There’s an article at the web site of Chicago’s public radio station, WBEZ, that does some back-of-the-napkin calculations on how expensive it would be to implement a jobs program that would in their words “eliminate a significant amount of violence” here in Chicago. Here’s their bottom line:

That final price tag, $1.1 billion for the program’s first year, is no small sum. But, just for context, it’s around the planned cost of redeveloping Union Station downtown. It’s also roughly what Illinois spends to keep its violent offenders in prison for one year.

And, while we’re considering cost, it might be a lot more expensive to allow Chicago’s shooting surge to continue. For starters, there’s the policing, incarceration and medical care. The violence is probably also a factor in the city’s population drop — a drain on the tax base. Another drain is simply having those 30,000 at-risk people jobless.

Now just for the record I think they’re making some bad assumptions, especially thinking that full-time $13/hour jobs would have the impact they’re projecting but let’s go with them on that. I have a few additional observations.

First, a very large percentage of Chicago’s homicides take place in a very small number of neighborhoods. Rather than looking in 26 of the city’s 77 community areas, I’d suggest they concentrate on the 15 that account for two-thirds of the homicides. Presumably, doing something about the economies of just those areas would have the most impact at a lower cost than in 26 neighborhoods. Heck, a third of the homicides take place in just five neighborhoods. Wouldn’t those be a good place to start?

Second, I’m going to suggest something that some people will view as argumentative. We’d be better off promoting economic growth on the South and West sides of the city than we would adding additional police officers. I’m not even going to try to prove my claim. Chicago already has the highest ratio of police officers to population of any major city. I see no reason to believe that increasing that ratio will change anything.

Finally, just as a bare minimum doesn’t it make sense for the Illinois legislature, the Cook County Board, and Chicago City Council to stop taking actions that will reduce economic activity? Some examples of such recent actions: the recent income tax hike, property tax hikes, and sugared soft drink tax. First do no harm, people.

The more I read about cases like this of a Missouri woman dying of a newly-discovered tick-borne disease the more convinced I become that I’m a survivor of such a disease and that explains my lifelong chronic pain.

Perhaps I’m misreading the editors of Bloomberg View’s take on President Trump’s Election Integrity Committee. On the one hand they acknowledge the need for such a committee:

One in eight voter registrations is invalid or inaccurate, according to a 2012 study. That includes 1.8 million dead people still on the rolls and nearly 3 million who are registered in more than one state. There are also non-citizens on the rolls.

I believe that drastically understates the problems with voter registrations. I doubt that the gravest abuse is non-citizens voting or outright fraud as in somebody casting a vote in a name other than their own although I have little doubt that those abuses take place. I think there are probably hundreds of thousands or even millions of people who are registered in multiple jurisdictions and vote in more than one of them—once in person and one or more times absentee.

They also suggest a justification for the committee:

The Help America Vote Act of 2002 requires states to create “a single, uniform, official, centralized, interactive computerized statewide voter registration list” with a unique identifier for each voters, and to coordinate their lists with other agencies. They’ve done a poor job of it, and it’s clear that more interstate coordination is needed.

But they’re suspicious of the motives of the members of the committee:

Straightening out this embarrassing muddle should be a national priority, but Trump’s commission lacks the credibility and expertise to do it.

Its vice-chair is Kansas Secretary of State Kris Kobach, a Republican who has led a partisan push for strict identification laws for registration and voting. A federal court recently fined him for making “patently misleading representations to the court” after refusing to turn over a voting memo he delivered to President-elect Trump.

Equally problematic, identifying ineligible voters — and avoiding false positives that could disenfranchise properly registered voters — involves a level of technical expertise that the commission has shown no sign of understanding.

To me that smacks of modern day Donatism. Donatism was the heresy that held that priests needed to be in a state of grace for sacraments to be valid.

There will be no perfect solution as long as the attitude towards voter registration (basically more is better) that prevails today continues. Any commission’s motives will be suspect.

