June 2012 – Windy Recycling Day

Explosion of inequality? Depends on how you look at it.
Fantastic new study from the AEI looks at consumption.. you know, the stuff we buy and use every day, and finds things haven’t changed much in the last 20 years, and in fact, we’re all richer.

First, instead of looking at income inequality, Hassett and Mathur look at consumption inequality, which represents a broader look at the economic resources a person can summon. Looking just at income ignores how individuals are generally able to smooth consumption by borrowing in the low-income years — such as during retirement or when they are just entering the workforce — and saving in the high-income years. Studies of income alone often exclude things like Social Security, Medicare, and food stamps.

Additionally, tax return data of the sort Piketty and Saez discuss can be influenced by changes in tax rates, giving a highly distorted picture of income inequality. For example, the personal tax rate reductions of the 1980s and the early 2000s caused businesses to shift income out of the corporate form and into the personal tax, thus raising reported incomes at the top.

So what does the consumption data tell us?

In 1984, households in the top income quintile, or top 20%, accounted for 37% of total consumption spending. Households in the bottom quintile accounted for only 10 percent of total spending. So the ratio of top-to-bottom consumption was approximately 3.8.

By 2010, that ratio had increased to just 4.4. This hardly represents an explosion in inequality. As measured by this ratio, consumption inequality has increased marginally over time, averaging 4.21 between 1984 and 1990, 4.29 between 1991 and 2000, and 4.46 between 2000 and 2010.

The graphs and charts tell quite a story, but not the narrative politicians want you to hear (click to enlarge):

I often mention seeing folks paying for food with “Independence” cards at the local grocery store while talking on an iPhone. Those people are far richer than the poor of 20+ years ago. Maybe we need to look at why they are richer now, instead of using force to take my stuff.

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Odd way to protect the public
So, the ATF today engaged in a gun battle with people who were planning to break in to a non-existent house owned by a non-existent drug dealer to steal non-existent drugs.

The suspects had gathered under the Jones Falls Expressway in Hampden around lunchtime with the intention of committing a robbery, authorities said. But as federal agents closed in, one suspect attempted to run down an officer and was shot as a quick-response team threw stun grenades to disorient the others.

The sting Thursday that led to six arrests was one in a series of area operations by the Bureau of Alcohol, Tobacco, Firearms and Explosives that have used robbery ruses to take suspects into custody just moments before they allegedly planned to strike. Two of the three recent incidents have erupted in gunfire.

In similar cases, suspects have met federal informants at Penn Station and a Baltimore YMCA to discuss home invasion holdups, according to court records. The supposed targets were Latin American drug cartels. The take was to be kilogram quantities of cocaine.

The ATF won’t discuss such cases in detail because of their sensitive nature. The tactics echo those used by federal agencies to catch would-be terrorists, including a Woodlawn man who met with undercover FBI agents and took what he thought was a bomb to an Army recruiting center.

One defense attorney says they “smack of entrapment.”

“Case law really favors the government,” said Gerald C. Ruter, a defense attorney and former prosecutor representing a man charged in one of the recent ATF stings. “What you find is the government concocting a drug dealer who doesn’t exist, who possess cocaine that doesn’t exist, and recruit people for a robbery, which isn’t going to happen. All they want is the participants to say is, ‘Oh yeah, we’ll do that.’”

ATF officials said those charged have demonstrated the willingness and the means to commit violent crimes, and said the agency takes steps to protect the public from harm.

Protecting the public from harm with gun battles to stop people from robbing pretend houses. Thank goodness. If the ATF has run out of legitimate things to do, Congress should defund the agency.
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On Politics and Inequality
What a fantastic little piece from The League of Ordinary Gentlemen.

As long as he was just a billionaire, Michael Bloomberg couldn’t stop synagogues from delivering bagels to homeless shelters. As mayor, he can. A billionaire can urge you to quit smoking, but a politician can ban it. And a billionaire can buy goods in the market, but a politician can confiscate them in broad daylight, with the full blessing of the law.

Politicians who complain about economic inequality tend to achieve two things: First, they extend political inequality. And second, they make it harder for market forces to raise the living standards of the least well-off. (Why is eflornithine expensive? It might be a difficult chemical synthesis, but it’s probably patent law or regulatory compliance. If so, then the government is a real-world Dives, and it deserves a lot more odium than the fictional one.)

Politicians do these things not because good remedies don’t exist, but because politicians don’t like good remedies. The political elite isn’t stupid. They want what everyone else wants — power. Unlike most of us, they already have a power base to build on. That’s also why they need to be stopped. Concentrations of power are dangerous, particularly when they can’t be punished by customers walking away.

When asked how much the rich should pay in taxes, we are primed to think of figures like Dives, and the answer is always more. Why? Because Dives is an asshole. Really. Our answer — “more” — arrives no matter how much the rich already pay, and whether or not they actually are assholes. I’m fairly sure that the answer will always be more; this alone should raise suspicion.

