Drawing the Wrong Conclusion

by Dave Schuler on October 25, 2014

I usually have no interest in Tea Party stories but the comments section in this OTB post on the dismissal of a case brought by Tea Party-related groups against the IRS has gone so far off the rails that I think it deserves some note. The case wasn’t dismissed because the IRS was exonerated or the claims were found to be spurious. It was dismissed because the groups bringing the suit had already received their non-profit status and the IRS had said that it was sorry and wouldn’t do it again. The case was moot.

Whether it had merit or not was not addressed. It might. It might not. But, since there was no remedy for the groups’ grievances because the grievances had already been remediated, the case was declared moot.


The Coalition of the Panic-Stricken

by Dave Schuler on October 25, 2014

I think it’s high time we began a list of Americans who are panic-stricken about Ebola. Here’s a start:

Andrew Cuomo
Chris Christie (ibid.)
Connecticut Department of Health
Georgia’s DeKalb County School District
Maryland’s Montgomery County Public Schools (ibid.)
New York City Department of Health (ibid.)

Nominations for new candidates gratefully accepted.


Another Second Derivative Effect?

by Dave Schuler on October 25, 2014

The way I would define “deflation” is as a general decline in prices, an increase in the real value of money. A recent article at Business Insider warns of the dangers posed by deflation:

The risk of outright deflation in Europe with inflation at such low levels, and the danger of similar developments in the U.S., should not be minimized as inflation has fallen in almost every previous U.S. and European economic contraction. Lower inflation is, in fact, almost as much of a hallmark of recessions as is decreasing real GDP. From peak-to-trough the rate of CPI inflation fell by an average of slightly more than 300 basis points in and around the mild U.S. recessions of 1990-91 and 2000-01. Starting from a much lower point, the CPI in Europe at those same times dropped by an average of 150 basis points. Given that inflation is already so minimal in both the U.S. and Europe, even the mildest recession could put both economies in deflation.

I think there are a number of distinct issues being conflated in the article: deflation, disinflation, a change in the velocity of the money supply, and a decline in the value of capital assets.

I don’t know what things are like in Europe but I see few signs of deflation here in the United States. Oil prices that have fallen slightly do not constitute deflation and neither does a small decrease in the Dow. Healthcare prices, housing prices, food prices, and the prices of automobiles are all rising, both in dollar terms and relative to incomes. If that’s deflation, it’s of a sort very different from what I was taught in school.


Be Careful What You Wish For

by Dave Schuler on October 25, 2014

From time to time I’ve suggested that the Islamic Reformation, longed for by any number of poorly informed Western pundits, is already in progress and it’s developing much as the Protestant Reformation did in Europe. In Europe a major sign of that development was the Thirty Years’ War of the 17th century.

Similarly, some have wished for a Great Awakening, a major religious revival. That may already be under way:

Economist editors John Micklethwait and Adrian Wooldridge shocked the secular West in 2009 by announcing that God Is Back—starting with China, of all places. Here were two epitomes of British reasonableness explaining that Europe was the modern exception in viewing God as dead, an irrational shadow of the past, with its Continent declining in population and power, and the rest of the world resembling America in having religion as a part of their cultural dynamism.


China’s atheistic communist government conceded that its Christian population had doubled to 21 million over the past decade, worshiping in 55,000 official Protestant and 4,600 Catholic churches. The underground church, it’s widely known, was much larger—by foreign estimates perhaps 77 million, which means larger than the Communist Party. A Pew Global Attitudes study found only 11 percent of Chinese saying religion was not important in their lives, compared to 31 percent saying it was very or somewhat important. Indeed, everywhere the authors looked outside their European homeland, religion was booming in the early 21st century world.

Six in 10 Americans today tell Pew pollsters that religion plays a very important role in their lives. Over 80 percent believe in God or some higher power, with only four percent choosing agnosticism and merely two percent atheism. Only eight percent said they did not pray, as against 73 percent who said they prayed at least weekly, while 83 percent said God answered prayers. Sixty-three percent said they belonged to a church. The most recent Pew poll reflected some changes, with a plurality agreeing that gays had a right to marry, but a majority also thinking that homosexuality was sinful. Seventy-two percent agreed religion was “losing influence” in America but 56 percent of these thought that this was a bad thing.

What is often overlooked is international data. WIN-Gallup International statistics show that 59 percent of the world population says it is religious and only 13 percent is atheistic, almost all of the latter in China, Japan, the Czech Republic and France. The people of Africa, Latin America, India and Asia, and the Muslim world almost all consider themselves religious. Tempering the Micklethwait/Wooldridge thesis somewhat, even many in Europe say they believe in God (with Sweden registering the lowest polling number, apparently we ought to call it Secularism Central) and many Europeans also say they pray.

Religion is not only a very powerful force but one that’s very difficult to control. I think that’s why some Americans and many Europeans fear it.


The One Sentence Answer

by Dave Schuler on October 24, 2014

My goodness. Iliya Atanasov took 760 words to answer the question “Why public pension plans are left unfunded” that I can answer in a sentence. Public pensions are left unfunded because it’s cheaper to promise large pensions, make unrealistic assumptions, and not pay for the promised pensions than it is to either to pay for the pensions or increase the wages of public sector workers.

