Thursday, October 29, 2015

Keeping Marijuana as a Schedule I Drug Is Too High of a Risk

For those who watched the Democratic presidential debate a couple of weeks ago might recall the part where the candidates were asked about their stance on marijuana. I personally thought the responses were weak on the whole. However, it looks like presidential candidate Bernie Sanders is taking it up a notch by saying that the federal government should remove marijuana from being scheduled by the Drug Enforcement Administration (DEA). As much as I disagree with Sanders on a whole host of issues, I have to say that in this case, he's right: having marijuana scheduled as a Schedule I drug is ridiculous. Why?

According to the DEA, a Schedule I drug is defined as a drug with no currently accepted medical use, has a high potential for abuse, potentially causes severe psychological or physical dependence, and is categorized as such because it is considered the most dangerous drug out there. I will start with asking how it cannot be considered to have an accepted medical use when, as of date, 23 states and the District of Columbia legalize marijuana for medicinal purposes. A recent study in the Journal of the American Medical Association shows how marijuana indeed has medicinal properties. It's nice to know that the wording can be vague enough in the statute where the ambiguity of who has to accept its validity can be up for debate. Leaving that one aside for now, why is it that marijuana is considered so dangerous that it is a Schedule I drug? From the DEA's perspective, marijuana is more dangerous than even meth or cocaine, both of which are only Schedule II drugs. Taking a study done back in 2010 (Nutt et al., 2010), marijuana is safer than alcohol, crack, heroin, cocaine, or tobacco (see below), yet two of those drugs are still widely sold in the United States. If you want a more recent, 2015 study, from Scientific Reports, I can provide that, as well (Lachenheimer and Rehm, 2015).

As I was explaining when I was doing some myth-busting on marijuana last year, marijuana is a drug, and like other drugs, it comes with benefits and risks. However, unlike many other drugs, the risks of smoking marijuana are relatively small in comparison. I personally wish that we would simply allow for marijuana's legalization in the entire nation. If the fight for legalizing same-sex marriage is any indication of how America handles social issues of this magnitude, my educated guess is that it will start off with a few states legalizing marijuana, much like we are seeing now. Eventually, the movement to legalize marijuana will pick up momentum where more and more states legalize it. Before we know it, marijuana will be legal in all 50 states and DC, and we'll look back wondering how we as a nation could have been oblivious enough to allow a repeat of the Prohibition. The fact we see the American approval rate for legalizing marijuana at 58 percent helps confirm my educated guess.

I don't see full legalization of marijuana happening anytime soon, but that doesn't mean we should accept the status quo. For one, it perpetuates the War on Drugs and the "tough on crime" mentality that should have died years ago. It also keeps marijuana in the underground market, which has its own additional costs. And let's not even begin to mention law enforcement costs surrounding a Schedule I categorization of marijuana. In this case, we shouldn't let good be the enemy of perfect because there are costs to keeping marijuana as a Schedule I drug. Rather than continue with failed drug policy, we should at the very least head in the right direction and reclassify marijuana as a Schedule II drug.

Earlier this month, researchers over at the centrist Brookings Institution released a paper showing how a Schedule I categorization is tantamount to the government declaring war on medicinal marijuana research. As the authors of the paper point out, it won't suddenly legalize marijuana because Schedule II merely recognizes that there are "accepted medical benefits," but is still dangerous. Given the confines of international drug treaties that have been signed and that it's a politically safe option, perhaps categorizing marijuana as a Schedule II drug is the best that can be done for now, even though it will be quite the pain to implement. At least that way, more substantive research can be done to determine whether marijuana is really the risk that naysayers claim it is.

11-6-2015: The DEA recently released its 2015 Drug Threat Assessment Summary, in which it surveyed over 1,000 law enforcement agents regarding the danger of illicit drugs. Guess which drug made the bottom of the list at 6 percent? You guessed it: marijuana.

Monday, October 26, 2015

Why Government Trying to Provide "Free" College for All Is an Exercise in Futility

Presidential election cycles are great opportunities to pick up on gaffes, idiocies, and poor public policy. As nice as it would be to criticize other candidates' policy platforms, Bernie Sanders simply provides good material for me to analyze. In his latest piece in the Washington Post, which he entitled Make college free for all, Sanders writes his opinion piece on why the government should provide universal college education for all. He opines that education is both good for personal wellbeing and national wellbeing. I'm not going to argue with that. Education is one of the single most important factors of determining professional success. This, however, is not sufficient reason to have the federal government pay for tertiary education for all.