Let’s not make the perfect the enemy of the good. If you genuinely want to increase confidence in our system, you should want the process to be as good as we can make it from end to end. That includes voter registration and validation of registration.

The reference in the title of this post is to the famous quip by Augustine of Hippo: “Grant me chastity but not yet.”

You may have heard that the Chicago area has received quite a bit of rainfall over the last day or so. Libertyville in the northern suburbs, for example, has received nine inches of rain. Roads are closed. Underpasses are flooded. There’s local flashflooding in some areas.

Here in Sauganash we’ve received about two inches of rain.

As I’ve mentioned before we had drainage control installed in our backyard recently. It’s working. Here’s a picture of our backyard after about 2 inches of rain before we’d installed the drainage control:

and here’s what our backyard looks like after our recent rain:

It’s working.

At The Diplomat Guy Plopsky asks a very good question—why is Russia pointing its missiles at China?

In early June 2017, Russian media reported that yet another Ground Forces missile brigade received the dreaded road-mobile 9K720 Iskander-M missile system (known in Russian military parlance as an “operational-tactical missile system,” or OTRK in short). The brigade in question is the 29th Army’s newly established 3rd Missile Brigade, based in Russia’s colossal Eastern Military District (MD). Formed in December 2016, this brigade was initially armed with the aging 9K79-1 Tochka-U tactical ballistic missile system, and became the Eastern MD’s fourth missile brigade to be re-equipped with the Iskander-M as part of the Russian Defense Ministry’s plan to phase out all Tochka-Us by 2020. The district’s three other brigades — the 107th, 103rd and 20th — received their Iskander-M OTRKs in 2013, 2015, and 2016, respectively. As a result, there are presently more Iskander-M brigades in the Eastern MD than any other district; Russia’s other three military districts (Central, Southern, and Western) currently house two Iskander-M brigades each. What, then, is the purpose of these four brigades?

Whereas the task of Iskander-M OTRKs being deployed in Russia’s Western MD is to hold U.S. and allied forces in the Baltics and Poland at risk, the systems stationed in the Eastern MD appear to primarily serve a different purpose: strengthening both Russia’s conventional and nuclear deterrence against China. Indeed, while an Iskander-M system stationed in Russia’s Kaliningrad Oblast allows Russia to target a wide range of NATO military assets, including the Aegis Ashore ballistic missile defense (BMD) system in Poland, an Iskander-M stationed in Russia’s Far East has very limited ability to threaten U.S. forces deployed in the region.

Read the whole thing. I doubt that this will assuage the concerns of those who fear a Chinese-Russian combine against the U. S. but it should at least make people think. The Russians have a lot more missiles pointed at China than they do at us or our European allies. If Russia and China are so chummy, why is that?

As I’ve said before, Russia and China are natural enemies while the U. S. and Russia are naturally uninterested in each other. Russia and China have territorial disputes and are competing for power and influence in the same regions. All we need to do to defuse tensions with Russia is to stop waving the Russophobia flag.

I don’t deny that Russia has been engaging in disinformation and, worse, information campaigns intended to influence American elections. As they say, payback is a bitch.

IMO blaming the Russians for a loss of confidence in our system is extraneous and unnecessary. We’re doing a fine job of that ourselves.

The first thing I thought of when I read this post at Political Calculations on U. S. oil exports to China was is the U. S. experiencing the “resource curse”?

I actually agree with the message of Crosby Smith’s op-ed in USA Today:

Illinois pensions are modest, just $32,000 a year on average. Since most public service workers aren’t eligible for Social Security, our pension is all many of us will have in what should be our golden years.

Politicians ran up our state’s pension debt over decades by using our retirement funds like credit cards. Instead of raising revenue or cutting costs, they skipped or shorted pension payments.

A pension is a promise that shouldn’t be broken. My life savings shouldn’t be taken to let politicians avoid tough choices. The Illinois Constitution agrees, saying pensions can’t be cut.

