Here is one bit:
Why not just target the output, rather than some random subset of inputs? We could tax obesity if we wanted to. Or if we want to seem less punitive, we could award tax credits to obese people who lose weight. A tax directly pegged to reduced obesity would certainly be a much more efficient way to achieve the stated policy goal of reducing obesity.
Of course, “fat taxes,” even when framed as weight-loss tax credits, seem pretty loathsome. Why is . . . unclear.
We tax soda instead, even though that is less effective, for instance because soda drinkers may substitute into other sugary beverages. We are unwilling to humiliate the obese by taxing them directly, and so our chosen policies do less to help…the obese. (That’s assuming that attempting to shift their consumption behavior helps them at all, which is debatable.) As Robin Hanson has told us many times, politics isn’t about policy…
Why can’t Europe police terrorism better?
What Europe does not have is any cross-national agency with the power to carry out its own investigation and make its own arrests.
This means that cross-border policing in the European Union has big holes. It depends heavily on informal cooperation rather than formal institutions with independent authority. Sometimes this works reasonably well. Sometimes this works particularly badly. Belgium is a notorious problem case, because its policing arrangements are heavily localized. In the past, many Belgian policing forces have had difficulty cooperating with each other, let alone with other European forces.
That is from Henry Farrell, there are other points at the link. Here is one bit more:
To take a different example, immigration and refugees present an even bigger and more visible set of challenges to the E.U. than terrorism, yet the E.U. has been unable to agree on reforms that might expand the budget and powers of FRONTEX, the E.U. agency charged with coordinating border control. Creating a European FBI-style institution would be an even bigger lift.
Keep this in mind the next time you are tempted to believe that the EU is doing everything possible to manage the refugees crisis well.
Is the refugees deal time consistent?
Just to refresh your memory, part of the deal is that newly arriving refugees in Greece get sent to Turkey, but in return the EU takes a refugee currently in Turkey. The goal is to reduce the incentive to migrate as a refugee, since you end up in Turkey rather than in Europe.
Gideon Rachman writes:
First, will the Greek authorities have the administrative capacity to process and turn around refugees arriving on their islands — as well as the many thousands already stranded in Greece? Second, will Turkey really co-operate — particularly given the fact that the EU is unlikely to deliver on all its promises? (The pledge of visa-free travel for Turks is unpopular in many EU states.) Third, will migrants desperate to get to Europe find alternative routes — perhaps via Libya, which has no properly functioning government?
Kerem Oktem summarizes the deal and makes some excellent points, including this one:
…we know that desperate people cannot be stopped. They will simply resort to new routes that will be more dangerous, more lethal and more expensive, whether it is the land borders between Turkey and Bulgaria, the boat journey from Libya to Italy or a new trajectory through Ukraine and Eastern Europe.
I find it strange that these European governments find it repugnant to allow life-saving trade in human organs, or trading away some of one’s privacy, or for that matter a free labor market. Yet they don’t seem to mind an institutionalized system of trading one refugee for another, with the explicit goal of increasing the number of Syrians who are trapped.
In essence, the wealthier Europeans are arranging for Syria, Greece, and Turkey to pay for building a stronger wall.
The Los Angeles war against tiny homes
So far Summer has given out 37 tiny 6- by 8-foot houses, which cost $1,200 each to build. They resemble sheds, painted in bright, solid colors, with solar panels on the roof, wheels to make them mobile and a portable camping toilet.
But recently, city sanitation workers confiscated three of the houses from a sidewalk in South Los Angeles and tagged others for removal.
“Unfortunately, these structures are a safety hazard,” says Connie Llanos, a spokeswoman for LA Mayor Eric Garcetti. “These structures, some of the materials that were found in some of them, just the thought of folks having some of these things in a space so small, so confined, without the proper insulation, it really does put their lives in danger.”
Llanos says they’d be better off taking advantage of official resources like shelters or housing vouchers.
And this:
According to the latest count, 44,000 people live on the streets in and around LA. The city’s sweep put some people back on the sidewalks and since then Summers has been handing out tents instead.
Here is the NPR feature. Perhaps there is a way to recognize and regularize a greater number of these structures?
