Friday, September 30, 2016

A Rosh Hashanah Lesson in Seeing What Is Right In Front of You

Have you had that moment where you are looking for your keys and they are in your pocket, or that moment where you can't find your glasses because you're wearing them? It's amazing how something can be right there, and yet we don't even notice it. This occurrence goes beyond the literal, and we see this in Torah portions for Rosh Hashanah.

In the Torah portion for the first day (Genesis 21), Abraham banishes Hagar and Ishmael to the desert. After all the water was consumed, it was uncertain as to whether Hagar and Ishmael would survive. Hagar lifted her voice, and afterwards, G-d opened Hagar's eyes, and she saw a well of water (Genesis 21:19). According to Midrash Rabbah, G-d didn't have a well miraculously appear. G-d metaphorically gave Hagar the ability to see that which was already in front of her.

We see a similar incident in the second day Rosh Hashanah Torah portion (Genesis 22) with the iconic passage about Abraham sacrificing Isaac. As Abraham was about ready to slay his son, an angel came down to stop Abraham (22:12). A verse later, Abraham saw a ram and replaced the ram with his son (22:13). According to Radak, Abraham saw the ram after it had become enmeshed in the thicket. Even if Abraham noticed the ram immediately after it was enmeshed, there was still some time between the ram arriving at the top of the mountain and Abraham noticing the ram. In either case, there a period of time where Abraham did not notice the ram, presumably because he was so entrenched in the moment.

What can we learn from this? In the Tanach, the verb "to see" (לראות) is mentioned over 400 times, whether it is conjugated or in the infinitive. Sometimes our eyes deceive us, but our eyes are also important in being able to navigate life. Even in a metaphorical sense, we are blinded by all sorts of distractions and cognitive biases: negativity bias, bandwagon effect, confirmation bias. There are so many things to distract us from seeing clearly. Perhaps it is why we Jews have a morning prayer for restoring the eyes of the blind (פוקח עברים).

With the month of Elul leading up to the High Holy Days, we are meant to partake in a high level of introspection. We are to reflect on the previous year and take an honest look at how we can improve upon ourselves, and to do so without blind spots. Without distractions or cognitive biases. If Hagar and Abraham teach us anything here, it is that what we see and focus on becomes our reality. Rosh Hashanah presents us with a choice: do we choose to continue seeing things the way we do, thereby perpetuating our status quo? Or do we take a harder, more honest and more introspective look a we approach the High Holy Days? In order to start with a New Year, we need to look at ourselves more holistically, more honestly. We need to get the distractions out of the way and view ourselves in a more sobering light. Once when we know ourselves in all honesty, both the good and bad aspects, can we begin anew.

Monday, September 26, 2016

Is "Black-on-Black Crime" a Red Herring When Discussing Black Lives Matter?

Black Lives Matter (BLM) has gained quite the traction in terms of gaining media coverage. It gained some particularly negative coverage when an umbrella organization, representing about 50 activist organizations, released its platform of demands back in August. Initially, it was a long list of far-Left projects, that ranged from Glass-Steagal to boycotting Israel and falsely calling Israel an "apartheid state." Appealing to the radical Left has not been the only criticism that BLM has received since it has tried to figure out what exactly it wants. One of the other major criticisms of BLM, particularly coming from the Right, is that of BLM not caring about black-on-black crime. The BLM movement responds to that claim by saying that mentioning black-on-black crime is a diversionary tactic, and that:

"The Black Lives Matter movement acknowledges the crime problem, but it refuses to locate that crime problem as a problem of black pathology. Black people are not inherently more violent or more prone to crime than other groups. But black people are disproportionately poorer, more likely to be targeted by police and arrested, and more likely to attend poor or failing schools....To reduce violent crime, we must fight to change systems, rather than demonizing people."

So the question of the day is whether mentioning black-on-black crime is indeed a diversionary tactic. Before continuing, I do have to say for the record, when I wrote about the relationship between African-Americans and police officers back in July, I did state that black people are more likely to be killed by police officers, that bringing up police misconduct is a symptom of racial disparity within the system, that police officers should be held to a higher standard, and I even outlined some policy reforms to help improve relationships between police officers and African-Americans.

Going back to the BLM platform released in August, the section of "End the War on Black People" demands "an end to the criminalization, incarceration, and killing of our people." I read through this platform, and I didn't find anything about addressing the crime problem in the black community. Granted, I understand that this particularly platform is less likely to represent the African-American community as a whole, and most probably represents the interest of those on the Far Left, especially when you read the anti-capitalist, pro-government language that is common on the Far Left.

