Heartland Musings

Another Incredible Piece on Gun Control

This was very thought-provoking and well-written.

Doesn't Australia Prove that gun control works?

This is perhaps the best response to that question I have yet seen.

 

https://www.quora.com/If-gun-laws-dont-prevent-violence-why-is-Australias-gun-violence-rate-so-low-since-they-banned-guns

Why I don't support Trump's Border Wall

Do not be misled: I absolutely believe the Federal government must secure the borders and reform our embarrassing immigration system.

But a border wall is a terrible idea for a few reasons:

• It will cost a lot of money up front and take a long time to build
• It will cost a fortune in yearly upkeep
• It is insufficient to guarantee border security

 

For the $25 billion or so they are estimating it might cost, we could buy a LOT of border patrol officers and equipment. That will buy a lot of surveillance drones, or a network of thermal sensors. Just going by upfront cost, the border wall is a poor investment in terms of cost and capability.

Finally, infrastructure is not a one-time expense. The more infrastructure you have, the more you must maintain. This problem is magnified when you have someone actively seeking to destroy the infrastructure (as inevitably, someone will attempt to dig under and bore through the wall in many locations).

The only real value of the wall is symbolic. And is a wall like the Berlin Wall a symbol we want to have associated with the USA? The passive defense a wall provides is a poor investment and provides less capability than more active security measures like drone patrols or sensor networks, satellite surveillance, or what have you.

 

And while border security is important, we could make it much easier to secure the border if we:

1) made illegals absolutely ineligible for government assistance or licensing

2) insisted on education only in English for primary schools.

3) required national verification of lawful status for any and all employees

4) Made it MUCH MUCH easier for people desiring to become Americans to immigrate legally.

Some of the most patriotic Americans you will ever find are those who had to WORK and WAIT for their citizenship. They realize how precious America is and value that citizenship very highly. We want more people like that living here.

Our current system provides the exact opposite of correct inventive: it makes it easy and inconsequential to immigrate illegally, and it makes it unreasonably difficult to follow the law and do it "right." Any attempt to fix our immigration system that looks at only one half of the issue is a misguided attempt that will surely fail.

 

 

SCOTUS:Overthinking Bakeries and Gay Weddings

The Supreme court heard recently the oral arguments in the case of the Colorado cake baker who declined to bake a cake for a gay wedding. Reading the briefs and the summaries of oral arguments, it occurred to me that the Court is facing a very difficult decision here. But that difficulty is entirely the Court's creation because of its own precedent.

The Court has declined for a long time to invalidate certain precedents when they become unworkable, choosing instead to try and craft little rules of thumb and obscure sub-interpretations that history has shown to create the proverbial Pandora's box.

Did any of the Justices ruling in Griswold intend to create a right to abortion? I don't think so. But by discovering in the "penumbras and emanations" a right to privacy, and by construing that right a certain way, we gained essentially a constitutional right to murder, albeit under limited conditions.

Likewise, the Hobby Lobby case had the Court craft the novel idea of a "closely held" business being entitled to a right of religious conviction that exempted them from Obamacare requirements. What is "closely held"? How big can a business be before it loses the right to determine its employment policies? Naturally, the Court punted on these points. Left completely uncertain is what businesses have which rights when it comes to Obamacare mandates-- or any other federal legislation that conflicts with employer's preferred policies. What if Hobby Lobby wasn't privately held? How do you measure the sincerity of the religious beliefs of the owners? How senior must someone be to speak for the company? 

Examples of such unresolved and perhaps unresolvable questions abound, drawn from many cases that all point to the same conclusion: the Court is weaving a web of impossibility for itself and for all of us as Americans.

Where the Court erred is in its construct of "public access." Civil Rights legislation introduced the idea that a business open to the general public is offering a public accommodation. This is a fallacy, though. While a business may be open to the public, the conduct of business is on the private level. In other words, private business transactions are conducted with parties drawn from the general public. But these are not "public" transactions, they are private. As such, businesses do not accommodate the public at large, they accommodate individuals drawn from the public at large. This is a subtle but profound distinction.

