When You Look At It That Way…

In reaction to the several terrorist attacks last weekend, the editors of the Wall Street Journal make a list:

The Federal Bureau of Investigation opened an “assessment,” which is a risk review short of a full criminal probe that includes interviews and cross-checks of federal terrorism and criminal databases. Mr. Rahami was cleared, though he travelled to Pakistan and Afghanistan several times over the last decade, including a year in the Taliban hothouse of Quetta.

Family and friends now say Mr. Rahami returned from these sojourns religiously and politically radicalized, and he began wearing traditional Islamic dress. He ordered his IED components online. Missing these red flags was especially notable given New York City’s antiterror focus since 9/11.

Was Mr. Rahami’s spree preventable? More details will emerge, but he is merely the latest domestic terrorist who had encounters with law enforcement or otherwise displayed suspicious patterns before acts of mass violence.

In 2013 the FBI assessed Omar Mateen, the Orlando nightclub killer. He was removed from the terror watch list the next year, despite trips to Saudi Arabia and his acquaintance with Moner Mohammad Abu-salha, a Floridian who became a suicide bomber in Syria in 2014.

The 2015 San Bernardino killers, Syed Rizwan Farook and Tashfeen Malik, weren’t in the terror database. But they spent a year planning and maintained an extensive digital correspondence about jihad and martyrdom. Malik was born in Pakistan and spent time in Saudi Arabia before marrying Farook.

The FBI also kept a file on the Tsarnaev brothers, the Boston Marathon bombers, after receiving a tip in 2011 that Tamerlan Tsarnaev was a dangerous Islamic radical. The G-men missed his trip to a Muslim region in Russia near Chechnya. The voyage registered on a Homeland Security travel monitoring system when he left, but the listing somehow lapsed by the time he came back and no one was alerted. Similar failures have also been documented after the separate attacks on two Tennessee military bases and in Garland, Texas in 2015.

When you look at it that way we don’t appear to have been doing a particularly good job of risk assessment, have we? Please don’t respond with any assertions of the effectiveness of tiger repellent.

There have been any number of explanations offered on why we’re having problems with risk assessment. And every explanation points to its solution. There are certain factors that every one of the cases cited by the WSJ editors have in common. When you start with the most specific (rather than the most general) it narrows the field pretty quickly.

You can’t do a reasonable risk assessment on the basis of fairness. The world just doesn’t work that way.

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What We’re Learning from the Campaigns

For the last year or so I’ve frequently noted how difficult it is for me to make heads or tails over what’s been going on with the political campaigns, I’ve thought a lot about it, and I think I may have some insights as to why that might be. Over the period of the next month or so I’m going to be writing a number of posts analyzing what we might be learning about how our politics is changing from the Clinton and Trump campaigns.

As part of my analyses I plan to produce evidence supporting my observations and outcomes that would test some of them one way or another. Stay tuned.

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The Absolute Choices Are Very, Very Few

There is a bit of wisdom in this post on risk analysis of environmental stressors by James Broughel and Dima Yazji Shamoun at RealClearPolicy that you might want to reflect on:

The first is that there are no absolute choices; there are only tradeoffs. Regulations that address risk induce behavioral responses among the regulated. These responses carry risks of their own. For example, if a chemical is banned by a regulator, companies usually substitute another chemical in place of the banned one. Both the banned chemical and the substitute carry risks, but if risks are exaggerated by an unknown amount, then we remain ignorant of the safer option. And because LNT detects — by design — low-dose health risks in any substance where there is evidence of toxicity at high doses, businesses are led to use newer, not-yet-assessed chemicals.

Economic costs borne from complying with regulations also produce “risk tradeoffs.” Since compliance costs are ultimately passed on to individuals, lost income from regulations means less money to spend addressing risks privately. When their incomes fall, people forgo buying things such as home security systems, gym memberships, healthier food, new smoke detectors, or safer vehicles. And when regulators inflate publicly addressed risks but leave private risks unanalyzed, it becomes impossible to weigh the pros and cons of public versus private risk mitigation.

There is good reason to believe that deadweight loss is among the most important factors in modern economic growth. That means that getting regulations right and administering them consistently are vitally important. Just throwing new regulations against the wall to see which ones stick is a bad risk.

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The Whole Is Greater Than a Single Part

I disagree rather strongly with Michael Barone’s analysis of the Democratic Party:

But what if Hillary Clinton loses? The political map in that case will look quite different, with Democratic states confined to the Northeast, West Coast and a few splotches in between. The presidential Democratic Party, like the congressional Democratic Party, will be concentrated in heavily Democratic central cities, some sympathetic suburbs and scattered university towns.

The shock for Democrats will likely to be more severe than for Republicans if Trump loses. “Imagine the best candidate in your party losing to the weakest candidate in the other party,” speculates Dan McLaughlin at nationalreview.com, “after years of telling yourself that your party had unlocked the demographic code to a permanent majority.”

