31 May 2017

Recent Rulings In The U.S. Supreme Court

Four cases was decided on the merits yesterday in the U.S. Supreme Court, including the first merits opinion of the U.S. Supreme Court in which Justice Gorsuch, President Trump's first appointee to the bench who was previously a 10th Circuit Court of Appeals judge participated. Three more cases were decided on Monday, May 22, 2017.

1. Impressions Products, Inc. v. Lexmark Int'l, Inc.

Reversing the Federal Circuit once again to weaken the rights of patent holders, the U.S. Supreme Court held that the first sale doctrine terminates all patent rights in an item, both in the case of sales in the U.S. and sales outside the U.S., even if the contract of sale purports to reserve patent rights in that particular item produces using the patent.

The immediate consequence is that refilling patented printer cartridges does not violate patent law, even though parties to the contract of sale of each particular printer cartridge may be violating that contract for which money damages might be available (but not injunctive relief, import prohibitions, forfeiture of the items, etc.).

The ruling is 7-1 with Ginsberg joining the ruling in part and dissenting in part.

2. Esquivel-Quintana v. Sessions

In California sex with someone under the age of eighteen by someone at least three years older is statutory rape. The defendant, who has had a green card for nine years was convicted of a felony in California under the statute for having sex that could have been consensual with his girlfriend who was under the age of eighteen. The INS seeks to deport him on the grounds that this constitutes the deportable "aggravated felony" offense of sexual abuse of a minor. 

Under the government's position and existing case law, the offense must count as an aggravated felony only if it is an aggravated felony when the victim is one day short of her eighteenth birthday and the defendant is twenty-one years old (the least serious conduct that can result in a conviction under the statute). 

Despite the fact that the age of consent under California law is eighteen, the U.S. Supreme Court concludes that the offense is not deportable unless the statutory rape victim under this particular statute must be under sixteen years old at the time of the offense. The age of consent under a federal statutory rape law enacted close in time to the immigration law in question. Whether he would have been deportable if the statute had required the victim to be under the age of sixteen but did not have a "Romeo and Juliet" exception, was reserved for a later case. 

The reasoning in the case is rather dubious and relies on dictionary definitions from non-legal dictionaries among other analysis, but the decision is 8-0 that the offender should not be deportable anyway as the California law is an outlier and does not fit the generic federal definition of the crime. Basically, this was a pity case where the Court had mercy on a guy subjected to an unreasonable California law.

The decision makes statutory rape a non-deportable offense in the seventeen states where the age of consent is greater than 16 years, including Colorado.

Police, thinking a dangerous armed felon is about (who is never found) enter a shack with a closed door without the permission of the innocent residents, without knocking, and without a warrant. One points a BB Gun at them thinking they are home invaders and the police shoot the residents. The entry was a clearly established violation of the 4th Amendment for which nominal damages were awarded. At issue is whether the police were entitled to qualified immunity for shooting the residents.

Under the 9th Circuit's provocation rule, shooting an innocent person after entering their home in violation of the 4th Amendment is automatically a constitutional violation. 

The U.S. Supreme Court strikes down the 9th Circuit's provocation rule and remands the case for consideration under the constitutional standard for improper police shootings applied in other circuits, namely: "The operative question in such cases is 'whether the totality of the circumstances justifie[s] a particular sort of search or seizure.'", and "if respondents cannot recover on their excessive force claim, that will not foreclose recovery for injuries proximately caused by the warrantless entry." The decision is 8-0.

This is the first merits decision of Justice Gorsuch on the U.S. Supreme Court. It is resolved 8-1 with Justice Sotomayor concurring in part and dissenting in part. The case, reviewing the Montana Supreme Court's decision that the Montana courts had general personal jurisdiction over the railroad, basically restates the holding in Daimler AG v. Bauman, 571 U. S. ___,  which gutted the concept of general personal jurisdiction overturning precedents dating back to 1945. 

The incidents forming the basis of the lawsuit under the Federal Employee Liability Act for injuries suffered by two railroad employees, over which federal and state courts have concurrent jurisdiction, occurred outside of the State of Montana. "Neither incorporated nor headquartered there, BNSF maintains less than 5% of its work force and about 6% of its total track mileage in the State. Contending that it is not “at home” in Montana, as required for the exercise of general personal jurisdiction under Daimler AG v. Bauman,  . . . BNSF moved to dismiss both suits."

Prior to Daimler, conduct of business in a state where it maintains a regular office on a permanent basis was sufficient to give a court general personal jurisdiction over the defendant on all claims arising anywhere in the world, a standard this case would clearly meet. But, under the Daimler rule a headquarters or the moral equivalent of one, and not just regular conduct of business from a permanent office, is necessary to give rise to general personal jurisdiction. These facts clearly do not meet this standard. Sotomayor's dissent is a sequel to her dissent in Daimler which she argues was wrongly decided and should not be followed in this case either. None of the Justices agree that the distinctions the Montana Supreme Court made to treat this case as subject to a different rule than the one adopted in Daimler are legally significant (mostly that the case involves a railroad).

In a 5-3 ruling the U.S. Supreme Court upholds a North Carolina trial court opinion finding that the North Carolina legislature intentionally engaged in racial gerrymandering with a predominant purpose of disadvantaging black voters. Therefore, North Carolina was ordered to redraw its Congressional districts in a legal manner. A contrary ruling in state court had no legal effect. It is extremely rare for a court to make such a finding and then to have that ruling upheld on appeal due to the deference normally afforded to state legislatures.

A Texas court authorized a Plaintiff to serve process on a Canadian defendant by mail and after the defendant was served by mail, entered default judgment. The Defendant argued that service by mail was prohibited by the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters (Hague Service Convention). The U.S. Supreme Court held that the treaty did not prohibit service by mail in these circumstances, where this method of service was authorized by generally applicable law in Texas and the Canadian government did not object using the treaty process to service by mail. The decision was 8-0.

This case is another major defeat for the Federal Circuit on venue in patent law cases.

In 1957, the U.S. Supreme Court found that the patent suit venue statute limited suits to venues in the state where the defendant is incorporated. In 1990, the Federal Circuit held that due to an amendment to the general venue statute that patent lawsuits could be brought in any district that has personal jurisdiction over the defendant. This gave rise to extreme forum shopping by patent trolls with the Eastern District of Texas arising as a very plaintiff friendly venue in which many patent infringement cases were brought, despite it having only minimal contacts with the patent holder. 

This 8-0 decision overrules the 1990 decision of the Federal Circuit and holds that the 1957 decision of the U.S. Supreme Court that patent lawsuits may be brought only in the state where a defendant is incorporated remains good law. Congress had strongly considered a statutory amendment of the venue laws to address this issue but waited for the Supreme Court to resolve this case first.

More analysis including the curious fact that a rule regarding venue for corporations was resolved in a case where the parties were LLCs can be found at SCOTUS blog.

Cycles, Creative Destruction, Careers and Charity

The kind of work that needs to be done in the economy changes over time.


Some of the changes are cyclical and predictable.

One cycle involves annual seasonal employment.

