Men of genius do not excel in any profession because they labor in it,
but they labor in it because they excel.
William Hazlitt
The Fed Prints On
The Fed Prints On
Bums once cried "hey buddy, have you got a dime"
Obama says the economy is doing fine
Now bums ask "do you have a dollar?"
Economists study facts from ivory towers
The Fed prints on, the Fed prints on
Marshall keeps pounding his fist on the door
Serves notice you don't live here anymore
La de da de de, la de da de da
Crony bankers make money hand over fist
The dollars chasing goods economists miss
The Dems keep spending faster all the time
Helicopter Ben still hands out the same old line
"Instead of opting for a full-blow QE3 package, the Fed decided that it would instead extend Operation Twist. The extension, which will take place through the end of the year, will result in another $267 billion of purchases in the 6 to 30 year bond range."
Jerry Sandusky Found Guilty on 45 of 48 Counts
of Sex Abuse of Minors
The 68-year-old former defensive coordinator for the Penn State Nittany Lions under the late legendary football coach Joe Paterno was found guilty tonight. I deliberately did not comment, because I believe that he is entitled to a fair trial. The recent revelation that his own adopted son Matt swerved his strong support into accusations of his own during the trial was particularly troubling.
Jerry Sandusky has the American legal system's right to a presumption of innocence. Not a single voice rose up against what I regard literally as lynch mob mentality against Sandusky--and the Penn State football program. I mean literally a lynch mob mentality: Sarah Palin said on Greta van Susteren's On the Record program this evening that if the charges turned out to be true, she would personally furnish the rope to hang him. Like 3 or 4 times.
I have heard and read enough (including the bizarre Costas interview) to know I would never trust Jerry Sandusky with my own kids if I ever had any. However creepy this guy is--and hearing him talking about showering with boys (not his own sons) and touching them on their thighs truly nauseated me--Sandusky deserves his day in court.
On a sad day where a Philadelphia monsignor, a former aide to Cardinal Cardinal Anthony J. Bevilacqua, was found guilty covering up sexual abuses by priests under his supervision:
we must never forget that children are gifts from God, and abusing a child violently, sexually or verbally , through negligence or violation of trust, is a heinous crime in the eyes of God and a crime against humanity. Whereas nobody else is guilty of Sandusky's convicted crimes, there are a number of people whom could have, should have, and did not come forward for whatever reason--fear of institutional scandal, getting involved, possible retaliation, whatever: how can one sleep at night knowing because of his or her moral cowardice, yet another unsuspecting child became a victim?
we must never forget that children are gifts from God, and abusing a child violently, sexually or verbally , through negligence or violation of trust, is a heinous crime in the eyes of God and a crime against humanity. Whereas nobody else is guilty of Sandusky's convicted crimes, there are a number of people whom could have, should have, and did not come forward for whatever reason--fear of institutional scandal, getting involved, possible retaliation, whatever: how can one sleep at night knowing because of his or her moral cowardice, yet another unsuspecting child became a victim?
Isn't It Time We Scale Back Our Wars
(on Drug, Terror, Unauthorized Immigrants,...)
I started this discussion in last Saturday's post when I was discussing the huge amount of resources this economy loses just in terms of the TSA, wasting personnel and other resources on checking over 99% of passengers whom pose absolutely no threat to air safety. (It's also not only a deadweight loss to the economy but not very effective, with TSA employers detecting only a minority of prohibited items in various testing.) I brought up a concept almost any business or economics student learns early in their courses of study: the Pareto principle. Here's a relevant extract from my post:
There's been a topic I've been meaning to discuss: the concept of risk. Social liberals have a problem with this discussion. Almost anyone who has ever studied economics and/or has a business degree has encountered what Joseph Juran called the Pareto principle (the 80/20 rule, aka the law of the vital few and the principle of factor sparsity ). Pareto, the Italian economist, discovered that 80% of the land was owned by 20% of the people. Similar proportions have been found across a wide variety of phenomenon (50%<=K<=100%, where K tends to cluster around 80%, to 100%-K%*), e.g., 20% of the pea pods in a garden contained 80% of the peas, a past United Nations Development Program Report revealed the richest 20% of the world's population controlling 82.7% of the world's income, Microsoft noted that by fixing the top 20% of the most reported bugs, 80% of the errors and crashes would be eliminated, 20% of the hazards that cause 80% of the injuries or accidents, 20% of customers contribute 80% of the income, 20% of patients have been found to use 80% of health care resources, and 80% of crimes are committed by 20% of criminals.
There are some nuances about specific distributions and additivity (see the above cited source); for instance, there is a certain reflexive nature to the principle. For example, if you look at the top 20% of income/wealth, it has its own Pareto ratio: for example, 4% (20% of 20%) of the population owns 64% (80% of 80%) of the wealth, and so on.