That’s only slightly misleading. Here in Chicago CPS teachers start at $50,000 per year for a nine month job with a median of over $80,000 while police and firefighters average in the low six figures when you include the overtime that’s nearly always available. When a teacher, police officer, or firefighter retires, he or she is eligible for a pension that’s 75% of ending salary.

But I agree that the state’s politicians are the primary culprits and that retirees should receive what they’ve been promised. Why those politicians are re-elected term after term with the support of Smith and Smith’s peers eludes me.

Here’s the proposed solution:

Our state’s fiscal problems stem from our low, flat income tax that allows rich folks to avoid paying their fair share, while two-thirds of Illinois corporations pay no income tax at all. To fund schools and other public services while paying the state’s bills, we need to close loopholes and enact a fair, graduated, tax.

Two-thirds of Illinois corporations pay no income tax because they’re small and aren’t making any money. Any tax that raises more revenue will at the margins drive businesses and individuals out of the state. Illinois’s population and economy are shrinking. What Illinois needs most is economic growth. Higher taxes won’t accomplish that.

Here are some alternative proposals for straightening out Illinois’s finances:

1. Immediately convert Illinois’s public employees from defined benefit pension plans to defined contribution pension plans. Illinois’s problem is not that we’re not taxed enough. It’s that Illinois’s politicians didn’t kick in to the public pension funds as they’d promised.
2. Cut the pay of present Illinois public employees. There was a huge run-up in public pay here during the Aughts. The state can’t afford it especially when pensions are yoked to pay.
3. Reduce pay and eliminate pensions for state elected officials. Reduce expense budgets for elected officials.
4. Impose term limits on all Illinois state politicians.

Those are remarkably similar to Gov. Rauner’s proposals which have received no consideration from the state legislature at all.

Illinois can’t meet its present let alone its future commitments with a shrinking economy. Sooner or later (probably sooner) Illinois will be unable to borrow to pay its bills. You can’t get blood out of a stone.

At Talk Poverty Perpetual Baffour asks a question that’s amazingly easy to answer: why are schools still segregated?

One would think Americans are ready for school integration, though. In a new study released by me and my colleague, Ulrich Boser, we found that most Americans—more than 60 percent—report that school segregation is an important issue for them, and nearly 70 percent of Americans agree that more should be done to integrate low- and high-poverty schools.

These findings were a bit startling at first glance. After all, if most Americans are in favor of school integration, why aren’t diverse, integrated classrooms spreading across the country?

Historically, school integration has met intense resistance. But at least in principle, the general public seems to endorse it, and our poll may have tapped into the country’s sympathy for people living in poverty.

The answer is patterns of residence. As long as whites are willing to move so their kids can attend “better schools” which, coincidentally, have fewer poor people, i.e. blacks and Hispanics, in them there are no real prospects for school integration. And as long as most school funding is based on local property taxes wealthy school districts will have more to spend on their schools.

If you’re looking for an explanation for the inadequate rate of domestic business investment, Jeffrey A. Sonnenfeld provides on in his Wall Street Journal op-ed:

The Wall Street Journal reported last week that 13 companies with market capitalizations greater than $40 billion replaced their CEOs during the first five months of 2017. This list includes Ford, General Electric , U.S. Steel , Buffalo Wild Wings , CSX, AIG, Yahoo and Arconic. Many fell victim to a short-term mind-set fueled by activist hedge funds. Meantime, some top-performing CEOs—such as Michael Dell, Whole Foods founder John Mackey and Panera Bread ’s Ron Shaich —have led their companies away from short-term financial markets to focus on long-term business investments.

Today’s corporate bosses aren’t the robber barons or country-club networkers of yesteryear. Modern CEOs are generally smart, diligent and committed to their jobs. They can easily travel hundreds of thousands of miles a year. Eighty-hour weeks are the norm. Many report that the professional demands are so intense that they have little time for family or personal friendships.

