Govern Policy Decisions by Logic, Not Emotion

There are not enough adjectives to describe the massacre in Connecticut on Friday -- horrible, evil, or unthinkable don't do it justice.  The sadness of the day, especially for the families of those who died, demanded our respect in not rushing to turn our thoughts to political matters; I thought the White House's decision to defer discussions regarding the implications for gun policy to another day was very gracious and appropriate.  But it is a discussion that is going to be undertaken, and it is an important discussion.

Whenever tragedies like this happen, the most immediate reaction seems to be an (understandably) emotional response that "something needs to be done".  It is important, however, that we base our response not on emotion but on sound logic.  Responding to a tragedy out of emotion rather than with careful, measured consideration may make us feel better in the short run, but it leads to decisions that do not solve the problem at hand, and may actually create more problems. In this case, the (in my opinion) largely emotion-driven response from numerous sources is to demand stricter gun control, in some cases calling for a complete ban on guns.  

First, this does not solve the problem (or problems) at hand:  Even a complete ban on guns, even in the unlikely event that it were successful at actually removing all guns from society, may reduce the severity but would not eliminate terrible cruelty like what we saw on Friday.  A tragic case in point is the report from China on the same day that a man armed with a knife attacked over 20 school children.  Guns are not necessary for evil men to do evil things.  

This leads us to the second problem that stricter gun control doesn't solve, and this one is crucial: it in fact would not remove all guns from society; it would not even come close.  Criminals would only obtain guns on the black market if need be, and there will still be gun violence; as I pointed out in an earlier post, Great Britain has some of the strictest gun laws in the world, yet still has rampant gun violence.  Likewise Chicago and D.C. here in the U.S.  The option of tightening gun control laws does not solve either the problem of people doing bad things, neither does it disarm criminals.  

Secondly, while not solving the problems it is intended to address, it in fact would create more problems.  As just stated, stricter gun laws would not disarm criminals, but at the same time, it would disarm law-abiding citizens.  If gun ownership were made illegal, for example, most law-abiding citizens would not seek out black market gun dealers to arm themselves, and they probably would not carry a firearm illegally.  So the net effect is that, aside from making it somewhat more costly for criminals to obtain guns, stricter gun control would have little effect on criminals, but would primarily impact law-abiding citizens.  Criminals would by and large continue to be armed while citizens who chose to obey the law will be disarmed.  In other words, making it harder, or illegal, for law-abiding citizens to obtain guns would give a major advantage to criminals.

Take as an example a homeowner who is the victim of a home invasion.  It is beginning to become more common to hear of the would-be assailants becoming the ones running for their lives as armed homeowners fight back.  (In two of the stories linked in the previous sentence, the innocents whose lives were saved by having a gun were youths.  I recommend doing a Google search for "home invasion intruder shot" to see how many lives have been saved in this way.)  Now, picture such a situation where the criminal forces his way into the home to find himself facing a homeowner armed with a gun.  Now, imagine walking into that home and taking the gun from the homeowner's hand, but leaving the criminal with his gun (or knife for that matter), then leaving the homeowner and his family to the mercy of the intruder.  That is, in essence, what tightening gun control would do. 

Nonetheless, what is the policy that is pursued in our schools?  To disallow any kind of weapon on school grounds.  On the surface, this may sound sensible, but clearly the animal who murdered those children and teachers did not care in the least about breaking that rule!  In fact, because of that rule, he knew when he went into that school that he would be the only one there armed, and that he would therefore be able to carry out his sick plan unimpeded; he only stopped his attack when first responders arrived. 

I was shocked recently to find that teachers are not even allowed to carry so much as a can of mace on school grounds!  This means that teachers are not equipped to protect themselves (or their students) from an unarmed assailant, let alone one who is armed.  This is unconscionable.  Some people bristle at the thought of teachers being armed, but I'm not suggesting handing them out at the weekly staff meeting!  Teachers who possess a concealed carry permit, at least under South Carolina law, would have been required to undergo training in firearm safety and use.  I wouldn't be opposed to requiring additional training to be allowed to carry on school grounds.  But declaring schools a weapons-free zone is wishful thinking of the most dangerous kind.  It only guarantees that the deranged person who manages to bring a weapon (gun, knife, whatever) into the school will be the only one armed.  

According to reports, the school's principal died when she courageously lunged at the attacker in an attempt to stop him.  (This hits me close to home, because I have a very dear friend who is a principal whom I could imagine being so brave.)  What if she had been allowed to possess a concealed weapon?  Perhaps she would have been able to save those others who were killed, and maybe she would have even survived herself. 