Ski resorts need more workers, some of whom must have specialized skills, in the winter. Retail stores need extra winter workers. There is extra work for Santa impersonators in the winter. There is extra work for snow plough operators and Christmas light hangers in the winter. Once or twice a year, farmers need extra workers to bring in their harvests. Demand for life guards and employees in beach resorts goes up in the summer. There is more of a demand for teachers and tutors at all levels during the nine months or so a year of the school year. Hail repair work, fireworks sales work, fireworks show designers, lawn mowing work, swamp cooler set up work, pot hole repair work, and gutter cleaning work is all seasonal.

Certain combinations of seasonal work are particularly common. A large share of farmers find seasons work in the skilled trades or as tax preparers or teachers or coaches during slow periods of the farm calendar, that the balancing with farming in season. Lots of ski industry employees work as tour guides or rafting expedition leaders or summer resort workers in the summer. Lots of "handymen" work a regular seasonal cycle of landscaping and building maintenance work over the course of a year - each with its own little subset of skills.

Another cycle involves the business cycle. 

For example, there is more work for foreclosure counselors and bankruptcy form preparers during economic busts. There is more work in building construction during booms. Purveyors of luxury goods and services thrive in booms. Purveyors of discount priced goods and services thrive in busts.

Another cycle involves demographic waves.

For example, our economy has disproportionately needed goods and services for baby boomer aged individuals as they have moved through the life cycle. When they were in school, we needed more teachers and coaches. When they were in college, we needed more professors and dorms. As they age, we need more health care and nursing home work.

Creative Destruction

The economy also makes "structural changes" over time, often as a result of what economist Joseph Schumpeter called a process of "creative destruction." When technology and resource supplies or climate change or wars, our economy needs different kinds of work to be done. 

Women who might have otherwise served as homemakers or maids or nannies end up working in war factories instead. Coal mining jobs disappear and jobs installing solar panels and building wind turbines come into being. The work that is no longer required, for example, telephone operators, rarely corresponds neatly and smoothly to the new kinds of work that need to be done to replace the old technologies, for example, setting up and maintaining cell phone towers. If self-driving semi-trucks become a thing, truck driving work that now employs millions of people may become obsolete, but there were be a greater need for people in a particular location to load and unload those trucks. 


All of the observations I have made so far in this post are common place. But, other than a few platitudes in matriculation and commencement speeches at liberal arts colleges about how education needs to teach people not specific skills that may be outdated in time, but instead needs to teach people who to learn to learn throughout their lives, not much thoughtful reflection goes into the implications of these common place facts.

Certainly, there are some people who do basically the same thing for their entire careers, all year around. But, there are tens of millions of people who ride those cycles and trends, regularly changing the kind of work that they do to meet the ever changing needs of the economy.

The Gig Economy

At the low end of this group of people are participants in the "gig economy" - Uber drivers, brand ambassadors, actors who find work in supporting roles and short term performances, and more.

New Work Within The Same Job Description

I'm in another layer of this group of people. While my job title, "attorney" and my credentials have remained essentially unchanged for all of my adult life, the actual work that I do has shifted with business cycles, with demographic shifts and with structural changes in our economy.

When the economy was thriving and estate taxes were high, a did a lot of estate tax planning work for middle class families that gradually and then more momentously dissipated as the bite of the estate tax and need for trusts to minimize estate taxation declined. In boom times, I did a lot of business transactions.

When the financial crisis hit, almost all of my transactional work dried up, and I turned to legal work for a lot of "formerly rich people" who needed to deal with creditors in the face of business transactions gone bad, and divorces made more difficult by declining family fortunes. But, when the economy recovered, lots of this work faded away or ran its course.

As more and more same sex couples came out, before same sex marriage was legalized, I helped couples put in place domestic partnership agreements with exhaustive documentation designed to accomplish more or less what the national legalization of same sex marriage would eventually make unnecessary leaving most same sex couples with only very simple estate planning needs. There work is still there (for example, it is necessary for polygamous families), but there is a lot less of it.

But, as the financial crisis started to run its course and the marriage substitute of civil unions was already starting to dry up demand for domestic partnership agreements, the legalized marijuana industry came into being and created a new boom that continues to occupy a significant share of my practice.

I've oversimplified the trends, but the core lesson remains sound. While my credentials and job title have remained basically unchanged for the last twenty-two years, the kind of work that I actually do in that career has dramatically shifted several times over that time period to the point where it would not be obvious to someone unfamiliar with the professional structure of the American economy that I was still engaged in the same profession. 

I have little doubt that the kind of work that I do on a day to day basis will undergo similar transformation several more times before I die or retire, even if I continue to have the job title of "attorney" and to hold the same credential.

New Medium Term Job Descriptions

Plenty of people in the economy experience the shifts in the kind of work that they do on a day to day basis without the continuity that I have enjoyed in my generalist profession. Shifting job titles and often needing new professional credentials, as well as changing the kind of work that they do.

I previously mentioned the demise of telephone operators. Add to the declining ranks coal miners, steel workers, assembly line factory workers of all stripes, newspaper reporters, gas station attendants, law office photocopier/courier positions, postal workers, conventional farmers, classical language (i.e. Greek and Latin) instructors, court reporters, psychiatric hospital workers, and proprietors of video rental businesses, record store businesses and brick and mortar book stores.

On the other hand new job types have come into being. When I was in high school, almost no one had a job title of barista. There were no "bud tenders" (i.e. skilled retail salespersons in marijuana dispensaries) and no one was legally employed in marijuana "grows". There were no "web designers", no Uber or Lyft drivers, no one who made a living managing AirBnB properties, and no "app developers". Few business offices had an IT contractor. Organic farmers were scarce. Very few people installed solar panels or windmills. The certified financial planning profession and veterinary technician professions were in their infancy. Online journalism (let alone "blogging") didn't exist, let alone search engine optimization specialists and paraprofessionals manually training search engine neural networks. There were no EBay brokers and were very few life coaches.

Tenders: From Job Titles To Redefined Career Identities

At some point, it is likely that people will come to recognize that a commitment to a line of work for the season, for this part of the business cycle, or until the next round of demographic change or creative destruction sweeps through, is not as much of a part of a person's identity as it was in the day when Smiths and tailors and masons took their professions as their surnames, or even a recently as a generation or two ago, when holding a single job title and even a single kind of daily work for a lifetime was the perceived norm.

There may come to be a class of people who identify first as "trenders" doing whatever kind of semi-skilled work is currently, but probably not permanently, in demand in the economy, and only secondarily with the particular kind of work that they happen to be doing at the moment, just as I identify professionally primarily as an "attorney", and not in a permanent sense as a "marijuana business attorney".

Some of these people may do this by generalizing how the view the kind of work they do. Instead of seeing themselves as video renters, they may identify as "entrepreneurs" or "consultants" (something a high school friend who was the best man at my wedding did). Or, they may see their many gig jobs under a larger umbrella - my wife often describes her industry in which she is hired for several dozen distinct gig jobs a year as "promotions".

Trenders may develop their own meta-skills at identifying growth sectors in the economy and obtaining the certification or training necessary to be competitive in these growth sectors. And, with this constant "hustle" to move onto new kinds of moderately skilled work, trenders may also also develop a professional and class identity that extend beyond their medium term occupation.

