Denver Real Estate Markets Hot

Hotels Full

The occupancy rate in the Denver hotel market is 76% (according to a Denver Post graphic that I saw in the print addition earlier this year and can't find a link for now).  While that may seem modest, it is actually the highest it has been for decades at least, and possibly much longer.  Typically, occupancy rates in Denver hotels have been between the high 40s and mid-60s, with even 70% being a strong market.  Room rates, meanwhile, are rising.

Housing Inventory Scarce

The inventory of houses for sale in Denver is about an 8th of what it was at its peak about eight and a half years ago.  In January 2015, there were 4,171 houses for sale in the Denver metro area and the average house was on the market for 43 days (in December of 2014 there were 4,355 houses on the market and the average house was on the market for just 38 days).  Usually, inventory builds up in the winter, but not this year.

In contrast, in 2007, there were 24,603 houses on the market and the average house was on the market for 105 days.  In the summer of 2006, there were almost 32,000 homes on the market.  The last time the inventory was so low was well before 2003, and the last time that the inventory was so low relative to the metropolitan area's population was even earlier.

Apartments Full

Apartment vacancy rates are also very low.  They had fallen to 3.9% last October, while rents have risen.  This was the lowest since the third-quarter of the year 2000 when it was 3.7% and is near a historic low.

Rents averaged $762 in the third quarter of 2000, compared with $1,145 during the third quarter of 2014, and up from $1,117 in the second quarter and $1,073 in the first, according to figures released Friday in the Denver Metro Area Apartment Vacancy and Rent Survey. The statistics were compiled by the University of Denver's Daniels College of Business and Colorado Economic and Management Associates.

Denver rents are still only about half of the rent for comparable places in San Francisco and New York City, however.

Market Responding

The market has been responding to the situation, at least partially.

New apartment buildings are popping up everywhere.  Northwest Denver is awash with them, especially along 38th Avenue, in the Highlands neighborhood, near light rail stations (e.g. the Gates Rubber Plant vicinity), and along major arterial streets like Broadway, Colfax and Speer, and near colleges.  One major apartment building has been completed near Speer and Washington, another is being built at 6th Avenue and Speer, and two thirty-two story high rises are in the work across from the Denver Country Club.  New housing and commercial buildings are flooding the Cherry Creek Mall and Cherry Creek North area.  A redevelopment plan is in the works with a contractor finally put in place for the former University Hospital site at 9th Avenue and Colorado Boulevard, an area that will take another hit when the massively overbudget VA Hospital is completed and that facility moves to Aurora's Fitzsimmons campus.

According to the Denver Post, "9,145 new apartments were built in 2013, 8,700 new apartments are expected to come online in 2014 and another 8,700 in 2015."

The cylindrical hotel never Sports Authority Field at Mile High is being converted to studio apartments, another hotel about a mile to the North has been converted to Auraria Campus student housing (as has a hotel near the Denver Performing Arts Center downtown), and a number of 1950s motels on state highways (like Colfax Avenue) have been converted to transitional housing for families who were homeless and into permanent apartments.

Many existing apartment buildings are being refurbished and updated to compete.

Many new hotels are being opened.  Inventory will expand by 1,700 rooms (3.8%) in 2015.

The past decade or so has seen the intense gentrifcation of Northwest Denver which has finally crossed a critical mass threshold, and North Denver is gentrifying in a swath that runs from I-25 all of the way to Quebec Avenue (where the Stapleton neighborhood begins).  The Northfield neighborhood of Stapleton is starting to fill out, as is the gentrifying Ballpark neighborhood near Coors Field, the River North neighborhood between downtown and I-25, and an "airport city" in and around Denver International Airport (DIA).

Denver proper makes up only about a quarter of the total population of the metropolitan area and is almost entirely landlocked.  Yet, it has consistently issued more than half of the metropolitan area's building permits over most of the last decade or two.

Single family home construction and condominium construction have been slower to come back.

Is Construction Defect Liability Discouraging Condominium Construction?

Condominium projects have been particularly scarce.  The Colorado General Assembly is debating a bill to make it harder for HOAs to sue builder of the projects.  The bill addresses allegations that condominium projects are scarce (which they are), not due to market forces and the availability of financing, but instead because HOAs of newly built condominium projects are too prone to bring construction defect litigation against builders.  They argue that this has driven up insurance costs, making apartment projects more attractive.

But, few, if any, examples of suits that were not meritorious have been offered to proponents of the law. Colorado already strictly limits construction defect lawsuits in general.  And, this theory fails to explain why a demand for condominiums isn't satisfied by converting apartment buildings into condominiums which is a fairly easy process that involves almost no exposure to that kind of liability.

Alternative Office Space Growth

There is office building growth as well. Open plan multi-tenant home office away from home situations, in the tradition of the campuses of the big players in the tech industry and business incubators, are also filling up as fast as they can be opened, although they still make up only a tiny share of the overall office market.

Why Is This Happening?

A number of reasons have been advanced for the boom.

Migrants are moving to Colorado at above average rates.  Our economy is healthier than many other places and the new marijuana industry has tightened up the real estate market while it was floundering elsewhere.  Colorado also took an earlier and lighter real estate bust than many places during the financial crisis and Great Recession.

Great Recession booms in foreclosures took people out of home and condominiums and put them into apartments, tightening up that market.

A financial crisis driven slowdown in construction to a near standstill allowed existing supply and inventory to be used up.

The recovery has allowed suppressed demand to form new households and put them in new homes to be realized.

Conventional mortgage interest rates below 4% for buyers with good credit has encouraged buyers to snap up inventory.  More generally, nationally driven shortages of financing during the financial crisis that shut down projects in Colorado even though local fundamentals didn't justify the tighter lending environment here, has ended.

Finally, there is a long term secular trend towards an inversion of the socio-economic geography of housing.  Affluent people are moving back to cities for a variety of reasons, while the poor are leaving central cities to get more housing for less money further out.  Drive until you can afford it has become the new mantra for working class and middle class families.

Also, Denver, in particular, has embraced development, rather than working hard to suppress it.

Gas Stations To Avoid In Denver

Gasoline is pretty much a fungible commodity.  Almost all gas stations sell two or three of the standard grades of gasoline, and almost nobody believes advertisements that claim that one gas station's brand of gasoline is better than another's.

In part as a result of that, gas stations operate in something very closely approximating perfect competition, in which market forces drive competitors to all sell the product as a market price that has a quite thin margin.  There are differences based mostly upon locality, but almost all competitors follow the strategy of maximizing sales by selling at the prevailing market price.

But, the law does not fix gasoline prices and there are a few gas stations that zag when everyone else zigs and charge far more than the going market rate for gasoline.

I am aware of at least two such stations in Denver.

The worst offender by far is the Shop Fast at 6504 E. Alameda Avenue at the intersection of Alameda and Monaco.  This gas station generally charges thirty to forty cents per gallon more for gasoline than the 7-11 gas station three blocks away at Leetsdale and Monaco selling precisely the same product.

Moreover, it isn't as it the Shop Fast is offering a superior customer experience.  Its pumps are primitive early 1980s versions that can't take your payments at the pump and haven't been upgraded for decades.  When you go in to pay, the convenience store is dilapidated, dirty, disheveled, understocked with lots of empty shelf space, and has a poor selection of products to buy.  The attendant on the couple of times that I have been there, has always been surly and rude.

The Conoco at Speer and Pennsylvania Avenue has a tidy and ordinary convenience store and modern gas pumps, but does engage in price gouging, typically charging twenty to thirty cents per gallon more than nearby stations such as the two gas stations at the intersection of Alameda Boulevard and Downing Street.

While government price fixing can create all sorts of problems, it is hard to think that the price gouging practices of these gas stations, which prey on people who are inattentive (a strategy that usually works when buying gas since so few gas stations charge and above market price and it is hard to keep track of weekly variations in gasoline prices that fluctuate rapidly), or aren't away of nearby, much less costly alternatives because they are in an unfamiliar neighborhood, promote any legitimate virtues.

Life Is Tough In The Long Tail

Between 2008 and September 2012, there were 66 No. 1 songs, almost half of which were performed by only six artists (Katy Perry, Rihanna, Flo Rida, The Black Eyed Peas, Adele, and Lady Gaga); in 2011, Adele’s debut album sold more than 70 percent of all classical albums combined, and more than 60 percent of all jazz albums. 

Between 1982 and 2002, the number of Americans reading fiction withered by nearly 30 percent. 

In a 1966 UCLA study, 86 percent of students across the country declared that they intended to have a “meaningful philosophy of life”; by 2013, that percentage was amputated by half, “meaningful” no doubt replaced by “moneyful.” Over the past two decades, the number of English majors graduating from Yale University has plummeted by 60 percent; at Stanford University in 2013, only 15 percent of students majored in the humanities. In American universities, more than 50 percent of faculty is adjuncts, pittance-paid laborers with no medical insurance and barely a prayer to bolster them. 

In the publishing and journalism trades, 260,000 jobs were nixed between 2007 and 2009. Since the turn of the century, around 80 percent of cultural critics writing for newspapers have lost their jobs. There are only two remaining full-time dance critics in the entire United States of America. A not untypical yearly salary in 2008 for a professional dancer was $15,000.