In his opinion piece, Sanders lists some examples of where government-sponsored tertiary education has been implemented. On the international level, Sanders lists Finland, Denmark, Norway, Sweden, Iceland, Ireland, Germany, and Mexico. Germany is an even more peculiar case because it provides free education not just to its own citizens, but international citizens. First, let's bring up the fact that the education is not free. Like any other good or service, someone has to pay for it because we live in a world of scarce resources. Rather than fund it directly through tuition, tertiary education is indirectly funded in the form of higher taxes. Second, with the exception of Finland, the United States  has a higher tertiary education enrollment rate than any of the other countries that Sanders mentioned. The third point has to do with tertiary education completion. According to the Organization for Economic Cooperation and Development (OECD) and its most recent publication on education statistics, the United States has a higher percentage of adults with a tertiary education than any of the countries that Sanders listed as exemplars (OECD, 2014, p. 44). For the 25-34 year old demographic, only Norway and Ireland outpaced the United States on percent of adults with a tertiary education (ibid.). These statistics undermine the pro-free tuition argument in two ways:

  1. Levying higher taxes in order to fund college does not guarantee universal education on the tertiary level. 
  2. Countries can and do have a higher level of tertiary-educated adults in comparison to countries that provide free tuition or free college for everyone, which is to say that having the government levy heavier taxes for tertiary education is not necessary.

Maybe it doesn't work so well in other countries, but Sanders also did mention the G.I. Bill as an example of how the United States government funded tertiary education in the past. Sanders cited two sources (Olson, 1973; Stanley 2003), claiming that these "scholars say that this investment was a major reason for the high productivity and economic growth our nation enjoyed during the postwar years." What's spurious about Sanders' claim is that the scholars he cited did no such thing. Sure, they pointed out that it spurred some college enrollment growth, but the cited studies make no claim that the G.I. Bill spurred higher productivity or economic growth. Even the Stanley study says in the abstract that impacts of GI Bills were "apparently concentrated among veterans from families in the upper half of the distribution of socioeconomic status." Even this research paper from the National Bureau of Economic Research (Bound and Turner, 1999) show modest and ambiguous results on college enrollment growth. Sanders also mentioned the state of California,  but failed to mention that during the late 1950s, the UC school system expanded from two universities to eleven, which would help explain why California was unable to fund tuition-free university so easily. Even in the link that Sanders provided about New York, it admits that economic reality got in the way of being able to continue with funding free college.

Having the government pay for community college or to enact student loan forgiveness show the same level of economic naïveté, not only because such policies ignore certain economic realities, but also because they do not touch upon major issues within the postsecondary education system in the United States. For those who are in favor of Sanders' proposal for providing free college education for all, let me bring up some food for thought:

  1. One of the cornerstones of Sanders' presidential platform is that of income inequality. A study from the centrist Brookings Institution earlier this year found that free college tuition for all would not mitigate overall earnings inequality. If your goal is to reduce income inequality, why advocate for such a policy?
  2. In July 2015, the Federal Reserve Bank of New York (FRBNY) released a study showing that for every dollar the federal government pays in federal student aid, it causes a 60¢ increase in college tuition. Why would doing more of the same contain costs?
  3.  The FRBNY also found that the underemployment rate for recent college graduates is over 40 percent, not to mention a 41 percent dropout rate. Additionally, many of the fastest growing occupations over the next decade, according to the Bureau of Labor Statistics, require an Associate's Degree or less. A study from Georgetown University also shows that the relationship between popularity of a major and salary is almost non-existent, i.e., R=-0.0009. Given these signs that the demand for a college education is artificially high, how does further increasing the number of college enrollees help with making sure that we don't have an excess of overeducated workers or deal with the increased demand of work not requiring a Bachelor's degree?
  4. Education is an investment in human capital, and serves the primary function of developing skills to be more marketable in the workplace. What would a system with free college tuition do differently to encourage people pursuing careers in higher-demand fields? How would this policy address credential inflation? I ask this in light of an FRBNY study showing that a high-subsidy, low-tuition policy has a disincentive effect on human capital acquisition. 

Once again, Sanders assumes that the solution to a problem is to increase taxes in order to pay for a government service, as if the sole problem were a lack in government funding. "Free" college is not really free: it's simply a different framework in which one can pass the costs on to the taxpayers, many of whom do not even have a college education. Sanders' policy idea does nothing to address the quality of education in this country. As we have seen with other countries, high tertiary education subsidies do not guarantee a higher percentage of adults with a tertiary education, nor do they really do anything significant to improve the state of income inequality. While we can craft education or labor policy that focuses on root issues, what I can conclude with is that a facile approach of throwing more tax revenues to try to provide more "free" college education isn't going to solve anything.

2-11-2016 Addendum: A recent paper released by the National Bureau of Economic Research shows that government policies account for 78 percent of the hike in college tuition between 1987 and 2010. Add that to list of how government subsidizing college education causes price hikes.

