Debating the Death Penalty

The American Spectator, a conservative magazine,
recently invited me to debate William Tucker about the death
penalty. Our point/counterpoint, which appeared in the July/August
Spectator, is
now online
. Here’s how my side of the dispute begins:

Old school.The typical
conservative is well informed about the careless errors routinely
made by the Internal Revenue Service, the U.S. Postal Service, and
city hall. If he’s a policy wonk, he may have bookmarked the Office
of Management and Budget’s online list of federal programs that
manage to issue more than $750 million in mistaken payments each
year. He understands the incentives that can make an entrenched
bureaucracy unwilling to acknowledge, let alone correct, its
mistakes. He doesn’t trust the government to manage anything
properly, even the things he thinks it should be
managing.

Except, apparently, the minor matter of who gets to live or die.
Bring up the death penalty, and many conservatives will suddenly
exhibit enough faith in government competence to keep the Center
for American Progress afloat for a year. Yet the system that kills
convicts is riddled with errors.

To read the rest,
follow the link
.

Tucker, meanwhile, points out that murder rates rose after
the death penalty was abolished nationwide and fell after “states
started executing people in significant numbers in the 1990s.” But
states that do not have the death penalty have also seen
murder rates decline
 in the same period—indeed, they’ve
enjoyed a somewhat greater decline—so I’m not convinced he’s found
the reason for the rise and fall.

He also offers an argument about incentives:

It's "In-A-Gadda-Da-Vida."For a criminal pulling off a holdup—or a rapist,
or a “surprised” burglar caught by a homeowner—there’s a very
simple logic at work. The victims of your crimes are also the
principal witnesses. They will call the police the minute you
depart. They can identify you. They will probably testify at your
trial. There’s a very simple way to prevent all this: kill
them.

The purpose of the death penalty is to draw a bright line between a
felony and felony murder. If the penalty for rape or robbery is
jail time, and for murder is more jail time after that, there isn’t
a huge incentive to prevent you from pulling the
trigger.

I didn’t mention it in my Spectator piece, but I have
invoked that same bright line elsewhere to show why, if there
is a death penalty, it should not apply to any crime less
serious than murder. If a criminal can be executed for, say,
kidnapping, he may well decide that he might as well kill people to
evade capture, since arrest already means a strong possibility of
being put to death. But while that bright line makes sense as an
argument against a particularly poor way of applying the death
penalty, I don’t think it works as well as an argument for the
death penalty itself. The same incentive, after all, applies to a
murderer: He might decide to kill more people to evade capture
too.

At any rate, you can read both Tucker’s full argument and mine

here
, and then you can join the debate yourselves in the
comments.

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Sen. Rand Paul: “The war on drugs has had a racial outcome…and I want to try to fix it.”

Sen. Rand Paul (R-Ky.) said that a new voting rights bill he’s
working on would help him reach out to new demographics, especially
minorities. Paul plans to introduce a bill that would
restore the vote for people convicted of minor drug
offenses. 

“Three out of four people in prison are black or brown for
nonviolent drug use. However, when you do surveys, white kids are
doing drugs at an equal rate, and they are a much bigger part of
the population. So, why are the prisons full of black and brown
kids? It is easier to arrest them. It is easier to convict them.
They don’t get as good of attorneys,” Paul said.


Read the full article here.

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Walmart Takes Red Pen to Typical NY Times Wage Gap Column

Prices so low they'll drive progressives insane!Timothy Egan over at the
New York Times
opined
in a poorly argued, talking-points-laden screed about
how terrible Walmart is. Typically this would be dog-bites-man
stuff. It contains stupid sentences like this one: “It’s a sad day
when we have to look to corporations for education, health care and
basic ways to boost the middle class,” as though the money the
government grabs to attempt to (extremely poorly) manage these
things would exist at all were it not for the marketplace that
created corporations in the first place (and as if the extremely
poor government management isn’t what is driving up prices of
health care and education as well).

