Upside-Down Logic on the Left

TalkLeft links to and quotes a report by Human Rights Watch about the risks to women who vote in Saturday’s Afghan elections. Here’s some of the quoted material:

When a U.S.-led coalition invaded Afghanistan in October 2001, one of the justifications for the war was that it would liberate women from the misogynistic rule of the Taliban. There have been notable improvements for women and girls. More than one million girls are enrolled in school and the new Constitution contains guarantees for women’s equal rights.

However, warlords and the Taliban are undermining Afghan women’s participation in the political process through ongoing threats and attacks. Throughout the country, militarized political factions are using force, threats, and corruption to stifle more legitimate political activity and dominate the election process.

About which TalkLeft says:

We’ll be listening to Bush in the debate closely as he credits his Administration’s achievements for Afghans, particularly women. I hope the mainstream media and bloggers will be fact-checking him.

So there have been “notable improvements for women and girls,” however, “warlords and the Taliban are undermining Afghan women’s participation in the political process through ongoing threats and attacks.” I would say that the notable improvements are to Bush’s credit and the efforts to undermine those accomplishments are to the discredit of the warlords and Taliban.

How is it Bush’s fault if things are better but not perfect in Afghanistan? That’s like saying it’s a cop’s fault if he grabs two muggers and a third one gets away because the cop has only two arms.

Poll-Shopping on the Left

I love it when lefties find a poll that shows Kerry ahead, then make a big deal of it, as Atrios does today at Eschaton.

I guess Atrios doesn’t like to look at realclearpolitics.com, where Bush now leads in 6 of the 10 most recent polls and is tied in 3 others. Rasmussen’s tracking poll, which realclearpolitics.com doesn’t cover, also has Bush ahead. Then there are the truly meaningful “polls” — namely, the betting markets — at Iowa Electronic Markets, TradeSports, and intrade, for example. Guess who’s favored to win, at all three sites? (Hint: It’s not Kerry.)

Give it up Atrios. We’ll let you know if and when Kerry actually pulls ahead of Bush. In the meantime, stick to other subjects about which you’re equally ignorant.

It’s Called Freedom of Speech

But it’s too much for a university professor to handle, accustomed as he must be to the cozy confines of academic speech codes. I’m thinking of the University of Utah’s David Hailey, whose ill-begotten effort to salvage the Rathergate memos was thoroughly debunked by Paul at Wizbang. Paul’s posts triggered an avalanche of ridicule and e-mail abuse aimed at Hailey. Wired carries a somewhat balanced story by Staci D. Kramer about the whole business:

David Hailey says he didn’t know much about blogs before he flipped on his office computer one late September morning and watched hate mail flood into his inbox.

Author of a report (.pdf) claiming that the controversial CBS News Texas Air National Guard memos could have been produced on a typewriter, the Utah State University associate professor of technical communications didn’t know he had become fodder for vigilant political blogs and discussion boards. To liberals, the report was proof that CBS was in the clear — making it another claim for conservatives to debunk.

But the debunking quickly turned into name-calling, with a guest blogger at Wizbang, a conservative political blog, leading his detailed critique with the since-retracted accusation that Hailey was a “liar, fraud and charlatan.” It escalated as Hailey updated what he calls a work in progress and his critics declared a cover-up.

The result was what Howard Rheingold, author of Smart Mobs: The Next Social Revolution, calls “a semi-organized swarming.” It is but one of a spate of recent incidents that underscores the power of a rapidly mobilized group online to accomplish a goal — and the potential for harm when online mobs form [like Democrats beating up Republicans at rallies, destroying lawn signs, and damaging Republican offices — only not as bad.]….

“For political figures, it’s fair game,” said Rheingold. “For people expressing political opinions, it’s scary. If some researcher does something you don’t agree with and you go after him personally, that’s scary.”…

At first, Hailey thought it was funny that his type-matching exercise ticked people off enough for them to write. By the second day, he was far from amused. By the end of the week, the tenured academic literally cried in relief when university officials called him to a meeting to express their support; many of them had received numerous e-mails demanding his dismissal and calling him a liar or a fraud [not surprising, given the sloppiness of Hailey’s work].

“It’s one thing to go to a university and point out that there are these problems,” Hailey said. “It’s another thing to start character assassination.”

Wizbang owner Kevin Aylward says that was never the intention but admits the language used in postings got out of hand.

“People are trying to make this into ‘we’re out to get him,'” Aylward said. “We were out to discredit the report.”

The guest blogger on Wizbang was spurred by a post on another blog suggesting that the Boston Globe was working on a story; the thread is called “Fact Checking the Boston Globe in Advance.”

Aylward apologized for the name-calling, which he retracted from his guest blogger’s post.

“It was a bad idea to use those words, they didn’t further the story. They were opinion, not news.” Still, he asked, “don’t you think when you inject yourself into that debate you’re stepping onto a national stage?”

He points to a Sept. 16 message from Hailey at liberal weblog Take Back the Media linking to the post. Hailey, a Democrat who contributed $250 to Kerry’s campaign, also posted a link at Democrats.com.

Asked if he hoped as a Democrat to redeem the memos, Hailey replied, “I’m a complete person. I’m a liberal. I’m a Democrat. I felt Dan Rather was being totally abused … [so he tried, ineptly, to salvage the forged memos] but mostly it’s like a crossword puzzle.”…

For Aylward, the matter’s already moved to the back burner. He shut the comments down in the main Hailey thread. Guest blogger Paul wrote a coda, expressing dismay about the personal attacks that followed his first post.

“I was admittedly rude with my first post. With the benefit of hindsight, it was not my finest hour,” he wrote. “But some of the things you people are doing is just beyond the pale.”

Utah State Counsel Craig Simper, who has been monitoring Hailey’s situation for the university, was struck by leaps to conspiracy theories and assumptions that a downed server meant Hailey was being fired.

“One of the bloggers claimed it’s not the crime; it’s the cover-up. This conspiratorial mentality is absolutely scary. It’s incredible,” Simper said, adding, “It’s very chilling.” [not like being shot at]…

Hailey credits the questions from Wizbang and others for spurring him to make the report stronger and encouraging him to mark works in progress as drafts. He’s even enthralled by the possibility of blogs.