As such, the correct governing principle is mutual consent. Are both parties agreeable to the transaction? Any legislation that grants a "civil right" to a transaction can only give that right after first having taken away the right of free association from another party. In the case of the Colorado baker, the "right" to have a cake baked for your wedding can only come from having taken away the baker's right to consent--or not consent-- to a transaction.

Having made the baker's consent secondary to whether a belief is "sincere" or whether a cake is "speech" is all nonsense. Sincerity cannot be measured as a matter of law, and it's untenable to place that in the law.

Moreover, the Baker's right at stake is not a right of "expression" either-- whether that is religious expression or "speech." Rather, it is the right of free association, which is even more fundamental than any form of expression. Everyone accepts that there must be limits on what you may say (i.e. "fighting words" or "fire in a crowded theater") and that there may even be limits on religious exercise (i.e., you cannot sacrifice children even if you sincerely believe it is pleased in your religion).

But who accepts the idea that you may not freely choose your friends? That you may not freely choose which civic groups you will belong to or avoid? That you may not exercise sole discretion over which job offer you will accept? Or which college you will attend?

The right of free association is perhaps the most fundamental of all rights. And it has been severely undermined in the name of "rights" that the Court has created from whole cloth.

I'm not expecting the Court to have the courage to undo the absurd doctrine of public access laws. But it will be interesting to see how it attempts to square the circle.

 

What Bernie Doesn't Understand About Tax Rates

I won't bother to try and inventory the list of the things Senator Sanders (I-VT) doesn't understand; that list is too lengthy for a blog posting. But I wanted to highlight a fatal flaw in Bernie Sander's Tax-The-Rich philosophy.

 

What Bernie (and apparently most of his supporters) doesn't understand is that applying a super high tax rate to the top bracket doesn't actually raise more money to the government.  The following chart shows the correlation of the top marginal rate for each year since WW2 and the amount of revenue the federal government took in as a percentage of GDP.

 

Notice that when the top marginal tax rate is in the low 30% range, the actual revenue to the government varies from below 15% of GDP to is high as 20.5% of GDP. And when you crank up the top marginal tax rate to 90%, the range of variation is about the same, with as little as the low 15% range to as high as about 20.5%.

The regression line comparing revenue to top tax rate is nearly flat. In other words, the revenue to the government seems almost entirely unresponsive to the actual top marginal tax rate.

 

Taxing the rich simply doesn't bring in more money to the government. Government revenue is almost entirely independent of the top marginal tax rate.

 

Since the pie doesn't get any bigger, does taxing the rich change how the pie is sliced? We'll examine that next.

Nothing is "Sustainable". Or is EVERYTHING?

Few things bother me more than the absurd torturing of logic and reason required to label something "sustainable."  I apologize to those educated readers who are aware of the 2nd law of Thermodynamics and already know why nothing is sustainable. But there's more to it than just an abstraction of perpetually increasing entropy. There are practical questions that the environmental movement chooses to ignore and cannot answer reasonably.

What exactly does sustainability mean? If solar output declines due to cloud cover (as often happens), then what percentage of that plant's output is sustainable? If a plant can produce 10MW in bright sun but only 800kW in thick clouds, is only 800kW sustainable? Clearly, 10MW is not sustainable through a passing cloud or at night.

And of course, solar panel efficiency degrades over time. Is something sustainable only above a certain energy efficiency level?

If an engineer defined "sustainability" is would be something like: "an energy source is sustainable if it can be expected to last more than 20 years and will over its lifetime produce greater than 100% of the energy it takes to produce,  dispose and/or recycle." Of course the 20 year mark is arbitrary. But that's the point: every definition of "sustainable" is arbitrary.