But something different happened this time, causing a bit of
viral buzz in conservative-libertarian circles. Walmart took a red
pen to Egan’s column and
posted it on their site
, with corrections. In response to Egan
calling Walmart a drain to taxpayers, they argue they’re the
biggest taxpayer in the country. In response to him claiming the
company forces employees onto public assistance, they point out
that they are responsible for moving employees off public
assistance. They even note that one piece of evidence of Walmart’s
bad behavior was
debunked by Politifact
. In response to a simplistic
back-of-the-napkin mathematical claim by a Fortune writer
that Walmart could increase the wages by all their employees by 50
percent with no consequences, Walmart suggests checking out the
description of the company from a gentleman named Jason Furman.

Read the whole thing
here
. (Tip to Walmart’s public relation’s folks: If you want
people clicking on links, actually make them links, not images of
site addresses that can’t even be copied or pasted.)

Walter Olson over at the Cato Institute noted
Furman is President Barack Obama’s current chairman of the Council
of Economic Advisers
and what he had to say about Walmart:

Wal-Mart’s low prices help to increase real wages for the 120
million Americans employed in other sectors of the economy.
And the company itself does not appear to pay lower wages or
benefits than similar companies, or to cause substantially
lower wages in the retail sector…

[T]o the degree the anti-Wal-Mart campaign slows or halts the
spread of Wal-Mart to new areas, it will lead to higher prices that
disproportionately harm lower-income families…

By acting in the interests of its shareholders, Wal-Mart has
innovated and expanded competition, resulting in huge benefits
for the American middle class and even proportionately larger
benefits for moderate-income Americans.

As usual, during this poorly argued babble about the “income
gap,” what is left out is how much more the poor and middle class
are able to get for their wages thanks to places like Walmart. It
will not be the one percent flooding the stores come Black Friday
buying television sets the size of dinner tables. It’s interesting
how the things that are allegedly becoming less and less obtainable
for the poor and middle class (education and health care) have been
heavily regulated and managed by the government.

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‘Hot Felon’ Illustrates Culture of State Supervision, Incarceration

nttawwtThe booking photo of Jeremy Meeks became kind of
a thing (“meme“) on
the Internet last week. Since then, his bail has been raised to $1
million. According to friends, Meeks’ wife is upset with the
attention his mugshot has gotten. “She’s furious. Her man is in
there and people are taking it as a joke, thinking it’s funny
talking about his looks, saying all kinds of crazy things,” a
friend told
CBS Sacramento
.

More interesting, however, is what led to Meeks being booked and
what his arraignment hearing last week was about. Via CBS
Sacramento:

Meeks was arraigned on eleven felony counts related to firearm
possession, street gang membership, and violating his
probation.

Stockton Police said he’s not a good guy. Meeks is a convicted
felon, having spent two years in prison for grand theft in
2002.

So the police label Meeks “not a good guy” based on a conviction
more than a decade ago, for which Meeks has done his time. Now he
is in the crosshairs of law enforcement largely because he has been
before. None of the felony charges listed above are for violent
crimes. Firearm possession is a Second Amendment right, street gang
membership arguably a First Amendment right, while probation is
largely a jobs program built on the backs of felons who have done
their time but whom the state wants to keep under adult supervision
anyway. One of the charges, not mentioned above, appears to be
called “street
terrorism
.” It’s a dangerous perversion of the word “terrorism”
to include not just politically-motivated violence by non-state
actors but violent crime in general.

And yet in this case, Meeks is not accused of any specific
violent crime, while Stockton apparently has a
serious crime problem
. The community may be better served if
cops target suspects accused of specific violent crimes rather than
engaging in the kind of pseudo-preventative law enforcement that
leads them back to the same low hanging fruit over and over again
while crime remains a problem.

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Something Very Disturbing Is Happening In The California Housing Market

Moments ago we showed that despite the rosy headline data reported by the NAR in tabulating its existing home sales, things below the surface for the US housing market were far worse than the soundbites indicate, as the only “stable” segment when it comes to existing home sales is that capturing transactions in the $1 million+ price bucket which corresponds to just 2.4% of all transactions.