Cashless Korea?
The Bank of Korea is planning a “cashless society” by 2020. If a shopper buys a 9,500 won item and pays with a 10,000 won banknote, for instance, the shopper will be credited 500 won to his or her prepaid card instead of getting a 500 won coin in change.
The trends are indeed lining up:
According to a central bank survey, Koreans carry on average 1.91 credit cards, 2.03 mobile cards and 1.26 check or debit cards. Four out of 10 picked credit cards as the means of payment they use most, up from three out of 10 the previous year. The ratio of those picking cash, meanwhile, continues to fall.
As Koreans are carrying less cash, with the average standing at 74,000 won last year, down 3,000 won from the previous year, the central bank is also issuing less cash. It released 12.3 percent fewer 10,000 won banknotes last year from the previous year, while the issuance of 5,000 won notes dipped 5.9 percent and 1,000 won bills 3.7 percent.
The country is also sufficiently non-diverse that such a transition could be made without leaving many people without means of payment, in contrast to say the Louisiana Bayou.
Here is the piece, via the always interesting Miles Kimball. Here is a recent piece on cashless Sweden.
What predicts (causes?) party realignments?
Richard L. McCormick discusses this question in his The Party Period and Public Policy (the quoted chapter is reproduced in jstor):
After coding and analyzing the contents of party platforms and federal statutes, Benjamin Ginsberg conclude that realigning eras were marked by high degrees of ideological difference between the parties and by significant transitions in national policy. David W. Brady and several coworkers marshaled evidence of heightened party voting in Congress and of the adoption of “clusters of policy changes” following the realignments of the 1890s and the New Deal era.
The simple-minded amongst us might be tempted to conclude we are likely in a realignment period right now, as argued very recently by David Frum. It should be noted that McCormick criticizes these theories for their simplicity in some regards, and their rather casual aggregation of different time periods.
Here is the Ginsberg piece from jstor. Here is one of the cited Brady pieces, again jstor.
The problem with ECB corporate bond buying
Yes, it is on the agenda, and those bond prices are up sharply, but there are more eligible bonds in some places than others:
Still BofAML sees €554 billion of debt ultimately eligible for ECB buying out of a European investment-grade universe that they put at €1.6 trillion. Of that €554 billion the vast majority has been issued by French and German credits, a fact which may disappoint some who were hoping for targeted stimulus of the eurozone’s weaker nations.
Deutsche Bank AG Credit Analysts led by Nick Burns see similar figures, estimating around €418 billion of eurozone corporate debt could be eligible for ECB purchases, with the bulk of that coming from German and French issuers.
The more economically integrated United States would not have this problem to the same degree.
Why Merkel’s deal with Turkey won’t work
First, the envisioned mass group deportation of irregular migrants from Greece back to Turkey is probably illegal under Europe’s commitments to the Geneva Conventions, which calls for individual evaluation of asylum cases and not mass deportations. Judicial review of this deal may well strike it down.
Second, the 1-1 swap model with Turkey is a nonscalable fantasy. EU leaders acknowledge that it does “not establish any new commitments on Member States as far as relocation and resettlement is concerned.” In other words, European leaders assume that any refugees accepted directly from Turkey will come out of the already agreed 160,000 quota slated for relocation from inside the European Union. While EU leaders should be applauded for trying to replace illegal migration through Turkey with a new regularized and legal route for refugees to enter Europe, it defies belief that EU member states will be more willing to accept refugees directly from Turkey than they have been willing to accept relocations from fellow EU members Greece and Italy. To date only a ludicrously low 885 refugees have been relocated, a fact certain to dampen Ankara’s willingness to accept returned irregular migrants from Greece. Rather than a 1-1 swap arrangement, this deal actually appears only to be a 0.00001–0.00001 arrangement.
That is from Jacob Funk Kirkegaard, the piece has other good points too.
Where is Germany headed?