But he’s still feeling the effects of the last few days.

“It doesn’t matter if you vindicate yourself, you’re stained,” he said. “(The university) can support me and that stain won’t rub off. I can sue the pants off these guys…. That doesn’t change anything because everybody else only sees what is out on the internet.”

If you can’t stand the consequences of true academic freedom, perhaps you shouldn’t be an academic. The Wired story omits two critical facts: Wizbang‘s Paul was absolutely on target in his debunking of Hailey’s work. And that debunking has been underscored by Joseph Newcomer, a professor at Carnegie-Mellon University. Newcomer’s detailed and devastating review of Hailey’s work is here, and Newcomer’s resume is here. Hailey should have sought expert peer review before exposing his half-baked and perhaps politically motivated work to the wonderful world of the web.

With "Friends" Like France…

…who needed Saddam? Actually, it’s been evident for decades that the government and elite classes of France are unfriendly (to say the least) toward the United States. It all began with de Gaulle’s resentment of his exclusion from the inner circle during World War II, a resentment upon which he acted in the 1960s by withdrawing France from NATO’s military arm and kicking U.S. forces out of France. It’s been more of the same since then.

Now The Washington Times confirms what we’ve suspected about France’s position vis-a-vis Iraq, namely, that Saddam encouraged and rewarded the anti-Americanism of French officials and elites:

Saddam paid off French leaders

By Bill Gertz

THE WASHINGTON TIMES

Saddam Hussein used a U.N. humanitarian program to pay $1.78 billion to French government officials, businessmen and journalists in a bid to have sanctions removed and U.S. policies opposed, according to a CIA report made public yesterday.

The cash was part of $10.9 billion secretly skimmed from the U.N. oil-for-food program, which was used by Iraq to buy military goods, according to a 1,000-page report by the CIA-led Iraqi Survey Group.

According to a section of the report on Iraqi weapons procurement, the survey group identified long-standing ties between Saddam and the French government. One 1992 Iraqi intelligence service report revealed that Iraq’s ambassador to France paid $1 million to the French Socialist Party in 1988.

The CIA report stated that the Iraqi ambassador was instructed to “utilize [the $1 million] to remind French Defense Minister Pierre Joxe indirectly about Iraq’s previous positions toward France, in general, and the French Socialist party, in particular.”

In the late 1990s, Iraq also used an oil-purchasing voucher system through the U.N. oil-for-food program, which began in 1996 and ended in 2003, to influence the French to oppose U.S. initiatives at the United Nations and to work to lift sanctions, the report stated.

The Iraqi Intelligence Service paid off French nationals by dispensing vouchers that allowed the holders to make hundreds of thousands of dollars in commissions by selling them to oil buyers.

The payoffs help explain why the French government, along with Russia and China, opposed U.S. efforts in the United Nations in the months leading up to the March 2003 invasion, U.S. officials said.

Iraqi intelligence agents also targeted French President Jacques Chirac, by giving gifts to a spokesman, two of his aides and two French businessmen, the report said.

One Iraqi intelligence report stated that a French politician assured Saddam in a letter that France would use its veto in the U.N. Security Council against any U.S. effort to attack Iraq.

Iraqi intelligence documents recovered in Iraq showed that the French citizens linked to the influence operation were “ministers and politicians, journalists and business people.”

“These influential individuals often had little prior connection to the oil industry and generally engaged European oil companies to lift the oil, but were still in a position to extract a substantial profit for themselves,” the report said.

Former Iraqi Deputy Prime Minister Tariq Aziz told the Survey Group that he personally awarded several Frenchmen “substantial” oil allotments.

“According to Aziz, both parties understood that resale of the oil was to be reciprocated through efforts to lift U.N. sanctions or through opposition to American initiatives within the Security Council,” the report said.

The report named former French Interior Minister Charles Pascua as getting a voucher for 11 million barrels of oil, and Patrick Maugein, who received a voucher for 13 million barrels of oil. The report said Mr. Maugein, the chief executive officer of the SOCO oil company, was a “conduit” to Mr. Chirac.

Michel Grimard, the founder of the French-Iraqi Export Club, received a voucher for 5.5 million barrels, and the Iraqi-French Friendship Society received vouchers for more than 10 million barrels.

French oil companies Total and SOCAP were granted vouchers for 105 million and 93 million barrels of oil, respectively.

But France wasn’t alone:

The report stated that Iraq covertly purchased missiles and other military goods from Russia, Belarus, China, North Korea and South Korea.

According to the report, illegal goods used in making weapons of mass destruction were sold to Iraq by companies in Jordan, India, France, Italy, Romania and Turkey.

Conventional arms also were sold to Iraq by China, Jordan, India, South Korea, Bulgaria, Ukraine, Cyprus, Egypt, Lebanon, Georgia, France, Poland, Syria, Belarus, North Korea, Yugoslavia, Yemen, Russia, Romania and the Republic of China (Taiwan).

Then there’s the U.N.:

The report said Saddam’s regime obtained $1.5 billion from U.N. humanitarian contract kickbacks and $228.5 million in surcharges on U.N.-approved oil sales.

Other oil smuggling provided the regime with $8 billion in cash outside of U.N.-approved oil sales, the CIA report reveals.

Where did a lot of the money go? One guess:

Charles Duelfer, the director of the CIA survey group, told a congressional hearing yesterday that a “sizable portion” of Saddam’s cash obtained from the oil-for-food program were diverted to the military, specifically the government-run Military Industrial Commission.

“The funding for this organization, which had responsibility for many of the past [weapons of mass destruction] programs, went from approximately $7.8 million in 1998 to $350 million in 2001,” Mr. Duelfer told the Senate Armed Services Committee.

Mr. Duelfer said that during the period from 1998 to 2001, “many military programs were carried out — including many involving the willing export to Iraq of military items prohibited by the Security Council.”

Tell me again why we should consult with “allies” like France or defer to the United Nations on any issue.