Wednesday, October 21, 2015

The United Nations and 70 Years of UNprofessionalism

"Can't we all just get along?" If history has taught us the answer to that question, it's a resounding "No!" The fact that people can't get along is why the United Nations was created in the first place back in 1945. Take a look at the UN Charter: The first thing in the Preamble is to "save succeeding generations from the scourge of war, which twice in our lifetime has brought untold sorrow to mankind." Looking at what happened in the two World Wars, I can hardly blame the founders of the United Nations. There was already one world war, and the League of Nations was an unmitigated disaster in terms of doing nothing to prevent the second. Given the death toll of the Second World War, there was a perfectly justifiable impetus to create an international organization to address peace and international security. As of this Saturday, it has been seventy years to the day since the United Nations Charter has been signed. What effects have the United Nations had on the world at large?

If you read through the entirety of the Charter, you can see that the UN took on quite a bit in terms of being able to address global governance. It should be no surprise that the UN thinks that they have done a superb job: that's simply issue advocacy. However, let's take a closer look. The UN has worked as a venue to peacefully work out its differences. It has also used its various agencies to create great databases for international trade, health, and other topics. Even so, I'm not sure if it is enough to have fulfilled its two primary missions of preventing future wars and promote human rights.

The bad news is that there have been many military conflicts since: the Korean War, the Vietnam War, the War in Darfur, the Chechen War, the list goes on. 41 million have died from 1945 to 2000.  The number of wars increased from 1945 to 1989, and then petered off. This doesn't count the indirect deaths from China's Great Leap Forward or the Pol Pot. The good news is that we haven't had a third world war. Even so, how much can we give credit to the United Nations? The most flattering one can get is that they were a forum for facilitating these discussions. Most international cooperation can take place and has taken place outside of the United Nations framework. NATO, the United States military, the IMF, the World Bank, the European Union, the World Trade Organization and mutually assured destruction did more than the United Nations has in its tenure, and did so independently of the United Nations. And looking at the veto record of the Security Council, i.e., over 300 vetoes, it doesn't surprise me given that they gave permanent Security Council member status and veto power to Russia and China. The balance of power, realpolitik,  and overall structure of the Security Council are a reflection of 1945 international politics, not 2015.

The failures in Rwanda, Sri Lanka, and Srebrenica, all of which the United Nations admitted were failures, show the UN's shortcomings on being able to protect human rights. This should not be surprising, either. The General Assembly's membership has no ties to its human rights record. When the United Nations started, it was led by the developed nations. Now, we only have 89 free countries out of the 197 that sit on the General Assembly. We also see that the UN Human Rights Council is a joke. Look at some of the current members: China, Kazakhstan, Pakistan, Russia, Saudi Arabia, all of whom I would consider human rights abusers. And yet, the UN loves to go after Israel, which is a democratic, pluralistic nation-state that protects the rights of women, Arabs, Druze, homosexuals, indeed all Israeli citizens. If we were to go through each of the UN Human Rights Council resolutions, 62 are against Israel while 55 were against the rest of the world as of August 2015. Even Syria only had 17 resolutions. To disproportionately focus on Israel at the exclusion of just about every other human rights abuser is egregious, plain and simple.

The anti-corruption watchdog Transparency International took the United Nations to task on its corruption issues. After all, who can forget such classics as the Iraq Oil for Food Programme Scandal or the sexual abuse by UN peacekeepers? Even with a goal of creating an international community, the United Nations has been far away from accomplishing its goal. Whether or not the United Nations is able to pass reforms, one thing is for certain: the UN has not been able to live up to its primary goals.

Friday, October 16, 2015

The Bad and Good Features About Denmark Bernie Sanders Doesn't Want You to Know

In the Democratic presidential debate on Tuesday night, presidential candidate Bernie Sanders said that he's not a capitalist, and that he's a democratic socialist. In his explanation of what a democratic socialist is, he included that "we should look to countries like Denmark...and learn from what they have accomplished from their working people." Leaving aside for a moment that what Sanders is describing is technically social democracy, it's not the first time he has sung Denmark's praises, and it probably won't be the last. However, let's take Sanders up on his offer and actually take a look at Denmark.

Much like with Sweden, Denmark is not the socialist paradise that Sanders and other social democrats like to depict. Before delving in, I should point out that Denmark, much like any other nation-state, is fallible because it is run by fallible human beings. There are going to be facets about nation-states that we like, and others that we don't. Sanders brings up certain facets he likes, such a paid family leave, subsidized health care, and free college tuition. What I find interesting is what this anti-capitalist presidential hopeful omits, such as Denmark having a higher ecological footprint per capita than the United States, from his diatribes. Rather than write a narrative on Denmark, I'm going to divide this into two sections: the bad and the good. The bad will entail those inconvenient truths that democratic socialists don't want you to hear. The good will entail the extent to which Denmark has pro-growth, pro-market policies.