Perhaps, in the educational world, we can find a happy medium between hyper-specialized skill training that is at risk of becoming obsolete almost as soon as it becomes useful (how many former factory workers in the 1980s were encouraged to learn the BASIC programming language at some community college or technical school only to never put it to any practical use), and a liberal arts education that consciously makes an effort to have students study fields that have no direct vocational application whatsoever (English literature, art history and anthropology majors who aren't bound for graduate school, here's looking at you.) Maybe that happy medium can be built around preparing people to be "trenders" performing "middle skilled" jobs and those that require only an undergraduate degree without a particular specialized college major in a specialized subject area.

Charity And The Inflexible Class

Of course, this also begs the question of what is to be done about the many people who may be resilient enough to master a single trade or career that isn't very skilled when they are adolescents or young adults, but simple aren't nimble enough mentally or psychologically to be trenders.

If you want to identify an important subset of frustrated Trump supporters who are willing to accept what deep down they know to be lies and poor character, it is members of this "inflexible class" because all they really want is to turn back time to the good old days of how it was for people in their shoes in their youth or in their father or uncle's days. For whatever reason, members of the "inflexible class" are disproportionately blue collar men without college educations - a class of people that is at a lower percentile on the socio-economic ladder and many people who would have lacked college education in a previous generation have gone to school for at least a few years to obtain a certificate, an associate's degree, or just "some college" that sets them apart from members of the "inflexible class" who found high school to be such a frustrating experience that they are loath to return to the classroom and fail again.

They yearn for a return of low skilled, good paying jobs on assembly lines or medium skilled jobs in coal mines that simply will never come back. Automation, irreversible offshoring, are the like have eliminated those jobs in a manner that can never be reversed.

In another decade, members of the inflexible class will be bemoaning the disappearance of jobs in department stores, and book stores, and newspaper reporting and truck driving and postal work.

Their counterparts in the Democratic party blame offshoring and corporate efforts to break the union movement. But, mass membership in private sector unions and mass repatriation of offshored jobs isn't happening either.

Members of the inflexible class may indeed be disabled in the narrow sense that their health is no longer good enough to find work in their original narrowly conceived profession as the number of people employed in it has dwindled and standards for those who remain in that line of work have risen accordingly, even if they are able bodied enough to do some kind of work of a different kind, possibly at lower pay or with less reliable or fewer hours until they build up alternative credentials and skills for new kinds of "middle skilled" work. And, this disability, narrowly conceived, also reduces their incentive to seek alternatives if they can get benefits in this capacity, and undermines their role as a breadwinner upon whom others are economically dependent that wrecks havoc on their families, and also disrupts their social circles, with an end result that is often a resort to opiods and/or alcohol dependency as they drift into untreated depression triggered by the constant anxiety of economic inadequacy.

Republicans tend to want to give members of the inflexible class a motivating kick in the butt by cutting benefits in what is perceived as tough love that will force them to get out of their funk and seek their fortunes in more fruitful lines of work in more prosperous places.

Democrats tend to focus more on the immediate suffering that cutting benefits imposes on people who as a practical matter truly are incapable of finding private sector economic support for themselves, at least in the short term, without more of a helping hand than they are receiving.a

There will always be some people in the United States who simply, as a result of modest IQ, a personality type that isn't very strong in the Big Five traits on conscientiousness and extraversion, or other particular barriers like congenital or acquired physical disabilities, substance abuse issues that they can't overcome without heavy handed assistance, or other mental health conditions like traumatic brain injury or psychosis or an autism syndrome disorder, or some combination of these things are simply never going to be terribly productive workers in any moderately meritocratic job market. Legions of potential workers abroad in offshored facilities and at home in immigrant populations are going to be smarter, have more of a disposition towards a good work ethic, better interpersonal skills, and less congenital and acquired barriers to economic productivity.

In any open, reasonably lassiez-faire economy, a rational firm will prefer to hire a more selectively fit worker to do their work for the same, or even for a somewhat higher price, and if more fit workers can actually be secured at a lower wage than less fit native born domestic workers, a firm is undermining itself by hiring the native born domestic workers. Yet, the fit immigrant hypothesis, which is well supported empirically, and the logic of comparative advantage, strongly suggests that this is exactly what is happening on a daily basis.

What is the just solution for member of our national community who are far below average in productivity, actually have negative productivity in a work environment, or at least have zero or negative marginal productivity when paid a minimum wage?

Economist Milton Friedman argued vigorously that the main problem of most poor people is not that they are overall bad people, but that they don't have enough money. He argued for a universal living wage, and a similar natural experiment, the Social Security and Medicare programs, seem to demonstrate that affording people who for some reason or another should not be required to continue to work to obtain the necessities of life, is an expedient and viable way to drastically reduce the suffering of the tens of millions of people who are categorically eligible for the program without reducing their sense of dignity and self-worth. Some who want to work a little can do so, many more do not and are continent with a modest but sufficient living that these benefits can afford them together with whatever savings they may have and some family support.

On the other hand, Malcolm Gladwell (e.g. in his book "Outliers") and many labor economists have argued equally strenuously that sustained separation of able bodied (even if not very productive) people from the labor force both greatly reduces that person's economic human capital for a sustained period of time going forward and leads to dire psychological and interpersonal harms to that person. In their view "meaningful work" during the time period when someone is able bodied, or perhaps even any regular work or educational activity, even if it isn't terribly meaningful, has intrinsic value and preserves the economic value of that person's human capital, whether or not any compensation is actually paid for doing that work. It prevents that person from becoming unemployable in the way that it has been empirically shown that people who have sustained periods of unemployment (even if for no fault of their own) do, whether or not this work activity is the source of their economic support in this time period. In the words of the Puritans, idle hands do the devil's work.

I'm not convinced that the two positions are totally incompatible from a public policy response perspective. Keeping someone engaged in meaningful work can prevent them from joining the "inflexible class", but just as we've learned that the approach to homelessness that works best is "housing first" before dealing with the root causes of an individual's condition, it seems extremely likely that "money first" is as a practical matter a necessary response to the poverty caused by in ability to work or unavailability of work.

And, less data still tells us how to coax someone out of the inflexible class, or what approaches work best to deal with the not insignificant share of the population which is simply not well equipped to compete on a meritocratic basis in a global economy that is full of other people who can do what they do better and at a lower wage.

Of course, taxes and incentives can be used to avoid all or nothing resolution of these situations and indeed there are a few tax credits in the Internal Revenue Code (mostly little known) with precisely this calculus in mind. How much should be subsidize a business that knowingly hires an inferior employee to keep him off the dole and make him a meaningful part of our society knowing that better potential employees will be able to land on their feet in the economy on a meritocratic basis.

Also, how much of the inflexibility in the behavior of the inflexible class is mostly a result of barriers that other policies have created that can be removed, as opposed to behaviors that reflect lack of personal character or ability.

