17 February 2017

R-Line To Open In One Week

The last major addition to Denver's RTD's light rail (as opposed to commuter rail) system, the R-line from the 9 mile station to I-70 along I-225 will open a week from today.

Quote of the Day

Cultural zeitgeist seem to exhibit nonlinear patterns of change. e.g., 1969 closer to 1979 than 1964.
- Razib Khan.

Very true.

SCOTUS Appointments Bring More Than Their Own Vote, They Have Peer Effects

As a new appointment to the U.S. Supreme Court looms, it is worth noting that there is well documented evidence that the way judges who sit in multiple judge panels vote in cases is influenced by who else is on the panel of judges deciding the case (continuing the theme that judges are people too).
Using data on essentially every US Supreme Court decision since 1946, we estimate a model of peer effects on the Court. We consider both the impact of justice ideology and justice votes on the votes of their peers. 
To identify these peer effects we use two instruments. The first is based on the composition of the Court, determined by which justices sit on which cases due to recusals or health reasons for not sitting. The second utilizes the fact that many justices previously sat on Federal Circuit Courts and are empirically much more likely to affirm decisions from their “home” court. 
We find large peer effects. Replacing a single justice with one who votes in a conservative direction 10 percentage points more frequently increases the probability that each other justice votes conservative by 1.63 percentage points. In terms of votes, a 10 percentage point increase in the probability that a single justice votes conservative leads to a 1.1 percentage increase in the probability that each other justice votes conservative. Finally, a single justice becoming 10% more likely to vote conservative increases the share of cases with a conservative outcome by 3.6 percentage points – excluding the direct effect of that justice – and reduces the share with a liberal outcome by 3.2 percentage points. In general, the indirect effect of a justice’s vote on the outcome through the votes of their peers is typically several times larger than the direct mechanical effect of the justice’s own vote.
Richard Holden, Michael Keane, & Matthew Lilley, Peer Effects on the United States Supreme Court (February 14, 2017).

President Trump's current nominee for the U.S. Supreme Court is roughly in the same point in the ideological spectrum as Justice Scalia whose death created the vacancy, so the pre-vacancy and post-appointment court can be expected to be pretty similar ideologically.

But, if the new appointee is more of a "team player" than Scalia was, the peer effects might be greater. And, this also suggests that the current eight member U.S. Supreme Court is more liberal than one might naively assume simply from the loss of Scalia's vote, because Scalia's peer influences on the other eight justices are also now absent.

Immigration Lowers Crime Rates

Contrary to popular belief, immigration reduces crime, it doesn't increase it.
Research has shown little support for the enduring proposition that increases in immigration are associated with increases in crime. Although classical criminological and neoclassical economic theories would predict immigration to increase crime, most empirical research shows quite the opposite. We investigate the immigration-crime relationship among metropolitan areas over a 40 year period from 1970 to 2010. Our goal is to describe the ongoing and changing association between immigration and a broad range of violent and property crimes. Our results indicate that immigration is consistently linked to decreases in violent (e.g., murder) and property (e.g., burglary) crime throughout the time period.
Robert Adelman, et al.,  "Urban crime rates and the changing face of immigration: Evidence across four decades" 15(1) Journal of Ethnicity in Criminal Justice (November 21, 2016).

16 February 2017

College Football Results Influence Juvenile Sentence Lengths

Judges are human and their discretionary decisions, like sentence lengths, are influenced by their moods. This is an important counterpart to the reasons in favor of giving judges wide discretion.
Employing the universe of juvenile court decisions in a U.S. state between 1996 and 2012, we analyze the effects of emotional shocks associated with unexpected outcomes of football games played by a prominent college team in the state. We investigate the behavior of judges, the conduct of whom should, by law, be free of personal biases and emotions. We find that unexpected losses increase disposition (sentence) lengths assigned by judges during the week following the game. Unexpected wins, or losses that were expected to be close contests ex-ante, have no impact. 
The effects of these emotional shocks are asymmetrically borne by black defendants. We present evidence that the results are not influenced by defendant or attorney behavior or by defendants’ economic background. Importantly, the results are driven by judges who have received their bachelor’s degrees from the university with which the football team is affiliated. Different falsification tests and a number of auxiliary analyses demonstrate the robustness of the findings. 
These results provide evidence for the impact of emotions in one domain on a behavior in a completely unrelated domain among a uniformly highly-educated group of individuals (judges), with decisions involving high stakes (sentence lengths). They also point to the existence of a subtle and previously-unnoticed capricious application of sentencing.
Naci Mocan and Ozkan Eren, "Emotional Judges and Unlucky Juveniles" (February 14, 2017).

Exemplary Appellate Opinion Writing

The recent unanimous opinion from the United States Court of Appeals for the 6th Circuit by Judge Sutton, on a technical international corporate tax issue, while not terribly important from a tax law perspective, is a brilliant example of exemplary legal writing in the modern 21st century style.

On the merits the court upheld an innovative combination of a special kind of tax advantaged export company called a DISC with a Roth IRA against a substance over form challenge from the IRS which the Tax Court had upheld. The IRS argued essentially that while Congress had contemplated and addressed the combination of a DISC with a traditional IRA that it had not contemplated the particular advantage available when a DISC was joined to a Roth IRA applying the logic of the plain language of the pertinent Internal Revenue Code sections.

