Handguns shouldn't be a household staple

Chicago Tribune article "Handguns shouldn't be a household staple" (July 9th, 2010) argues that handguns in homes make suicide easier for young people:

A gunshot is quick and irreversible. About 90 percent of suicide attempts with a firearm are fatal, compared with 2 percent of drug overdoses and 3 percent of attempts by cutting. Adolescents who experience a moment of despair and act impulsively with easy access to a gun almost always have a deadly result. Adolescents also are likely to survive most other methods of suicide, and nine out of 10 who attempt suicide and survive will not die by suicide at a later date.

Of course, people choose different weapons when they want to die with certainty. Those who take drugs or cut their wrists may not substitute into a handgun even if one is available because they seek attention or risk, not certain death. The proper comparison for the author to make would be whether suicide rates rise as soon as gun laws change in a state. A study by doctor David C. Stolinsky published in the Medical Sentinel notes that

The U.S. suicide rate has fluctuated between 10 and 17 for a century, with peaks in 1908 and 1932, and shows no relation to gun laws or gun availability.

Further research that exploits within-state variation is necessary to fully understand the impact of gun availability on suicide rates. Nonetheless, the Chicago Tribune's article attempts to make fact from what is quite possibly fiction, using irrelevant statistics to convince readers of a largely untested hypothesis.

What ever became of welfare moms?

Chicago Tribune article "What ever became of welfare moms?" (May 17th, 2010) offers the suggestion that no-one believes that potential jobs exist for individuals who are looking for them. Corrections isn't so sure.

No one sane assumes that today's unemployed are loafing, that jobs are 'out there' for them or that getting married would solve their problems.

The suggestion is that somehow, all individuals who are not unemployed due to minimum wage simply cannot get a job because there are no jobs out there for them. This idea is displayed graphically below (click to enlarge). The figure isn't copacetic with the empirical reality as Corrections sees it. Here, an increase in labor supply will only decrease wages while creating no extra jobs.

However, they still appear to be "voluntarily" unemployed, insofar as there are jobs they are unwilling to take. Let us examine job openings, layoffs, and the unemployment rate from the Job Openings and Labor Turnover Survey (for job openings and layoffs) and the Current Population Survey (unemployment rate). displayed graphically below (click to enlarge). All figures are seasonally unadjusted and relate to private job openings and layoffs.

As we can see from the figure, there is no giant increase in the availability of Summer jobs, and little discernible seasonal variation, save a spike in January layoffs. From this we might conclude the entire job market was being determined by demand-side economics--when firms want to hire, unrelated to the desire of individuals to work.

However, if we examine the teenage job market, we might expect a large supply shift during the Summer, because the cost of working has declined (they are no longer in school). If this is the case, and our first figure holds for teens, teen wages should go down but no more teens should work. However, this is not the case. We can see this through replication (note: our axes are different) of Figure 4 in Casey Mulligan's 2010 NBER Working Paper Simple Analytics and Empirics of the Government Spending Multiplier and other "Keynesian" Paradoxes (click to enlarge). The figure displays the total deviation in teen employment on yearly trend (in thousands). It clearly indicates that this Summer appears to be similar to past Summers in terms of employment--in spite of a supposedly inelastic labor demand. This suggests that labor demand is not in fact inelastic--it is elastic enough to support a large (million strong) (Summer) increase in labor supply.

As we see, teen employment in the two "crisis" Summers was almost exactly the same as it was from 2003-2007. That labor markets were this flexible for teens even while seasonally unadjusted job openings were not spiking dramatically. For Corrections point that labor demand is not inelastic to hold, the above is all that is required--earnings are not necessary (though preliminary examination of quarterly data indicates support for our claim). It should be quite clear that the increase in jobs is largely due to supply-side factors of workers rather than demand-side factors of firms.

However, in the interest of further making our point, we display "monthly" deviations from December-to-December trends of weekly earnings for our three relevant periods--2003 to 2007, 2008, and 2009 (click to enlarge). We note this is a bit artificial, as we use quarterly data with monthly trends. The general shape shouldn't change much, and it illustrates our point well.



There does not appear to be a consistent summerly (3Q) effect. No significant downward shift for the average of 2003-2007 and 2009, negative for 2008. If anything, this further indicates to Corrections that labor demand is relatively elastic, rather than inelastic. Were it inelastic, we would expect a Summer wage effect consistent across 2008 and 2009, due to the large increase in labor supply.

Corrections concludes that there do appear to be jobs out there for those who are willing to supply them--the labor demand of firms appears to be elastic enough to cause a positive employed individuals.