30 May 2017

Oberlin College Appoints 15th President In Its 184 Year History

Carmen Twillie Ambar has been named the 15th president of Oberlin College. She will transition to Oberlin this summer and be on campus full time beginning in September. . . .
Ambar has served as the 13th president of Cedar Crest College since 2008, following a highly successful tenure as vice president and dean of Douglass College at Rutgers University, where she was the youngest dean in the University’s history. Cedar Crest has thrived under her leadership. Three straight years with budget surpluses and a 35 percent growth in net assets have allowed the college to make significant investments in the campus without borrowing, and the college’s endowment has increased by almost 92 percent. Ambar has presided over the launch of 18 new academic programs and, during her tenure, Cedar Crest has seen enrollment growth in six of the last seven years and this fall will welcome its largest freshman class since 2007. . . . 
At Cedar Crest, she led initiatives to expand the access of high-impact practices for all students including: “The Sophomore Expedition,” a shared short-term study abroad experience funded almost entirely by the college for all sophomores beginning spring 2018; campus vibrancy initiatives and a robust First-Year-Experience that have increased retention by 11 percent; the 4-Year Guarantee, which provides a clear path to graduation; dual degrees, to help students get their master’s faster; and living learning communities. Under her leadership, the diversity of the student body increased from 16 percent in fall 2008 to 37 percent in fall 2016, with the highest increases in Hispanic and African American populations. . . . 
Ambar serves on several boards including the Colonial States Athletic Conference, for which she is Chair; the Women’s College Coalition; and the Pennsylvania Campus Compact board. In 2014, she was honored by the governor’s office as a Distinguished Daughter of Pennsylvania. Additionally, she has earned several awards for her support of women including the 2012 Girls Scouts “Take the Lead” Award, the 2011 American Association of University Women (AAUW) Gateway to Equity Award from the organization’s Allentown Branch, and the 2010 Athena Award from the Women’s Business Council (WBC) of the Greater Lehigh Valley Chamber of Commerce.
Prior to her time at Rutgers, Ambar served as assistant dean of graduate education at the Woodrow Wilson School of Public and International Affairs at Princeton University. As an attorney, she previously worked in the New York City Law Department as an assistant corporation counsel. 
Ambar earned her juris doctorate at Columbia Law School, her master’s in public affairs at Princeton University, and her B.S. in Foreign Service at Georgetown University. She is married to Saladin Malik Ambar, Ph.D., an associate professor in the Department of Political Science and Senior Scholar at the Center on the American Governor at the Eagleton Institute of Politics at Rutgers University. A native of Little Rock, Arkansas, Ambar has ten-year-old triplets, Gabrielle, Luke, and Daniel.
From here.

29 May 2017

Time For A DOD RFP

A mine-resistant, ambush-protected vehicle passes through a narrow opening between walls before entering Joint Security Station Hasan in the Gilan district in southern Afghanistan's Ghazni province, June 11, 2012. U.S. Army photo by Sgt. Michael J. MacLeod
U.S.-backed forces in Iraq have launched an offensive to reclaim the last ISIS-held districts in Mosul, according to The Wall Street Journal. The assault on the outskirts of the western part of the city started Saturday. The militants are expected to put up one last fight before coalition forces move in.  
Iraqi troops will have to do battle on foot because the armored vehicles are too big for Mosul's narrow streets and back alleys. The western part of the city is still filled with about 200,000 civilians.
From here (emphasis mine).

Before spending billions of dollars inventing the world's most expensive warplane or the latest and greatest new frigate, maybe the R&D folks in the U.S. defense industry should start listening to what the troops on the ground urgently need yesterday.

The U.S. Army does have a Mobile Protected Firepower program with the general goal of developing a lighter armored vehicle to support infantry, although the U.S. Army's idea of light (a 19-28 ton air liftable light tank) and what is actually needed to be light enough to be useful in conflicts like the Battle of Mosul, may be two different things. The smallest models of MRAPs in the U.S. inventory are about 8 feet wide. But, this is apparently too wide to get the job done in urban combat in places like Mosul. The original Humvee was 7 feet and 1 inch wide, was unarmored and even with armor was vulnerable to IEDs and too wide for practical use on many narrow streets and alleys.

Sometimes, what U.S. troops and their allies need is not a biggest in its category maximally lethal vehicle, which may be hard to deploy, but a more proportionate response to the current military necessity. Their is a time and a place for a 70 ton heavy tank designed to destroy enemy tanks, but there is also a time and a place for an armored car that could provide troops better protection in urban warfare against light infantry forces in environments full of narrow streets and alleys.

I am fairly certain that our engineers and scientists could come up with armored vehicles that could operate in the narrow streets and back alleys of Third World cities if they put their minds to it, with existing technology, and with enough political urgency and funds, they could probably do so in a matter of months, not years or decades.

There is no reason that a light MRAP or remotely controlled armored unmanned ground vehicle that is less than 6 feet wide with armor sufficient to protect against pretty much all of the small arms insurgents might have at their disposal and considerable firepower couldn't be developed in short order. Small armored bulldozers to clear obstacles are needed as well as armored vehicles.

Examples of armored vehicles like this exist historically.

For example, India has a small armored car, the A-TAC, debuted in 2010, which would be an improvement over infantry walking down back alleys with no protection other than their flak jackets:

The battery-powered Anti-Terrorist Assault Cart (ATAC) can carry two fully-armed soldiers or security officers along as is traverses narrow indoor corridors and rides service elevators . . . . The $45,000 vehicle also boasts bullet-proof windows that can survive grenade blasts, according to manufacturer Metaltech Motor Bodies Pvt Ltd. Its design was inspired by the 2008 terror attacks in Mumbai, India where Islamist gunmen held off Indian commandos for 60 hours inside two luxury hotels. The final casualties included 17 security personnel among the 166 people killed in total. 
Four firing ports would allow the armed driver and rider to fire at enemies from the safety of their vehicle, and could possibly offer more protection than a bunker shield carried by SWAT or elite police units. . . . 
Each car can run for about six hours on a single charge and speed along at 15 miles per hour (25 km/hr). That sounds about right for patrolling stadiums or airports; but don't expect to take one of these out for a run along the highway.
In the rubble and obstruction filled streets of urban combat zones, troops may need something less like the armored golf cart above designed for indoor use, and more like an armored all terrain vehicle, like the fictional one depicted below (from the 2009 GI Joe movie). The U.S. Forest Service defines an ATV as a vehicle which, among other things, is no more than 50 inches wide (i.e. 4 feet, 2 inches).

Real world versions (really just kits to adapt an ATV for police SWAT team use) are underwhelming but show that the concept isn't entirely vaporware:

Another option would be something like this Russian remote controlled mini-tank with a 30mm canon:

Another concept would be a remote controlled variation of a German World War II half-track motorcycle outfitted with a machine gun turret and perhaps a small compliment of Navair Spike missiles that cost about $5,000 each and weigh about 5.4 pounds each:

Or perhaps a modernized version of the French Panhard 178 that entered service in 1935, which was 6 feet, 7 inches wide:

Or perhaps something like Japan's Type 97 Te-Ke light armored car of the 1930s which was just 5 feet, 11 inches wide:

Or, an updated version of Russia's World War II BA-64 armored scout car  (5 feet 9 inches wide):

Or like the British WWII and post-WWII Humber Armored Car which was 7 feet, 3 inches wide:

Or even an updated version of the German armored motorcycle called the Panzerbike:

The point, of course, is not to say that we should restore 1930s and World War II military designs or armored golf carts designed mostly for indoor SWAT team type applications to the urban battle fields of the Third World. Instead, it is to demonstrate, through proof of concept via armored vehicles actually used in combat with technology no greater than exists today, that it is possible to design and build armored vehicles for use in narrow roads and alleys that could significantly reduce casualties of U.S. allies in current wars and U.S. troops in future wars.