The Illogic of Knee-Jerk Privacy Advocates

There’s much ado about a bill now before the Senate that would, in the words of Ryan Singel at Wired News,

let government counter-terrorist investigators instantly query a massive system of interconnected commercial and government databases that hold billions of records on Americans.

Some background (from the article):

The proposed network is based on the Markle Foundation Task Force’s December 2003 report, which envisioned a system that would allow FBI and CIA agents, as well as police officers and some companies, to quickly search intelligence, criminal and commercial databases. The proposal is so radical, the bill allocates $50 million just to fund the system’s specifications and privacy policies.

However,

[t]o prevent abuses of the system, the Markle task force recommended anonymized technology, graduated levels of permission-based access and automated auditing software constantly hunting for abuses.

An appendix to the report went so far as to suggest that the system should “identify known associates of the terrorist suspect, within 30 seconds, using shared addressees, records of phone calls to and from the suspect’s phone, e-mails to and from the suspect’s accounts, financial transactions, travel history and reservations, and common memberships in organizations, including (with appropriate safeguards) religious and expressive organizations.”

But task force member James X. Dempsey, director of the Center for Democracy & Technology, says the commercial records involved are more limited public records, such as home ownership data, not information about what mosque someone belongs to.

He said he believes it’s “absurd” to prohibit the FBI from using a commercial database like ChoicePoint to find a suspected terrorist’s home address (though the FBI currently can and does do this). On the other hand, he asked, “Should they be able to go to ChoicePoint and ask for all the subscribers to Gun Owners Monthly? No, I don’t think so.”

The proposed network would not look for patterns in data warehouses to attempt to detect terrorist activities, Dempsey said. Instead, an investigator would start with a name and the system would try to see what information is known about that person.

Seems to me that’s in keeping with the letter and spirit of the Constitution. But

critics say the Senate is moving too fast and the network could infringe on civil liberties. Lawmakers are taking a “boil the ocean” approach, according to Robert Griffin, president of Knowledge Computing. His company runs Coplink, a widely used system for linking law enforcement databases. Despite being a supporter of increased information sharing, Griffin criticized the proposal for trying too much too soon and relying too heavily on commercial data.

“The next Mohammed Atta is not going to be found in commercial databases,” Griffin said, referring to the tactical leader of the 9/11 attacks. “We are going to stop him running a red light somewhere, and we are going to run relationships associations with this guy and we are going to say, gee, you have things in common with guys on watch lists. That’s how you are going to find the guy — not because he has bad credit.”

Civil liberties lawyer Lee Tien of the Electronic Frontier Foundation accused Congress of “institutional laziness” for not holding hearings on the proposal to hear the perspectives of advocates for consumers or battered women. Tien also argued that a widespread lack of privacy and due process protections would make data sharing dangerous.

“If someone transfers your credit report or medical history, you have no way of knowing,” Tien said. “The natural feedback we expect in the physical world just doesn’t work in the area of information. You have to be careful.”

Tien is not alone in his concern. On Monday, more than 40 organizations, ranging from the American Association of Law Libraries to the National Association for the Advancement of Colored People, signed on to an open letter (.pdf) to Congress asking members to include adequate civil liberties safeguards in the pending legislation.

However,

technology professor Dave Farber said that his work on the task force convinced him the task force’s model was a “critical” tool in the fight against terrorists.

“A lot of (task force members) were very uncomfortable about data sharing,” Farber said. “But all of us at the end felt confident that if the recommendations were followed, it was as good as it was going to get relative to privacy protections.”

Let’s get this right, folks. We don’t know how the next Mohammed Atta will be found (if he is) before he commits an atrocity. How in the hell do you know, a priori, how you’re going to find him?

We’re talking about public records, right? If you don’t want to create a public record, don’t drive a car, own a house, open a public library account, borrow money from a regulated financial institution, and on and on. Look, do you think the government is going to slam you in jail because you live in Detroit, read Popular Mechanics, and give money to the Green Party? That’s a big waste of time. What the government needs is a better insight into the goings on of people who might, for other reasons, be suspected of implication in terrorist plots. It’s called “process of elimination”.

Get a grip on yourselves, folks. If 1984 is coming, it’s coming at your local university, where you can’t call say anything that might be construed as offensive to anyone who isn’t a white, Christian male.

Here are my questions for the hysterical, knee-jerk opponents of government data-mining: Are you (a) completely in favor of letting terrorists operate with impunity, (b) completely devoid of concern for the fate of your fellow Americans, (c) completely paranoid, (d) just waiting for a Democrat administration to propose the same legislation, when you’ll be for it, or (e) all of the above?

If you really think the proposal is a threat to your privacy and civil liberties, consider Dave Farber’s credentials. The man is a walking, talking, fire-breathing civil libertarian and Democrat. If he can live with, why can’t the rest of you?

How to Save Social Security: Part I

REVISED AT 4:58 PM (CT) – 10/06/04

The day of reckoning for Social Security — as we know it — can be postponed by converting the trust fund to real assets that generate real income. The question then becomes whether to keep it as we know it, to privatize it, or to do some of both. This post shows how the day of reckoning can be postponed. Future posts will examine the future shape of the program.

In an earlier post I pointed out (1) that the Social Security trust fund is mythical, not real, and (2) that the trust fund could be converted from myth to reality by gradually selling the Treasury securities now held in the fund and replacing them with high-grade corporate bonds and conventional mortgages.

The trust fund would then hold real assets, and those assets would yield a higher rate of return than the putative rate of return on the “special obligation bonds” now held by the trust fund. How much higher? The following graphic compares the interest rates credited on new special obligation bonds issued from 1990 to 2003 with the yield to maturity for AAA corporate bonds, conventional mortgages, and BAA corporate bonds:

(Sources: Average annual interest rates on new trust fund bonds from Nominal Interest Rates on Special Issues at Social Security Online, Actuarial Resources; average annual rates on AAA corporate bonds, conventional mortgages, and BAA corporate bonds from Federal Reserve Statistical Release.)