See how easy that was?


Whistling Past a Graveyard

by Dave Schuler on October 24, 2014

A world that is free from conscious intent and in which actions do not have consequences must come as a constant surprise. In a recent article the Economist laments that the United States isn’t more like Europe with compact cities and comprehensive mass transit:

In a paper* published in 1965, John Kain, an economist at Harvard University, proposed what came to be known as the “spatial-mismatch hypothesis”. Kain had noticed that while the unemployment rate in America as a whole was below 5%, it was 40% in many black, inner-city communities. He suggested that high and persistent urban joblessness was due to a movement of jobs away from the inner city, coupled with the inability of those living there to move closer to the places where jobs had gone, due to racial discrimination in housing. Employers might also discriminate against those that came from “bad” neighbourhoods. As a result, finding work was tough for many inner-city types, especially if public transport was poor and they did not own a car.


Some suggest that governments should encourage companies to set up shop in areas with high unemployment. That is a tall order: firms that hire unskilled workers often need to be near customers or suppliers. A better approach would be to help workers either to move to areas with lots of jobs, or at least to commute to them. That would involve scrapping zoning laws that discourage cheaper housing, and improving public transport. The typical American city dweller can reach just 30% of jobs in their city within 90 minutes on public transport. That is a recipe for unemployment.

Let me provide an alternative explanation.

Stage 1: There are many inner city jobs.

Stage 2: Blacks move into inner cities.

Stage 3: Jobs move out of inner cities.

Stage 4: The increase in new entry level workers represented by the Baby Boomers begins to come to an end.

Stage 5: The United States imports entry level workers, mostly from Mexico, to fill the gap.

I think I see a pattern emerging here. American businesses don’t want to hire blacks.

The obvious explanation is racism and I think that racism is a substantial component but it’s not the only component. Other components include mutual lack of cultural understanding and social pressure opposing cultural assimilation, just to name two. None of those problems are going to be solved by scattered site low cost housing or improved mass transit. Or by more immigration for that matter.

Just as a point of reference the last gasp of low-cost housing on the North Shore, a strip of SROs, was razed a decade ago. Anyone who thinks scatter site low cost housing is going to catch on is whistling past a graveyard.


Your Ebola Update

by Dave Schuler on October 24, 2014

Alex Berezow summarizes the CDC’s actions to date:

The CDC is one of the great institutions of our federal government. Microbiologists, such as myself, idolize the scientists who have dedicated their careers and lives to making the planet safer. But the CDC has made some major missteps. Some understandable mistakes are clearly from inexperience in dealing with Ebola, but others are harder to explain. For instance, effective communication is a vital part of all crisis management, which should be a core function at the agency.

But that’s also harder than it looks. CDC has found itself in a Catch-22. It’s a nearly impossible balancing act to provide accurate information without unnecessarily frightening the public. Whether CDC said too much or too little, it was going to be criticized by the news media. The outbreak spread, so the CDC was condemned for being unprepared. But if the outbreak had fizzled, it would have been chastised for fear mongering.

Likely aware of this, the CDC chose the worst possible action: In an effort to keep the public calm, the CDC pretended to know more about Ebola than it actually does.

while Alexis Simendinger outlines the CDC’s course correction:

An Ebola SWAT team from the CDC in Atlanta traveled to New York to exercise a beefed up regimen of care, one that has evolved dramatically since the country’s first and fatal case of the disease showed up in Dallas last month.

The CDC “surged” treatment experts to New York to help the patient and guide the health care workers responsible for his care. The CDC has established a new policy to bring experts to Ebola patients, and then transfer the stabilized patients to a handful of pre-trained and designated health facilities around the country, if necessary.

This, too, is a calculated risk. It presumes that the number of patients being treated in the United States remains very low, less than 20 which is the capacity of the “designated health facilities around the country.” Prudent risk mitigation requires that steps be taken to ensure that assumption remains good which is piece I think is missing at this point.

We can only hope that the no further secondary cases show up in New York.


Why I Don’t Write About the Canadian Terrorist Attacks

by Dave Schuler on October 24, 2014

You must certainly know by now about the two terrorist attacks in Canada in as many days that have left two Canadian soldiers dead. I do not know or understand the circumstances, conditions, or context of the attacks and I have complete confidence in the Canadians’ ability to manage their own affairs.


Virus Time

October 24, 2014

Michael Gerson believes, as I do, that more resources need to be mobilized faster to stem the Ebola epidemic in West Africa: Until there is a vaccine, limiting the spread of Ebola depends on education and behavior change. People must be persuaded to do things that violate powerful human inclinations. A parent must be persuaded […]

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Violating Your Own Doctrine

October 24, 2014

Eugene Robinson accuses the president of violating his own doctrine (“Don’t do dumb sh*t”): This is not a call for deeper U.S. involvement in Iraq and Syria. But if degrade-and-destroy is really the goal, I don’t see how deeper involvement will be avoided. This has morass written all over it. And morasses, as Obama knows, […]

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