Modern tanks are no longer optimal choices for destroying enemy tanks, but lighter armored vehicles still do make sense in counterinsurgency warfare.

How Rational Are Bank Robbers?

An economist looks at the behavioral economics of bank robbery in order to think about what might and might not work best to discourage crime.
Each year there are more bank robberies in Italy (approximately 3,000) than in the rest of Europe combined, with a 10 percent chance of victimization on average. 
…The average robbery lasts 4.27 minutes and leads to a haul of approximately 16,000 euros. Given that more than half of all bank robberies involve two or more perpetrators, the average haul per criminal is approximately equal to 8,700 euros. . . .
Those are a few interesting facts from a bold new paper, Optimizing Criminal Behavior and the Disutility of Prison. . . . 
[H]igher ability bank robbers have a higher disutility of prison. Thus higher ability offenders can be (especially) deterred by longer sentences. The authors focus attention on high-ability offenders because those are the offenders most likely to fit the assumptions of their rational-actor model. I think it’s actually better to focus on the contra-positive conclusion: its hard to deter idiots. . . .
The existence of idiots, however, calls into question the optimizing assumptions of the model. As I argue in What was Gary Becker’s Biggest Mistake? the poorly-socialized-child theory of crime can suggest other approaches to combatting crime (e.g. cognitive behavioral therapy): 
Here’s a simple test for whether crime is in a person’s rational interest. In the economic theory if you give people more time to think carefully about their actions you will on average get no change in crime (sometimes careful thinking will cause people to do less crime but sometimes it will cause them to do more). In the criminal as poorly-socialized-child theory, in contrast, crime is often not in a person’s interest but instead is a spur of the moment mistake. Thus, even a small opportunity to reflect and consider will result in less crime. 
The guy who robs a bank that has a security guard and then attempts to run away seems like a poor fit for a rational actor model. Perhaps more thinking would have led a better planned bank robbery but more plausibly it would have led to no robbery at all. Thus, I’d frame the author’s contributions in this path-breaking paper as telling us not just about rational bank robbery but about the limits and bounds of rational bank robbery.
From Alex Tabarrok at Marginal Revolution (emphasis mine).

As far as it goes, Tabarock's observations are astute.

He misses, however, the low hanging fruit. What is Italy not doing, that every other country in Europe does, that make so much of a difference?

26 May 2017

It's Personal

It is easy to fall into the trap of thinking that politics is just about competing abstract ideas. But, policies that result from politics, and even the social climate that results from the rhetoric that politics produces, affect the lives of real people.

My daughter's graduation yesterday from George Washington High School, an "inner city" school in Denver, Colorado, was a stark reminder of that fact.

There many speeches. They didn't proclaim a bright future where graduates could follow their dreams. Instead, the graduates were praised as resilient survivors who were equipped to survive in an adult world that had become an increasingly hostile place for them since the last election.

One graduate was a Dreamer who had lived in the U.S., undocumented, since he was 11 years old and would be attending CSU on a scholarship tailored to someone in his shoes. The Trump administration has started deporting people like him.

Another was a young black man who'd had a run-in with the law and disciplinary problems in middle school, but who turned his life around in high school and was off to play college football. The Trump administration wants to adopt policies that make it likely that he will have no recourse if he is targeted groundlessly by police and that he might end up spending disproportionate terms in prison if he makes a misstep.

One of the two valedictorians described the graduates (in the school color green gowns) as baby sea turtles, struggling against the ocean and long odds to make it in the world. Unlikely the sea turtles, they are not alone in the world, but the world is definitely not on their side.

One graduate had lost a mother to brain cancer but persisted. Another's mom had pulled through as her son struggled to figure out how school could be relevant - but his mom made clear that education was the path to a better life than he'd know in his childhood. Some graduates had children facing an uncertain future.

The programs that face deep cuts in the federal budget proposed by President Trump are programs that a large share of my daughter's classmates have relied upon to help meet their basic needs. Those cuts mean their little siblings will be hungry and may be denied medical care.

Many of her classmates' families send remittences to family abroad. Trump plans to heavy tax those transfers. 

Some of her classmates are homeless. Trump's policies, if implemented, will swell the number of George Washington High School students in those dire straights.

The upswing in expressions of hate directed at these students has visibly swelled since the election.

As a community, the students who attend George Washington High School, their family members, and the faculty and administration, are united in trying to create positive conditions for those students and in trying to give them a bright future. But, no one is fooling themselves. There are many obstacles in the way of these new graduates.

21 May 2017

Women Are Present, But Rare, In Formerly All Male Army Specialties

In 2010, 14.1% of enlisted active duty military personnel and 16.4% of officers, were women. 

Right now, less than 0.5% of women joining the U.S. Army are in specialties, like infantry, armor and the Rangers, which were reserved for men until 2015, and while the numbers will grow, they probably won't ever be terribly high, so long as raw physical strength and fitness (as well as extreme aggression in some cases) remain important qualifications for those positions. But, some women are taking on those positions according to the same standards as the men seeking to fill those posts.

Rough gender equality in positions calling mostly for physical strength is always going to be a literary trope of the science fiction and fantasy genre (because a female warrior is an intriguing character for both male and female readers), and not reality. On the other hand, we have already reached a point where traits in which women are at a severe disadvantage are critical only in posts which make up a minority of the posts in the active duty military. 
There were 48 women trainees who arrived at Fort Benning in February, and 32 of them were deemed ready to attempt basic training without any additional physical training. The 18 graduates were among those 32 soldiers. 
There were 148 men who started the class, and 119 of them graduated. . . . [Ed. women made up 22% of those who actually started and 13% of the graduates; 50% of the women failed to make it through basic training after starting, while 20% of the men failed to do so. In addition, a third of the women who applied and an unknown (but surely smaller) percentage of the men who applied, weren't physically fit enough to begin the program.]
The integrated training of men and women soldiers has played out at the Maneuver Center of Excellence in a public way since early 2015 when 19 women became the first soldiers to attend Ranger School, the Army's most demanding combat arms training. 
Capt. Kristen Griest, then assigned to military police, and Capt. Shaye Haver, an Apache helicopter pilot, became the first women to earn the Ranger tab in August 2015. Maj. Lisa Jaster completed the training two months later. 
A year ago, the first women to attended the basic officer leadership courses reported to Fort Benning to begin the integration of the officer ranks in Armor and Infantry. In October 2016, 10 women graduated the Infantry Basic Officer Leadership Course, the in December 2016, another 10 women graduated the Armor Basic Officer Leadership Course, becoming first lieutenants. 
"We started with leaders first," Kendrick said. "We have female company commanders out in the formation now. We have graduated lieutenants, I saw some of them out there this morning. We have produced four NCOs who have changed their MOS that have proceeded the privates. So, what you have here is the last step in producing soldiers that will be part of those formations ... for integration here." . . .
Maj. Gen. Jeffrey Snow, commander of Army Recruiting Command at Fort Knox, who is not surprised that the number of women completing these initial integrated courses is small. 
"We never anticipated to see a significant influx into the combat arms," Snow said. "The research indicated that the majority of the women will still go into non-combat positions. But what it did do for us -- and believe this in my heart of hearts -- it caused women to look at the Army in a different light and say, 'Hmm, it's now a level playing field.' So even though they didn't go into combat arms, we had a good year in 2016. We had 14,000 women make the decision to join the regular Army and Army Reserves. That was the best year in 10 years from a percentage perspective, and I think we are on track to do the same thing this year." 
Women failing to meet the standard than men by percentage is not surprising, said Kendrick, who offered an explanation. 
"Most of female trainees are on the lower scale of height and weight -- 5-foot-3, 5-foot-4, 5-foot-2, 5-foot, 120 pounds, 100 pounds -- our physical requirements are not altered for any percentage of body weight," Kendrick said. "They carry the same load as everybody else. What we find is when you have a smaller, skinnier person -- frail, I guess would be a word -- those physical requirements are very difficult." 
Currently, there are about 100 women either training or in the pipeline to do infantry basic training at Fort Benning, Snow said. The publicity generated from the first class to graduate should help increase that number, Snow said.
From Military.com.