For the period 1990-2003, the average yield on AAA bonds was 7.43 percent, as opposed to 6.34 percent for trust fund bonds. That’s 17 percent more interest income, on average, for each dollar invested in a AAA bond rather than a trust fund bond. Conventional mortgages and BAA bonds are even better: Conventional mortgages yielded 7.76 percent on average, 22 percent more than trust fund bonds; BAA bonds yielded an average of 8.27 percent, or 30 percent more than trust fund bonds. Somewhere in that mix lies a partial solution to Social Security’s underlying problem.

What is that problem? According to the 2004 report of Social Security’s trustees, it’s this:

[P]program cost will exceed tax revenues starting in 2018….Social Security’s combined trust funds are projected to allow full payment of benefits until they become exhausted in 2042.

What’s the solution? Again, according to the trustees, it’s this:

Over the full 75-year projection period the actuarial deficit estimated for the combined trust funds is 1.89 percent of taxable payroll–slightly lower than the 1.92 percent deficit projected in last year’s report. This deficit indicates that financial adequacy of the program for the next 75 years could be restored if the Social Security payroll tax were immediately and permanently increased from its current level of 12.4 percent (for employees and employers combined) to 14.29 percent. Alternatively, all current and future benefits could be immediately reduced by about 13 percent. Other ways of reducing the deficit include making transfers from general revenues or adopting some combination of approaches.

* If no action were taken until the combined trust funds become exhausted in 2042, much larger changes would be required. For example, payroll taxes could be raised to finance scheduled benefits fully in every year starting in 2042. In this case, the payroll tax would be increased to 16.91 percent at the point of trust fund exhaustion in 2042 and continue rising to 18.31 percent in 2078.

* Similarly, benefits could be reduced to the level that is payable with scheduled tax rates in every year beginning in 2042. Under this scenario, benefits would be reduced 27 percent at the point of trust fund exhaustion in 2042, with reductions reaching 32 percent in 2078.

Changes of this magnitude would eliminate the actuarial deficit over the 75-year period through 2078. However, because of the increasing average age of the population, Social Security’s annual cost will very likely continue to exceed tax revenues after 2078. As a result, ensuring the sustainability of the system beyond 2078 would require even larger changes than those needed to restore actuarial balance for the 75-year period.

The nugget in all of that is this: An immediate tax increase from 12.4 percent to 14.29 percent would eliminate the problem for 75 years. A tax increase of that size — about 15 percent — is equivalent to about $81 billion. (According to this table, Social Security “contributions” for 2003 were $533.5 billion; 15 percent of that is $81 billion.)

Interest on trust fund bonds generated $84.9 billion in 2003. That’s a fictional return of about 5.8 percent on the trust fund’s average assets of $1,454 billion for the year (from end-of-year data for 2002 and 2003 given here). That’s more than the return on new bonds, because the trust fund’s portfolio consists of a mix of bonds issued in various years at various rates. In any event, if the trust fund’s portfolio had been invested equally in AAA bonds, conventional mortgages, and BAA bonds, it would have yielded around 7.1 percent — about 23 percent more.

Let’s say the trust fund were completely converted to real assets by 2015, at which time it would have a current-dollar value of $4.4 trillion and earn about 5.6 percent interest (estimates derived from this table). The accumulation of additional interest earnings in the years after 2015 would prolong the life of the fund by about five years, that is, from 2042 into the late 2040s. Almost everyone who is now collecting Social Security benefits and who will begin collecting benefits in this decade would be assured of complete lifetime coverage. There would be no need to raise tax rates, cut benefits, or raise the retirement age beyond the current maximum of 67 years (for persons born in 1960 or later).

A slight upward adjustment in the retirement age would buy even more time in which to save Social Security without unduly burdening the coming generation of workers and retirees. And time is what it will take.

Libertarians Coming Together to Fight it Out

On October 22, the Cato Institute will host a conference on the subject of “Lessons from the Iraq War: Reconciling Liberty and Security.” Much of it will be a re-hash of the war in Iraq. But Panel III — “The Principles Guiding Military Intervention” — might offer some useful libertarian insights for and against pre-emptive war.

For some of my neolibertarian views on the subject, try these posts:

Libertarian Nay-Saying on Foreign and Defense Policy

Libertarian Nay-Saying on Foreign and Defense Policy, Revisited

Libertarianism and Pre-emptive War: Part I

Right On! For Libertarian Hawks Only

Understanding Libertarian Hawks

More about Neolibertarianism

More about Libertarian Hawks and Doves

Defense, Anarcho-Capitalist Style

That Mythical, Magical Social Security Trust Fund

You know the trust fund that’s supposed to keep Social Security solvent until 2042, even though benefit payments will begin to exceed receipts in 2018? First, it’s phony, as explained by Olivia S. Mitchell and Thomas R. Saving in a July 31, 2001, Washington Post op-ed piece:

…When Social Security ran annual surpluses in the past, it enabled other parts of government to spend more. The trust fund measures how much the government has borrowed from Social Security over the years, just as your credit card balance indicates how much you have borrowed. The only way to get the money to pay off your credit balance is to earn more, spend less or take out a loan. Likewise, the only way for the government to redeem trust fund IOUs is to raise taxes, cut spending or borrow.

Politicians and independent analysts have recognized the past inability of government to “lock-box” the trust fund. In 1989, for example, the assistant comptroller of the General Accounting Office said, “We shouldn’t kid the American people into thinking extra savings is going on.” It wasn’t until 1999 that the non-Social Security portion of the government budget finally reached balance. Only then was the Social Security surplus actually used to retire government debt.

We are surprised that this perspective on the trust fund is controversial. The commission’s interim report quotes credible sources — the Congressional Budget Office, the General Accounting Office and the Congressional Research Service — supporting the view that the trust fund is an asset to Social Security but a liability to the rest of the government. The Clinton administration’s fiscal year 2000 budget indicated a similar perspective:

“These [trust fund] balances are available to finance future benefit payments and other Trust Fund expenditures — but only in a bookkeeping sense. . . . They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits.”