Here is an excerpt in which I have put in italic type some of the most distinctive modern aspects of the writing style used which focuses on "tricks" to make the material more readable that ordinary traditional legal prose:
SUTTON, Circuit Judge. Caligula posted the tax laws in such fine print and so high that his subjects could not read them. Suetonius, The Twelve Caesars, bk. 4, para. 41 (Robert Graves, trans., 1957). That’s not a good idea, we can all agree. How can citizens comply with what they can’t see? And how can anyone assess the tax collector’s exercise of power in that setting? The Internal Revenue Code improves matters in one sense, as it is accessible to everyone with the time and patience to pore over its provisions.  
In today’s case, however, the Commissioner of the Internal Revenue Service denied relief to a set of taxpayers who complied in full with the printed and accessible words of the tax laws. The Benenson family, to its good fortune, had the time and patience (and money) to understand how a complex set of tax provisions could lower its taxes. Tax attorneys advised the family to use a congressionally innovated corporation—a “domestic international sales corporation” (DISC) to be exact—to transfer money from their family-owned company to their sons’ Roth Individual Retirement Accounts. When the family did just that, the Commissioner balked. He acknowledged that the family had complied with the relevant provisions. And he acknowledged that the purpose of the relevant provisions was to lower taxes. But he reasoned that the effect of these transactions was to evade the contribution limits on Roth IRAs and applied the “substance-over-form doctrine,” Appellee’s Br. 41, to recharacterize the transactions as dividends from Summa Holdings to the Benensons followed by excess Roth IRA contributions. The Tax Court upheld the Commissioner’s determination.  
Each word of the “substance-over-form doctrine,” at least as the Commissioner has used it here, should give pause. If the government can undo transactions that the terms of the Code expressly authorize, it’s fair to ask what the point of making these terms accessible to the taxpayer and binding on the tax collector is. “Form” is “substance” when it comes to law. The words of law (its form) determine content (its substance). How odd, then, to permit the tax collector to reverse the sequence—to allow him to determine the substance of a law and to make it govern “over” the written form of the law—and to call it a “doctrine” no less.  
As it turns out, the Commissioner does not have such sweeping authority. And neither do we. Because Summa Holdings used the DISC and Roth IRAs for their congressionally sanctioned purposes—tax avoidance—the Commissioner had no basis for recharacterizing the transactions and no basis for recharacterizing the law’s application to them. We reverse.  
A few definitions are in order, as are a few explanations about how the tax laws in this area work.  
Congress designed DISCs to incentivize companies to export their goods by deferring and lowering their taxes on export income. Here’s how the tax incentives work. The exporter avoids corporate income tax by paying the DISC “commissions” of up to 4% of gross receipts or 50% of net income from qualified exports. The DISC pays no tax on its commission income (up to $10,000,000), 26 U.S.C. §§ 991, 995(b)(1)(E), and may hold onto the money indefinitely, though the DISC shareholders must pay annual interest on their shares of the deferred tax liability, id. § 995(f). Once the DISC has assets at its disposal, it can invest them, including through low-interest loans to the export company. See 26 C.F.R. § 1.993-4. Money and other assets in the DISC may exit the company as dividends to shareholders. The Code taxes dividends paid to individuals at the qualified dividend rate, see 26 U.S.C. § 1(h)(1)(D), 1(h)(3), 1(h)(11)(B), which (since 2003) is lower than the corporate income rate that otherwise would apply to the company’s export revenue, id. § 11(a), (b). A DISC’s shareholders often will be the same individuals who own the export company. In those cases, the net effect of the DISC is to transfer export revenue to the export company’s shareholders as a dividend without taxing it first as corporate income.  
Congress has made clear that corporations and other entities, including IRAs, may own shares in DISCs. 26 U.S.C. §§ 246(d), 995(g). A corporation that owns DISC shares still has to pay the full corporate income tax on any dividends, which cancels out any tax savings. See id. § 246(d). For a time, tax-exempt entities like IRAs paid nothing on DISC dividends, which enabled export companies to shield active business income from taxation by assigning DISC stock to controlled tax-exempt entities like pension and profit-sharing plans. But Congress closed this gap in 1989 and required tax-exempt entities to pay an unrelated business income tax, set at the same rate as the corporate income tax, on DISC dividends. Id. §§ 511, 995(g).  
With § 995(g), Congress made it less attractive for a traditional IRA to own shares in a DISC. Investment earnings (including dividends) generally accumulate tax-free in IRAs. Id. § 408(e)(1). But DISC dividends are subject to the high unrelated business income tax when they go into an IRA and, like all withdrawals from a traditional IRA, are subject to personal income tax when they come out. Id. § 408(d)(1).  
The same considerations do not apply to the Roth IRA, which Congress created in 1997. With traditional IRAs, savers deduct contributions and pay income tax on withdrawals, including accrued gains in their accounts. Roth IRAs work in the other direction: Savers do not deduct their contributions from pre-tax income, but they take withdrawals, including accrued gains, tax free. Id. § 408A(c)(1), (d)(1).  
The Code imposes contribution limits on traditional and Roth IRAs. In 2008, the maximum annual contribution to each was $5,000. Id. §§ 219(b)(5)(A), 408A(c)(2) (2008). The maximum annual contribution to a Roth IRA decreases as an individual’s income increases. In 2008, single filers who made over $116,000 could not make any contributions to a Roth IRA. See id. § 408A(c)(3) (2008); Internal Revenue Serv., Publication 590, Individual Retirement Arrangements (IRAs), at 2 (2008).  
At this point, one can begin to see why the owner of a Roth IRA might add shares of a DISC to his account. The owner of a closely held export company could transfer money from the company to the DISC, as the statute encourages, and pay some (or all) of that money as a dividend to its shareholders, allowing the money to enter the Roth IRA and grow there. The IRA account holder, it is true, would have to pay the high unrelated business income tax—here roughly 33%—when the DISC dividends go into the IRA. But once the Roth IRA receives the money, the account holder could invest it freely without having to pay capital gains taxes on increases in the value of each share or incomes taxes on the dividends received—just like other Roth IRA owners who buy shares of stock in companies that generate considerable dividends and rapid growth in share value. As with all Roth IRAs, the owner would not have to pay any individual income or capital gains taxes when the assets leave the account after he hits the requisite retirement age. That’s how the tax laws worked at the time of the relevant transactions.  
Here’s how the Benenson family and the relevant companies put them to use.
The case is Summa Holdings v. Comm’r of Internal Revenue, No. 16-1712, Slip Op. at 1-5 (6th Cir. February 16, 2017).

It takes real artistry to explain such a technical tax transaction so fluidly and plainly. The overall rhetorical style of fancifully and engagingly explaining the fundamental legal concept driving the court's decision, and then laying out the history and structure of how this kind of transaction is intended to work in general, before applying it to the facts, is also a powerful one.