The Bad About Denmark
  1. Housing market and household debt. The price-to-income ratio measures the affordability of a house. According to the OECD, Denmark's price-to-income ratio is above OECD average, which is to say that housing is more unaffordable in Denmark than it is in the United States. The OECD, as well as the International Monetary Fund (IMF), also points out that Denmark also has the highest level of household debt within OECD countries (IMF, p. 8).
  2. High overall tax rate. The OECD points out that Denmark exceeds the average amongst developed countries for tax burden. Even the Danish government admits it has one of the highest tax rates in the world! The Danish levy their income tax not just on billionaires, but on those who make over 41,000 DKK ($6,251 USD). The Danish tax middle-class Danes quite heavily, which is contrary to what we are hearing from Sanders. Something tells me that Sanders wouldn't want to levy a tax burden of 37.48 percent tax on those with a $6,251 income. Another thing you won't hear Sanders mention is that an overly burdensome tax rate translates into stagnant economic growth, like this European Central Bank paper shows (also see Kreiner et al., 2014; Bergh and Henrekson, 2011). 
  3. High levels of government spending and economic growth. The Danish government spends 57.1 percent of its GDP on government spending, which is about 20 percent points higher than the US. As the World Bank points out, large amounts of government spending have a drag on economic growth, which is to say that Denmark is doing well not because, but in spite of a largesse in government spending. Denmark also experiences spillover effects not only from the Marshall Plan or NATO (the latter of which has kept Danish military spending down), but also from technological process from more capitalist societies like America. 
  4. Low fertility rate. Denmark's fertility rate is about 1.73. The good news is that it has increased from its low of 1.4 from the 1980s, but still could be higher to reach the replacement rate of 2.1 (same could be said about other developed nations). It's getting to the point where Danes are encouraged to have more sex [and children] in order to bring the fertility rate back up. 
  5. Potential financial sector instability. Denmark's financial sector is 650 percent of its GDP (IMF, p. 15). This should be unsettling for someone like Sanders who has problems with the clout of finance. Danske Bank, which is Denmark's largest bank, holds assets that exceeds the size of Denmark's GDP. I guess the issue of Big Banks isn't an issue for Sanders when it comes to his Danish paradise, but on a less chiding note, Denmark has to be all the more careful with monetary policy with its exchange rate peg and fully-open capital account (ibid.). 

The Good About Denmark
  1. More economic freedom. In spite of socialist rhetoric, Denmark actually is a place of economic freedom, even more so than the United States. On the Heritage Foundation Economic Freedom Index, Denmark is placed slightly higher on the ranking. Denmark has great respect for property rights and is open to foreign direct investment. The Fraser Institute gives similar high ratings for Danish economic freedom. You can also check out the Danish-based Center for Political Studies (CEPOS) for more information.
  2. Comparable levels of well-being. Looking at the United Nation's Human Development Index, Denmark and United States have ranked roughly the same over the past couple decades. That means when looking at such factors as years of schooling, life expectancy, and gross national income, they're quite close. The countries are also neck and neck in the OECD's Better Life Index. This certainly helps in taking on Sanders' myth that the United States is a hellhole in comparison to Denmark. If anything, the U.S. is doing relatively well for itself. 
  3. Lower corporate tax rate. The United States has the highest effective corporate tax rate in the developed world. A Danish corporate tax rate of 23 percent is not great (I personally would prefer that it's 0 percent), but it's better than 35 percent. And as a side note, the United States has a much more progressive tax system than Denmark.
  4. Less burdensome business regulations. According to the World Bank's Ease of Doing Business Index, Denmark actually ranks higher on the list than the United States. As of date, Denmark ranks 4th on the list, which is three places above the United States. What does this mean? The regulatory environment is more conducive for businesses to start a firm. 
Overall, Denmark is doing pretty well for itself, which is why it wasn't easy to find some of the more negative aspects about the Danish macroeconomy. There are other points of context that shape the Danish experience, which are further elucidated upon in this report from the Institute of Economic Affairs. Denmark's success in average life span and overall wellbeing actually predated the growth of Denmark's welfare state in the 1970s. Nordic Americans also rate comparably in terms of poverty rates and lifespan (Sanandaji, 2012, p. 51-59).  There are also cultural differences of Scandinavians in terms of trust in strangers, which allowed for a welfare state of such size to even exist in the first place.

Denmark is also a smaller, more ethnically homogenous country. Economies of scale work better in smaller nations than they do in larger, which is why it would be interesting to compare Denmark to more analogous nations like Switzerland, Singapore, or Hong Kong. Yes, the Danish government has a largesse in government spending and tax rates. Yes, there are some policies in Denmark that are a democratic socialist's wet dream (or social democrat, whichever). Even with the largesse in government spending and welfare, Denmark, much like its Scandinavian counterparts, has trended in the opposite direction Sanders envisions, and has taken on more pro-market tendencies. Denmark maintains open trade, overall high economic freedom, a minimal amount of business regulations, and huge respect for property rights, and I can tell you that Sanders is not a fan of open trade (you can read more in economist Scott Sumners' paper on the neoliberal reforms of Denmark). What we should glean from this is that although there are some Sanders-approved policies that are implemented in Danish governance, there are quite a bit of pro-market, capitalist trends that Sanders simply does not want to discuss.