From The New Republic via Marginal Revolution.

Just to provide some perspective on entertainment economics, a major Pixar movie costs about $2,000,000 a minute.  The originally webcast show RWBY cost about $4,500 to $9,000 per episode for 28 episodes which combined ran for about 280 minutes.  Add some shared overhead for the Rooster Teeth studio (which generates about $7,000 of revenue per episode from webcasting leaving it losing money on some episodes and making a bit of money on others, while keeping a couple dozen creative professionals in Austin employed (the company as a whole employs about 300 people, but in perhaps a dozen projects at a time of which RWBY was a flagship venture) even if it merely breaks even as a company) and you're talking about $1,000 per minute, using $500 software.  Rooster Teeth's products may not be as polished as the current Hollywood standard (which even Japanese anime studies and Indian Bollywood productions don't match), but at 0.05% of the budget, they are getting 85% of the product quality, perhaps, as a major motion picture, which isn't shabby at all.  Of course, for every RWBY, there are lots of efforts that go nowhere and produce crap or are abandoned midway through when money or interest die out.

Let me put this another way.  Four and a half hours of RWBY, more or less, cost about the same amount as 14 seconds of a leading PIXAR movie.  But, the value they create per dollar is far greater.

Sometimes Life Sucks

Monty Oum, who was just hitting the big time in his career with his originally web based anime series RWBY (which was recently released on Netflix and had DVD distributions), died on February 1, 2015 (a week ago today), due to a severe allergic reaction during a routine medical procedure at the age of 33.  His funeral was yesterday.  He is survived by Sheena Duquette, his newlywed wife of eight and a half months.

RIP Monty.

Atlas Shrugged Revisited

The textbook apology for the great inequality of wealth in the American economy is right out of Ayn Rand's Atlas Shrugged: A system where the most productive people in society receive compensation proportional to their productivity is necessary to cause those people to be productive; if we failed to provide these incentives, they would refuse to produce as much and our standard of living would crater.

The idea is powerful because has a kernel of truth in it. Incentives do matter. Given choices, people have a powerful tendency to do what makes them better off. Farmers who receive the fruits of their own labor are profoundly more productive than farmers in a collective farm whose fruits are shared according to need without regard to their efforts in producing its bounty. Undue reliance upon altruism and centralized planning by salaried bureaucrats were key factors caused the Soviet system to crumble.

But, this concept is also incorrect. What is wrong with it?  Here are five reasons why this is the case.

1. Wealth has diminishing marginal returns.

The vast majority of Americans have quite a strong unmet demand for personal consumption. They would like a nicer house (or more houses) but refrain from buying one because they can't afford it. They would like a nicer car, but can't afford it. They would like to own a boat, but can't afford it. They would like to eat out more often at nicer restaurants, but can't afford it. They would like to wear finer clothes, but can't afford it. They would like to have a doctor who made house calls, but can't afford it. They would like to send their kids to a private college but can only afford a public one.

The desire for more is pretty much insatiable. But, it does get weaker. The desire to buy another house becomes less intense when you are John McCain and can't remember how many houses you already own. There are basically no million dollar cars available to buy new, and if you don't have an insatiable desire for speed and no children, it is hard to spend more than a hundred thousand dollars on car. There is no college education in the world that costs more than $500,000 for four years in tuition, room, board, tutoring and even other quite luxurious living expenses, and most children want no more than one college education. Add all the graduate school a child could want, and it is still hard to spend more than $1,000,000 per child on higher education. The most expensive available private schools from pre-school through high school cost perhaps $750,000.

Also, the wealthier you get, the less disposable your consumption becomes. Mansions, collector's items, fine works of art, jewels, and rarely used boats, don't lose value when you own them. People who acquire prize horses and dogs learn that the pedigreed children are themselves profitable. Their purchases increasingly aren't consumed in the way that food, or a cruise, or car that you use every day.

Also, don't forget that the people who make their own wealth typically do so, at the lower end, because they are prone to consume less than is typical for someone of their income, and because they are workaholics who are so absorbed in their work that they devote less time than the average person to leisure time which most forms of disposable consumption requires.

In my experience as an estate planning attorney for the wealthy, the break point, where people tend to find it difficult to engage in wealth reducing disposable consumption at a rate greater than their investment income without making uncomfortable changes to the lifestyle that made them wealthy is typically somewhere around $10,000,000 to $20,000,000 of net worth.

Around that point, in order to spend their investment income disposably, wealthy people have to do things like travel and ski more than they have enjoyed doing so thus far in their lives, acquire a taste for exceedingly fine foods and wines that haven't been important to them so far in life, develop a fashion sense that departs from the one that they imprinted on as their personal style in their twenties, and so on. Instead, the wealthy who step up their consumption as their investment income increases tend to favor purchases like art, fine jewels, collectibles and real estate that retain their value over time.

Soon enough, charitable gifts are the only significant form of disposable consumption that is available to someone who is still working with tastes and temperaments that caused them to be wealthy in the first place.

2. Dynastic instincts are not unlimited.

Of course, wealth is not acquired solely because the person who earns it wants to personally consume it.

Heirs to great wealth tend to have a much easier time figuring out ways to blow vast sums of money than the highly productive people who imparted wealth to them. When they are still developing their tastes for consumption they develop interests in pass times that require large amounts of leisure time and involve massive amounts of disposable consumption. The learn to value expensive sports cars, extravagant trips, high fashion, gourmet food, servants, recreational drugs, helicopter skiing, sky diving, live chamber music in their homes, and massive parties.

Paris Hilton is not an exception. She is someone who has responded naturally to having vast amounts of wealth without working to earn it whose primary purpose in life is to figure out how to most beneficially spend as much of it as possible. She looked at the limited amount of benefit that her parents had received from their vast incomes and decided that their philosophy of personal consumption and of work-life balance was insufficiently hedonist and decided not to repeat their mistake.

The people who earn great wealth are, for the most party, acutely aware of the potential of their wealth to spoil their descendants. They want their descendants to have healthy lives, get good educations, and to live comfortable lives, but they also want their descendants to replicate their own massive capacity to earn wealth, to work hard, to excel at what they do, and to develop an instinct for charity. I say this not as a matter of supposition, but from perosnal experience. They are happy to spend money on rehab, but are appalled that their children spend money on recreational drugs. They do not necessarily, like the stereotypical Japanese patriarchs, expect their children to all play active leadership roles in the business ventures that they created - they recognize that childrens talents are not necessarily the same as their own. But, they do want their children toil intensely at something in which they can excel and be as distinguished as they were in their calling.

The wealthy very much want to leave some inheritance for their children and later descendants, but it is rather unusual for someone wealthy to want their descendants to inherit so much that they have no economic need to work if they want to have more than a very modest life, if they are capable of working. In practical terms, what this boils down to is that the intensity of the desire to leave a large bequest to descendants starts to diminish greatly as that bequest starts to approach something like $10,000,000 per child. A significant minority of wealthy individuals who have children who have either already succeeded on their own financially, or clearly have the capacity to do so if they apply themselves, wish to leave their descendants nothing more than token bequests that have sentimental value (perhaps a family vacation home and personal effect).

In very large estates, there is a strong shift towards leaving a legacy, first to descendants beyond one's children, and then to society as a whole in the tradition of the great philanthropists. Not everyone actually does this, but there is a palpable shift in the direction as one moves up the scale of the very wealthy.

3. Wealth makes leisure more tempting.

There is a Laffer Curve for income. The vast majority of people receive the vast majority of the funds that they use for consumption from their earned income, i.e. by working. This is true of the working class, the middle class and the upper middle class all the way up to the lion's share of specialist doctors, partners in large law firms, successful writers, professional actors and athletes, and hard working business executives.

But, as wealth accumulates investment income starts to provide a larger share of one's income than working. It happens most quickly for the managerial and professional workers who have the highest incomes and for managerial and professioal workers who inherit substantial wealth as well. As one reaches the point that working isn't necessary to maintain a comfortable level of disposable consumption, the economic incentive to produce more in order to maintain disposable consumption and provides a suitable dynastic bequest diminishes.

Many of these highly productive managerial and professional workers continue to work even though none of their earnings are necessary to maintain their disposable consumption during their lives, or to make a sufficient dynastic bequest. Highly productive workers typically really enjoy their work, which they are good at, and like the power it affords them in the business world. Also, old habits die hard. If you've spent the last twenty years of your life spending seventy hours a week at the office, you simply get used to it.

Also, some very wealthy people are philanthropists who work to support their charitable goals rather than their personal and dynastic consumption.

But, the key point to understand is that once someone is wealthy enough, having acquired many tens of millions of dollars somehow or another, working ceases to be an activity engaged in for the personal economic benefit of the person working or that person's family. At that point, working becomes something that one is doing out of habit, as a form of leisure, for love of power, or out of some form or another altruism. People who were in it for the money retire early at that point, at least, cut down they amount by which the produce significantly.