Nevertheless, if we are to talk about black lives mattering, it would make sense to talk about leading causes of death in the black community since part of black lives mattering is making sure as few black lives are prematurely taken from this world.

If we look at the leading causes of black people from historical data from the Centers for Disease Control and Prevention, we see that homicide is one of the leading causes of death in the black community. In 2014, homicide was the fifth leading cause for black males, and the fifteenth leading cause of death for black females. Assuming that the number of black people shot by police in 2014 is the same as it was in 2015 (i.e., 258 people), that would mean that police shootings accounted for 3.28 percent of the 7,876 homicides in 2014, which means that "killer cops" are not what is killing so many African-Americans. The outrage is comparable to those who disproportionately get heated over mass shootings, even though mass shootings only account for about 1.5 percent of gun homicides and 0.5 percent of overall gun deaths. This is compounded by the fact that when you look at homicide rates in the United States, as well as other crimes (see FBI statistics), the crimes are intraracial, which is to say that most crime is either "black-on-black" or "white-on-white."

It is as politically incorrect as it is sad to say that "black-on-black" homicide is one of the leading causes of death in the African-American community. One of the problems is with BLM is that they are focused on a small segmentation of homicides affecting the African-American community while neglecting to fully address the rest. If the goal is for African-Americans to live long, productive lives, and if the goal is for African-Americans to have the same opportunity for life, liberty, and the pursuit of happiness, then we have to discuss black-on-black crime since it ends the lives of so many black people.

As an article from the Washington Post brings up last year, focusing on police misconduct and crime in the black community are not mutually exclusive ideas. Much like has been done for decades, there should be civil rights protesting on these issues. However, if we are to say that blacks live matter, it shouldn't matter who takes them. As already mentioned, we do hold police officers to a higher standard, and it is more dismaying when a police officer takes another life. However, given the significantly higher number of black lives taken through non-police homicides, it should be cause for concern for anyone concerned with black lives. I think it is an error for those involved in BLM downplaying the fact that homicide and other crimes disproportionately affect the black community. It implies that the only black lives that matter are those who are taken by police officers. As this article from The Hill argues, ignoring these crime rates is something that BLM cannot afford to do.

Additionally, higher crime rates exacerbate some of the issues that BLM would like to solve, such as higher quality of education or ability to secure one's economic future. I'm not saying that police reform should be ignored or that certain disparities in policing should be neglected. What I am saying is that without talking about how crime negatively impacts African-American communities, the conversation is incomplete, especially given how intertwined the issues are to solve given disparities. Given that most crime is intraracial in nature, we can stop referring to it as "black-on-black crime." However, looking at only a few trees when you have to contend with the entire forest is shortsighted.

Wednesday, September 14, 2016

Trans-Pacific Partnership: To Ratify or Not Ratify, That Is The Question

Remember all the hoopla surrounding the North American Free Trade Agreement (NAFTA) during the 1992 presidential election? Former presidential candidate Ross Perot famously said that the "giant sucking sound" would symbolize the negative effects of NAFTA if passed. Over 20 years later, and NAFTA has had a net positive effect on the United States economy, as well as for the Canadian and Mexican economies. 24 years later, we are seeing the populist anti-trade sentiment kick in this presidential election with the Trans-Pacific Partnership (TPP) [see searchable version here]. Donald Trump and Bernie Sanders have gone on an anti-trade, protectionist tirade. Hillary Clinton has distanced herself and even flip-flopped on the issue. What about the TPP is so controversial?

The TPP is a trade agreement among 12 Pacific Rim countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. In 2014, the TPP member countries accounted for about 40 percent of the world's GDP and 25 percent of global exports. The purpose of the TPP is to promote "economic growth; support the creation and retention of jobs; enhance innovation, productivity, and competitiveness; raise living standards; reduce poverty; promote transparency, good governance, and enhanced labor and environmental protections." 

With over 5,000 pages and 30 chapters, the TPP is the largest trade agreement in United States history. Given the length of the trade agreement, there is bound to be at least one provision in the TPP that annoys all sides of the political aisle. With over 5,000 pages, the TPP would not pass a free trade litmus test. There are going to be certain provisions that liberalize trade, and others that restrict trade. The TPP is not so much a free trade agreement as it is a preferential trade agreement. Nevertheless, the question we shouldn't ask ourselves "Is there something bad in the TPP," but rather ask "Is the TPP an overall force of economic progress?" Let's take a look to see what preliminary research has to say.