Denver's Globeville Is The Most Polluted Neighborhood In The County

Everyone knows that Globeville has industrial areas and some environmental problems, but I would never have guessed that it was the most polluted neighborhood in America and worse than Love Canal (the very first case I worked on after passing the bar exam related to Love Canal where litigation continued decades after the fact). 

Not coincidentally, this is a historically African-American neighborhood, although that his shifted somewhat with gentrification.
No other populated area in the country carries as high an environmental risk as a few square miles just northeast of downtown Denver, according to a study from ATTOM Data Solution. 
That hasn’t dampened enthusiasm for development, however. Normally, high levels of past contamination and heavy industry nearby would weaken or kill off the surrounding housing market. But northeast Denver’s 80216 ZIP code, home to the Globeville and Elyria-Swansea neighborhoods and the River North Art District and National Western complex, is experiencing some of the strongest developer interest and home price gains along the Front Range.

To figure out where the highest environmental risks exist for property owners, ATTOM Data Solutions looked at 8,642 ZIP codes with more than 1,000 homes. It then looked at the number of Superfund sites, brownfield sites, active polluters and overall air quality to create an environmental hazard index. “It is a hot mess. A lot of people developing are cashing in on the market,” said Candi Cdebaca, a fourth-generation Swansea resident whose family has fought for years to ensure that part of Denver gets the remediation needed. 
The four measures combined gave the 80216 ZIP code a score of 455 on the environmental hazard index, putting it ahead of the 92408 area of San Bernardino, Calif., Baltimore’s 21226 ZIP, and the 90670 area of Los Angeles. 
Denver’s most at-risk neighborhoods scored even worse than the 14303 ZIP code-area near the old Love Canal site in New York, considered one of the nation’s worst environmental disasters. 
Many of the area’s environmental wounds came in the late 1800s, when smelters belched lead, arsenic and heavy metals and produced slag that contaminated the soil. Two Superfund sites and six brownfield sites are legacies of that industrial heritage.
A history of past contamination is common among areas across the country that currently rank high for environmental risk, and in many of those places, the generators of contamination are long gone. But that part of northeast Denver still has two dozen active polluters, as defined by the 2015 Toxics Release Inventory. That pushed the risk score over the top, even with a decent air quality score. 
From here.

14 February 2017

War On ISIS Continues

To date, U.S. coalition military efforts have resulted in the deaths of more than 60,000 Islamic State militants over the course of a two-year campaign, the commander of U.S. Special Operations Command said Tuesday. 
That figure is 10,000 troops higher than was reported in December, when U.S. officials said 50,000 of the extremist fighters had been killed. Speaking at the National Defense Industrial Association's annual Special Operations/Low Intensity Conflict conference near Washington, D.C., Army Gen. Raymond Thomas said that figure should signal to Americans how successful the fight has been. 
"I'm not into morbid body counts, but that matters," Thomas said. "So when folks ask, do you need more aggressive [measures], do you need better [rules of engagement], I would tell you that we're being pretty darn prolific right now." 
What makes the number of militants killed difficult to put into context is the wide variance between estimates of how many Islamic State fighters there are to begin with. The Syrian Observatory for Human Rights estimated in 2014 that there were 100,000 ISIS fighters in Iraq and Syria, while the Pentagon announced last summer that there were only 15,000 to 20,000 militants remaining in those countries. 
Thomas pointed to major military gains on ISIS strongholds, including U.S. and partners "on the verge" of toppling the capital of the group's caliphate in Raqqa, Syria, and advances in efforts to take back Mosul, Iraq. Some 1,500 ISIS fighters were killed when coalition forces claimed a recent victory in Sirte, Libya, he said.

The body count continues to rise. By U.S. military estimates, at least three-quarters of ISIS soldiers have been killed over the last two years. Yet, they are still a potent force. They have fought block by block for week after week of Mosul, holding back coalition forces trying to retake the city in northeast Iraq and continuing to slaughter local civilians with abandon. They have done so despite the fact that coalition airstrikes have nearly completely wiped out of all their heavier weapons systems.

It has been an incredible military accomplishment to kill so many enemy soldiers and to destroy so much of their equipment and so many of their bases with so relatively little loss of coalition lives. But, it is also humbling that a force that is so vastly inferior in resources and technology can be such a formidable military opponent. There have been more ISIS soldier deaths since 2014 than U.S. forces suffered from all causes in the entire Vietnam War.

But, a body count is only one data point of many. It doesn't count coalition casualties. It doesn't count civilian casualties caused by each side. It doesn't count the misery of those living in the ISIS regime. It doesn't inquire into how many of those ISIS fighters really care about the cause. Failing to become an ISIS soldier means immediate death for many, joining at least allows you to role the dice and defer that fate. It doesn't count the economic cost of fighting the war or the eventual economic costs of rebuilding. It doesn't reckon how the manner in which the war is fought will impact the legitimacy of a successor civilian regime. It doesn't count the global impact on personal freedoms, on how Islam is viewed, of global terrorism, or in the form of refugees (who not infrequently die trying to flee and almost always lose everything they own).

In order to secure the victory that comes with a surrender you have to give the other side a palatable option. So far, that hasn't happened. They see surrender to Iraq or Syria as death or an eternity of oppression and humiliation. It also takes a strong leadership to negotiate a surrender, and, it isn't obvious that ISIS has a strong leadership as coalition forces have killed a succession of senior figures in the regime.

The international community is capable of killing ISIS soldiers almost to the last man. And, few regimes in history have made such a great effort to provoke such attacks in a manner that provides it with no material gains of its own. But, no one is talking state building, even though without it, all of the military efforts will be wasted as the people ISIS once ruled rise phoenix-like from the ashes of their predecessors.

Quote Of The Day

Valentine’s Day is a just a fake holiday invented by Hallmark to sell greeting cards. So what have you invented recently to make people happy? Nothing, that’s what!
- Jeremy McLellan

13 February 2017

The Politics of Truth

















































From Pew Research. Note that this is a survey of people in the U.S.  Within the U.S., Muslims, Buddhists, and Hindus in the U.S. include a disproportionate share of people who migrated to the U.S. with H1-B visa and/or work in the tech industry and investor visas. They are not necessarily representative of people in the countries from which they migrated.

Yesterday was Darwin Day.