Post Script:  Assistant Principal Joel Myrick at Pearl High School in Mississippi had access to a handgun when a gunman attacked his school in 1997.  Sadly, two students had already been killed, but Mr. Myrick was able to subdue the shooter without firing a shot. 

Michigan is a Right-to-Work State

Score one for jobs!  Michigan is now a Right-to-Work state!  Maybe this will be a turning point for Michigan in its economic comeback. 

Poor Judgment by Costas

During the Dallas-Philly game last night, NBC aired a halftime segment, regarding the murder-suicide of KC Chiefs player Jovan Belcher and his girlfriend Kasandra Perkins on Saturday.  This was a horrible tragedy, and it was touching to see the players comforting each other following their win against the Panthers yesterday.  I hope we will all remember both Belcher's and Perkins's families and teammates in our prayers, especially the young child that they had together. 

I was expecting Bob Costas's comments after the segment to follow in the pathos of the somber post-game statement by the Chief's coach (who witnessed Belcher's suicide) in the video and the inspirational image of KC and Carolina players kneeling together in prayer after the game.  Instead, Costas decided to use this tragedy to step onto his soapbox and bring a political slant to the moment.  Aside from the fallacious nature of his statements, his using the moment to make an appeal for stricter gun control was in incredibly poor taste.  Even in responding to Costas's comments, I want to be very respectful: two people are dead and a child is orphaned.  Nonetheless, I can't disregard his comments. 

Are we to believe that domestic violence would not occur if handguns did not exist?  Apparently, Costas does.  Would murders no longer occur if guns were illegal?  Some of the highest rates of gun violence in the U.S. are in Chicago and D.C., which have some of the strictest gun laws in the nation.  Even Great Britain, which has some of the strictest restrictions on gun ownership in the world, has rampant gun violence.  So apparently, more gun control is not going to stop murders from occurring.  I have often said (not that it is original to me) that making gun ownership illegal would just mean that only criminals would have guns: criminals, by definition, disobey the law, so they would have few qualms about possessing guns, while law-abiding citizens would be unarmed, hoping that, should they ever be the victim of a crime, a police officer would by chance be standing nearby to defend them.  

In truth, I haven't been a big Costas fan since the 2002 Salt Lake City Olympics when he talked over the entire ceremony raising a tattered U.S. flag recovered from the ruins of the World Trade Center; the entire crowd was silent in somber reverence while Costas chattered away.  Even so, I'll give him the benefit of the doubt - perhaps Costas just doesn't like guns.  Maybe he would just prefer that people chose not to own them rather than that they be outlawed.  I can respect that.  However, his final comment, "If Jovan Belcher didn't possess a gun, he and Kasandra Perkins would both be alive today," is dangerously naive.  Fatal domestic violence tragedies occur everyday, sadly; in many of them, guns are not even a factor.  Costas, or columnist Jason Whitlock, whom he was quoting, making such a statement minimizes this horrible tragedy.

Peering Over (the Fiscal Cliff)

Copied from a comment I made on a discussion in one of my LinkedIn groups:

The standard Keynesian approach to correcting underemployment is to increase aggregate demand (AD), but how do you do that?  You increase income. How do you increase income?  There’s the issue:  You can either do it (1) with monetary policy (primarily by loosening credit, which is already about as loose as it can get right now), or (2) with fiscal policy (cut personal income taxes, increase government spending on transfer payments, or increase government spending on _____ program in order to artificially create demand and thereby jobs to meet it), or (3) by facilitating private sector investment to create new jobs by personal & corporate tax cuts, investment and R&D tax credits, and deregulation.  Each has its own pros and cons; the first two tend to be more inflationary, while the last is distasteful to some because of the perception that its most direct impact is on the wealthy, and due to the fact that folks tend to prefer immediate gratification over long-term growth (as evidenced by the abysmal rate at which we put income into savings in this country). 

What we’re facing now is that large sums of government expenditures have gone into, mostly, #2, to little effect, with the result that expenditures are growing faster than revenue at a much faster rate than in the past.  I would argue in fact that this mounting debt is to some degree why we have seen so little effect from the past few rounds of stimulus.  