A typical enlisted soldier, of either gender, is an eighteen or nineteen year old, who recently graduated from high school, who wasn't an obvious candidate to be college bound, but was in the middle 50% of their high school class, and a high school athlete. A decision to not just enlist, but to pursue a speciality in a combat arm like the infantry, is an incredibly bold move for a young woman.

According to Pew, within the military there are three categories of specialties that are more common for women than men (in parenthesis): 30% (12%) of women have administrative specialties, 15% (6%) are in medical specialties, 14% (12%) are in supply specialties. In addition 18% (31%) are in electrical or electronic specialties, 10% (10%) have communications specialties, 5% (7%) are craftsmen or in other technical specialties, 3% (19%) are in infantry, gun crews or seamen specialties, and 5% (5%) are in non-occupational roles.

This isn't necessary a bad thing for women in the military. Almost all of their jobs have relatively close civilian analogs. A much larger share of men are being trained in specialties with no civilian equivalent.

Like men, about half of women in military service are married. But, unlike men, about half of women in the military who are married, are married to someone else in the military.

How Long Is A Marathon In Imperial And Metric Units?

A marathon has an official distance of 42,195 meters (42.195 km), which is 26.219 miles (a.k.a. 26 miles, 385 yards). The approximation commonly seen on car stickers in the U.S., 26.2 [miles], is 33 yards too short. The three significant digit approximation in metric units: 42.2 [km] is 5 meters too long.

The distance is rooted in a Greek legend from the historic era.

Krugman Draws Wrong Lesson About Macroeconomics From Financial Crisis

Noah, at Marginal Revolution, think the less of the financial crisis is that macroeconomics has very few credible findings. I tend to agree that the entire sub-discipline is rotten. Krugman, in contrast, tries to make the case that macroeconomics was just simply missing some key data points to tune its models.
Noah is generally very down on macroeconomics, but I believe that we’ve learned a lot in macro since the 2008 crisis. Take fiscal policy: before the crisis there was strikingly little solid evidence about its effects, largely because history gave us so few natural experiments (causation generally ran from business cycles to budgets rather than the other way around). But the crisis gave us both some experiments via austerity and a renewed search for historical cases. I’d point to Blanchard and Leigh, using austerity as an experiment, and Nakamura-Steinsson, exploiting regional shocks from defense spending. Not saying these are the only fine papers, but they’re enough to show that there’s a real there there. 
I think we’ve also had some dramatic confirmation of what some of us thought we knew about monetary policy at the zero lower bound. I can think, for example, of a 1998 paper that has held up really well; but I’ll leave that as an exercise for readers. 
What about trade? Autor/Dorn/Hanson on the China shock may not be the last word, but surely a revelatory approach. In a strange way, I’d put Subramanian and Kessler in the same category: realizing that this globalization is different from anything that came before is a big deal. 
I guess that in a way I’m pushing back against Noah’s nihilism (noahlism?) even while endorsing his method. I think there has been a lot of good economics done, even if there are also vast literatures not worth your time.
From here.

18 May 2017

Land Use Regulation Is Bad For America

The title overstates the case, but only a little.

The differences in the cost of living between metropolitan areas is driven mostly by differences in housing costs. And, the variability in housing costs between metropolitan areas has increased dramatically between 1980 and 2007.

The variability in wages between metropolitan areas has also increased dramatically between 1980 and 2007.

What has driven this change?

A new economics paper has a model that explains this quite well.

One key part of the model deals with how metropolitan areas with differing levels of land use regulation (measured with an index of actual land use regulation strength in each metropolitan area as of 2007). In places with little land use regulation, when new people move to an area, housing prices don't increase much. In places with strict land use regulation, when new people move to an area, housing prices increase a lot.

Another key part of the model is that the amount of land use regulation in an area is driven by (1) the relative proportion of voters who are renters v. home owners, and (2) the proportion of each group that are college educated (because college educated people are more effective at influencing politicians). Renters, on average, favor less land use regulation because that keeps rents lower and reduces the down payments they need to eventually buy a home. Home owners, on average, favor more land use regulation, because it increases the value of their investment in a home and the higher housing prices get, the more intense the desire for strict land use regulation is because home equity becomes a larger share of their wealth.

A third key part of the model is that high wage, high skill people are less discouraged from moving to a place by high housing costs than low wage, less skilled people.

A fourth key assumption of the model is that people are more productive and earn higher wages in cities with higher productivity and less productive and earn lower wages in cities with less productivity, even if they are not personally high skilled people. 

Thus, less skilled people avoid more productive cities where they could earn more because the housing costs are too high, segregating whole cities into expensive to live places with lots of high wage earners and inexpensive to live places with lots of low wage earners whose wages are suppressed by leaving in these less productive places.

The conclusion: 
[T]he rise in regulation accounts for 23% of the increase in wage dispersion and 85% of the increase in house price dispersion across metro areas from 1980 to 2007. I find that if regulation had not increased, more workers would live in productive areas and output would be 2% higher. I also show that policy interventions that weaken incentives of local governments to restrict supply could reduce wage and house price dispersion, and boost productivity.
This happens, basically, because land use regulation decisions are made by local populations in their own self-interests without regard to the impact these decision have on people who might want to relocate there in the future, a classic case of an externality.

What are the policy responses the paper considers:
In the first, cities may choose their level of regulation up to an exogenous upper limit instituted and enforced by a central government. While this policy is not possible to implement due to legal constraints to federal involvement in local land use, it provides a ballpark estimate of what the central government could achieve with such a policy. In the second, the federal government introduces a tax that discourages regulation.
Basically, in the second option the tax increases taxes on owners of expensive homes and redistributes the funds to owners of less expensive homes.

Now, honestly, a 2% increase in GDP (actually 2.1%) over 27 years from a misallocation of labor isn't really all that impressive. The is a very lower order factor influencing GDP.  As it is, mean hourly wages increased from $8.48 an hour in 1980 to $26.18 an hour in 2007. The study suggests that without increased land use regulation, hourly wages would have been $26.70 in 2007. Thus, instead of increasing by $17.70, they would have increased by $18.22 over that time period. Thus, a little more than 97% of wage growth is unrelated to land use regulation, and about 3% of wage growth might be lost due to land use regulation.