Sometimes I'm am ambivalent about it. Too many people, in my opinion, try to elevate Charles Darwin to a position akin to Moses or Jesus or Muhammed or Buddha for the non-religious, or to that of Marx for Marxists. But, Darwin was just one more scientist, a giant upon whose shoulders we stand who himself stood upon the shoulders of giants to make some important insights about evolution. Just as Abraham Lincoln, whose birthday is the same day, was an important politician, but ultimately just that, an exceptional man among many, and not a god or infallible Pope.

But, I absolutely do agree that a Darwin Day is as good an occasion as any to celebrate the intellectual power of the idea of evolution which Darwin receives as much credit as anyone for developing, and to express dismay at how many people adhere, mostly for religious reasons, to utterly discredited alternatives.

You are entitled to your own opinions, but not to your own "alternative facts". But, in a democracy, no distinction is made between facts and opinions.

Would it be possible to devise a political system in which truthful facts would have a preferred position?

A system that would be deliberately biased against vaxers and climate change deniers and flouride conspiracy theorists and supply side economists and Holocaust deniers and homeopaths and the outright lies on issues from crowd side to the murder rate to the "Bowling Green Massacre" that are spewed daily from the Trump Administration.

Republicans, by virtue of having Evangelical Christians are particularly vulnerable to this, because a large part of its base, merely in order to maintain their religious faith, must routinely have psychological systems in place to reject science and reality.

This isn't to say that there isn't room in politics for conservatives. Despite the common left wing slogan that reality has a liberal basis, one can be reality based and still favor many conservative policy positions. But, if a large share of our leaders are not just conservative, but anti-reality, in the long run, our society has a real problem.

To be clear, this also doesn't mean that all issues have scientifically mandated or determined answers. The usual state of affairs in science is that there are some issues that are settled and other that are the subject of ongoing research. For example, while there are multiple proposals out there which are not inconsistent with the evidence to modify Einstein's theory of general relativity in ways that are not inconsistent with the reality (including the problem of "quantum gravity"), all legitimate physicists admit that Einstein's theory of general relativity explains reality more accurately than Newtonian gravity in a wide variety of circumstances.

Likewise, in politics, there are often many solutions that aren't clearly wrong, but a multitude of proposals that clearly are wrong. Simply eliminating the proposals that are clearly wrong would be progress.

Of course, the devil is in the details. How do you implement something like this? Do you change the culture of the political elite, and if so how? If not, how do you change this institutionally in a manner that doesn't repress minority but viable factual positions, but that still heavily burdens flatly disproven factual positions?

07 February 2017

American Ancestry

Genetics researchers combined 770,000 whole genomes and large amounts of ancestry information from Ancestry.com have reproduced the broad outlines of the regional cultural zones described in Albion's Seed, which relied on social history data.

The results aren't surprising to someone sufficiently familiar with regional American culture, history and demographics, but they still look very impressive in this form.


From Nature (Figure 3). The article is Han, E. et al. "Clustering of 770,000 genomes reveals post-colonial population structure of North america." 8 Nat. Commun. 14238 (2017). The Supplemental Figures referenced in the citations discussed below can be found here.

This figure is discussed in these excerpts from the article:
Taken together with the IBD network clustering results, the visualizations of the genealogical data in North America (Fig. 3) highlight broad-scale demographic trends, as well as patterns specific to individual populations. . . . we divide the clusters into four broad categories, and present examples of each. 
The first grouping, which we label as intact immigrant clusters, are likely driven by population structure present before immigration that may have been maintained post immigration. . . . We label the second grouping as continental admixed groups, the majority of which represent Hispanic/Latino populations. . . . The vast majority of our samples are contained in the third set of clusters, which we label as assimilated immigrant groups. . . . Finally, the fourth set of clusters we label as post-migration isolated groups; these groups have historically resided in small or geographically isolated communities within the United States. . . .
The first grouping, intact immigrant clusters, can be attributed to population structure existing prior to immigration to the United States. Despite subsequent admixture following immigration, we found clusters corresponding to Finnish, Scandinavian, Jewish and Irish ancestries—all groups who immigrated to the United States in large numbers within the past 150–200 years—as well as African Americans and individuals with Polynesian ancestry (labelled Hawaiian). . . .
The majority of these groups also show evident geographic localization within the United States (Fig. 3), corresponding to known migration patterns; for example, the Scandinavian and Finnish clusters are concentrated in the Midwest, while the African American cluster closely coincides with regions of high self-reported African ancestry. Reinforcing the connection between IBD clustering and global population structure, we observe that the degree of disconnectedness in the IBD network often correlates strongly with amount of admixture (Supplementary Fig. 22; Jewish r2=0.97, Finnish r2=0.67). . . .
We highlight two additional immigrant clusters with clear geographic concentrations both within and outside the United States: Acadians and French Canadians. During the mid 18th century, Acadian residents (modern-day Atlantic Canada) were expelled by the British and took refuge in various colonies, eventually including Louisiana, then under Spanish control. On the other hand, in the late 19th century, large numbers of French Canadians left rural Quebec in search of economic opportunities in New England and the northern United States. We identified two clusters in the IBD network likely corresponding to these distinct descendant groups. . . . As a final point, the low genetic differentiation (FST=0.001) between these groups, and their nearly indistinguishable admixture proportions, illustrates that standard methods may have difficulty separating them as we do here.
Next, we identified continentally admixed clusters, including Colombians and groups in Central America and the Caribbean, labels which are primarily inferred from the ancestral birth locations of cluster members. . . . It should be noted that, in some cases, the clusters we identify using IBD could be more reflective of US immigration patterns than inherent structure within source locations. For example, two of the Mexican clusters we identified are annotated with birth locations most concentrated in Jalisco and Monterrey, the predominant traditional sources of emigration to the United States. The over-representation of West Mexican birth locations in southwestern United States and Northeast Mexican birth locations in Texas, particularly South Texas in recent generations (Supplementary Figs 20,23), confirms known patterns of migration from eastern versus western Mexico to the United States . . . .
The five largest clusters, [(1) Northeast and Utah, (2) Pennsylvania, (3) Lower Midwest, (4) Upland South, (5) Lowland South] which we describe as assimilated immigrant clusters, account for a large portion (60%) of the IBD network and exhibit a markedly different profile. Lacking distinctive affiliations to non-US populations, they show almost no differentiation in allele frequencies (FST at most 0.001) and high levels of IBD to non-cluster members, suggestive of high gene flow between these clusters. Moreover, few members of these clusters could be assigned to a stable subset, indicating that this clustering is largely driven by continuous variation in IBD. Genealogical data reveal a north-to-south trend (Fig. 5), most consistently east of the Mississippi River (Fig. 3). These findings imply greater east-west than north-south gene flow, which is broadly consistent with recent westward expansion of European settlers in the United States, and possibly somewhat limited north-south migration due to cultural differences. . . .
Finally, we identified several clusters corresponding to post-migration isolated groups—historical groups who, despite possibly maintaining high levels of diversity and gene flow, likely experienced some geographic or cultural isolation during or following migration to the United States. One such cluster represents the Amish, a distinct ethno-religious minority that first arrived to the United States from Europe in the 18th century; the genealogical data associated with the Amish cluster pinpoint individual counties in Midwestern states and Pennsylvania with present-day Amish communities (Fig. 3; Supplementary Fig. 20). The clustering of IBD in Utah is most likely attributed to population growth of descendants of Mormons, who settled in Utah in the mid-1800s (Supplementary Figs 20,24). In addition, we identified a cluster concentrated near the Cumberland Mountain range that is suggestive of residents of Appalachia, people who experienced delayed economic development and regional isolation up until the 20th century. . . .
An unresolved issue common to . . . hierarchical clustering . . . is that stopping criteria are not well established: when to stop subdividing clusters . . . . additional clusters informative of population structure emerged when we proceeded to the third level of the hierarchical clustering (Supplementary Figs 25–27). For example, additional clustering discriminated Italians, Scottish, Norwegians and Eastern Europeans, and yielded fine-scale geographic structure in Ireland (Supplementary Fig. 26), the southern United States (Supplementary Fig. 27), and on the Island of Puerto Rico (Supplementary Fig. 21). . . .
[T]he genetic separation of other groups of historical importance—such as regions of Mexico corresponding to different sources of US immigration, and the New Mexican cluster corresponding to the Nuevomexicanos, European colonial settlers from New Spain—is a major contribution of this work. . . . we do not identify known structure in the United States among some present-day immigrant and other groups that are poorly represented in our sample, such as Southeast Asians and Chinese. . . .
[W]e find clear examples in our data where disease-risk variants are present at higher frequencies in identified clusters; these include a risk allele for prostate cancer that has a frequency of 5.6% in the African American cluster but is very rare (0.1%) outside the cluster, and a protective allele for squamous cell lung carcinoma that is 10 times more common in the Finnish cluster.