Beyond a certain point, wealth causes the most productive members of society to withdraw their productive efforts, not to continue them. In real life, it is far more common for the elite to retire early to pursue their hobbies than to refrain from working because they don't think that the personal economic rewards that they receive from their productive labors are adequate. Atlas Shrugged has it backwards. There are mountain towns full of titans of industry lazing around, Beaver Creek, Palm Springs, and Martha's Vineyard, for example, as they do in a town modeled on Ouray, Colorado in Ayn Rand's book. But, they have withdrawn from the world not because our political economy failed to reward them enough to spur them to work, but because we gave them so much that they no longer need to work.

4. Incentives need not be either proportional or monetary to be effective.

The vast majority of people are wage and salary workers whose incomes are only dimly tied to their performance monetarily - they must merely work well enough to avoid being fired. And, even where there are incentives that tie productivity to work, these incentives can be quite effective without being proportional economically to the productivity involved. The direction of the incentive, and relative strength of the incentive relative to other incentives, matters more than the actual amount of the incentive, and money is not the only currency in which incentives are denominated. For example, some of the most powerful incentives are reputational, rather than monetary.

5. The very rich are not very rich because they are the very most productive people.

For a salaried or hourly employee whose income puts them anywhere from the working class to the upper middle class, their income is largely a function of their personal ability to be productive. The labor market is largely driven by the supply of workers able to do the work, rather than the desirability of the work to workers, which is a decidely secondary factor in setting wages. The pay premium for doing a really unpleasant or dangerous job that requires a certain skill set over a much more pleasant job that requires the same skill set, is surprisingly modest. But, the pay premium for doing something that requires an extremly rare skill set, like neurosurgey, over even doing something else that requires a rare but not extremely rare skill set, like internal medicine, is extreme. Education and job skills make one capable of doing work that fewer people can do and increase one's income significantly.

But, the wage scales of entire industries are set by factors only dimly related to individual ability, and the incomes of the self-employed and of a subset of commission and bonus compensated workers, depend significantly on factors completely unrelated to personal ability or productivity. And, marginal economic productivity, which is supposed to drive compensation in simpler version of economic theory, is far less obvious in practice than theory would suggest.

What Might Comprehensive Immigration Reform Look Like?

What would a comprehensive immigration reform that made more sense look like?

1. Immediate family: No U.S. citizen or lawful permanent resident or worked related temporary visa holder should have to wait in line for any length of time to have an application to have a spouse, an unmarried child under the age of twenty-one, a disabled and unmarried child, or a disabled or elderly parent immigrate with them.

2. U.S. educated people or U.S. soldiers. People who have obtained four year college degrees, or graduate degrees or two year college degrees in critical specialties like nursing, from accredited U.S. institutions of higher education should be entitled to green cards with their degrees, as should anyone who serves a tour of duty in the U.S. military and is honorably discharged.

3. Simplify employment rules. The employment rules for non-citizen spouses and children of temporary visa holders who are allowed to work should be uniform.

4. High school graduates with weak ties to a home country. Non-citizen kids who have lived for many years in the United States, did not immigrate to the United States as adults, and graduate from a U.S. high school should be entitled to green cards and a short path to U.S. citizenship without regard to any immigration violations while they were minors, and without even the strings that the DREAM Act attaches. A kid who comes to the U.S. at age five or seven is functionally almost indistinguishable fromm a kid who is born in the the U.S. and is likely to have very weak ties to his or her country of birth. We shouldn't impose extra burdens on kids who are functionally integrated into our society because of the alleged sins of their parents. And, high school graduates who are integrated into our society are capable of supporting themselves in the United States, even if their parents or older siblings who immigrated to the U.S. as adults are removed from the U.S.

5. Establish bona fide marriage safe harbors. While there is inevitably some gray area in determining if marriages are bona fide for immigration purposes and fraudulent marriages for immigration purposes are a reality that must be considered, there should be safe harbors, like having had children, or having lived together while legally married for a certain number of years, that make the validity of a marriage for immigration purposes incontestable.

6. Establish a statute of limitations on deportation following illegal entry to the United States. At some point, perhaps eighteen years, someone who has illegally entered the United States should no longer be deportable merely as a consequence of the illegal entry.

7. Don't make illegal entry or unlawful presence, per se, a crime, just make it a ground for deportation.

The Questionable Triumph Of Positive Law

From 1842, when the U.S. Supreme Court decided Swift v. Tyson, until 1938, when the U.S. Supreme Court decided Erie Railroad v. Tompkins, almost a century, the doctrinally correct assumption that there existed general principles of law that could be discovered and constituted the "common law" which applied in the absence of state or federal statutes to the contrary. This "common law" did not know geographical bounds; it was as relevant in California as it was in Maine. Judges were bound by precedent, but applied with a free hand, guided by a common sense moral intuition that was external to, and perceived to guide common law jurisprudence.

After Erie, the doctrinally correct assumption was that the "common law" was actually made, rather than merely discovered by courts, as a body with the power to make law much like a regulatory agency does. The supposed freedom that an post-Erie conception of law gives to judges, however, also limits them. They no longer have an external body of moral common sense to which they are permitted to appeal when precedents fail them, although policy discussions of the law and economics type have sometimes rushed in to fill the vacuum. Even marginally relevant precedents assume greater weight in the absence of competing principles to guide them.

The pre-Erie conception of the "common law" wasn't exclusive to the federal courts either. In the era when Swift was applicable to differ over the substance of the common law with a sister state was more comparable to ruling that a prior precedent in one's own state was incorrect or misunderstood, than it was to determination that a court with the appropriate authority simply preferred another rule of law as a matter of policy in a case of first impression.

Even today, state courts accept common law decisions from sister states as persuasive. While there are cases when common law rules frankly differ between states, the common law remains harmonious enough between states, as a consequence of its common origins, that courts routinely cite a series of treatises called the Restatements of Law, which purport to set in codified form majority rule doctrine in a variety of common law subject areas. Neither sister state rulings nor Restatements officially have the force of binding law, but courts in practice still give these determinations more weight than the mere force of the ideas behind them.

In summary, Erie represented the triumph of a "positive law" conception of law, which argues that all laws exist because someone with authority created them, from a "natural law" conception of law, which holds that some rights really are self-evident.

Some parts of federal law, like admiralty and constitutional law, have only a thin scaffold of express constitutional language or statutory text to support the elaborate common law-like doctrine that courts apply in those fields (French and German civil codes develop the law of torts similarly), but in the post-Erie era it is seen as necessary to have some sort of legislative or constitutional touchstone for any legal ruling.

A positive law philosophy, in theory, encourages honesty. But, in practice, almost every judge facing a confirmation vote asserts that judges are mere umpires bound to uphold the law who have very little discretion, despite abundant evidence to the contrary. Judges are routinely appointed because their expected positions on the discretionary issues of the day believed to be important are right, and then promptly claim to be appolitical.

Historically, Western philosophy has felt that the ideal of "rule of law" is attainable, while Eastern philosophy has taken a more Faustian view of law as something that can be twisted to confound what is right. Instead, Eastern political philosophy has argued that the problems with "rule of man" are not inherent, but are instead of product of bad men. Westerners have doubted that they were capable of installing Platonic philosopher kings to guide them, enshrining the aphorism, "Power Corrupts and Absolute Power Corrupts Absolutely" into their canon of wisdom. The classic Confucian system took the stance that it was easier to select good men than it was to utilize lawyers to compel bad men to rule justly.

American politics has also places great weight on constitutions, and relegated those who apply the constitution and the laws adopted under it, to a secondary role.

The $1.5 Billion Clerical Error

Lawyers for JP Chase Morgan in a deal that loaned $1.5 billion to General Motors, which later went bankrupt, made a huge clerical error, failing to properly document that it had collateral for its loan.  Contrary to their lawyer's assertions on appeal of the ruling in which this mistake came home to roost, this is the normal result under the law and not a seismic shift.

This goof could become one of the biggest attorney malpractice cases in history and could easily wipe out the entire law firm and greatly exceed its malpractice policy limits.  One of my colleagues in my office litigated and won a similar malpractice case, where the right documentation was drafted but never filed, for stakes about 1/1000th as great, which were still hardly chump change.

In these stratospheric deals, where some very simple steps can make an immense difference, failing to be anally attentive to details can be catastrophic for creditors, as it was for JP Chase Morgan.

Schizophrenia, OCD and Autism May Have Related Neurological Causes

A new open access preprint at bioRxiv suggests that schizophrenia, OCD and autism "have the same neurobiological origin, stemming from a common root of a unique neurodevelopmental tree."  This common structure can be described in terms of a "damage network" (i.e. "a connecting link between the damaged areas that relates areas constantly involved in the disorder").

Three main findings emerged from our meta-analysis: 1) The three psychiatric spectra do not appear to have their own specific damage. 2) It is possible to define two new damage clusters. The first includes substantial parts of the salience network, and the second is more closely linked to the auditory-visual, auditory and visual somatic areas. 3) It is possible to define a "Damage Network" and to infer a hierarchy of brain substrates in the pattern of propagation of the damage. These results suggest the presence of a common pattern of damage in the three pathologies plus a series of variable alterations that, rather than support the sub-division into three spectra, highlight a two-cluster parcellation with an input-output and more cognitive clusters.

Russian Navy May Be A Paper Tiger

On paper, the two most powerful naval forces in the world, by a long shot, are the United States and Russia (North Korea, China, and Iran are some of the most notable potential naval threats).

