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Yglesias

A Dynamic Concentration Approach To Controlling Drug Violence In Mexico

(my photo available under cc license)

Mark Kleiman on what Mexico can do to better control drug-related violence:

Mexico should, after a public and transparent process, designate one of its dealing organizations as the most violent of the group, and Mexican and U.S. enforcement efforts should focus on destroying that organization. Once that group has been dismantled – not hard, in a competitive market – the process should be run again, with all the remaining organizations told that finishing first in the violence race will lead to destruction. If it worked, this process would force a “race to the bottom” in violence; in effect, each organization’s drug-dealing revenues would be held hostage to its self-restraint when it comes to gunfire.

I certainly agree that something along these lines is the right way to deal with the crime and violence associated with hard drugs. The idea that a city is going to eradicate the buying and selling of cocaine and heroin from its borders is preposterous. What you want to do is make the dominant business strategy for a vendor of hard drugs be something like “don’t kill anyone and don’t be a nuisance.” You find the peg that’s stick out highest on the disruptiveness chart, and you whack it down.

But this all relies on what Mexico can’t necessarily count on—a well-functioning public sector that can be relied on to engage in “a public and transparent process” in a reasonable way.

Politics

After Pledging To Not Raise Taxes, Walker Proposes Hiking Taxes And Fees On The Poor And Students

One of the most important ideological commitments of the modern conservative movement is an opposition to tax increases. It is with this ideology that then-Wisconsin gubernatorial candidate Scott Walker signed Americans For Tax Reforms’ “Taxpayer Protection Pledge,” a vow not to raise taxes on the people of his state.

Yet in his newly proposed budget, now-governor Walker appears to have already broken this pledge. While the budget would lower taxes overall — it includes $83.3 million in tax cuts “primarily for businesses and investors” — it would make up for lost revenue by eliminating tax credits and exemptions that primarily benefit the poor and even some in the middle class.

Wisconsin’s Legislative Fiscal Bureau — the state’s equivalent of the Congressional Budget Office — finds that this would amount to a $49.9 million tax increase on people who receive these credits over the next two years:

Low and middle income people would lose tax credits worth about $49.4 million over two years, the new Legislative Fiscal Bureau report said.

Those affected most by Walker’s proposal would include low-income families who qualify for the earned income tax credit program, and low-income homeowners who receive tax rebates under the homestead tax credit.

In addition to eliminating these tax credits, Walker also has proposed a spate of new fee increases. The “bulk of the fee increases are for tuition at University of Wisconsin campuses, totaling more than $105 million over two years.”

It appears that Walker is less committed to keeping taxes down on everyone than he is to cutting taxes for some of society’s most fortunate members, while raising them on some of its most vulnerable. He joins many other conservative state legislators across the country who are cutting taxes on the richest while slashing services and raising taxes for Main Street America.

Yglesias

Neighbors Vs Universities

Lydia DePillis reports on neighborhoods mobilizing against universities:

Most of the universities have some group that resists their expansion, whether explicitly (like AU’s Neighbors for a Livable Community) or in their capacities as citizens associations. Now, for the first time, activists from around the city are coming together to push the Wilson Building for laws that “protect communities” against “aggressive university growth.”

The District-Wide Coalition of University Neighborhoods has a six-member organizing committee of people from the American, Georgetown, Howard, Catholic, and George Washington areas, and has so far been endorsed by the Foggy Bottom Association, Citizens Association of Georgetown, and Burleith Citizens Association. They plan to incorporate as a non-profit and advocate for stricter caps on enrollment, containing new student housing, and anything else that would keep “disruptive” students under wraps.

As I’ve said before, I think it would be smart for economics teachers to try to draw more of their examples of government intervention into the marketplace from this sort of domain. Maybe it’s a good idea for rich, politically powerful households who live near rich, politically powerful universities to use the power of the state to restrict universities from deploying their property as they see fit or maybe it’s a bad idea. But like all interventions into the marketplace, these interventions create some distortions. And this kind of issue is a much more typical and realistic example of a deviation from the abstract ideal of a free market. It’s not particularly “ideological” it’s just people who want to use the political system to get their way.

Economy

Progressive Lawmakers Warn A ‘Significant Portion’ Of Gas Prices Is Due To Speculation, Call For Crack Down

Rising oil prices have pushed gas prices above $4 per gallon in many places, inflating prices on everything from food to airfare, imperiling the fragile economic recovery. Experts have been a bit befuddled by the steep rise in gas prices this early in the year, as global oil supplies have remained steady despite unrest in the Middle East.

Among other factors, experts are increasingly concerned about the prevalence of speculators in the global oil market which may be artificially inflating prices. Speculation on energy futures, including oil, is at an all-time high, jumping 64 percent since 2008. Everyone from Goldman Sachs to Republican lawmakers have acknowledged the role of speculation in artificially driving up prices. Energies futures markets used to be the domain of companies like airlines and shippers, which appropriately use trades to hedge against price volatility, but the markets are increasingly dominated by speculators who are only interested in making profits.