A New Atrocity In Syria

Thousands of people have been hanged at a Syrian prison in a secret crackdown on dissent by the regime of Bashar al-Assad, a report by Amnesty International has alleged. 
The human rights group says up to 13,000 people have been executed at Saydnaya prison north of the capital Damascus in a "hidden" campaign authorized by senior regime figures. 
Amnesty's report, Human slaughterhouse, says prisoners are moved in the middle of the night from their cells under the pretext of being transferred. They are taken to the grounds of the prison, where they are hanged, likely unaware of their fate until they feel the noose around their neck, Amnesty alleges. 
The report is based on result of a year-long investigation, including interviews with 84 witnesses including security guards, detainees, judges and lawyers, Amnesty says. 
Most of those hanged were civilians "believed to be opposed to the government," the report found.
Via CNN.

The hangings have been conducted twice a week for five years and were allegedly authorized by a military tribunal.

There is also widespread torture at this prison as documented by photographic evidence.

Of course, the Syrian regime has also used chemical weapons against its own people and repeatedly bombed civilians.

This would be more executions than in any other country in the world except China, which has more than 400 times the population of Syria, and is unrivaled even by other Islamic countries who feel that Islamic law justifies executions and corporal punishment in circumstances where no other legal system does so.

06 February 2017

Charlie Stross Still Has It

"Empire Games", the 7th novel of the Merchant Prince series by British author Charlie Stross was released recently, seven years after the 6th installment, and this speculative fiction author who excels at world building in near future alternate realities still has the Mojo that has won him three Hugo awards going strong.

This is not a fluffy space opera.

Few authors can write long monologues on the economic development impact of washing machines while still producing a compelling page turner.

He touches on plenty of topics that are well in tune with the zeitgeist.

One important group of people in his novel are refugees who flight was due to a series of military actions in which the United States of America played a part. The word panopticon probably appears a dozen times in the novel that explores in mostly accurate depth, the nature of the modern surveillance state. He explores widespread adoption of improved facial recognition technology, cheap and rapid DNA sequencing, climate change and self-driving vehicles.  He explores a variety of ways that nuclear weapons could plausibly be used, the economic impact of falling oil prices, the power of genetic engineering, Fermi's paradox, the impact of Facebook on our lives, the evolution of gay rights in the lifetime of people alive today, the politics of one party states, monarchies, a decaying United States democracy, and the political impact of terrorism. 

This is a novel for people who are paying attention to their world and want to sharpen their thinking about it with concrete examples and scenarios.

Go read it.

02 February 2017

The Economics And History Of The Rural-Urban Divide

This question and answer is migrated off of Politics Stack-Exchange:

Question:

Rural counties in the US generally tend, (often overwhelmingly), to vote Republican, while metropolitan counties similarly tend to vote Democrat.

Over the last few decades which portions of the average rural voter's disposable income in dollars, (or if there is no change, their quality of life), have consistently improved as a result of Republican policies, relative to Democratic policies?

Over the last few decades which portions of the average metropolitan voter's disposable income in dollars, (or if there is no change, their quality of life), have consistently improved as a result of Democratic policies, relative to Republican policies?

The question is not about the subjective values people place on different changes in their lives. It would be nice to factor state-of-health into that somehow too, but I realize that will get too murky.