But, an analysis of the Russian navy suggests that a large share of its ships are broken or seriously outdated, and that the pace of operations for the ships that they have is very light.  For example, the analysis claims that less than half of Russian Navy ships are operational, compared to 85% of U.S. Navy ships.  North Korea's navy suffers similar issues.

In other naval news, the United States Navy has decided to rename the Littoral Combat Ship as a "Frigate", now the last of the Oliver Hazard class of frigates has ended its active duty service in the Navy, in an effort to honor "naval traditions."

The Grown Ups Are No Longer In Charge

Colorado has the lowest measles vaccination rate in the country.

It doesn't help that New Jersey Gov. Chris Christie and Kentucky Senator Rand Paul, both Republican Presidential candidates, are encouraging parents to not vaccinate their kids with scare tactics (also here).

Not to be outdone, newly elected Republican Senator Thom Tillis of North Carolina, thinks that it ought to be optional for restaurant workers to wash their hands after going to the bathroom and returning to work.  One word:  Gross!

Have viruses and bacteria banded together to form a PAC or something?  Have parasites infected Republican brains?

Egypt Issues Mass Death Sentences

An Egyptian court triggered an international uproar Monday, confirming a death sentence for 183 defendants. The defendants were convicted of murdering 11 police and two civilians in August 2013, Egypt's state-run MENA news agency reported. 

Those deaths came in an attack on a police station. It followed a massive, deadly crackdown by Egyptian forces on supporters of ousted President Mohamed Morsy. 

"Issuing mass death sentences whenever the case involves the killing of police officers now appears to be near-routine policy, regardless of facts and with no attempt to establish individual responsibility," [Hassiba Hadj] Sahraoui [of Amnesty International said]. . . . 

"So far, 415 people have been sentenced to death in four trials for the killing of police officers, while the case against former President Hosni Mubarak, involving the killing of hundreds of protesters during the uprising, has been dropped. To date no security officers have been held to account for the killing of 1,000 protesters in August 2013," the organization said on its website. . . . 

Thirty-four of the 183 defendants were tried in absentia. All are permitted to appeal.

From CNN.

No country other than China (even runner up, Iran) has executed that 400 more people in a single year in recent times.  No country in the world, even countries like China and Iran which use the death penalty frequently, has imposed the death penalty en masse with some defendants even convicted in absentia in recent times.

The Arab Spring has been, in hindsight, pretty much a total disaster, even though it may presage democratic change in the long run.  It is the 1848 of the Arab World.

System For Disciplining Bad Prosecutors In California Still Broken

A 2010 report by the Northern California Innocence Project cited 707 cases in which state courts found prosecutorial misconduct over 11 years. Only six of the prosecutors were disciplined, and the courts upheld 80% of the convictions in spite of the improprieties, the study found.

From here.

A recent case in the 9th Circuit discussed in the linked article involves prosecutors who tried to defend a conviction in which an informant and the prosecuting attorney both lied in open court, but neither suffered any consequences for it, state judges upheld the conviction, and the 9th Circuit Court of Appeals reversed the decision in a federal collateral attack on the judgment after a scathing oral argument.

Selected International Developments

I haven't been covering all of these stories in daily detail, but some major international developments deserve mentioning:

European Economic Crises

* Greece was bailed out by the European financial community a while ago in the face of a sovereign debt crisis, in exchange for imposing austerity measures of dubious economic merit.  Opposition mounted to this deal and a few days ago, Greek elections gave a far left party 149 out of 300 seats with parliament after it ran on an anti-austerity platform.  This party allied itself with a far right party that is also opposed to the austerity measures that won 12 seats.  This produced a far left prime minister with majority backing who wants to disavow the deal and either renegotiate or default on the bailout deal.  This outcome has looked likely for a long time.  As a result, the Greek stock market has lost 15% of its value in the last three days and 50% of its value in the last ten months.

* International sanctions related to Russia's military incursions into Ukraine, and falling oil prices, have conspired to do deep harm to the Russian economy.  Among other things, the bonds that finance its national debt have been down graded to junk bond status.  Russia is hanging tough and appears to have popular support (in part due to controls over the media), but is enduring lots of economic pain as measured by a variety of economic indicators.

* A dramatic change in the policies of the central bank of Switzerland has caused the value of the Swiss Franc to rise dramatically (ca. 50%+) in a matter of days.  This matters because mortgages and other loans in many of Europe's less economically developed countries (e.g. about 45% of mortgages in Poland), are denominated in Swiss Francs rather than Euros.  The Swiss Franc has historically been one of the most stable currencies in the world, so few people anticipated that this would produce a dramatic increase in their effective repayment obligations in the absence of hyperinflation of the Euro which has not occurred.  This international payments crisis continues to unfold.

European Independence Movements

* Voters in Scotland rejected a referendum giving its independence from the United Kingdom, but won substantial new economic subsidies and autonomy concessions in the process.  The referendum was also notable because sixteen and seventeen years olds were allowed to vote.

* The autonomous Catalonia region in Spain has called for an independence referendum, and has staged events making it clear that such a referendum would pass if it was held by wide margins.  Spain has vehemently opposed any effort to conduct such a referendum, whether or not it is officially binding, and so far, no referendum has been held.

Conflict and Change In The Islamic World

* The moderately pro-Western, pro-Saudi government of Yemen collapsed, giving rise, de facto, to military law and a renewed division of the country into North Yemen and South Yemen.  But, the government was so ineffectual to start with that the chaos before this happened was only moderately less than the chaos afterwards.  Among other things, this makes the prospect of repatriating Yemeni individuals held at Guantanamo Bay by the U.S. military to their home countries (a process that Congress has thwarted despite President Obama's efforts to shut down the military prison camp in U.S. controlled territory in Cuba).

* The recent attacks in France on a satirical newspaper that had lampooned the Muslim Prophet, customers at a Kosher deli, and French law enforcement officers was led by individuals in France with ties to violent radical Islamist movements in Yemen and connected to ISIS.

* Saudi Arabia's sixth king died.  In Saudi Arabia, a successor king is chosen somewhat democratically by the senior male members of the roughly 5,000 strong royal family, from among a pool of several dozen family members who would be eligible for the office, rather than automatically passing to an eldest child.  In this case, the seventh king of Saudi Arabia is a 79 year old collateral relative (as opposed to a child) of the previous king.

* U.S. led international coalition air strikes on ISIS have killed about 6,000 ISIS soldiers (out of 12,000-18,000 on active duty and about 32,000 available in all to ISIS), in addition to many of its military bases and much of its heavy armaments.  Until last week, this wasn't accompanied by much in the way of territory leaving ISIS control.  But, in the last few days, Iraq's Kurdish militias supported by the air strikes and allowed to reach the field of battle across roads in Turkey finally drove ISIS out of Kurdish city (formerly of about 60,000 people most of whom have fled as refugees to Turkey) near the Turkish border with Syria.

* The radical Islamist Boko Haram group in Northern Nigeria and parts of the African Sahel in neighboring countries has massacred thousands in a Northern Nigerian village and continues its genocidal wave of mass murders and mass kidnappings of young women, while the central Nigerian government led by Jonathan Goodluck who is facing an election challenge that is nearing its final days, has been completely unable to get its own military, whose inclinations has been to flee or refuse to confront Boko Haram, dent the violence.

* In the "tribal areas" of Pakistan, the government has vigorously and largely effectively waged a military war on the Taliban in Pakistan (which had previously had support from some military and intelligence community factions), prompting a suicidal massacre at an Army sponsored school by a group of Taliban supporters.

New To Me (Food and Drink Edition)

I have been blessed to live at a time of great cultural change.  Perhaps the best way to illustrate this is by example.  I list below some of the foods and drinks that I started to consume, in various categories, as an adult, in roughly chronological order.  These are not all necessarily newly invented, but illustrate in sample size N=1, the expanding horizons that have come from cultural change.