Inequality between geographic areas is powerfully driven by land use regulation, but this inequality has only a very modest impact on productivity and wages.

If either of the policies he considers were implemented, "output would be 1.5% higher, wage differences 5% smaller, and average house prices 25% lower."

17 May 2017

Child Psychopathy Can Be Managed With Cutting Edge Treatment

It has been known for a while now that a significant share of individuals who as adults would be classified as pyschopaths have had that traits since at least age 3-4 and probably congenitally (the etiology of psychopathy is unknown but is believed to involve the limbic system in general and the amygdala, in particular).

A story in The Atlantic magazine discusses two programs that have been successful in helping kids with this condition manage it. It doesn't cure the condition, although there is some hope that childhood treatment may alter its progression. But, it does use psychological hacks flowing from an understanding of how psychopathy changes a person behaviorally to tame a child's destructive and dangerous tendencies, and to channel the child into more pro-social behavior.

The article is rich, credible, consistent with other writing on the topic and worth time to read, even though it is lengthy.

Until now, no really proven treatment programs existed. The condition is present in about 1% of kids, comparable in frequency to schizophrenia, bipolar personality and autism spectrum conditions. But, because its connotations are (rightfully) so horrible, there hasn't been a social movement to help those who suffer from it in the same way that there has for those other conditions. For the most part, the existing default approach has been to address this conditions through the ordinary criminal justice system, both for juveniles and adults, by imposing long periods of incarceration or capital punishment.

16 May 2017

U.S. Crude Oil And Coal Production Per Capita By State

Which states will be hardest hit by declining coal production and declining oil demand which arises when electric cars become the norm due to advances in battery technology?

Which states produce the most oil per capita (in barrels equal to 42 gallons each), which currently has a market price of about $50 per barrel ($48-$51 depending on types)? (2015) Source: 2017 World Almanac.

Which states produce the most coal per capita (in short tons) with a market price of about $52 per short ton? (2015) Source: U.S. Energy Administration.

Red States in Bold

----------------------------Oil--Coal = Oil + Coal Production Per Capita Per Annum
1. Wyoming------------147 + 626 = 773
2. North Dakota--------536 + 36 = 574
3. Alaska----------------251 + 2 = 253
4. New Mexico----------67 + 7 = 74
5. West Virginia----------4 + 53 = 57
6. Texas------------------46 + 1 = 47
7. Oklahoma-------------41 + 0 = 41
8. Montana---------------29 + 6 =35
9. Colorado--------------22 + 3 = 25
10. Utah-------------------12 + 5 = 17
11. Kansas-----------------16 + 0 = 16
12. Kentucky--------------1+14 =15
13. Louisiana-------------13 + 0 = 13
14. Mississippi------------8 + 0 = 8
15. California--------------5 + 0 = 5
16. Alabama---------------2 + 3 =5
17.  Illinois----------------1 + 4 = 5
18. Pennsylvania--------- 1+ 4 = 5
19. Indiana-----------------0 + 5 = 5
20. Ohio--------------------2 + 1 =3
21. Arkansas---------------2 + 0 = 2
22. South Dakota---------2 + 0 = 2
23. Nebraska--------------2 + 0 = 2
24. Virginia----------------0 + 2 =2
25. Michigan--------------1 + 0 = 1
26. Arizona----------------0 + 1 = 1

Offshore Oil 563M barrels per year (2 per capita for USA)

What Works When Responding To Bullying?

Most advice for dealing with bullying given to individuals isn't practical or is simply unwise, according to a new study, even though a variety of approaches are widely shared. In particular, it tends to recommend solving the problem personally, and suppressing emotions triggered by the bullying. Recourse through formal institutional channels also often fails to work, particularly when driven by a single complaining victim.

While the paper discusses at length what does not work, it takes real effort to dig through it and glean the approaches that do work which are illustrated without a clear declarative statement about what they involve. But, because this is such a dire situation when you are in it, and the advice is ultimately good and unexpected, I have done the work for you.

Solving a bullying problem by yourself usually doesn't work. Neither, in most cases, does suppressing your emotional response to the bullying with everyone in contact with the situation. Neither in most cases, does resorting to formal institutional channels by yourself.

What responses to bullying do work?

1. Share the experience with peers who also interact with the bully in a fully emotional manner that demonstrates the these peers the seriousness of the situation, outside formal organizational channels.

2. The right thing for a peer who hears these accounts to do is to validate these emotions and to seek to expand the group that learns about the bully's conduct so that more peers can learn about the bully and validate these emotions.

3. The victim and the peers of the victim should then put time and thought into developing a collective response to the bullying that is primarily outside of formal channels.

4. Resort to formal institutional channels should be a secondary part of this plan and should also be organized as a collective response to the bully's conduct that should be activated when it is likely to be successful.

From an economics perspective, bullies are basically a collective action problem.

GPS Still Irritating

Mouseover: Technically, both cars are haunted, but the murder ghosts can't stand listening to the broken GPS for more than a few minutes.

Fun facts that illustrate my attitude towards GPS:

* It takes about two and a half miles of driving along 14th Street to convince a GPS that you really want to get to your destination via 14th Street rather than Colfax which runs parallel to it one block to the north.

* My GPS has a name: Loki, because it leads me astray and tries to confuse me.

* Forget returning cursive writing to the curriculum, I want them to restore cartography.

* GPS consistently overestimates how easy it is to make a left turn onto a busy street during rush hour.

* I was looking for a McDonald's once and it directed me to an abandoned building that used to be a VFW hall.

Battle of Mosul Seven Months Old And Still Not Over

ISIS won the city of Mosul in 2014. For the last seven months, Iraqi forces with U.S. support have been trying to retake it from ISIS fighters who are utterly outnumbered and have far inferior military weapons systems at their disposal (e.g. no air force or meaningful anti-aircraft resources, poor training for troops, and vulnerable supply lines).

U.S. military leaders say that the battle, begun in October, is nearing its end
The Mosul fight is approaching its "final stages," Brett McGurk, special presidential envoy for the global coalition against the IS, told The Associated Press during a meeting with Iraqi military and civilian officials at a water treatment plant near the town of Hamam al-Alil. 
"The world is now seeing that (Iraqi) soldiers are completely destroying Daesh," McGurk said, using the Arabic acronym for the Islamic State group that is also referred to as IS, ISIS and ISIL. He described the fight to retake Mosul, which was launched nearly seven months ago, as one of the most difficult urban battles since World War II.
But, about 200,000 people remain in ISIS controlled territory within the city. At least 12,000 civilians have been injured in the Mosul battle and treated in local hospitals. More than 400,000 Mosul residents have been displaced. Rebuilding costs once the battle is over are estimated at an eye popping $100 billion.

It is hard to tell, from afar, why this particular instance of urban warfare is so difficult in the face of an ISIS force that by all standard measures of military capabilities should be completely outmatched. 

Are Iraqi tactics missing something important? Are Iraqi forces unwilling to show the commitment and make the sacrifices necessary to bring this battle to a more prompt end? Are key military resources available to the U.S. being withheld? Are ISIS insurgents just amazingly great? Or, it retaking territory in urban combat just that hard?