This question aims to find historical factors, (or elicit pointers to them), that could be used to evaluate how much, or how little, influence pocketbook voting factors have had. I'm looking for drivers of whatever rational components exist that might be obscured by more conspicuous subjective motivations.

Answer:

The question is one that any accurate answer to must be very complex and detailed. This answer explores the underlying facts that would drive an ultimate answer without trying too hard to actually quantify and spell out in more detail the economic benefits and losses associated with various policies.

Subtypes of Rural Voters

One important difficulty in the analysis it that there are multiple types of "rural voters" who have different kinds of economic interests. Each one has its own economic interests that are easier to analyze separately than in the aggregate when economics incentives to get get muddied.

The stereotypical rural voter is a family farmer. But, only about 2% of the population of the United States is employed in farming, and even if you have a substantial multiplier for people who economically benefit when farmers are doing well, this is still only a modest share of the rural population in the United States. Farming is one of the few sectors of the U.S. economy that produces a trade surplus, rather than a trade deficit. For the most part, the farming industry has been reasonably health and stable with increased productivity and decreased employment almost every decade since the 1790s and earlier (new organic farms finally broke the trend in 2010). Almost all of the gradual but very long term decline in the proportion of the population engaged in farming is due to technologically driven improvements in farming productivity. But, the tobacco farming industry has collapsed in the last decade or two, and a lot of big U.S. farm products are heavily dependent upon federal subsidies (for much of recent history, 50% of the income of corn, sugar and cotton farmers came in the form of federal subsidies), in part, because their international competitor are also heavily subsidized. Tobacco, sugar and cotton are all predominantly Southern crops. Corn is predominantly a crop of the Great Plains. Ranching, which is a major part of farming in the mountain West, is less heavily subsidized, as is fruit growing and wine making which is a particularly large part of farm economies in Florida, California and Arizona, each of which has a larger than average percentage of people living in urban areas.

A rapidly growing, but much less familiar form of rural voter is someone who lives in a "exurb", which is a low population density area, usually adjacent or near a genuine suburb, and commonly home to affluent individuals stereotypically living on 5 acre "ranchettes" who either are willing to have a long commute in exchange for a less crowded rural lifestyle, or are retired, or can telecommute or otherwise work from home. This segment of the rural population includes a disproportionate share of people in the top 1% of income and wealth, respectively, and of the top 10%.

Another group of rural voters are those who rely on extractive industries like coal mining, oil and gas drilling, and the like for their livelihood. The coal industry is seeing huge declines as cheaper renewables, cheaper natural gas, and greater air pollution controls make it less attractive as a fuel, this is a long term trend that has recently accelerated and reached crisis proportions. The oil and gas industry has historically been a boom and bust proposition dependent on global oil prices, but has recently seen a huge boom due to fracking that has greatly reduced U.S. oil imports and has created demand for pipelines to make newly developed fracking based production available where demand is greatest.

Quite a large share of rural voters are elderly retirees or elderly farm economy asset owners who live mostly off rents. Often they settled in rural communities when they were economically more healthy (e.g. in a small town that relied on one factory that left or mine that shut down), but never moved away. For example, a significant share of my extended family consists of older relatives who live in towns listed in books like "the ghost towns of Ohio" and "the ghost towns of Michigan". These towns are very solidly Republican.

It is worth noting that while people under age 65 in the U.S. live in a heavily market dominated economy where poor employment outcomes mean poverty and a lack of access to health care, almost everyone over age 65 has most of their healthcare paid for by Medicare (a FICA tax financed, single payer system that pays providers more or less the same rates as private insurance companies and has few cost controls), more than half of their nursing home costs paid by Medicaid (which is stingy in how much it pays providers and moderately means tested), and receives enough of a guaranteed income from the combination of Social Security and SSI payments to keep the poverty rate for people age 65+ (even if they have no retirement savings of their own) above the poverty line, regardless of the state of the local economy. People in this age bracket are also most likely to own a home with a paid off mortgage and to have significant financial investments compared to all other age groups. But, people who own homes in rural areas have seen far less housing price appreciation than people in urban areas, so they can't afford to move from rural areas to urban areas because this would increase their housing costs so much. So, for seniors, there is an economic incentive to maximize their purchasing power by living in places with a low cost of living, and to stay in places with low housing costs if they already living in houses in those areas, because their income does not depend upon where they live (unlike non-seniors who earn less in rural areas removing much of the benefit from a lower cost of living). Essentially, the U.S. has a European style welfare state for all of its senior citizens, and one of the weakest welfare states in the OECD for people who are not senior citizens. While some of the programs that benefit seniors (SSI and Medicaid nursing home coverage) are means tested, the lion's share of this welfare state for seniors (Social Security and Medicare) is not means tested and is instead structured as social insurance.

A lot of rural voters in the hill country of the South particularly, but in small towns across the county, live in what amount to company towns where one or two modest sized factories provide most private employment. Everybody knows about the decline of the large, often unionized factories owned by big businesses, often in big cities, in the "Rust Belt" and the Northeast. Far fewer people realize that a significant share of the remaining manufacturing capacity in the United States has relocated to union unfriendly, small towns in the South, usually in fairly small enterprises that have supplier relationships with big name manufacturing companies but aren't big names themselves. Many of these towns were hard hit by the Great Recession in 2008, due to the general disruption to consumption caused by the initial real estate and financial market crisis that started this recession.

A variation on this theme are small towns centered around smaller military bases or military academies (public and private). Also, active duty military personnel at both the enlisted and officer level are disproportionately from the South in particular (around 50%), and Red States, generally, regardless of where they are stationed. As a result, veterans, including disabled veterans and veterans who have served in combat, disproportionately live in the South. It is also worth noting that the military is one of the most racially integrated employers in the United States. There is no big private business in the United States where such a large percentage of their workers spend a large share of their routine work days with other workers of different races as the military. The size of the U.S. military has decreased greatly since the end of the Cold War in 1989 (with a more than 25% of active duty personnel levels since the 1980s, and obviously a far greatly decline since Vietnam era peaks). Military spending on expensive major weapons systems like aircraft and ships and submarines built in large cities has grown much faster than military spending on personnel who frequently hail from rural areas (which has actually declined as military spending overall has surged).