Why are fossil fuels not sustainable? Humans have been harvesting coal for hundreds of years, oil and natural gas in meaningful amounts for well over a century.  All the empirical evidence suggests that the fossil fuels can be sustained indefinitely. If a over a century of sustained use of an energy source doesn't demonstrate sustainability, then what is the standard of proof? Two hundred years of use?

Why are energy sources that receive massive amounts of government subsidy considered sustainable, but not those that receiver proportionally much less or none at all? Doesn't the presence necessity of subsidy inversely reflect the true sustainability of a source? If not, why not?

Is carbon emission the only applicable standard of sustainability? If not, what other measures are germane?

These are some of the questions that easily befuddle many environmentalists. But with enough thought, the smarter ones can be brought around to a realization: sustainability is not a scientific term. It is a political and economic term. It is political because of the power and money the issue attracts.

But more than anything else, it is an economic term. Something can be sustained as long as there is an economic incentive to do so. Whale oil as a lamp fuel would have been sustainable indefinitely. It's just that eventually enough whales were killed that it made the oil very costly to procure and made substitutes like kerosene far more appealing. The level of price at which whale oil would be sustained would be far too expensive for it to be useful. So it was not sustained-- but it could have been. 

Likewise, Buffalo were hunted nearly to extinction in North America. But not totally. Why not? It simple: at some point, the scarcity made the value of buffalo much higher than the utility of killing more of them.

Absurd faith in carbon-scare computer models aside, there's no reason to think that fossil fuels will become any time soon more costly to use than they are worth. To the contrary, the world is "doubling down" with more fossil fuels being than ever before. Even as the world consumes more electricity than ever, electricity is overwhelmingly produced from fossil fuel sources.

There isn't any real debate. The issue is "settled" because people have voted globally with their feet. Fossil fuels are now and will remain for the foreseeable future the dominant and preferred energy source, and over time, this dominance has grown, not waned. They are getting cheaper, not more expensive. We are producing more, not less.

Let's stop pretending and just move on with optimizing the efficiency with which we consume those wonderful fossil fuels that are greening the planet and lifting millions out of poverty.

Foolishness isn't less foolish just because it's more popular...

I was reminded of this recently by this absurd Mashable article claiming that the temperatures observed in 2014 had a "less than 1-in-27-million chance" of occurring by natural causes. 

But WHY is it so foolish? Ah, that's why it's so interesting when W.M. Briggs (Statistician to the Stars) applies his legendary reasoning abilities to these common junk articles. Do read it all.

More Junk "Science" from EPI.

The Economic Policy Institute (EPI) is an advocacy group posing as a think tank. Before we get into the glaring sloppiness of this paper extolling the virtues of a unionized labor force, please watch this video explaining why so many "studies" like this are junk. Complete and total junk.


 

 

Poor data analysis techniques are alarmingly common in "hard" sciences like chemistry and physics. But it is truly an epidemic in social sciences where most of the "research" is done by advocacy groups setting out to prove a pre-existing conclusion. Recall that phrase about using science "as a drunk uses a lamppost: for support rather than enlightenment." (An example of how junk research is done is found in this post about guns and crime, where simply shifting the observed time period a couple years produced the opposite "proof" of the study).

So we know there is a lot of junk science out there. We know the EPI is an advocacy group, publishing studies in social science-- the discipline far most likely to contain some junk science. How rigorous is this study?

The Study

The executive summary of the study lists lots of claims that all generally go to support the claim that unions raise wages for both the unionized and non-unionized worker alike. The core findings of the study, however, concern the impact of unionization rates upon non-union wages.

On its face, this is a plausible claim. Indeed, higher wages and benefits are the raison d'être of organized labor. It is important to understand the mechanism by which this works: by introducing artificial scarcity, the existing demand will drive union wages higher by the reduction of supply. The union gets to be the monopoly provider of labor to the business that is unionized. It's pretty clear how union membership increases the wages of those union members.