1-19-2016 Addendum: Otto Brøns-Petersen at the Cato Institute released an economic bulletin outlining why Denmark is not a model that the United States should be emulating.

Monday, October 12, 2015

Are Private Prisons Really Privatized, and Is Focusing on Them Addressing Mass Incarceration?

While understandable given the high crime rates in the 1970's, it's unfortunate to see in hindsight that the "tough on crime" mentality of law enforcement in the 1980's caused so many unintended consequences. It's even more unfortunate to see that mass incarceration is still ongoing to this day as a result of those policies from more than thirty years ago. There are those on the Left who think that if we eliminated the private prisons in this country, it would solve the problems of mass incarceration because they have the perverse incentive to keep the prisons as full as possible. After being accused of taking political contributions from private prisons, Hillary Clinton went on record this past Friday saying that she would like to eliminate private prisons. Bernie Sanders has also stated that he would like to introduce legislation to eliminate private prisons because they are morally repugnant.

Before jumping into the discussion, there are two facts to help contextualize the discussion that not even the Left-leaning Vox could deny. One is that corporations did not cause mass incarcerations. Private prisons were a government response to dealing with overcrowded prisons. The second fact is that private prisons account for a small portion of the overall American prison system. Between state and federal prisoners, private prisoners hold 137,220 prisoners, which account for 9 percent of the overall prisoner population. While I think that having the highest global prisoner population per capita in the "land of the free" is extremely problematic, it does show that the private prison system has relatively small sway over the overall trend of mass incarceration. Even with those facts in mind, should we still have a privatized prison system?

You might be thinking that my answer is in the affirmative simply because the prisons are referred to as "private prisons." Yes, it is true that I have a preference towards privatizing because when examining between privatization and government ownership of a good or service, the private sector outperforms the public sector the vast majority of times. However, what I would like to touch upon at this moment is whether the prisons in question are truly privatized. Essentially, the private prisons, also known as for-profit prisons, are places where individuals are confined or incarcerated by a third party that is contracted by a government agency. These private prison companies enter into a contractual agreement with the relevant government agency, who in turn pays the company on a per diem or per mensem rate for each prisoner. Even if the private company manages and operates the facilities, the state is still in charge of contracting and funding the private prison companies, as well as selecting the inmates put in prison, selecting the type of facility to be contracted out, and overseeing the contractor's disciplinary practices. While the state is still involved in the private prison system, we cannot consider these prisons to be truly privatized because the government is merely contracting out a service that is already a government monopoly. The more accurate term for such an arrangement is a public-private partnership (PPP). A PPP can be implemented with such goods and services as national parks, fisheries, charter schools, or air traffic control. The success of PPPs are more mixed because it depends on which aspects of the private and public sectors are mixed into a given industry. How does that play out for the "private" prison system?

Trying to conduct a cost comparison between public prisons versus their more privatized counterparts remains an elusive task. The Government Accountability Office has pointed out that even if one is able to find two prisons with comparable demographics, it still remains difficult because of data collection and cost measurement methodology differences. What further differentiates the two is the different accounting procedures render the project more arduous. As such, any attempt to determine which prison system is more cost-effective is tenuous at best. Even so, some have tried. A meta-analysis from the Utah Criminal Justice Center had mixed results. Four of the eight studies found that private prisons found cost savings, while the other four came up with negligible differences (Lundhal et al., 2009). A survey of 30 state correctional agencies shows that private prisons are lower in cost than public ones by 28 percent. The Sentencing Project actually does not find significant cost savings in the "private" prison system (Mason, 2012), while the Reason Foundation has found cost savings (Segal and Moore, 2002). The same ambiguity can be applied for performance metrics between the two prison systems. None of this even gets into how for-profit prisons fare in developing countries (Allen and English, 2013).

Whether it is a private prison or public prison, the perverse incentive system to keep many inmates in prison, especially once it has become acceptable policy, remains a part of both prison systems because both systems experience self-interested, pro-incarceration advocacy. Regardless of whether the prisons are private or public, drafting contracts on a numbers-based policing model only fuels the rent-seeking for mass incarceration. We need to focus more on lowering recidivism rates, which is why it's nice to see that The Council of State Governments produced a great report on targeting recidivism. If we are going to draft up contracts for private prisons, the least one should do is make it based on the rate at which a prison can reduce recidivism rates. We can experiment with performance contracting models, much like in Pennsylvania and the United Kingdom, so that reduced recidivism becomes the incentive for contracted companies instead of being incentivized to bring in more prisoners for the sake of lining one's pocket with money.