Does this mean the government will not make good on those trust fund claims? Of course not, and the commission never suggested this. In fact, one principle guiding the commission’s work is that current and near-retirees must have their benefits preserved. Still, the nation has only three ways to redeem trust fund bonds: raising taxes, cutting spending or increasing government borrowing. If there is some alternative source of funds, no one has yet suggested it. And the annual amounts to be repaid are large and rising over time: $93 billion in 2020, $194 billion in 2025, and $271 billion in 2030 (in today’s dollars).

Some have suggested we could solve our Social Security problems simply by legislating a higher interest rate on trust fund bonds. This has superficial appeal, since it would be a simple bookkeeping matter for the Treasury. It would make the trust fund look bigger and extend the date when the trust fund is exhausted — on paper. But no increase in the amount we owe ourselves creates new saving. The same people will be retiring, expecting the same benefits and posing the same need for revenues irrespective of the size of the trust fund.

One way or another, promises of Social Security benefits made under the current system must be financed by taxpayers. These costs are slated to grow from 10.5 percent of taxable wages today to 13.3 percent in 2016, 17.8 percent in 2038 and 19.3 percent in 2075. That is why reform now is crucial, when time is still on our side. With each passing year of non-action, the day of reckoning draws nearer, leaving us with fewer options.

Olivia S. Mitchell, a Democrat, is a professor of insurance and risk management at the University of Pennsylvania’s Wharton School. Thomas R. Saving, a Republican, is a professor of economics at Texas A&M and a member of the Social Security Board of Trustees.

So much for the mythical trust fund. Now, about those magical interest rates. According to the Social Security Administration, bonds issued to the trust funds in 2003 had an interest rate of 3.5 percent, compared with an interest rate of 5.25 percent for bonds issued in 2002. That’s not too bad, considering that the average rate on 20-year Treasury bonds (the Treasury’s longest maturity) was 4.96 percent in 2003 and 5.43 percent in 2002. But it’s not nearly as good as, say, AAA and BAA rated corporate bonds and conventional mortgages, which had these average yields: AAA 2003, 5.66 percent; AAA 2002, 6.49 percent; BAA 2003, 6.76 percent; BAA 2002, 7.80 percent; conventional mortgage 2003, 6.54 percent; conventional mortgage 2002, 5.82 percent. In other words, high quality corporate bonds and conventional mortgages carry significantly higher interest rates than government bonds (because of the perception that corporate bonds and conventional mortgages are riskier than government debt).

These facts point to a way to ease the transition to private Social Security accounts. First, convert the mythical trust fund to a real one by creating an independent agency to invest the trust fund in high-quality corporate bonds and conventional mortgages. The agency would gradually sell off the trust fund’s portfolio of highly marketable government bonds and replace them with high-quality corporate bonds and conventional mortgages. In the end, the trust fund would comprise real assets, and those real assets would earn real income, at rates higher than those magically credited to the mythical trust fund upon which the future of Social Security now rests uneasily.

The additional revenue earned by the new trust fund wouldn’t wipe out the pending deficit in Social Security, nor would it prevent the eventual depletion of the trust fund. But the depletion of the trust fund could be held off long enough to enable a graceful transition to private social security accounts. The slower that transition, the less painful would be the temporary — but necessary — combination of tax increases and/or benefit reductions.

In the end, we’ll be better off because each worker will be investing for his or her own retirement — unlike the present system, which places an increasingly heavy burden on future generations. But we need more time to get there, and “privatizing” the trust fund is a good way to buy that time.

Billy Bob and the Bard

“Billy: Bard’s a load of bull.” That’s the headline on a piece at The Sun Newspaper Online. There’s more:

HOLLYWOOD star Billy Bob Thornton has created Much Ado in the acting world — by branding William Shakespeare “bulls**t”.

The heavily-tattooed American actor, 49 — whose films include Bad Santa and Armageddon — launched an astonishing attack on the Bard.

He compared the legendary English playwright’s work to corny soap operas.

He said: “I think Shakespeare’s overrated. It’s bulls**t. I’d never go and see a Shakespeare play. Who’d want to see me in Hamlet?…

“It’s not that I don’t understand it. But people think if you speak with an English accent it somehow makes you smarter.

“I don’t believe in all the flowery language — all of his plays are just a series of soap operas.”

Billy Bob — who plays a foul-mouthed Father Christmas in the Santa comedy — likened works such as Macbeth and Romeo and Juliet to US daytime drama Days Of Our Lives….

Well, Billy Bob, no one would want to see you in Hamlet, that’s for sure. If he thinks there’s nothing more to Shakespeare than “flowery language” he doesn’t understand it, in spite of his protestations. But what do you expect from someone who starred in Bad Santa, a vile piece of trash that I tolerated for about five minutes. If the DVD hadn’t been a rental I would have smashed it.

Actually, I think Billy Bob’s in a bad mood because he’s made so many stinkers lately. Not counting Bad Santa, six of his last seven movies have garnered fair-to-terrible ratings by viewers, according to Internet Movie Database.

Why I Don’t Hang Around with Economists

Sometimes economists who blog remind me why hanging around with economists is not good for the soul. Matthew Yglesias, a philosopher, started if off by saying, in connection with some controversy about Al-Zarqawi’s tied to bin Laden:

Maybe the Marginal Revolution guys can shed some light on whether it’s better to be fighting a consolidated jihadi monopoly or several competing terrorist firms.

Unfortunately, the economists rose to the bait. First, Tyler Cowen at Marginal Revolution goes through the usual, “if this, then that” routine before saying:

My guess: In Iraq you would prefer a smaller number of groups, since there is some chance of striking a deal with them. And there we are more worried about the suicide bombers than a loose nuclear device, so economies of scale do not overturn this conclusion. We are less likely to ever “trade” with al Qaeda and its offshoots, so in that case I would prefer splintering. Furthermore al Qaeda has a greater long-run nuclear potential, so it is more important to deny them potential economies of scale. I suspect we do not much mind if western Pakistan becomes a scene for terrorist infighting, whereas such conflicts could scuttle reconstruction in Iraq.