Scary ‘IRS agents’ claims --- Truth comes out about the ‘16,500 thugs coming with their guns’ to jail insurance cheats

Chicago Tribune article "Scary ‘IRS agents’ claims --- Truth comes out about the ‘16,500 thugs coming with their guns’ to jail insurance cheats" (April 8th, 2010) misses the point in attacking Ron Paul's argument concerning IRS agents. Specifically, Representative Paul suggested that if one fails to pay one's taxes individuals with firearms will come to one's door and put one in jail. The Tribune thinks this is in error.

In an interview on the Fox Business Network, U.S. Rep. Ron Paul, R-Texas, conjured up this specter of "armed bureaucrats," then, in the spirit of vividness, turned them into "16,500 thugs coming with their guns and putting you in jail if you (don't) follow all the rules."

It's hard to know where to begin unpacking this claim.

First, IRS "bureaucrats" — auditors, agents and other enforcement personnel, are seldom armed.

To Corrections, Paul appears quite correct. While auditors, agents, and other enforcement personnel of the IRS may not be armed, failure to comply with their orders will result in armed law enforcement officers coming to one's door. Taxes come from political power, and political power, as Chairman Mao noted in Chapter 5 of his Little Red Book, grows out of the barrel of a gun. This is a fundamental distinction between government and other institutions, and one that Austrian Economists especially are not hesitant to make.

The Tribune's correction is in need of a correction. Paul is quite correct in what he is stating.

Census as a celebration

Chicago Tribune editorial "Census as a celebration" (March 21st, 2010) offers a proposition that is not necessarily true. Specifically, it speaks about how important the current U.S. Census is, and how its consequence has increased due to a change in structure.

And something new: The old long-form questionnaire, sent to one in six addresses, has been eliminated, replaced by an ongoing statistical poll called the American Community Survey. This is mailed to about 250,000 addresses every month, thus providing a constant updating of the data.

But the survey is rooted in the findings of this year's census. All of the extrapolations that will be made from the survey's statistics will be based on the 2010 census. So, this year's head count is even more important than in the past.

The degree to which this is true depends on the methods by which extrapolations are computed. On the one hand, statistics can be calculated as, for example, the mean given the census's data. Researchers have more data than the census. For example, they have prior beliefs about population means (e.g. proportion of the population that is white). In such a case, they can update their prior beliefs using current census data to generate a posterior distribution by Bayesian updating. Furthermore, they can continue to do this using new population updates. This may be especially useful as it relates to possibly unknown and unobservable data.

Let us imagine that we cannot observe the true number of whites in the population ever. However, we can observe our survey results, and the true number of whites is some function of the number of survey responses plus noise from that period (the noise could, for example, be normally distributed a mean zero and some standard deviation). Then having more observations over time could give more accurate data. This is especially true if the target is "moving," like in a Kalman Filter's setup. Below, we show an example in which incorrect prior beliefs are "corrected" and a never-known moving target is guessed at. In this case, we call it the true number of whites. We see that when our observable, with its own shock or error, is a function of the truth, which evolves in some manner plus its own shock or error, then more time periods help correct for time-period-specific errors. The noisy signal and true, never-known information is displayed graphically below (click to enlarge), along with the "best guess" using the Kalman Filter is displayed graphically below, along with the "true" value (which one never knows in theory, though because this is random sample data we do) (click to enlarge).

Corrections concludes that it is not clear whether or not the Tribune is correct that this census is more important.

Where left meets right: Outsiders? They've always been in

Chicago Tribune opinion "Where left meets right: Outsiders? They’ve always been in" (March 7th, 2010) offers a political analysis as asinine as it is sophomoric. The article compares Huey Long's policies to Sarah Palin's policies.

She was beat to that I'm-just-plain-folks posture three quarters of a century ago by Huey Long, FDR's detractor. When patrician opponents said Long, the governor of Louisiana, lacked dignity, he embraced the put-down for all its political worth. "This state's full of sapsucker, hillbilly and Cajun relations of mine," Long responded, "and there ain't enough dignity in the bunch to keep a chigger still long enough to go brush its hair."

That kind of industrial-strength rabble-rousing got Long elected governor at the age of 35. He went on to be a U.S. senator and, by 1933, Long considered FDR vulnerable. He toyed with making a run for the White House, just as Palin is now.

Long didn't get a chance to make a decision. He was gunned down by an assassin in 1935. But his Share Our Wealth movement - a recipe for ending the Depression by soaking the rich - survived as one ingredient of a political stew similar to the one now bubbling over.

Huey Long, a U.S. Senator from Louisiana from 1932-1935, wanted to tax wealth above $8 million dollars at 100% (approximately $124 million today). He wished to tax income above $7 million dollars at 64%, and the remainder at $100%.