If we want to tackle the issue of mass incarceration at its core, we need to go beyond prison contract reform. Much like the Reason Foundation brings up in its 2014 Annual [Prison] Privatization Report, we have to deal with criminal justice reform on a broader scale. Just a few ideas of how to tackle the issue of mass incarceration: modernizing federal drug sentencing policies, make the Fair Sentencing Act of 2010 retroactive, abolish victimless crime laws so that prison is for the violent criminals only, raising the "good time credit" limitvictim-offender mediation, or creating a continuum of care using private prisons. If we implemented some or all of these policies, it would do a lot more help than the facile approach of Sanders or Clinton.

Thursday, October 8, 2015

Why America Shouldn't Follow Australia's Lead on Gun Control

Last week on October, an unfortunate shooting at Umpqua Community College in Oregon took place. Before the facts were even gathered, Obama released a statement about the tragedy, and unsurprisingly blamed guns. As part of his statement, Obama went beyond the usual gun control rhetoric and hinted at gun confiscation:

"We know that other countries, in response to one mass shooting, have been able to craft laws that almost eliminate mass shootings. Friends of ours, allies of ours: Great Britain, Australia, countries like ours. So we know there are ways to prevent it." 

Since Australia has some of the strictest gun laws out there, let's examine the extent to which Australia is an exemplar for gun control, and whether the United States should follow Australia's lead.

On April 28, 1996, a gunman open fired on tourists in Tasmania. 35 were killed and 23 were wounded. In response to the tragedy, the Australian government enacted a series of stringent gun laws. Semi-automatic rifles, as well as semi-automatic and pump shotguns, were banned. The government created a restrictive system on licensing and gun ownership. The Australian government strongly pushed for a gun buyback program, in which it purchased and destroyed about 643 thousand firearms between October 1996 and September 1997. This crackdown on firearms has been lauded by gun control proponents.

We should look at three types of gun-related incidents to see whether the Australian crackdown on guns was a success: homicides, suicides, and other gun-related crimes. A 2008 report from the University of Melbourne (Lee and Suardi, p. 23-24) concludes that "although gun buybacks appear to be a logical and sensible policy that helps to placate the public's fears, the evidence so far suggests that in the Australian context, the high expenditures incurred to fund the 1996 gun buyback has not translated into any tangible reductions in terms of firearms deaths." A 2007 report (Baker and McPhedran) found that the gun laws had positive effects on suicide rates, but nothing significant for homicide rates. The main study lauded by gun control advocates (Leigh and Neill, 2010) points out that gun suicides decreased because of Australia's laws, but were not able to say the same for gun-related homicides. What is interesting in Leigh and Neill's study (p. 40) [see below] is that from 1987 to 2000, the firearm suicide rate is dropping at roughly the same rate pre-buyback that it is when the buyback, which makes it harder to argue a case for correlation.

If I had to summarize the criminology data, there is inconsistent data on the effects of firearm suicides. The suicide rate decrease could be just as easily explained by a suicide prevention initiative that began back in the early 1990s (Klieve et al., 2009), which very well could be causing the ambiguity in the suicide rate data. However, the data are pretty clear in terms of finding that the Australian laws have not impacted the homicide rate in Australia (Baker and McPherdan, 2015). Scholars over at the centrist Brookings Institution (Reuter and Mouzos, 2003, p. 121-122) noticed that there was a "relatively small effect" since the firearms that were confiscated "had not previously been used frequently in crime or suicide." The lack of impact of the buyback program might also have to do with the fact that the increase of gun imports since 1997 replenished the previously destroyed guns, which would put Australia at pre-buyback levels.

According to the Australian Institute of Criminology, the number of murder and manslaughter victims stayed steady from 1993 to 2007, homicides involving firearms as a percentage of total homicides had already been decreasing since 1987, the number of homicide victims increased in 1999, and the number of homicide incidents in Australia had already been decreasing since at least 1990. This doesn't even consider that the number of armed robberies and assaults increased substantially after the gun buyback, or that other violent crime, e.g., sexual assault, kidnapping, were also increasing since the gun buyback (see here and here). Looking at these government data, the only positive thing we can say is that it decreased mass shootings, which is a small subset of gun-related deaths to begin with. Furthermore, something as drastic as a buyback should produce immediate results. Yet in the case of Australia, homicides did not really decrease for eight years, and the number of armed robberies increased shortly thereafter. Suicide rates also stayed at roughly the same rate pre-buyback (Australian Bureau of Statistics, p. 60) as they did immediately after the buyback took into effect.

Let's forget for a moment that the data on the rates of homicides, suicides, and overall violent crime in Australia don't point to the positive effects that gun control proponents were hoping for. Even if Australia were hypothetically a role model for gun control, would it be possible to implement?