It is also plausible that higher union wages might simultaneously raise non-union wages because the opportunity cost of union labor is higher, so the benefit of non-union labor is also higher. Putting numbers to it, if the free market labor rate is $20/hr and the union rate is $30/hr, a non-union worker could offer to work for $25 and still be cheaper than the union, while earning a premium relative to the free market rate. Remember that last phrase, as that is critical.

You can see that's it's reasonable to construct a situation where unionization raises the wages of both organized and non-union labor. But being able construct a scenario where this happens is not the same as saying that it actually has happened on a broad scale across a national labor market. And it is still another thing to claim that if it did happen on a broad scale at one period in time, that all of those factors would again combine the the same way to produce the same effects in a time period nearly 40 years removed.

While the authors do present some data for their claims, they also make some bald assertions that are completely unsubstantiated: 

In the ongoing debates over wage stagnation, these indirect effects of unions have not received nearly the attention as the oft-cited accounts mentioned above. Partly this is due to the difficulty in disentangling the independent effect of unions on nonunion workers’ pay. Globalization, technological advances, and institutional shifts—most notably the dramatic decline of the U.S. labor movement, along with the falling real value of the minimum wage—have all affected average workers’ wages. These developments are intertwined in numerous ways. For example, union decline reduced resistance to offshoring, and offshoring, or the threat thereof, emboldened employers in union negotiations

There is no evidence to support the idea that the unions were able to keep companies from offshoring. And it's far from given that a union can both create the benefit of offshoring (via "union wage premium" and also dis-incentivize that same off-shoring. How is it that a union can prevent off-shoring? It cannot. Clearly other factors may explain the marginal utility of offshoring: increased productivity in the developing world, enhanced capital mobility, improvements in the rule of law and safety of intellectual property, etc. It seems for more plausible to me that union strength, not decline, drove much of the appeal to offshoring. The value of off-shoring derives substantially from the opportunity cost of on-shore labor.

Methodology

To really find out why the study is bogus, we have to dive into the methodology. Hang in there, this gets a little nerdy. The first thing to observe is what they include in their sample:

All of our analyses are limited to nonunion private-sector workers who report positive wages and report working 30 or more hours per week and are between the ages of 16 and 64. We exclude top-level managers along with the self-employed.

Samples are often a primary contributor to invalid results. In this case, the sample seems plausible. It is very large and encompasses a substantial portion of the nonunion labor force. 

For our model-predicted wage series, referred to in the text as our “estimated” weekly wages, we regress weekly wages for private-sector workers who are not union members on the following set of covariates: industry-region unionization (described above), a oneyear lagged version of the industry-region employment rate (described above), four mutually exclusive race/ethnicity measures (non-Hispanic white, non-Hispanic AfricanAmerican, non-Hispanic other, and Hispanic), four mutually exclusive education measures (less than high school, high school diploma or equivalent, some college, four or more years of college), potential experience and potential experience squared, a set of four occupational measures (professional/managerial, production, service, farm/forestry/ fisheries), hours worked per week, a measure of whether the respondent lives in a metropolitan area, year dummies, and a dummy indicating whether the respondent works in the manufacturing sector. Wages are measured in constant 2013 dollars, and models are weighted to be representative of the active workforce. For our analyses of non–college degree and high school or less workers, we replicate the model described above but limit the sample first to those workers with less than a bachelor’s, and then to those workers with a high school diploma or less. We cluster our standard errors by industry-region in all models.