Perceived Benefits
  • Peterson Institute: According to the Peterson Institute (Petri and Plummer, 2016), annual income gains by 2030 are expected to be $492 billion, $131 billion of which is for the United States alone. The TPP is also expected to increase US exports by $357 billion (by 9 percent) in 2030.
  • Net Economic Liberalization: The Cato Institute released a chapter-by-chapter analysis of the TPP earlier this week, and was done so from a pro-free trade/libertarian standpoint. Yes, the Cato Institute did find that five chapters in the TPP that Cato Institute considers protectionist: Textiles, Trade Remedies, Intellectual Property, Labor, and Environment. Overall, Cato Institute did find that the TPP is net liberalizing and will expand economic freedoms. 
  • Tariff Rates: Since the U.S. already has small tariff rates, the impact of the TPP on imports will be relatively small. However, the other countries have some high tariff rates. Tariff reductions will represent 10 percent of the gains mentioned in the Peterson Institute study. Many tariffs among these countries will either be greatly reduced or eliminated, which will provide member countries greater access to other member countries' goods, thereby increasing trade flows. TPP is expected to remove 18,000 tariffs on American goods. Seven out of twelve countries will eventually eliminate tariffs, whereas all twelve countries will eliminate export subsidies. 
  • USITC: The U.S. International Trade Commission (USITC) found that by 2032, TPP will add real annual income of $57.3 billion (0.23 percent higher), add $42.7 billion to the real GDP (0.15 percent), and employment would be 0.07 percent higher (128,000 FTE). On the whole, these gains are relatively modest for the United States. 
  • World Bank Study: The World Bank finds that the TPP has the potential to lift the GDP by 1.1 percent by 2030 (10% in Vietnam, 8% in Malaysia). Aggregate GDP losses for non-members is at an average estimate 0.1 percent loss. 
  • International Monetary Fund: The IMF recently published a paper primarily focusing on the effects of Latin American countries. The IMF concluded that the Asian TPP members countries benefit the most, while the benefits for Latin American member countries are much more modest.
  • Canada: The Office of the Chief Economist in Canada found that signing the TPP would generate GDP gains of $4 billion by 2040, whereas not signing the TPP would create GDP losses of $5.4 billion by 2040.
  • Fair Use Provision for Intellectual Rights: Although intellectual rights provisions are sub-par (see below), there is at least a fair use provision (TPP, Article 18.66) to temper it a bit. 
  • Rules of Origin (ROO): These are rules for customs authorities to determine whether a given imported good originates from a TPP country or not. On the one hand, these laws are more liberalizing than they have been in past trade agreements. On the other hand, these rules limit free trade, particularly in the auto and textiles industries. 
Perceived Costs
  • Two economists from Tufts University (Capaldo and Izurieta, 2016) found that the TPP would actually reduce the United States GDP by 0.5 percent over the next decade, as well as create net job loss of 448,000 jobs. 
  • Intellectual Property and Digital Rights: The intellectual property laws will force customers to pay more for movies, medicine, and other goods under the IP provisions. With regards to copyright laws, it does not impose additional copyright laws not the United States since the United States already has laws extending to the author's life plus another 70 years. However, it will impose additional strictures on other countries. The silver lining for the United States is that patent laws really will not change all that much because the TPP is not more stringent than current United States law. 
  • Investor-State Dispute Settlement (ISDS): An ISDS essentially is an alternative judicial system for multinational corporations who think they are being treated unfairly by more local governments. ISDS provisions are not particularly controversial since they are standard in trade agreements. As a working paper from the Center for Strategic and International Studies (CSIS) points out, about 90 percent of trade agreements do not even invoke ISDS provisions. Most of the time, ISDS claims take place in countries with weaker legal institutions. States are twice as likely to win, and even when corporations win, they tend to get less than 10 cents to the dollar on their initial claim. In short, ISDS provisions play a minimal role in TPP considerations.
  • Textiles Industry: The fact that there is a separate chapter for the Textiles and Apparel industry is an affront to the idea of free trade. While the idea is to eliminate trade barriers in the textiles market, the entire chapter mitigates the effects that free trade in the textiles market that would have existed otherwise. Given that Vietnam is the second-largest exporter of apparel to the United States, the added access that removing tariffs will have is expected to boost the Vietnamese economy, which would explain why the World Bank (see above) found that Vietnam is one of the larger beneficiaries of the TPP in terms of GDP growth. 
  • American Enterprise Institute (AEI): AEI released a paper on the TPP late last year grading and evaluating major provisions within the TPP. While it does note some positive aspects, AEI has more reservations than even the Cato Institute. AEI is not only worried that the provisions around agriculture have no bite, but also that the rules of origin (ROO), nonconforming measures, and provisions on state-owned enterprises (SOEs) will distort trade. 