Then Glen Whitman at Agoraphilia gets into the act:

In reality, both models apply. Terrorists get money both from sales of other products and from donations, and they commit terrorist acts both for consumption and as a business venture. If it’s true that terrorist organizations are becoming more decentralized and independent, the net gain or loss to the victim-class will depend on which source of funding, sales of illicit services or donor contributions, is more important. My sinking suspicion is that it’s the latter.

For pity’s sake, fellas, it doesn’t matter because we can’t do anything about it, other than figure out where they are and what they’re up to, then stymie their plans and kill them.

Economists often lose sight of the ball. They’re so busy explaining what makes it curve that they’re not ready to swing at it.

All of which reminds me of going to lunch with economists, which I quit doing after a few outings. The idea of going to lunch with colleagues is to have some laughs, some good conversation (not about economics), and a few beers to help you coast through the afternoon. With economists, however, lunch always went something like this: Carping at the waiter about what’s not on the menu, followed by carping at the waiter about whether he brought the right orders to the table, followed by carefully dissecting the bill to ensure that everyone pays for precisely what he ordered, followed by computing the tip down to the last red cent instead of rounding up to the nearest dollar out of consideration for the beleaguered waiter. I’d rather have lunch with undertakers.

Does Capital Punishment Deter Homicide?

Ted Goertzel wants to believe that it doesn’t. In “Capital Punishment and Homicide: Sociological Realities and Econometric Illusions,” he asks and answers the question:

Does executing murderers cut the homicide rate or not? Comparative studies show there is no effect. Econometric models, in contrast, show a mixture of results. Why the difference? And which is the more reliable method?

His argument for comparative studies is simplistic, to say the least:

The first of the comparative studies of capital punishment was done by Thorsten Sellin in 1959. Sellin was a sociologist at the University of Pennsylvania and one of the pioneers of scientific criminology….

Sellin applied his combination of qualitative and quantitative methods in an exhaustive study of capital punishment in American states. He used every scrap of data that was available, together with his knowledge of the history, economy, and social structure of each state. He compared states to other states and examined changes in states over time. Every comparison he made led him to the “inevitable conclusion . . . that executions have no discernible effect on homicide rates”….

Sellin’s work has been replicated time and time again, as new data have become available, and all of the replications have confirmed his finding that capital punishment does not deter homicide (see Bailey and Peterson 1997, and Zimring and Hawkins 1986). These studies are an outstanding example of what statistician David Freedman (1991) calls “shoe leather” social research. The hard work is collecting the best available data, both quantitative and qualitative. Once the statistical data are collected, the analysis consists largely in displaying them in tables, graphs, and charts which are then interpreted in light of qualitative knowledge of the states in question. This research can be understood by people with only modest statistical background. This allows consumers of the research to make their own interpretations, drawing on their qualitative knowledge of the states in question.

This is laughable. You compile a bunch of data and display it in “tables, graphs, and charts which are then interpreted in light of qualitative knowledge of the states in question.” In other words, you see what you want to see, and scores of researchers who want to believe that capital punishment doesn’t deter homicide have simply squinted at their “tables, graphs, and charts” in just the right way, so that they could “prove” what they already believed. Qualitative, gut-feeling, ouija-board analysis — in Goertzel’s view — is superior to rigorous statistical analysis, which he pooh-poohs. Worse than that, he seems to pooh-pooh it without understanding it:

Econometricians inhabit the mythical land of Ceteris Paribus, a place where everything is constant except the variables they choose to write about. Ceteris Paribus has much in common with the mythical world of Flatland in Edwin Abbot’s (1884) classic fairy tale. In Flatland everything moves along straight lines, flat plains, or rectangular boxes. In Flatland, statistical averages become mathematical laws. For example, it is true that, on the average, tall people weigh more than short people. But, in the real world, not every tall person weighs more than a shorter one. In Flatland knowing someone’s height would be enough to tell you their precise weight, because both vary only on a straight line. In Flatland, if you plotted height and weight on a graph with height on one axis and weight on the other, all the points would fall on a straight line.

Of course, econometricians know that they don’t live in Flatland. But the mathematics works much better when they pretend they do. So they adjust the data in one way or another to make it straighter (often by converting it to logarithms). Then they qualify their remarks, saying “capital punishment deters homicide, ceteris paribus.” But when the real-world data diverge greatly from the straight lines of Flatland, this can lead to bizarre results.

They don’t adjust their data to make it “straighter,” they introduce relevant controlling variables, which cannot done in any way other than through econometric (multiple regression) analysis. Try looking at “tables, graphs, and charts” of comparative homicide data while mentally accounting for such factors as income, age, race, gender, and population density, and see what you come up with. Nothing at all, unless you choose to ignore those and other relevant factors. Goertzel is either stupid or he simply chooses to misrepresent multiple regression analysis.

Goertzel does acknowledge and discuss some econometric analyses, for the purpose of contrasting their results:

…Mocan and Gittings…concluded that each execution decreases the number of homicides by five or six while Dezhbaksh, Rubin, and Shepherd…argued that each execution deters eighteen murders. Cloninger and Marchesini…published a study finding that the Texas moratorium from March 1996 to April 1997 increased homicide rates, even though no increase can be seen in the graph….The moratorium simply increased homicide in comparison to what their econometric model said it would have otherwise been….[Exactly. That’s what econometric models do.]

Cloninger and Marchesini concede that “studies such as the present one that rely on inductive statistical analysis cannot prove a given hypothesis correct.” [That’s simply a standard scientific disclaimer, which Goertzel wouldn’t understand.] However, they argue that when a large number of such studies give the same result, this provides “robust evidence” which “causes any neutral observer pause.”…[But Goertzel isn’t a neutral observer, as you can tell.]

Econometricians often dismiss the kind of comparative research that Thorsten Sellin did as crude and unsophisticated when compared to their use of complex mathematical formulas. But mathematical complexity does not make for good social science. The goal of multiple regression is to convert messy sociological realities into math problems that can be resolved with the certainty of mathematical proof…[No, the goal is to take relevant factors into account.]