Our counterfactual series replicates the model described above except we set the industry-region unionization rates at their 1979 levels. That is, we solve the regression equation by plugging in the observed values for every other covariate except for industryregion unionization. For example, for each individual in the dataset, we treat that individual as if their industry-union rate was equal to the 1979 rate (regardless of what the true rate is in that particular year), leave all other covariate values equal to their observed values, and compute their predicted weekly wage using the estimated model equation. Instead of modeling log weekly wages, we estimate generalized linear models (GLM) specifying a log link and gamma distribution family. 50 While estimating a log-linear model and then applying an appropriate smearing factor to retransform the dependent variable will improve the mean predicted wages relative to exponentiating log wages, this approach does not ensure that predictions for individual cases are particularly accurate, and there is little consensus regarding what smearing factor is preferable. Our approach does not require transformation of the dependent variable in the first place or retransformation post-estimation in order to predict values of the dependent variable in its raw-scale. We experimented with other common approaches, such as retransforming our predictions to the original scale following the estimation of log-linear ordinary least square (OLS) models using naive and Duan smearing estimators. Results are available upon request. In general, the GLM approach produces slightly larger counterfactual wage estimates than retransforming and using the Duan smearing estimators.

OK, what is that in English?

A regression is simply a comparison in how changes in one factor relate to changes in another. A good model with statistical power can predict the change in the dependent variable based on changes in the independent variable(s). It's like collecting a bunch of data relating how hard you throw a ball to how far it goes. With good analysis, you can predict (with high precision) the distance the ball will travel if you know how hard it was thrown. That is a simple two-factor regression. You can add several more factors and often get some fascinating results. For example, I once generated a multiple regression model that could predict within 7 degrees Fahrenheit the temperature of  a section of a diesel engine piston based on fuel rate, injection timing, and a couple other factors.

But this study "regresses" the dependent variable against all those factors listed above relating to race, region, education, ethnicity, hours worked, etc. The thing with regression is that it must be done with continuous variables as independent variables. That means each factor must be capable of assuming the infinite range of values within its limits. It is "continuous" because there are no gaps in the range of values the variable can take. This is critical because regression is dealing with rates of change between variables. The difference between 3 and 4 is one. But what is the numerical difference between White and Hispanic? Regression must be able to quantify a change in an independent variable. It cannot do that for "occupational measures."

Which means that each of these variable must be made into "dummy" variables that are completely and utterly arbitrary. So perhaps you assign a value of -2 to not having finished high school, -1 to high school diploma, 0 to Bachelor's degree, 1 to Master's, and 2 to PhD. The problem with that approach should be pretty obvious; if you are attempting to examine the impact on wages, then the gap between variable positions must be the same. For example, if you have a variable like temperature to the nearest degree, it would be OK because the difference between 30 and 31 means the same as the difference between 50 and 51: namely, a single degree Fahrenheit. THIS IS NOT THE CASE WITH EDUCATION, you cannot consider the five levels of education I just outlined from the view that the differences between each increment are comparable with respect to wages. Moving from "1" to "2" is not twice as much education.

The only proper way to use a dummy variable in regression is as a binary yes/no indicator-- and even then it introduces much source of error. For example, a researcher studying life expectancy in Kansas might make a dummy variable of "is there a war happening" with yes/no options (usually represented by one or zero, like in computer programming). But that is irrelevant because you can't really define "war" in a context like this, and it would be far less of an indicator than the number of Kansans present in the military at any given time.

Returning the education example, one could create a dummy variable for "master's degree" that is yes or no (1, 0). But those with Master's degrees had to get Bachelor's degrees, too-- which means that every "1" for Master's should also have a "1" for Bachelor's. Meaning you have massive collinearity in the variables if you do it this way.

Because of these dummy variables, the numerical precision of the regression is certainly wrong.

Moreover, the authors make the absurd assumptions that everything (except unionization rates) were the same in 1979. This is where taking techniques from the hard sciences and employing them in social science leads to junk.

Note also how we get certain factors to be lagged, squared, and such. There's no discussion of why lagging one year-- instead of three or not at all-- is the right amount. Nore is there any argument as to why certain factors should be squared.

In hard sciences, such lagging and squaring is very common, but it is completely justifiable. For example, science empirically proved long ago that aerodynamic drag is proportional to the cube of speed. So it would be appropriate to use "speed cubed" in a regression of factors that determine aerodynamic drag.