The issue is that government debt, which is financed through bonds, competes in the same market as corporate debt, which is what finances the kind of capital investment that contributes to future productivity.  This leads to varying degrees of “crowding out”, where investors opt for safer Treasury bonds over riskier corporate bonds, requiring corporations to pay higher yields to draw investors, which increases the cost of acquiring new capital, and ultimately retards future productivity.  So, I suspect one reason for the sluggish recovery is that we are seeing the impact of depressed capital investment over the past several years; therefore, there is less productive capacity and less job creation.  I haven’t done any modeling to support this, but based on the theory, it is what I predict to be true. 

So, the fiscal cliff comes about because, in a rare moment of clarity, lawmakers apparently realized that the continued expansion of government debt, which now exceeds our annual GDP, cannot continue indefinitely, and perhaps they even realized that the pool of potential creditors is shrinking, given the sums required to continue our fiscal expansion.  I do think that if we do “go over” the cliff the results won’t be cataclysmic.  I suspect we probably would go back into recession, mainly because households will see a noticeable impact on their after-tax income, which will be painful to a lot of folks.  But it won’t be a depression, and I suspect it won’t be as deep a recession as what we just came out of.  In the long-term, it might just focus enough attention on the fiscal situation to get some actual reforms in place.  (Focusing event... Kingdon... any of my policy people?)  Or the preference for immediate gratification might continue to prevail. 

Twinkie Twilight

I kind of got out of the habit of writing this blog and took a "brief" 3-year break.  The recent election, however, has jolted me back into a blogging mood.  As has the following item from the news:

The Twinkie is no more... along with Ding-Dongs, Ho-Ho's... and we have the Bakery, Confectionery, Tobacco Workers and Grain Millers Union to thank for it.  Hostess has apparently been struggling financially for several years, according to a story in the NY Times, but it was done in by a Union strike that crippled 2/3 of its factories.  The workers were presumably striking for better pay.  Now they, and the rest of Hostess's 18,500 employees have no pay.  Nice job.

This underscores why I believe Unions are a detriment, not only to employers, but to the workers whom they claim to represent.  Labor unions began in the late 1800's in order to protect workers from poor working conditions and to ensure that workers were paid a fair wage.  At this time, the nation had a very different economy from what we have now: the U.S. had just transitioned from an agrarian economy to an industrial one; family farms went the way of the dinosaur, for the most part, and, with many towns being one-mill towns, laborers only had one choice of where to work to put food on the table.  In this environment (the economic term is monopsony), the employer had no incentive to create a welcoming (or in many cases, safe) work environment, or to pay workers decent wages, because the workers had no other choice than to work at the mill or face destitution.  In other words, workers had no bargaining power; the employer offered the wage and terms of employment, and the worker took it.  In this environment, the organization of labor into unions made sense; it provided workers with the bargaining power that they did not have on their own, allowing them to demand higher wages and better conditions.  Unions were, at their inception, very much a functioning of the free market.  Government did have to intervene insofar as having to remove legal barriers to organization under antitrust laws, and to require employers to allow their workers the freedom to organize.  

More than a century later, we do not face anything closely resembling the monopsonistic work environment that our great-great grandparents faced.  Factories are cleaner and safer, wages are higher, and benefits are better.  A number of factors have contributed to this, including government safety regulations, but, particularly in the area of wages, the biggest driver has been competition between employers for workers.  No longer, except possibly in some isolated rural areas, do single mills command the entire workforce.  Modern transportation allows workers to commute to other towns for work, and multiple employers are in any given town, giving the workers expanded choices about where to work.  While it is not perfect -- unskilled workers working for large employers do sometimes face unfair treatment -- it is far better than the newly-industrialized world of the 1890's.  

In this world, unions become anachronistic.  Union leadership garnishes workers' wages to pay their own salaries and to support politicians who protect their power.  They force wage rates above the market rate, which creates higher unemployment (supply and demand in the labor market works the same as in the market for bread and milk: if the price of bread goes up, you buy less bread; if the price of labor (wages) goes up, companies hire less workers).  Rigid work rules that were once designed to prevent exploitation of workers now only serve to reduce efficiency, resulting in higher production costs and therefore higher prices for consumers, and, in the case of public-sector unions, tax rates.  Multi-year labor contracts restrict the ability of employers to react to changes in economic conditions, increasing the probability of bankruptcy.  And strikes, as in the case of Hostess, sometimes only succeed in forcing the employer out of business, leaving the workers that the union claimed to be protecting unemployed, not to even mention the ripple effects that plant closures have on regional economies.  And, of course, all of the cupcakes that people won't get to enjoy...

So (unless another company buys up Hostess's production line), the next time you start craving a Twinkie only to realize that they don't exist anymore, thank a labor union.