Here’s the reason that I disagree: the Clintons are not the sum total of the Democratic Party. For the last thirty years they’ve made a fine art of sucking all of the air out of the room and, importantly, attracting a lot of money. Given the commitment of the present national Democratic Party to the professionalization of politics, that’s vital.

It takes a huge amount of money to run a national or statewide campaign these days and it’s a finite resource. If all of the money floats your way it naturally discourages potential competitors. And that’s what’s happened with the Democratic Party.

There are tens of thousands of elected officials who are Democrats and who knows how many of those candidates would be much better known nationally if it weren’t for the Clintons? Of major U. S. cities only a relative handful—Albuquerque, Colorado Springs, Fresno, Jacksonville (Florida), Mesa, Miami, Oklahoma City, Omaha, San Diego, Tulsa, Virginia Beach, and Wichita—have Republican mayors. Even in solidly Red Texas no major city has a Republican mayor.

So don’t worry about the Democratic Party if Hillary Clinton loses. It’ll be fine. It might well free the party.

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Those Were the Days

Take a look at this post at The Citizens Audit on the complicated flow of money, donations, and commissions among non-profits, PACs, 527s, etc. operated by David Brock.

It used to be that newspapers did this sort of investigation and analysis. Those were the days!

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The Two UN Speeches

You might not have realized it from reading the news coverage but there were actually two valedictory speeches given at the UN yesterday and they could hardly have been more different. President Obama’s address praised the “liberal international order” and appeared to be directed primarily at a domestic audience:

He painted a dark picture of the future awaiting Americans, and the world, if the forces of “aggressive nationalism” or “crude populism” win out. And he specifically inveighed against building a wall — a centerpiece of Trump’s proposal on border security.

“A nation ringed by walls would only imprison itself,” Obama declared to the assembled representatives of the UN’s member states.

Gone were Obama’s idealistic appeals to bring about a world free of nuclear weapons and an agenda focused on peace, as were his previous UN addresses. The “hope and change” of his argument as a presidential candidate himself was also replaced by exhortations against a future filled with chaos.

“Time and again human beings have believed they finally arrived at a period of enlightenment, only to repeat cycles of conflict and suffering. Perhaps that’s our fate,” Obama suggested.

“We have to remember the choices of individual human beings led to repeated world war,” Obama said. “Each of us as leaders, each nation can choose to reject those who appeal to our worst impulses and embrace those who appeal to our best. For we have shown that we can choose a better history.”

He pointed to growing divisions and discontent at home that challenge those decisions, and noted that the shortcomings of globalization had created “an uncertainty and unease and strife” that required acknowledgement, but not turning inward.

“I believe that at this moment we all face a choice,” Obama said. “We can choose to press forward with a better model of cooperation and integration or we can retreat into a world sharply divided and ultimately in conflict along age-old lines of nation and tribe and race and religion. I want to suggest to you today that we must go forward and not back.”

To my ear President Obama’s remarks were only tangentially related to reality. The United States is a multi-ethnic, multi-confessional state, astonishing in its diversity. At present roughly 14% of its population consists of immigrants. We already have among the most liberal trade policies in the world. The evidence that the problems of the world can be solved by the U. S. accepting more “refugees” or further liberalizing its trade is weak.

By comparison China is not multi-ethnic and is barely multi-confessional with religious minorities routinely persecuted. It is an illiberal oligarchy. It has highly restrictive trade policies. Unlike the U. S. for every incremental dollar of GDP it produces proportionally more greenhouse gases.

India remains for practical purposes a one-way autarky. The Kingdom of Saudi Arabia has a large population of foreign workers with almost no rights. Trade is controlled rigidly. The same may be said of many of the Arab countries of the Middle East and North Africa.

In other words, not only is President Obama preaching to the choir, he’s damning the choir for its misdeeds when by far the graver misdeeds are those of others.

By comparison UN Secretary Ban Ki Moon’s farewell address was more generally addressed and even less optimistic:

Ban stated that recent achievements in economic development and public health are vulnerable to “grave security threats.”

Armed conflicts have grown more protracted and complex. Governance failures have pushed societies past the brink. Radicalization has threatened social cohesion—precisely the response that violent extremists seek and welcome.

This is not where he then pivoted with a but! to things more hopeful. Instead, Ban went on to detail the consequences of these trends in Yemen, Libya, Iraq, Afghanistan, the Sahel region, Ukraine, South Sudan, and North Korea. Still, he saved most of his frustration for Syria, pointing to this week’s bombing of a U.N. aid convoy and saying “just when we think it cannot get any worse, the bar of depravity sinks lower.”

He noted:

Present in this hall today are representatives of governments that have ignored facilitated, funded, participated in or even planned and carried out atrocities inflicted by all sides of the Syria conflict against Syrian civilians.