In its analysis of economic reports measuring economic benefits and costs of TPP, the Congressional Research Service asks for better data and understanding of supply chains to support Congress' decision (p. 31). In a similar vein, I do want to iterate that the results of these studies are preliminary and ex-ante. There is also need to reiterate that because of all the provisions, this is not a free trade agreement. This is a question of whether the costs of protectionist provisions are outweighed by the more liberalizing aspects of the TPP. Based on preliminary research, the answer is that the TPP does more good than harm. There are certainly portions of the TPP which are decidedly unsatisfactory, but we don't want to be in a situation where we can't see the forest from the trees. As much as I would love to see a TPP with unfettered free trade, the truth is that we don't live in that world. We live in a world in which compromises are made, and certain aspects of the agreement are unsavory. Nevertheless, I have to say that having the member countries ratify the TPP is better than maintaining the status quo.

Monday, September 12, 2016

Looming Tension Over the South China Sea

It's amazing how China is caught up in a number of territorial disputes with its neighbors, but none might be more important than the South China Sea (南海). Sure, it hasn't gotten as much coverage as Taiwan, but it's arguably more important than Taiwan. For one, the Philippines, Taiwan, Malaysia, and Brunei all have multiple, competing claims. It is not only a matter of geopolitical strategy that other countries fight over it, although it would explain why the two sides accuse the other of overt militarization in the South China Sea. It's not the central location or that about $5.3 trillion worth of trade passes through the South China Sea annually. Although largely uninhabited, the South China Sea is important because of the natural resources. The Chinese government estimated last year that there was 900 trillion cubic feet of natural gas and 130 billion gallons of oil in the South China Sea.

This Sea has been in dispute  for a number of years (read Council on Foreign Affairs research here), but the most recent disputation was when the Hague ruled that under the United Nations Convention on the Law and the Sea (UNCLOS), China's nine-doted line claim [to have sovereignty over a disproportionate amount of the South China Sea] is invalid. While the Hague's ruling is not enforceable, it does stand as a litmus test of how international organizations and international law play a role in the global order. If last week's ASEAN conference reminded us of anything, it is that this dispute is far from over. If anything, the South China Sea dispute is only going to create a greater diplomatic impasse in the foreseeable future.

There are a few scenarios in which this could play out in a more escalated fashion. One such example has to do with the Philippines. Philippines need for this claim to go through since the natural gas from the Reed Bank will greatly help their fast-growing economy. If China continues to exert enough pressure where the Philippines cannot procure the natural gas, it could very well draw a red line for the Philippines. Given the 1951 Mutual Defense Treaty that the United States signed with the Philippines, the United States military might be dragged into the Sino-Philippine dispute.  Hopefully, the Philippines won't provoke China to that level, but the Hague ruling might have overly emboldened the Philippine government. We also have to keep in mind Taiwan's reaction, since the Hague did not rule favorably for Taiwan, either. This has the potential to subtly undermine the Hague's ruling, as well.

The outcome will largely depend on how China reacts or how much China will use the South China Sea dispute as leverage in future diplomatic, economic, or military negotiations. The Chinese government could deny United States ships entry into China's 200-mile exclusive economic zone (EEZ), which could somewhat damper American economic growth. China also can reward countries who side with China by encouraging investment and tourism in the allied countries. But this is a matter of how China fits into the greater world order. To what extent will China cooperate and play ball? To what extent will it completely ignore international law?

Historically, China has preferred to remain a regional hegemon, as opposed to a more global one. While the past can have predictive power of what the future holds, it hardly guarantees that China's aspirations remain the same. Even with a growing economy and military, China still has to watch its step as it figures out how to handle its territorial claims over the South China Sea. After all, the Chinese government's official position is still to solve the dispute amicably and diplomatically. While the direction seems to be diplomatic, we cannot rule out a militaristic approach in the near future, either from China or the United States. I would hope that with its "One Belt, One Road" initiative, that it will lean towards trade and diplomacy over military escalation, especially given that threatening trade flows anywhere would be folly akin to shooting oneself in the foot. However, given that China has historically been difficult to predict, only time will tell.