The Australian gun ban was able to confiscate about a fifth of the country's guns, and that was with much fervor. To apply that confiscation rate to the United States and try to confiscate a minimum of 20 percent of 357 million guns, which is 71.4 million firearms, is just untenable without using police force. Let's also recall that the number of guns in the past couple of decades went from 192 million in 1994 to 310 million in 2009. Even with this increase in American gun ownership, violent crime has decreased. New Zealand also experienced increased firearm ownership rates while homicide rates decreased in the same time period (McPherdan et al., 2010), which begs the question of necessity of a gun ban.

What also worries me about when people say we should follow Australia's example is that they mean mandatory confiscation of firearms. Not only does that violate the Second Amendment, but it also comes into conflict with the United States' gun culture. Even the Left-leaning Mother Jones concedes that a buyback program would not work in the United States. Australia did not have a Bill of Rights, which made it all the easier for the Australian government to confiscate firearms. Furthermore, Australia is an island nation-state without domestic gun manufacturers, which also allows for easier enforcement. Combine the poor performance of Australia's gun ban and the infeasibility of implementing a gun ban in the United States, and I can make a very educated guess that a gun ban would not take place in the United States anytime soon, which is why I would rather steer the argument towards public policy that would actually lower gun violence (another blog entry for another time, to be sure) instead of steering us towards a mirage of "common sense" nirvana.

Sunday, October 4, 2015

Why We Read the Seemingly Depressing Book of Ecclesiastes on Sukkot

Sukkot, which is the Feast of the Tabernacles that typically takes place around late September/early October, originally started as a harvest festival for the ancient Israelites. It is also referred to as זמן שמחתינו, or the "time of our joy," for a variety of reasons. Being the festive holiday it is, it comes off as a peculiar tradition [for Ashkenazi Jews] to read the Book of Ecclesiastes, also referred to as קהלת (Kohelet), during the Shabbat Sukkot services as a way to celebrate this rejoicing. The Book starts off with "Futility of futilities, all is futile (Ecclesiastes 1:2)" and continues with such lines as "for with much wisdom comes much grift, and he who increases knowledge increases pain (1:18)," "What does joy accomplish? (2:2)," and "for the fate of men and the fate of beast, they have the same has no superiority over beast, for all is futile (3:19)." It seems counterintuitive to read a dejecting text that points out the futility of life on a time where we celebrate the joy in our lives, so I did some research in hopes to resolve the paradox:

  1. Let's not take it too far with the joy. Maimonides teaches the Aristotelian idea of the golden mean, which is to say that we should not take our מדות (character traits) to extremes. The trait of joy is no exception. In the Mussar text ארחות צדיקים ("The Ways of the Righteous"), if we give in entirely to humor or frivolity, we detract our focus from G-d. Ecclesiastes is the antidote to lightheartedness (Avudraham; R. Azaryah Figo). The joy we should feel is not for frivolity, but in serving G-d (Sefer HaMagid, Vol. III).
  2. Joy is not about material wealth. King Solomon was a man who had hundreds of wives and concubines, as well as all the riches a man could imagine. At the end of the day, King Solomon realized just how transient material wealth can be, and how futile it was to chase after it (Ecclesiastes 1:11). We read Ecclesiastes at this time of year to remind ourselves that we are to rejoice in our lot, and that happiness will not be found in chasing after insane amounts of wealth (R. Mordechai Yaffe).
  3. Ecclesiastes is about steadfastness to Torah. The Talmudic rabbis wanted to censor the Book of Ecclesiastes as apocryphal because its contradictory statements would end up confusing the masses (Shabbat 30b). However, the Rabbis decided not to suppress the text because the text begins with matters of Torah (Ecclesiastes 1:3) and ends with matters of Torah (Ecclesiastes 12:13). When discussing the question of "what profit does man have under the sun (1:3)," the Rabbis interpreted that as those who go "before the sun," i.e., study Torah, then one profits. In spite of the skepticism that King Solomon expresses throughout the Book, he concludes that the purpose of life is to "fear G-d, and keep His mitzvahs because that is the whole of man (12:13)."
  4. Faith in the midst of uncertainty. In Ein Ayah, R. Avraham Yitzchak Kook points out that in spite of the intellectual pursuit, King Solomon ultimately returns to fear of G-d. Ecclesiastes is a reflection of how many people struggle with life. It can be confusing, contradictory, unfair, and downright harsh. As I wrote in a previous entry, faith is not acceptance in the form of passivity. We are allowed to question the purpose of it all and do so quite profoundly. At the end, of the day, we stick with G-d. We struggle, question, and wonder, and yet still remain within the framework of Judaism because the Jewish tradition allows for us to be human. The ability to stay steadfast to Judaism while still contending with the inconsistencies and injustices  of life that we observe and process with our rational faculties is the Ecclesiastical experience. It is to remind us that even in the unknown, we can still find meaning in life and experience joy. 
  5. Accepting the transience of our physical livesThere is a Midrash (Shir HaShirim Rabbah 1:10) that says that King Solomon wrote this text at the end of his life, a time during which he reflected on all he had done. For King Solomon, he viewed life as a הבל (Ecclesiastes 1:2). The word הבל is commonly mistranslated as "futility"; a better translation would be "breath." For King Solomon, he realized that life was but a fleeting moment, and G-d was eternal. We can amass wealth and power, but there is an end for us. A definite, inevitable end. King Solomon realized this after all the wisdom and wealth he gained during his lifetime. It is my hope that we can not only realize the gift that life has to offer us and the important things in life, but to realize that the amount of time we have to enjoy and experience that life is like the length of a breath. People come, people go. The world in which we live is all too temporary. The sobering message that Ecclesiastes sends us is that we should enjoy and appreciate it while we still can. Having that level of radical acceptance to understand the ephemeral nature of life and how to fulfill your true calling within a small amount of time is the true joy of reading Ecclesiastes on Sukkot.