Also notably, the military that has such a huge rural economy is basically a socialist economy. Access to resources is governed by bureaucratic decision making and politics, not market forces or profit margins or productivity. Service members have also no freedom to decide where they will live and work, and routinely get shuffled around contrary to their own wishes. Lots of basic economic needs are provided for in kind, rather than in cash. The cost of basic groceries and consumer purchases is subsidized through the PX system. Everyone has at least one guaranteed job per household, but nobody is allowed to quit. There is universal health care, dental care, and housing. Children in military families have access to military provided schools. Pensions and post-retirement benefits are very generous relative to the private sector. Active duty military personnel with larger families receive more compensation (including in kind compensation) than those without families or with smaller families. Income inequality among active duty military personnel is profoundly less great than in the general economy even after accounting for the non-monetary privileges of rank with economic value.

Another variation on this theme are small towns centered around one or more prisons (e.g. Canon City, Colorado). Prison populations grew steadily for decades until just a few years ago when declining crime rates (which have fallen since the 1990s) and state budget concerns led a movement towards "smarter" sentencing and controlling incarcerations rates. Incarceration rates tend to be higher in Southern states which are often more rural as well.

There are also a few kinds of rural voters who tend to be liberal leaning contrary to the usual trend, although they are a decided minority of the rural population:

* Residents of small college towns and research facilities and towns with notable boarding schools where colleges take the place of factories in a small town economy.

* Residents of small towns that rely on tourism and/or artists colonies and/or retreats for their economic well being (think of towns like Jackson Hole, Taos, Telluride, Martha's Vineyard, and Manitou Springs).

* Residents of small towns that are predominantly non-white (there are lots of predominately Hispanic small towns along the Texas border with Mexico, in New Mexico, in Southern Colorado, there are many Native American and Native Hawaiian towns in the American West, Hawaii and Alaska, there are a fair number of predominantly African-American small towns in the South).

* Organic farmers and legal marijuana growers.

* Solar utility operators.

* Park rangers and communities around national and large state parks, other than the farmers and ranchers in those communities.

Other Facts

The South was less industrialized than the North on the eve of the U.S. Civil War. Its economy was destroyed during the Civil War, and took further blows during the Reconstruction era at the hand of "carpetbaggers" from the North, particularly involving Northern banks providing financing to plantation owners who would pledge their land as collateral and often lost that land when they failed to repay the loans as agreed. Only in the last few decades has the South made appreciable strides towards catching up economically with the rest of the country from these setbacks and the "Deep South" is still decidedly behind economically even today as is Appalachia (for quite different reasons).

Appalachia's economy is a predominantly combination of near subsistence farming, coal mining, and small factories. Most of the region is in a state of serious economic decline and has been for decades.

Rural areas, in general, average about half of the per capita economic productivity of metropolitan areas. Indeed, there are a strong and predictable relationship between the size of a metropolitan area or rural region with a comparable geographic area, and per capita economic productivity. Almost uniformly, in every country on Earth, the larger the population of a metropolitan area or the rural equivalent, the more productive it is per capita, and the lower its population is, the less productive it is per capita.

Red States are overwhelmingly receive more federal funds than they pay in federal taxes, while Blue States tend to receive less in federal funds than they pay in federal taxes.

Unsurprisingly, if you think about it, rural areas tend to have little net migration into those areas (and few immigrants who are domiciled there) and urban areas tend to have more in migration and more immigrants. (If you have lots of migrants into your area, you cease to be rural quite quickly.)

Rural areas are generally stagnant or declining in population. Urban areas in some places are stagnant in population (particularly in the Northeast and Midwest) and in others are growing rapidly (particularly in the South and West). But, the shift from less urban to more urban areas while relentless and continuing for centuries, has taken place more slowly than most people realize.

More rural states tend to have more regressive taxes and lower taxes overall than more urban states.

In the South, there are substantial African-American populations in both urban and rural areas and the percentage of the population that is African-American is quite high compared to states outside the South. In the North, African-American populations are largely confined to large urban areas and their less affluent first ring suburbs, and segregated neighborhoods that are a legacy of pre-Civil Rights era patterns of housing discrimination remain the norm in older parts of non-Southern cities (although newer suburbs tend to be considerably more integrated than older neighborhoods outside the South). About half of the African-American population in the United States lives in the South, and the extent of the ongoing economic, family and cross-migration ties between the South and urban African-American populations in large American cities like Chicago, is greatly under-appreciated. In the South, essentially all African-Americans prior to the Civil War were engaged as slaves in agriculture and after the Civil War, most African-Americans continued to be engaged in agriculture because there was no other healthy sector of the economy to earn a living in. In the North, African-Americans trace their roots to the "Great Migration" and less intense versions of that movement of people before and after that wave of migration, mostly to industrial cities seeking factory jobs at the height of the U.S. industrial economy that declined starting around the 1970s and has continued to decline in employment but not productivity, partially due to automation and partially due to offshoring of jobs to lower wage, less regulated countries. The loss of urban factory jobs led to the collapse of the African-American married couple family structure as far fewer men has steady good jobs that allowed them to support a wife and kids economically (a pattern that less educated whites would follow a couple of decades later), and to the decline of Rust Belt cities across the Midwest and Northeast. The story of African-American migration to the American West is quite different as it wasn't as large and wasn't driving primarily by the pursuit of factory jobs that came in abundance and then left for good.

One implication of the different spatial distribution of people by race is that lots of metropolitan areas have de facto segregated schools, while Brown v. Board of Education and the cases that followed were quite effective in requiring schools in small towns and rural areas with racially mixed populations to be integrated, since they don't have many schools period and don't have nearly as great residential segregation into large nearly mono-racial groups of neighborhoods the way that many large cities do. Small towns and rural areas also generally don't have enough students to support significant choice options or charter schools within the public school system. Also, many non-Southern cities have a long traditional of Catholic K-12 schools sponsored by the Roman Catholic Church, subsidized by parishes, while the South which has few Roman Catholics also has few Catholic schools as a result.