Then, we decided to drill down a little more, because while the average number is certainly jarring, when it comes to housing, the US is hardly a homogeneous market, and where every region has its own supply and demand issues. And by and far, the one region that has always stood out the most when it comes to abnormalities in US housing was the “West”, largely a name for the state of California: the same place where the housing bubble was spawned back in the early 2000s, and where it first popped some time around 2006.

What we found when looking at just the “West” was that the distribution of sales by price bucket is beyond ridiculous in this state. The table (from the NAR) below summarizes the results:

What stands out is that while California is by far the most vibrant market when it comes to the most expensive segment (at +6%, the highest in the nation), it is shambles when it also comes to the two lowest price buckets, both of which blow out any myth of a recovery for the “non-1%” out of the water, with a collapse of 40% in sales in the $0-100K range, and a 20% plunge in the prime $100-$250K market (the Median existing home price across the US in May was $213,400).

As usual the best way to get a sense of the surprising divergence in the Western housing market is visually. The following chart, shows the sales by bucket in the West, as well as across the US.

Clearly, something very disturbing is happening in the California housing market: on one hand the latest housing bubble for the bulk of the market has clearly burst, on the other, the bubble for the ultra-luxury segment keep soaring to new highs.

Sustainable? Or just more “noise?

Source: NAR




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US Releases Redacted “Due Process Need Not Blink” Memo Justifying Drone Strikes On US Citizens

With the number of drone failures rising domestically and the likelihood of an exponential rise in drone strikes in Iraq imminent; the US federal court has decided now is the time to release the redacted memo justifying the use of unmanned drone strikes on US citizens. …also recognized that “the realities of combat” render certain uses of force “necessary and appropriate,” including against U.S. citizens who have become part of enemy forces-and that “due process analysis need not blink at those realities.”

 

As WaPo reports,

Accident investigation documents show that 47 military drones crashed in the United States between 2001 and 2013 in what the military categorized as Class A accidents — the most severe category.

 

 

The Pentagon is planning to expand drone operations to at least 110 bases in 39 states by 2017.

 

The number of accidents has jumped as the military has brought back drones from overseas and operated them more frequently in airspace shared with civilian planes. The military has almost tripled the number of hours its drones have flown annually in shared U.S. airspace since 2011, according to federal data.

The US federal court releases the excuses for droning Us citizens…

Although in the “circumstances of war,” as the Hamdi plurality observed, “the risk of erroneous deprivation of a citizen’s liberty in the absence of sufficient process … is very real,”

 

…also recognized that “the realities of combat” render certain uses of force “necessary and appropriate,” including against U.S. citizens who have become part of enemy forces-and that “due process analysis need not blink at those realities.”

 

Full modestly redacted ‘excuse for drone use’ memo below:

Drone Memo




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Don’t Buy Dubai – From IPO Bubble To Bear Market In 2 Months

Less than 2 months ago we highlighted the effervescence of Dubai’s equity markets when a “shell” of a company with no actual operations (but big plans) was 36x oversubscribed. We asked at the time if investors would ever learn… and it seems just weeks later, that a few are getting the joke. Dubai’s General Financial Market Index is down 20.3% – a bear market – since just after that exuberant IPO hit the market. Is Dubai another leading indicator on the world’s slowly rolling dissatisfaction with various asset classes?

 

 

Charts: Bloomberg




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Just What Indebted Students Needed: Hideously Expensive Luxury Dorms

Taj MahalPrivate and public university
dormitories keep getting nicer and nicer—and more
expensive—courtesy of soaring tuition prices and generous support
from taxpayers.

Students may be graduating $30,000 in debt, but at least they
live in relative opulence for four, five, or six years. From

the Associated Press
:

Campus living for students today is a far cry from the cramped
dormitories of generations past. New facilities are geared to
handle laptops, smartphones and tablets and offer Wi-Fi
connectivity and extra room outlets. Suites housing two or more
people — with a shared bathroom instead of communal ones — are also
popular, and some of the new halls feature computer labs, study
centers, cafes and even a gaming room.

Fifty-two new residence halls at private and public schools to
house 19,000 students opened last year or will open this year
around the U.S., with a price tag of more than $2 billion,
according to Paul Abramson, an analyst with New York-based
Intelligence in Education who tracks college construction. Overall,
the number of new residence hall construction is up from 40 that
Abramson counted a year ago for his annual May survey.