Enough of Goertzel. The econometric evidence is there, for those who are open to it: Capital punishment does deter homicide. See, for example, the careful analysis by Hashem Dezhbaksh, Paul Robin, and Joanna Shepherd, “Does capital punishment have a deterrent effect? New evidence from post-moratorium panel data,” American Law and Economics Review 5(2): 344–376 (available in PDF format here). Dezhbaksh, Rubin, and Shepherd argue that each execution deters eighteen murders. That number may be high, but the analysis is rigorous and it accounts for relevant variables, such as income, age, race, gender, population density, and use of the death penalty where it is legal. It’s hard to read that analysis and believe that capital punishment doesn’t deter homicide — unless you want to believe it. I certainly wouldn’t take “Ouija Board” Goertzel’s opinion over that of careful econometricians like Dezhbaksh, Rubin, and Shepherd.

Now, I must say that I don’t care whether or not capital punishment deters homicide. Capital punishment is the capstone of a system of justice that used to work quite well in this country because it was certain and harsh. There must be a hierarchy of certain penalties for crime, and that hierarchy must culminate in the ultimate penalty if criminals and potential criminals are to believe that crime will be punished. When punishment is made less severe and less certain — as it was for a long time after World War II — crime flourishes and law-abiding citizens become less secure in their lives and property.

A Victory for Property Rights: The Do-No-Call Registry Lives

The U.S. Supreme Court has “let stand a lower-court ruling that telemarketers’ rights to free speech are not violated by the government’s nationwide do-not-call list,” according to a Reuters report at MSNBC. The report continues:

Without comment, the justices rejected an appeal by commercial telemarketers against the lower-court ruling, which upheld as constitutional the popular program in which consumers can put their names on a list if they do not want to be called by telemarketers.

“We hold that the do-not-call registry is a valid commercial speech regulation because it directly advances the government’s important interests in safeguarding personal privacy and reducing the danger of telemarketing abuse without burdening an excessive amount of speech,” the appeals court said.

It’s all too nuanced for me. Here was my take on the issue, back on June 29:

It’s my phone and my house, dammit. There’s no free speech issue. Does freedom of speech give anyone the right to burst into your house at dinner time and shout “Joe Schmoe for dogcatcher!”? I don’t think so.

Anyway, let’s celebrate a victory for property rights, even if the courts can’t bring themselves to call it that.

Driving, Austin-Style

Austin must be the stop-sign-running capital of the world. I don’t know why everyone here is in such a hurry. It’s worse than the D.C. area, where I lived for almost 40 years. I can understand why all those people in the D.C. area run stop signs (and traffic lights) with abandon — they’re in a hurry to do something “important” for the nation. But Austin is the mere capital of one State (granted, it’s a big State and it still has a lot of oil), and an Austinite, by definition, can’t be more important than a denizen of the D.C. area.

Maybe Austinites are propelled by the refried beans that come with Austin’s ubiquitous Tex-Mex food. (I will say that Austin’s version of Mexican food is about 1000-percent better than the D.C. version.) Whatever it is, Austinites have this truly annoying habit of zooming through stop signs and around corners to plant themselves in your lane of traffic. Once there, most of them slow to a crawl and start talking on their cell phones.

Oh well, I’m retired and I have all the time in the world. Don’t mind me — just don’t hit me.

Happy Belated Anniversary…

…to me. Yesterday, October 3, marked the Xth anniversary of my retirement from the defense think-tank where I had worked for 30 years. I won’t dwell on the reasons for my joy at retiring — but it was a joyous event. So, happy belated anniversary to me.

P.S. You will note that I wrote “Xth anniversary,” not “X-year anniversary” in the contemporary way. “Anniversary,” according to The Living Webster Encyclopedic Dictionary of the English Language (1975 edition), means a “stated day on which some event is annually celebrated.” The Latin roots of the word are annus, a year, and verto, versum, to turn. Thus, the literal meaning of “anniversary” is “returning with the year at a stated time.”

The construction “X-year anniversary” has arisen because it has become common to denote the passage of less than a year since an event as an “X-month anniversary.” Only a person who is completely ignorant of the meaning of “anniversary” — or a person who is unwilling to stand up to the forces of lexical barbarity — could say “X-month anniversary.” As for “X-year” anniversary, it’s wrong because it’s redundant; “anniversary” itself denotes the passage of years.

There’s only one way to say it correctly, and that’s my way: “Xth anniversary.”

More about Israel, and the Left

I wrote recently and approvingly about Israel’s Gaza offensive. Now, according to an AP story, Israel’s Prime Minister Ariel Sharon has pledged to escalate a broad Israeli offensive in northern Gaza, saying troops will remain until Palestinian rocket attacks are halted. Sharon’s resolve is sure to invoke more wrath and scorn from the left, which reflexively hates Israel.

Why does the left hate Israel? Richard Baehr of The American Thinker spells it out:

1. It is an easy way to express one’s hatred for America.

2. Israel is viewed as an outpost of colonialism, and an active practitioner of it.

3. Israel is a western nation, and hence can be judged by the left. Israel is not protected by cultural relativism, as the Arabs are.

4. Leftist Christian churches can escape any lingering guilt about the Holocaust, by turning Israel into a villain. Some leftist churches hate Israel because they think this will help protect their members in the holy land — in other words they feel threatened.

5. Ferocious Muslim hatred of Israel and the Jews reinforces the natural cowardice of many on the left who go along with the Muslims to stay out of their line of fire.

6. Jewish leftists are prominent in the anti-Israel movement. This opens the floodgates for everybody else.

7. Israel is attacked because the secular left is appalled by the influence of religious settlers and their biblical connections to the land of Israel, and by the support for Israel by evangelical Christians, and Christian Zionists.

I think there’s a lot of merit in what Baehr says. I’m especially persuaded by the first three points, and the rest seem more than plausible.