Monday, September 5, 2016

John Oliver's Partially-Researched, Inaccurate Take on Charter Schools

Normally, I enjoy John Oliver and his witty take on political issues. However, the episode he did on charter schools a couple of weeks ago that (see below) was sub-par, to say the least. He criticizes charter schools by saying that proponents overstate their success, the schools siphon talented students [from public schools], and use precious resources. To his credit, he does point out some egregious cases out there, and we charter schools incompetent of managing its operations should be shut down. However, Oliver's piece was nothing short of selection bias.

He essentially cherry-picked the worst examples out there to make his case. Why don't we take a look at some major public school systems to see how they perform? Earlier this year, 12 Detroit principals were accused of taking kickbacks on supplies that were never delivered. If you want to know how bad corruption is in Chicago, read the Inspector General's report outlining Chicago Public School system corruption in 2015. To name some other major public school systems with major levels of corruption: San Francisco, Wake County in North Carolina, New Orleans, Atlanta, Houston, New York City, Los Angeles, Las Vegas. I could keep going, but you get the point. These are examples of how financial mismanagement and bribery are rampant in large public school systems, but I very much doubt that Oliver would ever run a piece like that because I would wager to guess that his liberal friends and allies would not take too kindly if he attacked public schooling the way he attacked charter schools.

Whether intentional or not, Oliver overlooked some points. He forgot to mention that charter schools have to voluntarily attract and recruit students, as opposed to perpetually funding the number of public school boondoggles with taxpayer dollars. At least with charter schools, if they fail, they're held accountable for their results. Public schools that under-perform most probably stay open for years, if not decades. Good luck getting that level of accountability with the public school system! Also, charter schools are more likely to enroll disadvantaged students, which creates a bigger uphill battle for charter schools. As illustrated below, this makes the performance of charter schools all the more impressive. Finally, although Oliver pointed out that charter schools are paid on a per-student basis, charter schools still receives about $3,059 less per student, which means that if charter schools perform at the same level or even outperform public schools, it's all the more impressive because it's more cost-effective on a per-student basis.

If Oliver wanted to take a significantly more objective approach on the matter, he would have compared charter schools to its alternatives, most notably to public school, in as apples-to-apples of a fashion as possible. That was the approach I took when I wrote on the topic of charter schools back in 2014, during which I concluded that in spite of receiving less funding and taking a higher proportion of disadvantaged students, charter schools on average outperformed traditional public schools. Here is some noteworthy research that I have found in addition to what I found when I wrote my 2014 blog entry:
  • A study from the National Bureau of Economic Research: Back in the early 2000s, charter schools were initially less successful than traditional public schools. However, exits [of poor-quality charter schools] from the sector, improvement of existing charter schools, and positive selection of charter management organizations that open additional schools raised average charter school effectiveness over time relative to traditional public schools." (Baude et al., 2014).
  • John Oliver cited a 2013 Stanford University's Center for Research on Education Outcomes (CREDO) as the basis of his criticism. I'll forget that the 2013 study showed (p. 83) that the closures of low-performing charter schools helped increase overall performance. Let's look at a 2015 study from the same Center that shows that urban charter schools outperform their traditional public school peers.
  • A 2015 study from Mathematica used a randomized control trial to find that while charter schools had a negative, but statistically insignificant effect on advantaged students, there was a positive gain for disadvantaged students.
  • There is also a 2014 Mathematica study showing that those in charter schools have a higher graduation rate and greater lifetime earnings. 

Am I here to say that the worst charter school outperforms the best public school? No. I'm sure there are some wonderful public schools out there. Does this mean that charter schools are immune from criticism? No. We should criticize when there are under-performing schools, but we should also show the same level of scrutiny for public schools. We could look through more studies, but when it comes down to it, we should be asking ourselves if it is better on the whole for schools that receive taxpayer dollars to be operated by the public sector (i.e., traditional public school system) or if schools should be able receive taxpayer dollars while being able to operate with a fair amount of autonomy (i.e., charter schools). Especially for disadvantaged students who could use an alternative from their failing public school, this is a major question for those who want to acquire a higher-quality secondary education. It might not be as glib or whimsical as John Oliver, but on the whole, charter schools provide greater advantage than the traditional public school system. I hope that in future episodes, John Oliver exercises better journalistic responsibility and brings both humor and a well-researched viewpoint to his shows.