This very nicely points out fundamental flaws in Leftist/Collectivist thinking, as well as highlights the commonly polled response “higher taxes are great, as long as they are only higher for people richer than me”.*

I would suggest the reason eflornithine has a high price is supply and demand, not the cost of regulation. The cost of regulation affects supply – if the cost is higher than the expected price, the drug is not produced, or it is only produced in quantities where a very high price offsets the costs; thus is only one part of the price equation. It’s semantics and nitpicky, but I can get that way.

(Via @radleybalko on Twitter)

* “A CBS News/New York Times Poll conducted in 1985 found 69 percent felt that “people who have more money than you” were paying too little in taxes – while they themselves were paying their fair share (51 percent) or even too much (45 percent).”
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One Simple Question
Well, OK, it’s a fourteen part question, but a great one, at that.

If a Republican in 2008 had run promising to do the following things:

(1) Codify indefinite detention into law;

(2) draw up a secret kill list of people, including American citizens, to assassinate without due process;

(3) proceed with warrantless spying on American citizens;

(4) prosecute Bush-era whistleblowers for violating state secrets;

(5) reinterpret the War Powers Resolution such that entering a war of choice without a Congressional declaration is permissible;

(6) enter and prosecute such a war;

(7) institutionalize naked scanners and intrusive full body pat-downs in major American airports;

(8) oversee a planned expansion of TSA so that its agents are already beginning to patrol American highways, train stations, and bus depots;

(9) wage an undeclared drone war on numerous Muslim countries that delegates to the CIA the final call about some strikes that put civilians in jeopardy;

(10) invoke the state-secrets privilege to dismiss lawsuits brought by civil-liberties organizations on dubious technicalities rather than litigating them on the merits;

(11) preside over federal raids on medical marijuana dispensaries;

(12) attempt to negotiate an extension of American troops in Iraq beyond 2011 (an effort that thankfully failed);

(13) reauthorize the Patriot Act

(14) and select an economic team mostly made up of former and future financial executives from Wall Street firms that played major roles in the financial crisis

would you have considered voting for him/her? If not, how do you justify your continued support for President Obama, given He has done all of the above?

That’s why He won’t run on his record, but then, if you’re still going to vote for Him, He certainly doesn’t have to run on much of anything, does He?
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Idiots in the media
Something is seriously wrong with the information in this article:

More female teens than males have attempted or considered suicide, the survey found. The rate was highest among Hispanic females, at 13.5%, and lowest among white males, at 4.6%. Students struggled with suicide more during the first two years of high school – roughly ages 14 to 16. Rates dropped off slightly when students reached junior and senior year.

Overall, the suicide rate among teens has climbed in the past few years, from 6.3% in 2009 to 7.8% in 2011, numbers which reflect the trend gaining national attention as more teen suicides are reported as a result of bullying.

So, 6 out of 100 teenagers commits suicide? Really? That can’t be correct, can it? 30 seconds on Google gets us the answer.
In 2007, suicide was the third leading cause of death for young people ages 15 to 24.¹ Of every 100,000 young people in each age group, the following number died by suicide:¹
- Children ages 10 to 14 — 0.9 per 100,000
- Adolescents ages 15 to 19 — 6.9 per 100,000
- Young adults ages 20 to 24 — 12.7 per 100,000
Um, that’s not 6.9%. That’s .0069% in 2007. Math is the hards.

One more reason to ignore scientific reporting in the mainstream media.
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Straw Woman
Thomas Sowell nicely summarizes the truth about the fabricated ‘war on women’.

Not content with dividing classes and races, the Obama campaign is now seeking to divide the sexes by declaring that women are being paid less than men, as part of a “war on women” conducted by villains, from whom Obama and company will protect the women — and, not incidentally, expect to receive their votes this November.

The old — and repeatedly discredited — game of citing women’s incomes as some percentage of men’s incomes is being played once again, as part of the “war on women” theme.

Since women average fewer hours of work per year, and fewer years of consecutive full-time employment than men, among other differences, comparisons of male and female annual earnings are comparisons of apples and oranges, as various female economists have pointed out. Read Diana Furchtgott-Roth of the Hudson Institute or Professor Claudia Goldin of Harvard, for example.

When you compare women and men in the same occupations with the same skills, education, hours of work, and many other factors that go into determining pay, the differences in incomes shrink to the vanishing point — and, in some cases, the women earn more than comparable men.

But why let mere facts spoil the emotional rhetoric or the political ploys to drum up hysteria and collect votes?

Facts are not important. Putting people in easily identifiable little groups to be pandered to is important, especially when your single most impressive skill is being a politician.
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I can’t believe it’s been this long
Just been so busy.

We did spend the last two weeks in Japan, which was awesome.

Blogging and training shall resume in earnest in the next few days.
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