Thursday, October 1, 2015

Soaking the Rich With Higher Income Taxes Won't Help with Income Inequality

There are those in the United States who have so much wealth that they don't know what to do with it while there are others who have to work hard to earn an honest living or even survive from day-to-day. The sort of outlandishness that is exhibited by the exceptionally wealthy comes off as unfair to many. The latest Gallup poll on the subject shows that 52 percent support redistributing wealth by heavily taxing the rich. Bernie Sanders is making it one of the cornerstones of his presidential campaign. It is such a part of Sander's campaign that he stated that he would love to soak the rich with a marginal tax rate of 90 percent because honestly, how else do you expect him to pay for his costly, insolvent programs that would most probably do the exact opposite that he intends?

As proponents of this line of thought would like to think, "If we could simply tax the rich and spread some of that money around, we could make a huge difference in the lives of so many Americans." To quote Penn Jillette, "Voting for our government to use guns to give money to help poor and suffering people is immoral, self-righteous, bullying laziness." But let's set aside moral or philosophical qualms for now. Let's also set aside how this would increase revenue (see herehere, and here), how it would affect economic growth, decrease work incentives for the rich, create new reasons to evade taxes, or how the welfare system creates disincentives to work. I would like to answer the question of whether increasing income taxes on the wealthy would solve income inequality woes.

Taking from Peter to give to Paul seems intuitively sound at first glance. The government takes money from the rich to give to the poor. The poor take that money, purchase goods and services that they desperately need, and circulate that money into the economy. This would give the poor a great economic boost, and subsequently pull the poor out of poverty. As nice as that might sound, there has been some recently published research to counter that notion.

Earlier this week, the Brookings Institution released a paper entitled "Would a significant increase in the top income tax rate substantially alter income inequality?" Let's keep in mind that the Brookings Institution is not a conservative think-tank or a proponent of the free market system. The Brookings Institution tends to be more centrist (although sometimes more Left-of-center than it likes to admit), and comments often enough on the importance of dealing with income inequality. It came as a surprise to some, including one of the researchers of the paper, that soaking the rich with a higher marginal income tax rate would do so little to help with income inequality. How so?

[As a side note, it also came as a shock to these same researchers that increasing access to college education would also have minimal effects on income inequality.]

Currently, the top individual income tax rate is at 39.6 percent. The researchers at the Brookings Institution ran a microsimulation to see what would happen if that tax rate were raised to 50 percent. To find out how this would affect income inequality, they took a look at the effects it would have on the Gini coefficient. Essentially, the Gini coefficient is a 0 to 1 scale measuring the dispersion of income distribution in a given nation (further explanation is here). The main thing that surprised me was that the Brookings Institution had the pre-tax Gini coefficient at 0.61 because looking at data for the World Bank, the CIA, United Nations, and the OECD, it is considered lower than 0.61.

However, let's assume that the Gini coefficient is that high. Under the current law, government redistribution lowers that to 0.574. Assuming that the tax revenue would be an explicit redistribution of wealth to the lowest quintile, the difference between current law and raising the marginal income tax to 50 percent would change the Gini coefficient to 0.571 (Table 2). That is a measly 0.003 points on the Gini scale, which is only a 0.52 percent change!

Raising the marginal tax rate to soak the rich is yet another example of how misguided good intentions can be. Increasing the marginal income tax might help to increase government revenues (only to a certain point before the reality of the Laffer curve kicks in), but decreasing income inequality by an amount of any significance is certainly not a reason to do so. The poor are not poor because the rich are rich, and trying to redistribute wealth in a "soak the rich" fashion is not going to ameliorate that. It would be nice to have a discussion about how public policy should be more than feel-good activism, but I suspect with the 2016 election cycle in swing, I doubt the majority of American people can transcend the knee-jerk, populist sentiments of sticking it to the rich.