Foods I Grew Up With That Were Not Eaten Or Exotic For Both Of My Parents Before College
pizza
spaghetti
Chinese food
granola
grapefruit
Pineapple juice
pineapples

High School (Oxford, Ohio; New Zealand; domestic and Western European travel)
soda
coffee
wine and beer
gazpacho
matzo
tofu
Toblerone chocolate
papaya
star fruit
escargot
raw oysters
ugly fruit
Mexican food other than tacos (e.g. enchiladas, burritos)
dim sum
Indian food
lassi
yogurt
frozen yogurt
rice cakes
grog
selected Greek foods (e.g. Gyros, baclava)
weinersnitzel
veal
British style fish and chips with malt vinegar as a topping for the chips
meat pies and Shepard's pie (other than Cornish pasties)
tea with milk
Yorkshire pudding
mince pies
Pavlova
Kiwi fruit
fried cicadas
caviar

College (Oberlin, Ohio), Law School (Ann Arbor, Michigan) and Buffalo, New York
ramen
Hawaiian pizza
calzones
barbecue tofu
matzo ball soup
bread bowl salads
falafel
humus
squid aka calamari
Tabasco sauce as a popcorn topping
cold Vietnamese style coffee
gouda cheese
Asian pears
lychees
Korean food
shrimp chips
sushi
select Japanese food and saki
mango
pate
pesto
portabella and shittake mushrooms
almond butter
nutella
couscous
polenta
salt bagels
plantains
expresso drinks
almond syrup
chocolate covered expresso beans
biscotti
NutraSweet (r)
brewer's yeast as a popcorn topping
powdered cheese as a popcorn topping
prosciutto
artisan breads other than baguettes
marijuana
sangria
gelato
olive oil in lieu of butter on bread
mole sauce
frozen custard
buffalo wings
beef on weck
crab cakes
mackerel
mahi mahi
shark
tuna not in a can
frog legs
borscht

Since Moving To Colorado
elk
venison
Rocky Mountain Oysters
guacamole
avacados
pomogranate juice (as oppose to seeds)
pistachios
buffalo
breakfast burritos
spiced cheeses (e.g. Pepper Jack)
absinthe
wasabi bites
edamame
California style burritos an Burrito bowls (e.g. Chipotle, Qdoba)
Gorditas (possibly invented by Taco Bell)
whole wheat tortillas
smoothies
white pizza
cocktails (i.e. mixed alcoholic drinks other than beer or wine or grog or sangria)
mead
fish tacos
flavored sparkling waters
kefir
rabbit
kale
Andouille chicken sausages
bruschetta
moist non-shredded mozzarella cheese
white cheddar cheese
focaccia bread
paninis
agave nectar
chai tea
white tea
Thai food
soba noodles
pierogies
tempeh
soy milk
almond milk
nutritional yeast flakes
honeycrisp apples
Smart Balance (r) and similar butter substitutes
ratatouille
"ancient grains" (e.g. spelt, amaranth, quinoa, chia, eikhorn wheat, durum wheat, emmer wheat)
high percent cocoa gourmet chocolate
spicy pepper mocha
steak served Brazilian style
Vietnamese food
Mongolian style BBQ
Ethiopian food
vege straws
alligator
gourmet donuts (i.e. donuts with elaborate toppings in the style of Voodoo Doughnuts)
kumquats
Greek yogurt
protein powder
turmeric drinks
cookie butter
tangerine juice
blood oranges
truffle oil
coconut butter
ostrich meat
shrubs (i.e. mixed drinks including vinegar as an ingredient)

Other food trends
There were also other trends in food that didn't have momentum until much later in my life.

"Natural foods" was something that I was aware of even as a child, and that my parents were aware of early on, as were reductions in sugar and fat in diets and vegetarian diets.

But, "organic", "gluten free", "GMO-free", "low carb" and vegan diets were very uncommon.  Nobody knew about nut allergies as something that ordinary people needed to be concerned about for others, if not themselves, either.

Eating local was something one did out of economic necessity, rather than moral commitment.

Quote of the Day

Its weird how I'm constantly surprised by the passage of time when it's literally the most predictable thing in the universe.

- xkcd.

Millionaires Common

The percentage of the population in 917 metropolitian and micropolitan area who have $1,000,000 or more of financial assets is substantial, ranging from 2.11% in small town Kentucky to 11.62% in Los Alamos, New Mexico, in each case, small towns at either extreme of the range.

For the nation as a whole 5.2% of households at at least $1,000,000 in financial assets, and 1% have a bit more than $5,000,000 or more each.  In Maryland, the state with the most millionaires on a percentage basis, 7.7% of households have financial assets in that amount (about the same a Boulder, Colorado).

Washington D.C. is the large metropolitan area with the highest percentage of millionaires: 8.81%.

In greater San Francisco, the rate is 7.28%.

Analysis

It is worth a moment to consider what these statistics mean in practice:

* A financial millionaire is now upper middle class (the percentage of millionaires and the percentage of people with earned graduate degrees is similar), but no more.

* Married couples in the bottom 99% are not subject to the estate tax if non-financial assets make up less than half of their net worth.

* For the upper middle class, particularly in governmental centers and homes to big businesses, a very large percentage of the total financial assets are in retirement plans.  But, financial assets in retirement plans are inflated by design, because typically 20%-40% of those assets will be paid in income tax when withdrawn, a tax that the step up in basis at death that President Obama proposed to eliminate in his State of the Union address yesterday, does not eliminate.

* Wage and salary earners with upper middle class jobs are better at saving financial assets that are hard for them to touch than others, and they reap the rewards of this when they retire.

* Wage and salary earners are also helped in accumulating financial assets because they can't make risky investments not available to them in their retirement plans (in addition to investing and being evaluated based upon before tax funds and having little access to retirement funds during their working lives for consumption purposes).

* The flip side of the limited investment freedom of people with retirement savings, is that retirement assets provide much less economic power prior to retirement, than other financial assets.  They can't be used for consumption, can't be used to invest in a closely held business, and can't be used for a major current charitable initiative.

* The new rule of thumb in the financial planning industry is to assume that financial assets can support a 4% of asset value income stream (the old rule of thumb was 5%).  Thus $1,000,000 of assets is a fairly modest $40,000 a year. Even rent free and supplemented by Social Security cheks, this supports only a fairly middle class lifestyle for a retiree's household.

* The $5,000,000 of financial assets of a one percenter household is about $200,000 a year, comfortable to be sure, but hardly opulent, again, even rent free.

* A traditional monthly defined benefit pension typically sounds much more modest than it would if converted to the financial asset portfolio amount necessary to generate that income stream.  A meaningful defined benefit pension translates into substantial financial affluence.

* At the time that the word millionaire came into wide usage, $1,000,000 nominal dollars was worth about $10,000,000 to $25,000,000 in today's dollars adjusted for inflation, at a threshold where today, estate taxes are likely to be due at death without substantial estate planning work and enough to generate a genuinely affluent lifestyle income stream.  This is also roughly the threshold where, in my professional experience, it becomes are for a typical person with a comfortable but not decadent lifestyle to spend money on consumption faster than they earn money on investments; lots of consumption items for people in this wealth bracket, like vacation real estate and art, tends to appreciate in value or maintain its value, rather than losing value over time.

* The average social security benefit for retirees ($1,300 a month) is roughly equivalent to about $325,000 of retirement savings.  The maximum Social Security retirement benefit at normal retirement age (66 years old) is $2,642, which is equivalent to about $700,000 of financial assets for someone who would have had to have been an upper middle class wage earner (or spouse of a wage earner) for almost their entire life.  While there is no minimum Social Security retirement benefit, in practice, almost anyone who has worked for most of their lives has an income stream in retirement from Social Security equal to something in the low hundreds of thousands of dollars, even when they have a below average monthly benefit.  Almost no American senior citizens are really destitute, and few are in poverty, as a result, something that the U.S. does not replicate for its children.

* A large share of millionaires are retirees or people late in their careers getting ready to retire.  A 66 year old with $1,000,000 in financial assets is merely middle class, because modest retirement consumption needs will absorb almost all of it before death.  A 20 years old with $1,000,000, in contrast, is quite affluent, because that person can still work and has lots of time to earn investment returns before needing to rely on investment income to live from day to day, and is also likely to have much greater access to those funds for consumption purposes (since they are almost surely not retirement funds) than a new retiree with the same financial asset value.

* For most households, their main non-financial asset is real estate, typically starting with a primary residence that may or may not include a farm.  In small town America and even decent sized cities in the South and the American heartland, a paid off upper middle class residence may have a fair market value of as little as $100,000.  In expensive big city and resort housing markets, a comparable upper middle class residence may cost two or three million dollars.

* The percentage of millionaires in term of financial assets seems to be only mildly related to housing costs, and then, with places with more expensive housing costs having somewhat higher percentages of millionaires (perhaps in part to the financial assets of people who cash out equity in their homes late in life).  Higher compensation in places with higher housing costs more than compensates for the higher housing costs, on average.  Also, primary residence mortgages, like retirement savings, force people to save in a way that they can't easily access for consumption purposes.

* Fitting the distribution to a Gaussian Normal Distribution curve from roughly 3 standard deviation tails suggests that the distribution of percentages is about 5.2 +/- 0.9%, with a symmetric rather than the expected asymmetric distribution (one would expect a higher upside than downside).  This is surprisingly even geographically, and very few data points differ by more than a factor of +60% or -60% from the mean.  The regional disparity in wealth is driven more by real estate values (which doesn't impact asset use value), than by financial wealth at this level.  There are very few extreme outliers.  The data points are skewed somewhat towards lower as opposed to higher values with a longer low end tail than the high end tail.

* People in areas with high value real estate have much more of their total wealth in real estate.  It is unclear how much large real estate holdings by farmers modify the regional variation in financial wealth.

* The amount that a judgment creditor can collection from someone is on average from their financial assets is frequently much lower than their financial assets due to creditor protected retirement accounts and similarly protected assets either in special kinds of accounts or in trusts inherited from someone else that are not subject to creditors.  Homestead exemptions also limit the available real estate equity, although real estate equity is frequently the most collectible asset of an affluent individual.  The number of people capable of paying a $1,000,000 judgment from non-exempt assets is much smaller than the number of millionaires.  As a result, in lawsuits against individuals, very large money judgments are often a merely academic exercise.  This is not true, however, of big business that can often afford to pay such large sums.

Paranormal Insurance

From Saturday Morning Breakfast Comics.