The surge comes as U.S. schools are simultaneously trying to
attract students with the comforts of home while fighting
perceptions that tuition hikes and other expenses are putting
college out of reach for a growing number of Americans. But even as
costs go up, demand for updated residence halls and other amenities
is motivating schools to keep spending.

Wichita State University provides a good example of what this
means for students:

At Wichita State, a new $65 million residence hall and dining
facility at the center of campus has a waiting list while openings
are plentiful at the university’s older, lower-priced halls. It’ll
cost between $10,000 and $12,000 a year (including meals) to live
in the new facility, compared to $6,800 a year for older residence
halls.

Nicer stuff is nice, sure. Infrastructure gets old and needs to
be replaced. And campuses can certainly support a range of
differently-priced living options.

All that said, the trend seems to be toward more opulent
housing, even as students have fallen a trillion dollars into debt
to get degrees that are less and less likely to guarantee jobs.
Since the federal government’s loan program helps students pay the
cost of college up front—no matter how insane it is—colleges have

every incentive to keep raising the price
.

Now that so many graduates are having trouble repaying their
loans, the government is considering a number of measures to reduce
or forgive their debts. It’s easy to see where this leads. Since
the government made the loans, taxpayers take the hit.

In other words, students may not be able to afford a night at
the Ritz Carlton University, but as long as the bill doesn’t come
for years—or gets sent to taxpayers instead—who will notice?

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Guess Who Is Propping Up The US Housing Market

A month ago we showed a chart that, in our humble opinion, summarized all that is wrong with the US housing market. The chart in question showed the April breakdown of existing home sales on a Y/Y basis by pricing bucket.

 

Needless to say, what the chart showed was the symptomatic, and schizophrenic, breakdown of US housing into two camps: the housing market for the 1%, those costing $750K and above, where the bulk of transactions are mostly between non-first time buyers, and typically take place as all cash transactions, and the market for “everyone else” which continues to deteriorate.

Moments ago the NAR released its May data, which on first blush was widely lauded as bullish: the topline print came at a 4.9% increase, rising from 4.65MM to 4.89MM, above the 4.74MM expected. Great news… if only on the surface. So what happens when one drills down into the detail? As usual, we focused on the last slide of the NAR breakdown, located at the very end of the supplementary pdf for good reason, because what it shows is hardly as bullish.

So how does this “housing recovery” in which the NAR has proclaimed the “sales decline is over” look on a granular basis.

The answer is below, and it is even worse than the April data. It also explains why first time buyers have dropped to even further cycle lows of just 27%, down from 29% both a month and year ago.

This is bad because while in April there was a modest increase sales in house buckets from $250 all the way up to $1MM +, in May the only bucket that had an increase in sales from a year ago was that exclusively reserve for the ultra-richest, i.e., those who benefit the most from the Fed’s non-trickle downing wealth effect policies. In fact, on a price bucket basis, the May data was unformly worse than April!

The logical follow up question: what is the total percentage of sales by given price bucket? The answer, once again, below.

Housing recovery? Maybe for the richest, and even they are far less exuberant about purchasing $1MM+ mansions. For everyone else, enjoy “plunging” hedonically-adjusted LCD TV prices. Everything else is, well, noise.

Source: NAR




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Despite YoY Existing Home Sales Dropping 7th Month In A Row, Realtors Declare Sales Decline Is Over

Existing Home Sales beat expectations by the most in 11 months at 4.89 million annualized. This headline print is being greeted with exuberance as NAR declares the sale decline is over. However, this is the 7th month in a row of year-over-year declines and the gains are anything but broad-based with the Midwest and South being the biggest driver as the West stagnates. The percent share of first-time buyers continued to underperform, representing less than one- third of all buyers at 27% in May, down from 29% in April (hovering near record lows). Not exactly the organic, non-flip-dat-house wealth building transmission mechanism the Fed is hoping to build the US ‘recovery’ on.

Big beat..

 

But this is the 7th month in a row of YoY declines…




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