Mapping Indian addresses and managing Indian logistics
A startup named Delhivery has hired more than 15,000 staff, from developers to executives poached from Facebook and posh consultancies. Its headquarters in Gurgaon are so packed that engineers spill onto an outdoor porch, tapping their keyboards furiously. Delhivery, which works with a number of e-commerce firms, is using machine learning to subdivide India’s postcodes, the better to map idiosyncratic descriptions. “We’ll know the house with the yellow door next to the temple,” says Sandeep Barasia, the managing director. The company moves goods to 700 or so small distribution centres overnight to avoid congested main roads during business hours. Thousands of delivery boys then dash to and from the distribution centres throughout the day, bearing more than 20 kilos on their bikes.
That is from The Economist, a good article throughout.
The EU refugee Coasian bargain evolves
Turkey has made a host of last minute funding and political demands that threaten to derail a controversial EU-Turkey deal to dramatically reduce migrant flows to Europe.
Ahead of crunch summit between EU leaders and the Turkish prime minister on Monday, Ankara has called for an increase on the €3bn in aid previously promised by the EU, faster access to Schengen visas for Turkish citizens and accelerated progress in its EU membership bid, write Alex Barker and Duncan Robinson in Brussels.
Although talks remain fluid, the wishlist represents Turkey’s new price for giving the EU’s response to the migration crisis a harder edge by facilitating the systematic return of non-Syrian migrants from Greek islands to Turkey.
I don’t blame Turkey, but this is a good example of what happens when you rely on poorer, lower quality institution countries to solve your problems for you.
The story is here. By some accounts, the Turks will be getting much of their wish list. But here is Dani Rodrik’s comment — Schengen may collapse.
The plan, for the refugees that is
The Turks are already playing host to over 2m Syrian refugees – and many more could be on their way, if and when the fighting in Syria resumes in earnest. And yet the EU wants Turkey to close the safety valve that allows many Syrians to cross the sea to Greece and the EU. As one German official admitted to me in Berlin recently: “We’re asking Turkey to keep its border with Syria open to refugees, but to close its border to Greece and to accept non-Syrian migrants that we turn back from the EU. I’m not sure I would agree to that, if I were them.”
That is from an excellent blog post by Gideon Rachman. May I add something? I don’t see how that can work!
What about Coase? Gideon has thought that one though too, I wonder if he plays chess?:
In their efforts to persuade Turkey to accept at least parts of this deal, EU officials have dangled various sweeteners – including billions in aid and the prospect of easing the visa regime for Turks wishing to visit the EU. The Europeans also say that they might accept more refugees, direct from camps in Turkey – to reduce the incentives to cross the sea to Greece. But the Turks are understandably sceptical that any such promise would actually be kept.
A decisive, unified EU really is important for solving some problems, but that is exactly what we do not have…
Addendum: Here is more:
According to draft reform options seen by the Financial Times, responsibility for all asylum claims could be shifted [away from the “initial country status” standard] to the European Asylum Support Office.
This offers advice to national governments but would be turned into a federal agency responsible for claims. If Brussels pressed ahead with this option it would mark another transfer of sovereignty to the EU and ultimately require treaty change.
So the new plan is that every EU nation will approve this? And Plan B? Ronald Coase I love you, but I just don’t see how this is supposed to work…
The polity (culture) that is France
As most of you probably know, there is a legal campaign against Uber going on in France, here is part of the back story:
It took only a few years for Uber and other platforms challenging the Parisian taxis’ monopoly to create more than 15,000 jobs. (About 5,300 are self-employed and the rest are employed by minicab companies.) They compete against the 17,000 taxis in Paris.
“There has been a tidal wave of start-ups in the banlieues, an entire generation wants to be Uber drivers,” says Sabrina Lauro at Planet Adam, a non-profit organisation that helps residents in the suburbs set up businesses. Uber appeals to those without a diploma or work experience, she said.
Research seems to bear this out. Charles Boissel, a PhD student at HEC Paris, a business school, found that most minicab registrations were in the “suburbs of northern and south-eastern Paris, where economic conditions are harshest”.
Here is the Anne-Sylvaine Chassany FT piece, recommended.
Fact of the day
Islamic countries revealed significantly lower homicide, suicide, and overall lethal violence rates than non-Islamic countries.
The full article is here. That is from CrimePsych, via Richard Harper.