Selling people insurance with no intent to pay claims is fraudulent.  But, what if, instead, you formed an insurance company that paid claims in every case where the insurance company couldn't prove that it was a hoax (essentially the premise of a contemporary fantasy Downside Ghosts series by Stacia Kane).

One could set rates simply from actuarial experience and if one was interested in locating potential paranormal events, what better way to do so than to use the device of people making claims on the paranormal insurance coverage.  Even if the business operated at a loss, the anthropological or metaphysical research payoff (depending upon what the research investigating claims revealed) might very well be a small cost to subsidize in order to secure the research tool.

African American Political Identity In America

The Limits Of Political And Behavior Science Theory

As a general rule, one associates values that are traditional, rather than rational/secular, and that are survival, rather than self-expression, oriented with personal and economic insecurity.  On the other hand, values are determined at a quite high level extending to a significant extent to the supra-national level, rather than at the level of the individual.  Between culture differences in values dwarf within culture differences in values.

The study of regional cultural differences also tends to indicate that cultural features of a founding population in a region can persist for centuries, even in the fact of substantial immigration.

Historically, African Americans are the population within the United States that has been, both more personally insecure, as evidenced by violent crime victimization rates, incarceration rates and victimization in the criminal justice system, and more economically insecure, as measured by unemployment rates, educational attainment and dropout rates, incomes and household wealth.

Also, until the "Great Migration" from around 1910 to 1970 in the United States, when African Americans migrated in large numbers to industrial cities in the North for manufacturing jobs, African Americans were overwhelmingly residents of the American South (i.e. the former Confederate States).

These deep cultural roots in the American South are evidenced, for example, by the dialect of American English known as African American Vernacular English and in the religious practices of the major African American religious denominations, many of which show the hallmarks of the Second Great Awakening (ca. 1790-1840) that gave Evangelical Christianity in the American South its current character, which is unique in the Christian world (except in places evangelized from the American South).

The culture of the American South, in terms of its values, are in broad stroke more "survival" as opposed to "self-expression" oriented, and more "traditional" as opposed to "secular rational", than those of America's dominant "Yankee" culture of the North and the Pacific states.  There are good historical reasons for this, but for the moment, I merely note that this is true and has been for a very long time that probably predates the Revolutionary War by which our nation attained its independence in 1776.

Thus, political theory and the behavioral sciences affords us good reasons to expect that African Americans would have more conservative political values than any other demographic in the United States.

Why Do African Americans Overwhelmingly Have Such A Liberal Political Identity?

Obviously, this didn't happen.  It is no secret that formally affiliated Republicans who are African American Republicans are very rare (especially in the South), while African Americans tend to actually vote for Democrats at rates of around 90%, more loyally than almost any other ethnic group or demographic in America.

Why Might We Expect African Americans To Be More Conservative?

At one level, this is highly unexpected.  Republicans have become through a process known as realignment that has almost completely run its course at the federal level, almost a Southern regional party.

The Republican party often espouses a vision of the United States as Christian nation and has deep misgivings about the First Amendment's establishment clause jurisprudence, while one of the other most reliable constituencies of the Democratic party are people who have no religious affiliation (often called the "None" and not necessarily atheistic, despite disavowing traditional religious denominations).  The Republican party identifies itself as the party of "traditional family values" while the Democratic party identifies itself as inclusive.  Likewise, on all manner of issues that implicate the survival values v. self-expression values divide, the Republican party consistently falls on the survival values side relative to the Democratic party.

Naively, we would expect African American political values to more strongly mirror those of the tradition/survival values oriented Republican party, and not the secular/rational/self-expression values oriented Democratic party.  Of course, nothing could be further from the truth.

Similarly, why does the Democratic party, which sees itself as the party of the poor, have the values of a party of the secure middle class and the affluent, and the Republican party, which is widely seen as a party of the rich, have poverty and working class driven values?

Had Malcolm X Prevailed Would African Americans Have Been More Conservative?

One could have imagined another course.  African Americans could have embraced the vision of Malcolm X and adopted the deeply conservative traditionalist/survival oriented ideology and religion of Islam, rather than making the commitment to self-expression values and tactics that Martin Luther King, Jr., whom we commemorate on today's holiday, instead.

Neither Malcolm X, nor Martin Luther King, Jr. had a secular vision.  Malcolm X was an advocate for African American Islam.  Martin Luther King, Jr. was a minister in an African American Christian denomination.

Both men lived at a time when the break down of the traditional African American nuclear family structure was just beginning to become apparent, decades before working class white Americans followed in the footsteps of their African American peers, and both we advocates for strong traditional families.

The moral content of African American religious denominations and the values of African Americans, generally, have until very recently, been as fervently anti-gay, as those of their Southern white evangelical Christian peers.

African American enlistment in the military, especially, the Army, rivals that of Southern whites, and is much higher than that of Northern whites, although African Americans are more often denied the opportunity to enlist due to issues with insufficient academic ability or criminal records.

Then again, it is important to recall, that overall, Protestant Christianity is the most self-expression, rationalist oriented religious tradition in the world, while Islam is the most survival value, traditionalist oriented religious tradition in the world.

While Southern Protestantism (both white and black) is a much more conservative religious movement than European Protestantism, for the most part, it still draws upon and is influenced by liberal views (viewed in a global values context) that are deeply embedded in Christianity's DNA.  By embracing Martin Luther King, Jr.'s black protestant religious views, a natural step for a community of African Americans that overwhelmingly shared his religious views at the dawn of the civil rights movement, African Americans were drawn by the influence and by the influence of the Northern Protestant Christians who became their fast allies in the white community in the civil rights movement.

Southern Protestants look very conservative when juxtaposed against a historically continental and Scandinavian European style Protestantism, and against the deep secularism that has emerged from that tradition.  But, they remain in the same ethical territory as many white Roman Catholics, and in a territory that places more weight on self-expression (vis-a-vis survival values) than Orthodox Christians, Hindus, Muslim, Latin American Catholics, and African traditional religion practitioners.

White Evangelical Christianity may afford women a subordinate role and have deep seated racism issues, but in the 21st century, they aren't ready to revert women to chattel status or reinstate slavery, as ISIS would like to in the Middle East and Boko Haram would like to in the African Sahel.

Historical Reasons For African American Alienation From Republicans

African American alienation from the modern Republican political party can be traced, fairly clearly, to the outright racism and hostility present in the Republican party which became the new home of segregationist Southerners (the former "Dixiecrats") who wanted to keep first de jure and then de facto and private sector discrimination against African Americans in place.  Republicans have, at every step, opposed the integration of public institutions, viable employment discrimination laws, and viable remedies for victims of abuse in the criminal justice system (particularly those like the sentencing disparities between powder and crack cocaine that disproportionately impact African Americans for no principled reason).  Republicans have opposed African American judicial and cabinet nominees (with the notable exception of African American conservative U.S. Supreme Court Justice Thomas).  Republicans have favored regressive taxation schemes and weak social welfare safety nets in ways that have done disproportionate economic harm to African Americans.  Republicans have opposed history instruction in schools that highlights African American contributions.  Republicans opposed making Martin Luther King, Jr. day a holiday.

The Democratic party, in contrast, has had the back of African Americans on issues with strong racial overtones for the last half century or more, has consistently advanced African American economic interests, and has embraced African American advancement in partisan political party offices, as candidates for elective office, and as political appointees in executive branch and judicial branch offices.

How Has Membership In The Democratic Party Coalition Has Changed African Americans?

This coalition, in turn, has mobilized elites in the African American community to back a Democratic party political agenda, and to advocate for and cause the realization of African American community values in the United States, such as efforts to find common cause with Hispanic immigrants, rather than seeing them as threats, and seeing environmental protection as something that personally advances their health rather than as a threat to their jobs, that would not have been natural responses in a vacuum outside the Democratic Party coalition.   Similarly, the larger Democratic Party coalition has influenced African Americans in responding to criminal violence in their communities with calls for gun control, rather than easier access to gun ownership (e.g. through restoration of the civil rights of those with criminal convictions).

Put another way, African Americans have largely repudiated the culture of the American South from which their own ethnic subculture has arisen as a parent culture whose standards are relevant to them, and realigned their own subculture with that of the rest of the United States.  Following that switch of cultural allegiances, their own conditions of personal safety and economic security have been relegated to second order within community differences in values that also shift the entire community's values modestly in their direction, rather than reinforcing the similar although less intense values of working class white Southerners in a similar conservative direction.

Has Public Policy Changed African American Values?

It is also possible to argue that public policy itself has changed African American political values.

For example, on the issue of health care, there has been a sustained period of time from the adoption of the Medicaid program, until the implementation of Obamacare, where those in poverty had more secure access to medical care, than working class individuals with no health insurance, a substantial share of all working class people.

Affirmative action has made it easier for an African Americans who are ready to go to college to obtain a higher education than an academically comparable working class white person for a sustained period of time

There have been time periods in many places where African Americans have more heavily utilized the social welfare safety net available than comparable poor whites, in part due to better community knowledge of how the programs work, and in part due to a lower degree of distrust of those programs.