Not so with using "potential experience squared." What is "potential experience"? Why is it appropriate to square it?

 

To me, this suggests model "tuning" or "p-hacking" as the video above describes. The authors massaged their model until it supported (albeit very weakly) the headline case they wanted to argue: the unions help EVERYONE, even the non-union worker.

 

 

 

The Real Email Scandal

By now, those paying attention at all know that Hillary Clinton illegally used private email for government business, illegally stored classified information on that system, and has lied repeatedly to obscure those two facts.

But the real scandal is the rampant use of private email by government officials, not just Clinton. Obama’s EPA administrator did it to email a lobbyist. Clinton has done it. We now know that Obama has done so as well.

Why do government officials use private systems? Surely they are more convenient. However, officials are using these private accounts to skirt public records laws and avoid accountability.

Every American should be insistent that government records be kept properly. Otherwise, we live under a shadow government that considers itself above the law.

Equality? Or Just Rent-seeking?

The recent media hype about “equality” with respect to bathrooms and gender has spurred a larger conversation about equality and the limits of discrimination. I’ve always wondered why it is that the politicians and business leaders like to couch this equality issue in economic terms. Consider this excerpt from an interview with Doug Burgum, candidate for Governor of North Dakota, on the impact of state legislation that would forbid discrimination based on gender identity as well as sexual orientation:

 Currently, North Dakota has over 23,000 job openings. From an economic impact, filling these jobs would be like adding another large city to our state. Every policy the legislature is considering should be viewed through a lens of supporting workforce development in the state. After decades of watching the majority of our North Dakota University System graduates leave the state, we are now in new territory. We are not producing enough graduates to fill all the open positions in the state. We need population growth by both retention and net in-migration to fulfill our enviable growth needs. The aged 18-35 year old demographic is particularly attuned to the social climate of our cities and state. Any laws we have that discriminate against or limit the rights of any citizens based on gender orientation create a barrier for recruiting and retaining talent in our state.

Let’s put aside the disingenuity of using the impossible ideal of zero percent unemployment (an undesirable and impossible condition).

Let’s focus on the core fallacy Burgum uses—one shared by all the advocates of his position. Namely, the fallacy is that unless a law bans transgender discrimination, then the silence of the law assures 100% discrimination. Of course, Burgum then argues that there are economic advantages to preventing such discrimination. Stated differently, there is an economic disadvantage to allowing discrimination.

But if that is truly the case, then why would the law be necessary? If it is truly the case that economic advantage flows from extending special protections to the transgendered, then no business would indulge that discrimination without incurring an economic loss.

And what of those businesses that chose to incur that price? If you favor non-discrimination, wouldn’t you prefer that those who discriminate pay some kind of price to do so? Wouldn’t you prefer to gain a competitive advantage over your bigoted economic rivals? OF COURSE you would.

The only logically consistent position for the advocates of transgender (indeed all such LGBT) protections then is that they actually expect to have a disadvantage in the marketplace. Because they expect that people will prefer not to patronize a business with transgendered employees, their indulgence of the “equality” scam is really an effort to remove the competitive advantage a business rival may have from their “discrimination” against transgendered employees.

Consider the case of Hooters. What if you wanted to start a restaurant that also had the mediocre food I’m told Hooters has, but you resented the competitive advantage Hooters had in selling its food using attractive females? Why, let’s end discrimination against less attractive, less female, employees! With Hooters’ business model disrupted, you can sell you own mediocre food on a level playing field. Or something closer to level.

The point of the Hooters example is that a business can gain competitive advantage (or reduce the advantage of a rival) using the power of the government’s “equality” legislation.

Which means that the business lobby and its powerful interest groups really care about minimizing competition, and they want the government to protect them. Which is just about always the case in every circumstance.

The granting of special protections to the transgendered is therefore just time-honored rent-seeking in a newer, more fashionable guise. That, and elites wanting to force to people to adhere to a code that they themselves may not consider binding.