Mark Fields worked for the Ford Motor Co. for 28 years, rising to become its CEO in 2014. During his three-year tenure at the helm of America’s second-largest auto maker, the company was profitable. Ford’s recent success was due in part to the popularity of the redesigned F-150 truck, which became America’s best-selling vehicle on Mr. Fields’s watch, and to other major product relaunches, including the legendary Mustang. In 2015, the company enjoyed the best earnings year in its 113-year history.

But since Mr. Fields took the reins, Ford’s stock price had plummeted by 36%. He had warned investors that the pace of technological change meant Ford needed to sink some of its recent profits into long-term research and development. Ultimately the company’s family-controlled board decided it could no longer resist pressure from investors to reinflate the stock price. Mr. Fields was let go in May.

Board panic is a feature of the current corporate environment. The board of retail giant J.C. Penney fell victim to activist pressure and pushed out the highly successful CEO Myron Ullman in 2011. Two years later they sheepishly had to lure him back.

Ellen Kullman’s brilliant six-year reign at DuPont produced a 266% total shareholder return. In early 2015, she beat back a challenge from an activist hedge fund with a 2.7% stake in the chemical manufacturer. But while Ms. Kullman survived that battle, she couldn’t hang on for long. Later that year DuPont suffered two weak quarters due to the strength of the dollar against Brazil’s currency and a downturn in Chinese demand for agricultural chemicals. Before the company could recover from this modest setback, the board panicked and let Ms. Kullman go. A subsequent decision to merge with Dow Chemical has cost jobs, destroyed shareholder value, and ruined the reputation of this 215-year-old global icon.

Honeywell ’s Dave Cote left a proud legacy when he retired this spring in a classic internal succession. In a decade at the helm, Mr. Cote grew the Morris Plains, N.J.-based conglomerate’s global market share and spurred a stock-price gain of nearly 200%. During the same period, the Standard & Poor’s 500 index gained only 63%. Yet two months into the reign of successor Darius Adamczyk, activist investor Dan Loeb pushed for change. So much for a honeymoon at Honeywell.

Activist proxy campaigns are on the rise as hedge funds hunt for short-term stock returns. In the 1960s investors held stocks on average for eight years. Now the average is eight months. Fearing the cost of engaging in proxy battles, not to mention the bad press, directors often wrongly settle with activists, just as many settled with the leveraged-buyout artists of the 1980s. Corporate boards settled 45% of proxy battles in 2016, with many settlements involving invitations to activists to join the board. Fifteen years ago only 17.5% of proxy battles were settled in this way.

These settlements often lead to disproportionate activist representation on corporate boards. It’s not unusual for a 4% ownership stake to net an activist as much as a third of the seats on a board. The research and consulting firm FTI looked at 300 activist campaigns between 2012 and 2015 and found that CEOs were three times as likely to be replaced within 12 months after activists joined the board.

All of this activist agitation hasn’t translated into soaring performance. According to a 2015 Fortune magazine study, activist funds beat the S&P 500 index in only three of the previous eight years. Preqin’s Hedge Fund Spotlight found that 100% of the institutional investors it surveyed were disappointed with their activist hedge fund investments.

The hedge funds are not the only ones to blame for the short-termism stalking corporate America’s corner offices. Institutional investors such as public pension funds and university endowments fuel the activists’ war chests. Eager to make up for faltering performance and lacking the resources for in-depth research on targeted companies, hundreds of such funds delegate their judgment to proxy raters and activists solely focused on short-term share price.

The combination of yoking executive compensation to stock prices and extremely short term thinking on the part of institutional investors and hedge funds is irresistible.

To change that you’ve got to change the incentives which means reforms that are almost diametrically opposed to the ones being proposed. Propping up the old growth forests of the economy while the young shoots languish in the shade doesn’t help, either.