These policies and others like them make it possible to conclude that public policy has done more to alleviate insecurity for blacks than for whites for a sustained period of time, muting somewhat differences in absolute physical and economic well being, although this argument does not seem to be the more compelling explanation.

The Parallel Case of Unions

Clear partisan divides on union-management issues, with Republicans being fervently anti-union, and Democrats seeing unions as a core base of support, has likewise influenced the American union movement to devise a political agenda consistent with the larger Democratic party coalition, for example, on the issue of immigration, and has muted activism within the political sphere on issues that put its constituencies at odds with each other, like addressing racism within union organizations with litigation.

Of course, while unions institutionally, are strongly aligned with the Democratic party and against the Republican party, rank and file union members who vote have increasingly been a swing constituency between the political parties.  Support from white working class union members, even when it has not risen to the level of majority support, has been important to many recent Republican electoral victories in the Midwest.

Then again, given the declining role of unions in the economy, with private sector unionization levels now below those of the earliest strong legal protections for unions in the late Progressive era, in part for legal reasons and in part for economic ones, the union vote, in general, has become less numerically important and more concentrated in public sector unions that are very different creatures than their private sector counterparts.

The Adult Male To Female Ratio Impacts Behavior

Razib Khan has a nice post discussing how a macro-environmental factor, the adult male to female sex ratio in a population, can greatly impact how men and women behave.  This society wide difference in environmental context which varies consistently across cultures is a good example of how context, rather than genetics, can have broad impacts that differ from group to group.

Uninformed by this environmental factor, one could easily and wrongly infer that ancestry informative genetic differences were the cause of these behavioral differences.

Coming Events

This summer, a little before my youngest child turns 14 years old, this blog will be ten years old. This blog is almost a third child or long lived pet.  I am pondering what, if anything, I should do to celebrate the occasion.

Superbowl 2015

On a couple of occasions previously, the Superbowl was between my own Denver Broncos, and my brother's team, the New England Patriots.  This year, the Superbowl will between his team, the New England Patriots and my sister-in-law's team, the Seattle Seahawks.

This poses the difficult question of who to root for.  Is the enemy of my friend my enemy, in which case I should root for the Seahawks?  Or, is blood thicker than marriage, in which case, I should support the Patriots?

In Your Eyes and Dreamless

I'm glad that I'm not the only person whose noticed the extreme parallelism between the excellent webcomic "Dreamless" that finished its run four years ago, and last year's Josh Whedon movie, "In Your Eyes".  Admittedly, the two are almost surely not close enough to qualify as a copyright violation, and yet, it seems almost painfully obvious that the Whedon movie was inspired by the comic.

Does Nationalism Promote Peace?

Nationalism is often blamed for wars and strife.  But, a 2011 study argued that accurate alignment of political and geographic boundaries with ethnic, religious and national identities was a powerful predictor of the absence of those things.

The idea is starkly at odds with the American ideological commitment to multiculturalism, diversity and the "melting pot", yet is institutionally embedded in our political DNA as a federal state.  In contrast, the idea is much more mainstream in Japan and in many European nations that are built on nationalist foundations.  And, it is widely acknowledged in political science circles that one of the important factors that caused newly independent European colonial states to fail was their lack of congruity with a national identity.

For example, Nigeria experienced a civil war based on east-west ethnic differences shortly after its formation, and is now experiencing a genocidal ethnic and religious conflict between Muslims in the North and Animists and Christians in the South near their geocultural boundaries in the Northern Nigerian states.

A more skeptical view of that premise is found in the high concept Young Adult novel/political fable "Feuds" (2014) by Avery Hastings, told in part from the perspective of the daughter of a politician who favors the segregation of biologically and educationally enhanced "Priors" and non-enhanced "Imps" (for imperfects) in the 22nd century city of Columbus.

Wanted: Comprehensive, Non-Redundant News Coverage

A Wall Street Journal story last updated on January 9, 2015  offers a comprehensive and complete story of what happened over a three day period in the Charlie Hebdo attack and parallel shooting of a French traffic cop and hostage incident at a Kosher deli that left 17 victims, three dead perpetrators, and almost a dozen other people injured, in addition to disrupting the lives of millions of the French people.  The story continued beyond that as well, in the form of the reactions to the incidents like a massive unity march, the "Je suis Charlie" and "Je suis Ahmed" slogans, the policy initiatives that are being formulated to respond to the attacks, and an attack on a possibly related terrorist cell in Belgium.

The Wall Street Journal story has details, like the fact that text messages from a print shop employee hiding while two of the Charlie Hebdo gunmen holed up there in a police siege were critical to the police success in killing the gunmen before they could kill anyone else, that didn't make it into the headlines.

The problem is that while there are good stories like this that are written eventually, if you are searching for news as it happens on the Internet, you face two problems.

First, there are hundreds of reports and it is hard to distinguish those with the same source and same information, from those that add new information to the coverage.  It is easy to find the basic core of information about a big story like the Charlie Hebdo attack, but is hard to find the stories that go beyond the core of the early news wire reports.  It is even harder to find the much later corrections to facts that were inaccurately reported in early coverage.  Even if there is a correction from one source (which is hard enough to find when looking at the original in many cases), many other media outlets rebroadcasting the original story will not note the later correction in what is by the time it comes along cold news.

Second, it is not always easy to be confident that you have located all updates to developing stories that transpire in multiple related incidents over a period of days, weeks, months or even years.  This is particularly an issue in the case of local news stories with diffuse coverage, that only a handful of media outlets may cover in half a dozen stories over many months, like the developments in a just barely newsworthy local murder case, or land use fight.

Even in the case of a big story like the Charlie Hebdo attack, while it is easy to learn, for example, how many people were initially reported to be injured in the attacks, it is much harder to learn, a week later, how successfully (or not) those who were injured have been at recovering from the injuries, or how they felt about the incidents, even though that kind of reporting is relatively easy to do with just a little elbow grease, and often is done by smaller circulation media outlets or much later buried in the lifestyle section far from the front page.

An ideal service would rapidly assimilate all information relevant to the story (not just from media outlets, but also from sources like social media and blog posts and public and commercial record source data), over the entire time period of the story's development even long after the fact follow up reporting, while also purging redundant information and eliminating the time and effort necessary to compile it all.  The service would also track when you last looked at the story so it could highlight everything that has happened since you last read about the story.

One could imagine an artificially intelligent computer program with Google class processing capacity that could do that automatically, in real time, with every single developing story worthy of any media outlet that is available on the Internet.

Systems that do that are common place in flashy spy movies set in the present or near future, but in reality, don't exist.  The function can be and sometimes is carried out, but it is done much more slowly and laboriously by smart (and expensive) people.

Church Hates Lesbians Even After They Die

The New Hope church in Lakewood, Colorado, led by pastor Ray Chavez who founded the church in 1981 to minister to those afflicted by drugs, alcohol, gangs and violence, has refused to hold a funeral service for a woman who died at age thirty-three who is survived by her wife and children, because she was a lesbian.  Instead, it posted security guards to keep protesters out.  As a result, a secular funeral home ended up hosting the funeral instead.

The New Hope church, of course, has every constitutional right to do just that under the First Amendment's freedom of religion and freedom of association clauses.

But, when they act as they do, these Christians don't look very Christian.  The Gospels are full of instances of Jesus snubbing Jewish religious officials of his day for similar behavior.  But, scriptures are rarely a good source to understand how people who practice a religion really live their faith.

U.S. and Allies Blow Up Lots Of ISIS Stuff

According to U.S. military officials, there have been an average of 11 air strikes per day since August 8, 2014 when President Obama authorized the beginning of the air strike campaign for a total of 1,600 strikes on 3,200 targets in Iraq and Syria.  Much of the military equipment was captured from Iraqi forces in an ISIS surge that began in June.  The targets hit have included:

* 184 Humvees
* 58 Tanks
* 700 Other Vehicles
* 28 MRAPs (Mine Resistant Ambush Protected Vehicles) and armored personnel carriers.
* 79 Artillery and Mortar positions.
* 673 Infantry Fighting positions
* 14 river crossing small ferry boats
* 900 ISIS buildings and barracks
* 92 checkpoints
* 23 munition caches
* 52 bunkers
* 259 small oil refineries and storage facilities run by ISIS.

There is no word on whether we have blow up any partridges in pear trees, lords a leaping, or golden rings.

Via Defense Tech.  There is more analysis of the impact of, and character of the air strike campaign here.

At least some of our fighter pilots are getting some real world combat experience dropping smart bombs, and the technologies involved are getting a trial in the sandbox before being pressed into use in some more symmetric conflict.

Some of the small numbers of U.S. troops in the region were shot at by ISIS forces for the first time of the campaign last week, although apparently did not suffer casualties.  Most of the heavy lifting when it comes to ground combat has been carried out by Kurdish militias who have proven themselves to be more capable than the Iraqi or Syrian Army in this conflict.

ISIS may be reasonably well armed and equipped for an insurgent force, but hardly has the military resources of the full fledged nation-state that it claims that it is now, and has an Army of perhaps 20,000 or so men fighting for it (with large margins of error on that estimate).