A significant share of the gaps in income, education, crime and other socio-economic indicators between Southern states and non-Southern states in the U.S. is associated statistically with having larger African-American populations, although Southern whites are still lower in income, less likely to receive educations, and more likely to commit crimes, etc. than whites in metropolitan areas outside the South.

The cost of living is lower in most rural areas than in most urban areas, although part of that lower cost of living is attributable to subsidies of rural governmental functions like road and bridge maintenance and K-12 education by residents of more urban areas. As a result, lower incomes in rural areas imply less of a hit to purchasing power from disposable income than a crude comparison of nominal income between urban and rural areas would suggest. The biggest source of regional differences in the cost of living is the cost of housing which is much greater in healthy urban areas than in rural ones, although housing is also very cheap in depressed Rust Belt urban areas where populations are just starting to stabilize after several decades of declining populations.

Elite institutions of higher education are disproportionately outside the South and outside Red States, and students from Red States who attend these elite institutions frequently assimilate into Northern/Blue State culture and do not return to their home states. There has been long term brain drain (and plain old population shifts) from rural America to urban America more or less continuously since the 1870s, with the possible interruption of the Great Depression and World War II. In general, the most economically fit individuals tend migrate away from places that are economically weak, and the least economically fit individuals tend to continue to live where they were born.

White Americans without college degrees are much more likely to not marry and to divorce and to have multiple marriages during a pre-elderly lifetime than they were historically, while white Americans with college degrees are now more likely to marry and less likely to divorce than they were for the past several decades. This has been driven economically by basically 0% earned income growth for men without a college education since about 1970 combined with rising job insecurity and growing disability rates, accompanied by rapid earned income growth for women without a college education, combined with a rise in the tendency to marry someone with similar education. Women without college educations are dramatically less economically dependent upon their husbands than they used to be, while the economic dependence of women with college educations on their husbands remains high because both men and women with college degrees have seen surging incomes since the 1970s and most women with college degrees experience large income penalties for leaving the work force for a while to raise children while women without college degrees don't face those kinds of income penalties in their far less skilled jobs.

Rural areas have a larger proportion of jobs that don't require college educations than urban areas.

Rural people are far more likely to own firearms, especially long guns purchased primarily for hunting and protection from wild animals, than urban people, because it is much cheaper and easier to hunt and fish in rural areas than in urban areas. There is less of a rural-urban disparity in hand gun ownership because hunting and protection from wild animals are not factors in hand gun ownership. Also, crime rates are lower in rural areas than in urban city centers, and police response times are much slower in rural areas than in urban areas due to the lower population density which means long distances from a police station to the average crime scene.

Large urban areas have large immigrant populations spanning a range from very low income to very high income professionals and are vital to large urban economies. Highly skilled immigrants are a significant share of the work force in medicine, in academia, in engineering and in other technology industries, all of which involve jobs disproportionately located in large urban areas.

This trend is long standing and dates back to the late 1800s. The economic tendency of immigrants to work in large urban areas is one of the main reasons that large urban areas have much more religious diversity and many more residents who are neither WASP nor African-American, that rural areas. Catholic migration to rural areas was largely confined to the North and the West and largely dates to the 19th century, after which further Catholic migration to the U.S. was largely to large urban areas like all other forms of immigration to the U.S.

A number of refugee communities (e.g. in Saint Louis and Great Detroit and in Wisconsin) have migrated to Rust Belt cities where they have filled inexpensive neighborhoods largely deserted by the original residents and revitalized them as ethnic enclaves.

Rural areas have far more local governments and far more elected officials per capita than urban areas. As a result, far more rural people have run for elective office or held an elective office or know someone who has done so, and rural people have far more influence in a direct democracy manner over their local governments than people in urban areas. But, also, as a direct consequence of the larger proportion of elected officials, and also as a result of the lower rates of educational attainment in rural areas, elected officials in rural areas are far less "elite" educationally, socioeconomically, and in political and administrative competence than elected officials in urban areas, on average. Political activity is far more "professional" at the local government level in urban areas where there are far fewer governments and far fewer elected officials per capita, and a far greater supply of people who higher education and with high level managerial and professional work experience.

In addition to true local governments, many economic functions that are carried out by investor owned companies in urban areas are handled by consumer or producer cooperatives in rural areas. Rural phone companies and electric utilities, rural financial institutions, rural farm product marketing companies, companies that provide irrigation water, and lots of the companies that sell goods to farmers, for example, are all organized as cooperatives of either consumers or producers and run on a much more democratic basis than investor owned companies. This is a legacy of New Deal policies that has remained in place due to historical contingency and inertia.

Thus, no only due rural people have a greater democratic say in how their local governments are run, they also have a greater democratic say in how some of their key utilities and economic institutions and are far more likely per capita to serve on the governing boards of such institutions (even though, as in the case of governments, they have far less formal training and expertise in doing so than their urban counterparts running investor owned corporations that do the same things in urban areas).

Conclusion

A full analysis of the economic implications of these facts for the pocketbooks of rural v. urban people would take a long time and more space than a single answer would allow, but these facts suggest pretty directly some conclusions about which policies would and would not help rural v. urban people economically.

01 February 2017

GOP Import Tax Would Hurt Its Base

The GOP plan to reform corporate taxes — which the Trump administration last week claimed could make Mexico pay for President Trump's border wall — would effectively charge companies 20 percent on their imports. To consumers, it would feel a lot like a hefty new sales tax on foreign-made products. And, like any sales tax, it would put the most strain on the poorest households. 
Families at the bottom of the income ladder could pay 5 to 8 percent of their incomes as a result of increased prices from the Republican proposal, according to new calculations from Katheryn Russ, an associate professor of economics at the University of California, Davis. Middle-class families would pay between $700 to $1,000 a year, or about 1.3 to 2 percent of their incomes. . . . The highest-earning 10 percent of households would pay the most, because they buy the most. But since poorer families spend a larger share of their paychecks toward purchasing food, clothing and other necessities — which are often imported — the import tax would make a larger impact on their budgets.
From The Washington Post.

Which famous company would be particularly prominent among those hurt by the plan? 

Walmart, the quintessential retailer of Trump's America, which keeps prices low, in substantial part, by importing goods from lower wage countries like China. Many of its products would see an immediate 20% price hike.