He also shouted out both Israeli and Palestinian leaders, calling the current state of affairs “madness” and arguing that abandoning the two-state solution “would spell doom” for both peoples.

He doesn’t like Donald Trump, either.

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Debating the Great Recession

When I took economics (before the glaciers descended and dinosaurs ruled the earth), the Great Depression of the 1930s was still being debated and to a lesser extent it still is. We have probably just barely begun debating the Great Recession. There are several diverse explanations for why U. S. economic growth has been so slow in its aftermath:

  1. The fiscal stimulus wasn’t large enough.
  2. It wasn’t caused by a shortfall in aggregate demand but by too large a debt overhang, i.e. it was a “balance sheet recession” (which means that fiscal stimulus of whatever size would have been ineffective).
  3. We have a mature hybrid economy now that doesn’t respond to the old strategies.
  4. We are in a global economy now and moves by the U. S. are matched by counter-moves in other countries. Fiscal stimulus in the U. S. may result in economic growth in China rather than the U. S. Chinese inflation may result in U. S. deflation.

Note that the first two explanations are mutually exclusive.

The most recent salvo in the debate over the aftermath of the Great Recession comes from Robert Barro in an op-ed in the Wall Street Journal:

Arguing that the recovery has been weak because the downturn was severe or coincided with a major financial crisis conflicts with the evidence, which shows that a larger decline predicts a stronger recovery. Moreover, many of the biggest downturns featured financial crises. For example, the U.S. per capita GDP growth rate from 1933-40 was 6.5% per year, the highest of any peacetime interval of several years, despite the 1937 recession. This strong recovery followed the cumulative decline in the level of per capita GDP by around 29% from 1929-33 during the Great Depression.

Given the lack of recovery in GDP, a surprising aspect of the post-2009 period is the strong employment growth. The growth rate of total nonfarm payrolls averaged 1.7% a year from February 2010 to July 2016, despite the drop in the labor-force participation rate. The post-2009 period is not a jobless recovery; it is a job-filled non-recovery. Similarly, the drop in the unemployment rate—from 10% in October 2009 to 4.9% in July 2016—has been impressive, though overstated because of the decrease in labor-force participation.

What accounts for the strong recovery in the labor market combined with the non-recovery in GDP? Mainly weak growth of labor productivity. The growth rate of GDP per worker from 2010-15 was 0.5% per year, compared with 1.5% from 1949 to 2009. The recent productivity slowdown is clear since 2011 but may have started as early as 2004.

Probably the most controversial claim in Dr. Barro’s op-ed is this:

The main U.S. policy used to counter the Great Recession was increased government transfer payments. Federal social benefits to persons as a ratio to GDP went from 8.7% in 2007 to 11.7% in 2010, then fell to 10.9% in 2015. The main increases applied to Medicaid, Medicare, Social Security (including disability) and food stamps, whereas unemployment insurance first rose then fell. Unfortunately, increased transfer payments do not promote productivity growth.

and he doesn’t much care for either the prescriptions of Hillary Clinton or Donald Trump.

My own view is that we’re in a global economy now, that debt overhang probably played some role but not the only role, that we import too much of what we consume, and that the fiscal stimulus of 2009 was probably too small, definitely too slow, and almost entirely politically motivated. The employment figures are a phantasm, created by obsolete adjustment factors.

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Our Stars or Ourselves?

There’s more evidence that gaining weight might not just be a result of bad behavior over at LiveScience:

Obese children have a different population of microorganisms living in their intestinal tracts, compared with lean children, researchers have found. These microorganisms appear to accelerate the conversion of carbohydrates into fat, which then accumulates throughout the body, the researchers said.

The study is the first to find a connection between the gut microbiota and fat distribution in children. The gut microorganisms in obese children are similar to those seen in previous studies of obese adults, providing evidence that bacteria play a role in excess weight gain starting at an an early age.

It might be that different diets might be conducive to different gut microbiota. That was suggested by studies conducted by the Chinese (in studies that could only have been conducted by the Chinese). Or it might be congenital. Or we might learn that obesity is a communicable disease.

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Is Our Dysfunctional Politics a Predictable Outcome of Our Political System?

As I read the remarks of Danish journalist Anders Agner Pedersen on the American election at RealClearPolitics, it occurred to me that the political system of the United States has endured longer than any European system other than those of the United Kingdom and Switzerland. I don’t know whether that suggests that our system is more durable than their systems or that ours is obsolete.

The UK is separated from the rest of Europe by water while Switzerland is practically a direct democracy and has a strong inclination to independence.

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Whose Middle East Policy Do You Favor?

At RealClearWorld they have an interview with Green Party candidate for president Jill Stein on U. S. policy with respect to the Middle East. I think I agree with her answers more than I agree with the answers of either of the major party candidates.

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