On Wednesday, ThinkProgress sat down with a handful of progressive House Democrats who also warned about the increasing prevalence of oil speculation and called for doing more to address it:

REP. PETE DEFAZIO (D-OR): A member of the Commodity Futures Trading Commission said…a significant portion of what we’re paying here is due the speculation, I’m going to ask him if I can publically release his letter. … And this is a member of the commission saying this has got to stop.

REP. BRAD MILLER (D-NC): There is also, obviously, a lot of manipulation. It’s a little hard to detect it. But there actually been articles in the last couple weeks talking about the Koch Brothers, in addition to all their other good works, have been involved in oil speculation over the years. So there is an an international market that is subject to manipulation.

REP. CHELLIE PINGREE (D-ME): I still feel like speculation drives up the prices. And I would he happy to see us do more about that.

Watch it:

The Dodd-Frank Wall Street reform law passed last year actually calls for regulators in the Commodities Futures Trading Commission (CFTC) to crack down on speculation, but conservative commissioners have thus far blocked the implementation of the law. Meanwhile, Republicans in Congress have tried to defund and defang the CFTC, which would leave the markets at the mercy of speculators.

Update

MSNBC’s Ed Show had a good segment last month clearly explaining the relationship between commodity trading and gas prices, with a focus on how commodity trading could be regulated to prevent artificial rises in fuel prices. Watch it:

Yglesias

The Spending Debate

Richard Stevenson writes that “What is under way now is the most fundamental reassessment of the size and role of government — of the balance between personal responsibility and private markets on the one hand and public responsibility and social welfare on the other — at least since Ronald Reagan and perhaps since F.D.R.”

I sort of doubt this on a number of levels, including the fact that there’s a lot of mismatch between our historical memory of these events and their reality. Consider the actual federal spending trends of the past forty years:

Nothing about this exactly screams “Reagan Revolution” to me. Federal spending was consistently above the long-term average in the Reagan years, in stark contrast to the small government agenda of Jimmy Carter and Bill Clinton. Of course a lot of this is national defense. But spending is spending, and traditionally the defense channel is one of the main ways we do social welfare policy in the United States. See, for example, the GI Bill. And even though we remember Social Security as a key element of the New Deal welfare state, the program as we know it was really created in the 1950s rather than the 1930s.

I think the right way to think about the current debate is this. We have a fairly settled view in the United States that one important function of the government is taking care of elderly people. We also have a fairly settled view in the United States that one important function of the government is ensuring that people have health insurance. We also have a fairly settled view in the United States that we like being an unusually low tax country. We also also have a fairly settled view in the United States that we want to maintain a uniquely expensive posture of global military hegemony. These are straightforwardly incompatible goals. Large, regionally significant states such as China, India, Brazil, and Nigeria are growing faster than we are putting pressure on military hegemonism. The share of the population composed of elderly people is rising. And the productivity of the health care sector is increasing more slowly than the productivity of the economy as a whole. This leaves us with a lot of adjusting to do.

The essence of the problem is that what people want is the status quo, but the status quo is untenable. In a healthy political system featuring bipartisanship by alternation, both parties would put forward visions of fairly small deviations from the status quo and they would take turns implementing those deviations. The net impact over the course of the years would be quite large, and the weighting of the changes would depend on what proves workable, what proves popular, and the vicissitudes of electoral politics. Instead, we have a political system that counts on this problem being solved via some form of “grand bargain.” That turns various proposals into game theoretical exercises and creates a strange bargaining dynamic that empowers extreme voices.

Yglesias

The State Level War On The Environment

A frightening Leslie Kaufman report indicates that Maine’s new governor thinks the state suffers from an excess of natural beauty:

Weeks after he was sworn in as governor of Maine, Paul LePage, a Tea Party favorite, announced a 63-point plan to cut environmental regulations, including opening three million acres of the North Woods for development and suspending a law meant to monitor toxic chemicals that could be found in children’s products.

We also learn that Chris Christie thinks “the Highlands Water Protection and Planning Act, which preserves more than 800,000 acres of open land that supplies drinking water to more than half of New Jersey’s residents, is an infringement on property rights.” And, indeed, it does sound like that’s a bit of an infringement on property rights. With the purpose, it seems, being to preserve drinking water. Is that the only infringement of property rights that exists in the entire state of New Jersey? Or would it be possible to tackle the state’s anti-density zoning rules rather than its water protection ones?

Update

More on Maine from Downeast Magazine:

Indeed, in February it came out that the governor’s “Phase 1” reform list had actually been written by one of the state’s premier lobbyists, Ann Robinson, who heads the lobbying division at Preti Flaherty Beliveau & Pachios, an influential Portland law firm. Robinson, who served as co-chair of LePage’s transition committee, is the registered lobbyist for the Toy Industry Association of America, the drug industry association PhRMA, and other companies that would benefit from the changes. This placed her in the enviable position of being able to ghostwrite the governor’s policies on behalf of her paying clients.