Certainly, the airstrikes have made some dent in the military resources of ISIS and made the war costly for them, while requiring only minimal U.S. and allied commitment in blood and money.  ISIS has been left with a military limited to troops with small arms using civilian vehicles like pickup trucks and no major military bases in good repair.  ISIS can use its limited military resources ruthlessly to retain control of its territory and even advance along parts of its borders to key strategic targets.  But, it has been denied almost all military vehicles, almost all weapons more potent than an assault rifle or rocket propelled grenade launcher, and any decent base or training facility.  As the months drag on, these are not going to be ideal conditions under which it will need to continue to maintain its fighting force.  And, of course, ISIS also needs to replace its many killed and wounded soldiers with new ones, as well.  Each month that passes of more airstrikes further degrades the military capabilities of ISIS and its core oil extraction driven economic base.

On the other hand, it isn't at all clear that the air strikes have had a decisive impact anywhere but a few border towns that have historically had non-Sunni Arab populations.  ISIS seems to control almost all of the historically Sunni Arab territory of Iraq, to have made slight inroads into Kurdish and non-Shi'ite minority areas of Iraq, and to have taken most of Eastern Syria.

The Iraqi military, the Kurdish militia, Syrian rebels, the embattled Syrian government that rules the rump territory remaining in its control in Syria, and the U.S. and its allies, all appear to have been powerless to dislodge ISIS from historically Sunni areas in Iraq and from Eastern Syria.  Indeed, it seems as if they are struggling, in their combined efforts, simply to hold the line against further ISIS advances.

I've heard nothing about any serious Sunni led efforts to rise up against, or dislodge the ISIS regime whom Sunni Muslims in its territory seem to have accepted, happily or out of fear, as the de facto government whose brutal regime it is futile and dangerous to resist.  And, it was not as if there was any great love lost for the Shi'ite controlled civilian government of Iraq that had ruled them from Baghdad, or Syria's former Baathist regime, in any case.

So, we have a stalemate.  Nobody can defeat ISIS, but ISIS must now struggle to maintain control over its territory with its meager military resources and a reign of terror.  So, ISIS can probably continue to be contained indefinitely.

Indeed, as long as ISIS can be contained, it isn't clear that we have any end game other than to leave ISIS to weak to expand or think about anything but clinging to its perilous grip on power in the territory it controls.  We aren't eager for the area to be controlled by Syria's Baathist regime.  But, the Syrian rebels don't have the wherewithal to fight the Baathists on one front and ISIS (including many of their comrades in arms from the still ongoing Syrian civil war) on the other.  The Baathist regime is likewise too busy holding into the territory it still controls in the face of an ongoing civil war to retake the hard target of ISIS controlled territory.

Neither the U.S., nor its allies, nor the rump Iraqi government, nor the Kurdish militias are inclined to try to not only oust ISIS from its core territory, but to impose marital law until the territory can be handed over in good order to the rump Iraqi government that is now a Shi'ite nationalist assembly that is closely allied with Iran, or the Baathist regime in Syria.

The pre-ISIS civilian local and regional and central government officials who used to run this territory are gone, and have no realistic capacity to restore their legitimacy to rule this territory again on behalf of the national governments that used to control these territorial areas, even if the ISIS fighters and governmental officials could be ousted tomorrow.  Local civil society, likewise, it seems, has been vaporized in the face of the all encompassing effort by ISIS to establish a new Caliphate run in accordance with strict and conservative interpretations of Islamic law.  Anyone who stepped forward to try to led a successor regime in the region would be at grave risk of violence by agents of an exiled and temporarily routed ISIS regime, much like successors to the Taliban in Afghanistan became targets there.

So, while we can do a lot of damage, and economic pain, and can contain ISIS, and we can destroy almost all of their heavy weapons, we have no real game plan to secure meaningful regime change in its core territory and then to rule that territory.  It would take a well disciplined and equipped Army of many tens of thousand of ground troops, if not hundreds of thousands, who spoke the local language, and vast amounts of nation building funds, at a time when low oil prices and wartime economic disruption are leaving Iraq and Syria strapped for cash, to have a serious chance of success in that endeavor.  Nobody involved is willing or able to commit those kinds of resources to that task at this time.

In the meantime, each month that passes further cements the stalemated status quo, which is miserable for all involved and is further segregating the country on ethnic and religious lines in the few pockets o the country where this hadn't happened already, destroying prospects for a renewed multi-ethnic state of the kind that Iraq had under Saddam Hussein.

Every month that passes only cements the legitimacy of ISIS as a genuine nation-state further, and makes it harder to restore a legitimate civilian replacement government of Syria or Iraq respectively.  The national military forces couldn't prevent ISIS from terrorizing average people and seizing control back in June, and any ordinary citizen would be taking a huge gamble to assume that national military forces could do it now, with a more entrenched foe and fewer resources of their own as a result of this massive civil war and succession movement that is now about six months old.

Yet, it is hard to ignore a regime that makes a point of beheading your nation's citizens on television, trying to carry out genocidal campaigns directed an ancient minority religious communities in their core territory, endorses terrorist attacks in the homelands of their opponents, and reestablishes legal sex slavery for girls and women captured from non-Sunni religious sects or others who have displeased the regime.  It is even harder when this is happening in one of the world's most abundant swath of oil fields and refineries that are key to the national wealth of Iraq and Syria respectively and disrupting the global economy in the process.

While it is hard to say that we were wrong to intervene and prevent multiple instances of genocide aimed at minority religious populations in Iraq as a result, it is also hard to know what the next objective of our involvement in this conflict (and the Syrian civil war in which we are supporting rebel forces that nonetheless seem to be losing ground in Baathist regime held territory) should be.

So, until we decide otherwise, our mission seems to be to continue to degrade the military technology and infrastructure of the fighting forces of ISIS and its regime generally, and to contain the regime do that it doesn't expand beyond its current borders, until some other actor in the region takes more decisive action, or the situation on the ground shifts for some reason.  For example, a successful Iraqi "surge" or a decision by the Turkish government to intervene decisively in this conflict rather than staying on the obscure sidelines as much as possible while tolerating military conduct just over the border by Kurdish militants who have been the Turkish military's bitter adversary in counterinsurgency operations spanning decades that were merely at a lull and not actually concluded when the rise of ISIS changed everything.

These U.S. and allied military tasks, of course, could last for many years to come until the stalemate breaks somehow.

Even if we somehow "win" the war, the people of this region may be far too alienated from the regimes that they have been forced by ISIS to fight against for all those years while scraping by in a country that is an economic shambles, to embrace their new rulers willingly.

A best case scenario for post-ISIS Iraq and Syria, however many years hence ISIS can be ousted, probably looks something like post-Irish independence Northern Ireland without the Protestants around to support the ruling United Kingdom government.

A worse case scenario looks something more like Somolia or Yemen.

Faced with that prospect, a more reasonable end game may be to oust the theocratic ISIS Caliphate regime in lieu of a regime run by Sunni tribal leaders and warlords in the image of post-Taliban Afghanistan and post-civil war Eritrea, while forcing Iraq and Syria respectively to cede these huge swaths of their own territory to a new Sunni Muslim state in the same territory that ISIS holds now and some treaty assurances from a post-ISIS regime in a nation-state that ISIS forcibly carved out of former Iraq and Syria.

That would be a bitter pill, but it is hard to imagine any better outcome to this conflict for the U.S. and its allies.  This would be a loss for almost everyone involved on all sides.  Given the reality of the situation there right now, would viable alternative would be a better outcome?

Particularly tricky would be the dominoes that such a step might trigger.  If the ISIS territory were granted de jure independence, the Kurds would likely insist upon their independence from Iraq as well.  Iran would likely warm to rump Shi'ite Iraq and might even annex it or join it in some sort of federation.  Indeed, given Iran's more successful history of electoral democracy than Iraq, flaws as it is, an annexed Iraq might be more democratic and have a more functional civilian government than it does in the status quo.

Freed of potential threats from Iraq and Afghanistan by U.S. military action, emboldened Iran might turn to less urgent priorities like harassing or attacking Israel, something that it has long expressed the desire to do.

Rump Syria, meanwhile, would leave the Syrian Baath regime a less overwhelming task to consolidate what remained than it would have faced to retake control of its Eastern territory.  But, still facing a U.S. funded insurgency in an ongoing civil war, it might have little choice to pursue the less ambitious agenda, and prioritize a brutal crackdown on Syrian rebels in an effort to retain control.

Values Are Not Universal

Derived from the World Values Survey (and international version of the General Social Survey) via a very thoughtful post at Gene Expression in response to a terrorist attack in Paris (see also recent posts of his here and here).

Pay particular attention to the top right corner of the chart.  Half of my ancestors were Swedish speaking, and I guess, somehow or other, the sentiment must have rubbed off on me as well.

Also, while values are not universal at any given time, that doesn't necessarily mean that human beings deep down, are fundamentally different.  Values change when you put people in different contexts.  Values can change.  Ideally, from leaders within the society that is changing.  Values do not exist divorced from the society in which one lives.

And, to complete that thought:

Some past posts on the motives of terrorists are found here, and here, and here, and here, and here.

Complexity Economics

A subfield that deserves more attention is complexity economics.  It deserves props for studying economic phenomena that are worthy of study but marginalized by more mainstream theory driven work.

In other economics news, Lithuania has joined the euro zone.