Here’s my take: Israel owes its existence and strength, in large part, to the United States, which is Israel’s longtime benefactor. Israel and the United States are natural — if tacit — allies in the war on terror. The left hates America because America isn’t what the left wants it to be. In fact, the left’s hatred for America is so strong and deep that it’s fair to say that the left regards America as its main enemy. Israel — a staunch friend of the left’s main enemy — is therefore the left’s enemy, as well.

The Splenetic Krugman Truth Squad

According to Jeff Salamon, writing in today’s Austin American-Statesman,

Paul Krugman, whose incendiary columns occasionally run on the op-ed pages of the American-Statesman…, made the leap from famous-within-his-profession Princeton economics professor to famous-period pundit when he accepted a twice-weekly column at the no-longer-quite-so-Gray Lady. Krugman has been so tough on the current administration that he has even inspired a self-styled Krugman Truth Squad, who are even angrier than he is. Even when they get him dead to rights — and they do, sometimes — their rhetoric is so over the top (typical KTS blog headline: “Krugman Hate Crimes”) that you notice their spleen, rather than their facts.

The spleen is understandable. Krugman is the Goebbels of the pseudo-academic left. It’s hard to react to out-and-out vicious, lying propaganda with pure reason, even though the Krugman Truth Squad has reason (and facts) on its side.

But I’m not indulging in reason tonight. Just call me a member of the splenetic Krugman Truth Squad. And proud of it.

One Baseball Tradition Ends, Another Continues

A few days ago I posted about the fact that all the teams then leading major league baseball’s six divisions were pre-expansion (pre-1961) franchises. So much for that piece of trivia. The Anaheim Angels, one of the first two expansion franchises (est. 1961) caught up with the Oakland Athletics (descended from the Philadelphia Athletics, est. 1901) and went on to win the American League West title by beating the A’s today.

For those few of you who might be interested: The other 1961 expansion team was the Washington Senators, a team that replaced the original American League Senators (1901-60), which moved to Minnesota for the 1961 season and has been there since, as the Twins. The expansion Senators lasted only 11 seasons (1961-71) and moved to Texas, as the Rangers. You may know all that, but did you know that there were two Washington Senators teams in the National League (1886-9 and 1892-9)? Which means that Washington is about to get its fifth baseball franchise.

How many chances do you get to show that you can support a baseball team? If your name is Washington, it seems that you get as many chances as you want.

Birds of a Feather

AP, via Yahoo News!, reports this:

Brokaw, Jennings Show Support for Rather

By DEEPTI HAJELA, Associated Press Writer

NEW YORK – While acknowledging mistakes in CBS anchor Dan Rather’s “60 Minutes” report that questioned President Bush’s service in the National Guard, competing news anchors Tom Brokaw and Peter Jennings offered support Saturday for the beleaguered newsman.

Brokaw blasted what he called an attempt to “demonize” CBS and Rather on the Internet, where complaints about the report first surfaced. He said the criticism “goes well beyond any factual information.”

“What I think is highly inappropriate is what going on across the Internet, a kind of political jihad … that is quite outrageous,” the NBC anchor said at a panel on which all three men spoke….

The Guard story, aired on Sept. 8, was discredited because it relied on documents impugning Bush’s service that apparently were fake.

“I don’t think you ever judge a man by only one event in his career,” said Jennings, anchor on ABC….

Political jihad. That’s cute, Brokaw. But Rather’s the one who’s been on a political jihad for most of his “journalistic” career.

I agree, Jennings, never judge a man by only one event in his career. Rather’s bias shows up nightly. That’s more than 4,000 events since he took over as the anchor of CBS Nightly News. Not enough evidence for you? Plenty for me.

We’ll Be Watching You

The U.S. Supreme Court is the “you” in this case. The 2004-5 term of the Court opens Monday. Cases to watch, according to an AP story at Yahoo! News:

The death penalty, free speech and prison sentences are back on the agenda, along with new topics such as medical marijuana and out-of-state wine purchases that are likely to produce significant disagreement….

Here’s the death penalty issue:

A case sure to elicit strong opinions will be argued this month when justices are asked to rule on the constitutionality of executing killers who committed their crimes when they were juveniles….

The juvenile case will decide the fate of about 70 people on death row who killed when they were teenagers, including a Missouri man who was 17 when he helped push a woman off a railroad bridge in 1993. The United States is among only a few countries that allow execution for crimes committed before age 18.

Let the punishment fit the crime, I say. Don’t gas the guy, throw him off a railrod bridge.

This year’s top free speech case asks if the government can force cattle producers to pay for programs such as the “Beef: It’s What’s for Dinner” ad campaign. The court’s ruling is significant because the government forces growers of many agricultural products, from eggs to alligators, to share expenses for marketing. The eventual ruling would affect nonagriculture government programs, too….

And farmers and ranchers, of course, are passing on the cost of those ad campaigns to consumers. So, by forcing farmers and ranchers to support the ad campaigns, the government is effectively forcing taxpayers to subsidize advertising. Why doesn’t the government just ship 10 percent to the ad agencies and drop the advertising? We’d all be better off.

As for medical marijuana, maybe it should be legalized, with a proviso that marijuana growers must join forces with the Miller Brewing Company for a “high time” advertising campaign.

Allowing inter-State shipment of wine to individual consumers should be an easy one. If a State allows the importation of alcoholic beverages pursuant to the 21st Amendment — and I guess all States do — then barring the shipment of wine to individual consumers within the State amounts to State regulation of interstate commerce, which is reserved to the federal government. Next case.

The Meaning of "Hate Speech"

The left is fond of saying that those who challenge the veracity and virtue of leftists, leftism, and leftism’s lapdogs are guilty of “hate speech.”

I wondered how it could be hateful to say, truthfully, that John Kerry consistently voted against programs that would help the armed forces of the United States deter and defeat our enemies. Yet, Democrats strove mightily to portray Sen. Zell Miller’s righteous anger about Kerry’s voting record as hatred.

Similarly, Democrats strive mightily to portray those who favor self-reliance, free markets, and property rights as “haters” because they don’t believe in the redistribution of income and wealth.

Thinking about all of that has led me to this insight: If the left hates what you say, it’s “hate speech.”

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