Conservative politicians are so familiar with the “public choice” critique of activist government that they’ve decided to not even bother trying to do things right.

Politics

‘Pro-Life’ Alaska GOP Kills Health Bill To Insure Thousands Of Low-Income Women And Children

On Wednesday, the Alaska Senate shot down a health bill that would expand a program that provides medical services to the low-income children and pregnant women. The 14-year-old program, Denali Kid Care, is specifically “designed to ensure that children and teens of both working and non-working families can have the health insurance they need.” The bill seeks to “restore the original income eligibility threshold established more than a decade ago, raising it from the current 175 percent to 200 percent of the federal poverty line” — a move that bill sponsor State Sen. Bettye Davis (D) said would cover nearly 1,300 more children and about 250 pregnant women. But the bill — which passed the Senate last year 15 to 4 — failed this year. The obstacle? A woman’s right to choose.

The Alaska Supreme Court holds that the state must fund medically necessary abortions if it funds medically necessary services for others with financial needs. The mere possibility that a woman could have even a “medically necessary” abortion under this health insurance program was enough for Republicans to stall the bill in a 10 to 10 vote:

– Abortion was a key issue in floor debate Wednesday. Sen. Fred Dyson, R-Eagle River, said he believes the Senate has shown a propensity for standing up for children and families but that he in good conscience could not vote for a bill that would help some but also result in abortions.

“I think there are just a lot of unknowns about what is ‘medically necessary,’ what is considered an abortion,” said Sen. Kevin Meyer (R-Anchorage), who did not support the bill.

According to Davis, the program expansion “might” fund 22 abortions. But that hypothetical number was enough for 9 Republicans and 1 Democrat to block coverage for over 1,000 Alaskan women and children. “Six Senators who voted for the measure last year voted against it today.” Only one Republican — state Sen. Lesil McGuire — supported the measure, stating “that the Senate cannot turn its back on pregnant women who need help.”

While Davis reserved the right to reconsider the bill later, Alaska Gov. Sean Parnell (R) — who vetoed the very same bill last year over abortion — said “he cannot envision a scenario in which he’d support an expansion.”

Yglesias

Finland’s Selective Teacher Training Programs

I don’t agree with everything in Time’s take on Finland’s education policy successes but I think this correctly grasps the most important thing:

In 2008, the latest year for which figures are available, 1,258 undergrads applied for training to become elementary-school teachers. Only 123, or 9.8%, were accepted into the five-year teaching program. That’s typical. There’s another thing: in Finland, every teacher is required to have a master’s degree. (The Finns call this a master’s in kasvatus, which is the same word they use for a mother bringing up her child.) Annual salaries range from about $40,000 to $60,000, and teachers work 190 days a year.

“It’s very expensive to educate all of our teachers in five-year programs, but it helps make our teachers highly respected and appreciated,” says Jari Lavonen, head of the department of teacher education at the University of Helsinki.

I don’t think there’s a ton of evidence that the existence of a five-year program, per se, is doing much work here. Many American teachers have master’s degrees and there’s very little evidence that they do any better than our BA-wielding teachers. The key point as far as I can tell is simply that these programs are very selective. Lots of people want to be teachers, so it’s hard to get into the programs, so getting into the program makes you seem prestigious, which makes applying to be a teacher desirable, etc., etc., etc. It’s a self-sustaining cycle. Teach For America has some of this quality where people apply because it’s prestigious and it’s prestigious because it’s selective and it’s selective because a lot of people apply, and one’s generally hears that this can’t be scaled up. But in Finland it more or less is.

Economy

CHARTS: The GOP’s ’21st-Century’ Budget Slashes Investments In Education, Infrastructure And Science

The House yesterday approved — by a vote of 235 to 193 — House Budget Committee Chairman Paul Ryan’s (R-WI) radical budget. Most of the attention paid to Ryan’s budget has, deservedly, focused upon its proposals to dismantle Medicare and Medicaid, slash the social safety net, and raise middle taxes (while ignoring the bloated Department of Defense and cutting taxes for the rich).

But the plan also includes substantial cuts in important investments in education (cut by 53 percent), transportation infrastructure (cut by 37 percent) and scientific research (cut by 28 percent):

As CAP economist Adam Hersh and research associate Sarah Ayres wrote, “in total, the Ryan-Republican budget proposal would strip more than $1.4 trillion from public investments in education, infrastructure, and science and technology that create a foundation to support private investments…By disinvesting in the sources of productivity and competitiveness to pay for tax cuts for the rich, the Ryan-Republican budget plan puts little value on America’s economic future.”

Today, Ryan wrote in a Washington Post op-ed that the GOP’s budget has been crafted “to meet 21st-century needs.” Evidently Ryan and the House Republicans don’t believe that the 21st century will require adequately funded schools, roads, or scientific research.

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