The answers will have to come from someone with better information about the detailed progress of the battle than I have available to me. But, clearly, this kind of urban warfare is one place where there is definitely room for improvement that calls for a Manhattan project class effort to improve our performance.

15 May 2017

Things Not To Do At Your Korean Job

Dropping your pants and [urinating] in the person’s briefcase would be only a little ruder than calling him/her by his/her first name.
Via Language Log.

Comment Spam Purged

About a week ago, I purged about half a year's worth of comment spam that had escaped the spam filter and rescued three or four legitimate comments that were wrongfully classified as spam from the spam folder. It is all current now.

A Quick SCOTUS Summary

It was a bad day for consumers and ex-spouses at the Supreme Court today.

* Filing a claim for zombie debt is a bankruptcy is not actionable as an unfair debt collection practice. Midland Funding, LLC v. Johnson. Justices Sotomayor, Ginburg and Kagan dissented from the 5-3 decision. The ruling hinges on the fact that the statute of limitations is an affirmative defense rather than part of the prima facie case to enforce a debt.

* An arbitration agreement with a nursing home entered into by a POA agent binds the principal and the principal's estate with respect to a wrongful death case, even though state law didn't authorize the agent to enter into arbitration agreements. Kindred Nursing Centers Limited Partnership v. Clark. Justice Thomas is the sole dissent futilely arguing as he has in many dissenting opinions that the Federal Arbitration Act does not apply to the states.

* A military spouse's QDRO benefits for a military pension can be reduced when some of the pension is converted to a disability benefit after the decree enters. Howell v. Howell. The opinion is unanimous, although Justice Thomas concurs.

Of course, Justice Gorsuch, did not participate in any of these cases which were granted, briefed and argued before he was appointed. He probably won't regularly appear as a participant in cases upon which opinions are rendered by the Supreme Court until October.

11 May 2017

One Down, One To Go

High school is all over for kiddo number one (above), except for the parties! Our nest will be half empty in the fall.

Kiddo number two, meanwhile, will no longer need dad to accompany him as he drives his chariot  (below) around town starting this summer. (The previous owner is depicted in the photo, not Clark.)

10 May 2017

What Wage Would It Take To Attract American Farm Workers?

One area of the labor market that is dominated by immigrant labor is farm work, especially seasonal and migratory farm work associated with harvests.

Once or twice a year some offers up a headline showing that out of hundreds of applicants for this work that stick it out, only a handful are native born citizens.

Of course, as any good economist would tell you, this doesn't really mean that native born citizens are unwilling to do this work. It simply means that the price at which they are willing to do the work is much higher than the price at which immigrants are willing to do the work, which often pays more than minimum wage, but rarely pays well.

What I haven't seen is any serious effort by economists or anti-immigration advocates to ascertain what wage is necessary to voluntarily fill the available jobs with native born citizens.

Surely, the available information is sufficient to make clear that the wage would have to be significantly higher than it is now. And, some of the relevant information isn't to hard to find.

* This kind of work employs 3.5 million people in any given year.

* The pay is more than minimum wage, but not much, and isn't a full time, year round job.
Farm employers reported paying their hired, seasonal harvest workers—the folks picking and sorting everything from grapes to peaches to tomatoes—an average wage of $10.19 an hour in 2010. Because harvest work is seasonal, many farmworkers only find employment for part of the year; it’s not uncommon for farm laborers to report working about 1,000 hours a year, the equivalent of six months of full time work.
 * The impact of higher farm worker wages on the cost of produce would be pretty modest:
The average American household spent $515 on fresh fruits and vegetables in 2014, and about 28 percent of that—around $137—went to produce farmers. The farmers paid about a third of that to workers, while the rest went to farm maintenance and other costs. At current wages, farmworkers’ annual share of each family’s grocery bill at $45—less than 10 percent. 
Raising farm worker wages in the U.S. to $15 an hour—and annual earnings to $15,000—would represent a 47 percent wage increase. That might seem huge, but Martin says Americans spend so little on produce that it wouldn’t mean much for families’ grocery bills. 
Remember that farmworkers’ share of each U.S. household’s annual grocery bill is $45. If farm worker wages go up by 47 percent, grocery bills would go up just $21.15 a year, or $1.76 a month.
* Maybe $15 an hour still wouldn't be enough. Suppose that it was necessary to pay $23.77 an hour to find native born American workers to do those jobs, more than twice as much as the average employer pays now. This would cost the average household $52 a year, which would work out to about $1 a week.

At that wage, the average farm worker would make $23,770 per year during the farm working season, plus whatever part-time work that the person could find, perhaps 500 hours a year of part-time work in the off season at $8 per hour for a total of $4,000 of income in the off season, resulting in a total annual income of $27,770 per year from seasonal farm work and working half time at close to minimum wage in the off season. 

This isn't a lot of money, but it would be more than the federal poverty line for a family of four. And, the number of jobs involved would be greater than the total number of people unemployed in the United States at the moment.

Of course, not every unemployed person is fit to be a farm worker whether they want to do the work or not, at any price. The work takes a certain level of physical health that lots of unemployed Americans lack, putting aside any reluctance to do "hard work" which probably has more to do with low pay than a true unchangeable lack of motivation. For example, your average 60 years old former blue collar worker on disability probably isn't going to be able to do this work.

On the other hand, since this work wouldn't require licensing or a spotless criminal record or a diploma, in all likelihood, lots of able bodied people who have great trouble finding work and staying employed because they didn't graduate from high school, or have a criminal record, or what have you, who are at rock bottom in the current economy, would have a much easier time finding work and making a living without nearly as much government assistance as they receive today.

But, the notion that the economy would collapse because farmers couldn't hire people to harvest their crops at a price that the market could afford to pay in the absence of immigrant labor willing to work for lower wages is malarkey.

Also, if the wages for farm workers were high enough to fill those positions with native born American workers, this wouldn't just affect farmers and people who buy groceries. The higher wages available in this work would also reduce the supply of less skilled workers in all other lines of work, increasing their wages and reducing the number of less skilled workers who are unemployed.

* Maybe even $23.77 an hour wouldn't be enough. Lots of not very skilled temporary labor jobs in the gig economy, like sign spinning, pay that much and that is easier work. Maybe it would take wages of $30 an hour and increase the costs of groceries for the average household by $1.50 a month (while at the same time lifting millions of households that are the most sensitive to grocery prices out of poverty). This might bring about an annual income of $34,000 a year for a bread winner who is able bodies but has no other particular skills. 

In any case, certainly, at some price, it is almost certain that farmers could hire all the American farm workers they need to do this work, and it is highly unlikely that that price would be one that the market couldn't afford to bear.

High school and college students on summer vacation, for instance, might be a good source for a lot of these workers.

The government wouldn't have to set the wage. It could simply credibly enforce labor laws and repeal laws allowing legal immigrants to do that work as guest workers. Farmers would moan and groan about how this would put them out of business, but they'd eventually pay workers enough to get the work done, prices for produce would rise at wholesale which would translate into higher retail produce prices, and life would go on. It might even be necessary to impose some tariffs on agricultural goods to prevent this work from being offshored to lower wage farm workers in other countries. But, it could be done and once it was done, it wouldn't be very noticeable in the daily lives of consumers, while it would have a huge impact on the market for all low skilled workers.