The individual and political movement the Tribune is referring to, Sarah Palin (in some vague sense, the doyenne and the Tea Party, while populist insofar as it purports to

The Tea Party is defined by its Tax-Day Protests, Taxpayer March on Washington, and were, in Correction's memory, ignited by Rick Santelli's haranguing of the government on CNBC in February 2009. It is composed of, according to CNN's survey, individuals with above median education and above median income.

In economic terms, these are individuals who wish to avoid the redistribution of wealth through taxation and medicare. As much as a factional group like the Tea Party can be, they are diametrically opposed to the economic fatuity a boor like Long represented. Comparing the two is not to compare two ends of the same spectrum, but two orthogonally motivated groups.

Growing poverty rate for Ill. children

Chicago Tribune article "Growing poverty rate for Ill. children" (February 11th, 2010) speaks on high child poverty rates in Illinois without asking why that might be the case. Corrections suggests that the reason a place like Illinois might have many individuals below the poverty line is because they do good things for the poor, rather than neglect them.

"Now is not the time to pull back on ensuring that our children have the basic education and health care they need to develop to their full potential," Ryg said.

This may "exacerbate" Illinois's problem. Corrections suggests, as Ed Glazer and Josh Gottlieb did in their NBER Working Paper "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium," (2009), that the reason cities might have many poor people is because they are good places for poor people to be, not bad, as one might intuitively suggest. The reasoning is simple: poor people move to places where they can get the most assistance, the best living standards.

Imagine a world in which there are four cities. One large one and several small. Before time t, the large city and smaller cities have the same poverty programs. At time t, the large city enacts a welfare program to help the poor. The poor from other cities will move to the large city, and the impact of welfare by a city may be to increase the number of poor while perhaps decreasing the total number of poor people. The increase comes from having more poor people move to the city than the program eradicates.

Three 3-D graphics, where the x and y axes are spatial coordinates of cities, and the z axis is level of poverty, are displayed. The center city is the city that enacts the welfare program.The first diagram represents poverty levels in the cities before the welfare program was enacted (click to enlarge).



The second diagram represents poverty levels in the cities after the welfare program was enacted (click to enlarge). Note the z-axis increases slightly, which hides the increase in the central city (but displays more prominently the decrease in outside cities.



The third diagram represents the difference in poverty rates (click to enlarge). The poverty program reduced total poverty, but the gain was seen by the outer cities.



Corrections concludes that local, city, or state poverty levels tell us little about whether or not the poor are better off in a location. Indeed, our modeling suggests that areas with more poor people are perhaps doing more for the poor--that is why they are there. Finally, and as a side note, Corrections could forego the above exercise and note that applying the Law of Demand indicates that good welfare programs encourage high poverty rates. (Though we note they also have a direct effect).

Supreme Court sets bad public policy

In the Chicago Tribune Opinion "Supreme Court sets bad public policy" (February 8th, 2010) describes the consequences of striking down an Illinois law prohibiting exorbitantly high awards for malpractice lawsuits:

The law ended ridiculously high noneconomic (e.g. pain, suffering and loss of consortium or society) awards handed out in Illinois malpractice suits, especially in downstate Madison County, the malpractice lawyer's mecca. The law was effective, helping reduce medical costs and stemming the departure of Illinois health care providers because of excessively high malpractice insurance costs.

The article forgets one additional effect of such a law: it made bad doctors stay in the state. When the punishment for malpractice increases, so too does the cost of practicing medicine, especially for the worst (most likely to get sued) doctors. Of course, higher malpractice payouts should all get passed to consumers in the form of higher doctor's fees, because in the long run doctor location is elastic.

Locked Up

Chicago Tribune Editorial "Locked Up" (November 14th, 2009) appears to neglect the proper statistics. Speaking on the life incarceration of young men for multiple serious crimes not involving murder, it claims:

Does it sound sensible to write off a teenager because of two serious convictions that don't include murder? Not to our mind.

And

As a matter of general policy, there are reasons to be skeptical about jailing a youthful criminal for the rest of his life. Juveniles lack the judgment and impulse control to be fully responsible for their actions, and they may be more amenable to rehabilitation than adults. With 77 inmates serving life without parole for non-homicide crimes committed as juveniles -- twice as many as all other states combined -- Florida clearly puts excessive reliance on this option.

While they may be more amenable to some new, untried rehabilitation that we have not been practicing, the percent of released prisoners from all states who were rearrested within three years is a monotonically decreasing function. The older you are, the less likely you are to be re-arrested, and re-convicted. It seems to be in our interest to put younger individuals away longer than older individuals.

Additionally, of all violent offenses, property offenses, drug offenses, public order defenses, and other offenses, murderers are the least likely to be re-arrested or re-convicted within three years Releasing the marginal murderer seems much less criminal than the marginal rapist using recidivism statistics.