The basic thing I'm trying to get across is that when we look at things like social policy, airport safety, etc., we have to start from the fact that we have a finite amount of public resources (i.e., tax revenue).Mark Perry of Carpe Diem recently noted that Nixon's war on drugs started over 40 years ago. In a time where government is finding our expensive jails and prisons overly crowded and lacking resources to buy new ones (see the first table below), we need to seriously overhaul our laws and legal system: we are imprisoning at the highest level in the world--an ironic fact for the "land of the free", nearly 5 times the rate of our closest allies (second table) and over 4 times our own percentage in the early 1970's (third table).
If we look at the distribution of our prisoners by crime category, almost two thirds are accounted for by immigration and drug (see the last two html tables below). It would seem that we need serious policy solutions for these two categories of crimes, and it's clear that the war on drugs is failing and correlated with the rise in prison population. Marijuana, a more innocuous drug than the others cited, has the highest rate of convictions. It's not just the clogged courts and prisons, but in a recent WSJ article cited below, the prices of harder drugs (i.e., not marijuana) have continued to drop, which one would expect to increase demand. (Discussion continued after the tables.)
Data courtesy of prisonstudies.org
| Country | UNITED STATES OF AMERICA |
| Prison population total
(including pre-trial detainees / remand prisoners)
| 2,266,832
at 31.12.2010 (U.S. Bureau of Justice Statistics)
|
| Prison population rate
(per 100,000 of national population)
| 730
based on an estimated national population of 310.64 million at end of 2010 (U.S. Census Bureau)
|
| Official capacity of prison system | c.2,134,000
(866,782 in local jails at 30.6.2010, c. 1,140,500 in state prisons at 31.12.2010, 126,863 in federal prisons at 31.12.2010)
|
| Occupancy level (based on official
capacity)
| c.106%
(86.4% in local jails at 30.6.2010, c. 115% in state prisons at 31.12.2010, 136.0% in federal prisons at 31.12.2010)
|
Prison Population Rates per 100,000 of the national population
| 1 | United States of America | 730 |
| 6 | Russian Federation | 516 |
| 7 | Cuba | 510 |
| 29 | Iran | 333 |
| 92 | United Kingdom: England & Wales | 155 |
| 115 | Australia | 129 |
| 124 | China | 121 |
| 145 | France | 101 |
| 175 | Sweden | 70 |
 |
| Courtesy of Carpe Diem |
| US FY2011 Primary Offense Category | Percentage Offenders Overall |
|---|---|
| Immigration | 34.9 |
| Drugs | 29.1 |
| White Collar Fraud | 9.8 |
| Firearms | 9.2 |
| White Collar Other * | 3.6 |
| Child Pornography | 2.2 |
| Larceny | 1.8 |
| Other | 9.4 |
| Unauthorized Drug Category | Percentage Offenders Overall |
|---|---|
| Marijuana | 27.9 |
| Cocaine, Powdered | 23.9 |
| Methamphetamine | 18.1 |
| Cocaine, Crack | 16.8 |
| Heroin | 7.1 |
| Other | 6.2 |
* embezzlement, forgery/counterfeiting, bribery, money laundering, and tax
SOURCE: U.S. Sentencing Commission, 2011 Datafile, USSCFY11.
The standard response from libertarians is to legalize drugs: most of these crimes are victimless, competition of the free market would drive down the high margins attracting drug cartels and other organized crime. We would be able to get (say, sales or income) tax revenues from suppliers and consumers, and we could regulate distribution, purity, etc.
Mark Kleiman, Jonathan Caulkins and Angela Hawken have an interesting WSJ commentary, Rethinking the War on Drugs. They try steering a middle ground between prohibition and legalization. They point out, for instance, that alcohol, a legal drug, is a worse problem:
In the U.S., alcohol kills more people than all of the illicit drugs combined (85,000 deaths versus 17,000 in 2000, according to a study in the Journal of the American Medical Association). Alcohol also has far more addicted users. Any form of legal availability that could actually displace the illicit markets in cocaine, heroin and methamphetamine would make those drugs far cheaper and more available. If these "hard" drugs were sold on more or less the same terms as alcohol, there is every reason to think that free enterprise would work its magic of expanding the customer base, and specifically the number of problem users, producing an alcohol-like toll in disease, accident and crime.I have had similar concerns and have usually phrased my approach as decriminalization much as the authors are suggesting here, also using the Pareto principle. For example, special attention could be paid to recidivists, and police could target transactions in public areas or over a certain amount. The authors also suggest innovative sentencing procedures (e.g., some variation of an ankle bracelet, surprise testing in probationary arrangements) and point out that low risk of detection and lengthy time between arrest and sentence weaken the law's effectiveness.
Musical Interlude: My Favorite Groups
Tom Petty & the Heartbreakers, "Rebels"
