Sunday, February 26, 2012

Great quotes

Picture source:

"... if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house..."

- A campaigning Senator Obama in 2008, criticizing Hilary Clinton's proposal of an insurance mandate.

Calculating program impacts

It can be very difficult to forecast the impact of economic legislation before it is passed, and just as hard to measure this even after the passage of time... So, for example, discussions of what was achieved by The American Recovery and Reinvestment Act of 2009 (ARRA) range all over the map - from Republicans claiming that it has exacerbated the economic problems of the country, to Democrats who insist that it was very successful in generating employment and economic activity and that the situation would be much worse had it not been passed, to positions in between....

A CBO report, 'Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2011 Through December 2011', speaks to the methodologies used by The Congressional Budget Office to estimate the legislation's impact.

The first methodology is driven by the legislation itself... It required those who received over $25,000 as a result of the legislation to report on a quarterly basis a myriad of details about the projects funded and their impacts. If you summed them up this provided numbers of people employed, which could then be attributed to the effects of the legislation.

The CBO report points out the deficiencies of this methodology:

"However, the reported number of jobs funded is not a comprehensive measure of ARRA’s effect on overall employment or even of those provisions of ARRA for which recipients’ reports are required. The actual impact could, in principle, be significantly larger or smaller than the number of jobs reported. If, for example, recipients’ reports include employment that would have occurred without ARRA, the impact on employment suggested by the reports could be too great. Some people whose employment was attributed to ARRA might have worked on other activities in the absence of the law...

Conversely, the reported figure could be too low because the reporting requirement is limited to primary and secondary recipients of funds and thus excludes lower level recipients, such as subcontractors hired by a main subcontractor. Thus, if expenditures under ARRA led to increases in employment among lower-level subcontractors and vendors, those effects would be
missed by the reports.

Recipients’ reports also do not include indirect effects that could increase or decrease the impact on employment. Among those effects are potential declines in employment in other businesses or economic sectors as demand shifts toward the recipients of ARRA funding— a phenomenon often called the “crowding out” effect of government policies.

Conversely, spending under ARRA could lead to higher employment at companies that are not directly connected to that spending...

Finally, the recipients’ reports reflect only about one-fifth of the total amount of spending increases or tax reductions that are attributable to ARRA’s provisions. The reports cover direct government purchases of goods and services, grants and loans to private entities, and some grants to states and localities, but they do not cover tax cuts or increases in transfer payments to individuals.

So, the CBO turns to a second methodology. In this case it grouped all the ARRA provisions into a number of categories (see chart below) and then applied the historical "multipliers" (using a 'low' and a 'high' estimate for each category based on a consensus amongst economists) to the various expenditures at the various dates that they occurred... The output estimates thus obtained were translated into estimates of effects on employment and unemployment, etc.

This second methodology also has pluses and minuses... Per the CBO report:

"... A key advantage of the model-based approach used in this analysis is the ability to provide estimates of the total effects throughout the economy of the government spending, transfer payments, and tax cuts resulting from ARRA...

A key disadvantage of the model-based approach is the considerable uncertainty about many of the economic relationships that are important in the modeling. Because economists differ on which analytical approaches provide the most convincing evidence about such relationships, they can reach different conclusions about those relationships... For those reasons, CBO provides ranges of estimates of ARRA’s economic effects that are intended to encompass most economists’ views and thereby reflect the uncertainty involved in such estimates..."

However, unlike economists, most politicians don't go for estimates, ranges, or nuance! So, if the CBO estimates that between 0.7 million to 3.3 million jobs may have been created by ARRA in 2010, the administration will tout the 3.3 million figure!

Sunday, February 19, 2012

In memoriam - Anthony Shadid

This past week the news broke that Anthony Shadid had died on assignment... Immediately the encomiums started to flow - "... In an era blessed with more than its fair share of brilliant foreign correspondents, he was the best of the breed...," being a relatively mild example (for more see the reactions of his NYT colleagues at: Remembering Anthony Shadid or do a Google search...) It seemed that every journalist covering international affairs was coming out of the woodwork to say how he or she had been touched, inspired, awed, etc. by Anthony Shadid... This blogger has two observations:
  • The praise was well-deserved, Anthony Shadid was a great reporter who told it the way it is...
  • However, there is scant evidence that the legions of journalists professing to have been inspired by him were all inspired enough to emulate him insofar as it comes to taking the time and care (as he did) in writing about the subjects that they cover! Most are pale shadows of Shadid. For example, which of the main journalists covering say, Iran, are doing a good job of laying out the facts and circumstances of a complex narrative? Hardly any - most seem content to be stenographers, parroting the positions of the administration or of various U.S. politicians; while others are actively beating the drums of war...
This is a big loss....

Anthony Shadid (1968 - 2012)
Anthony Shadid: The Best of Our Breed
At Work in Syria, Times Correspondent Dies
Correspondent Anthony Shadid, 43, dies in Syria
Anthony Shadid dies, leaves hole in foreign correspondency
Journalists and Friends Respond to Death of Anthony Shadid...

The 2004 Pulitzer winners - International Reporting - Anthony Shadid
The 2010 Pulitzer winners - International Reporting - Anthony Shadid

Random chart - gas prices

Source: Gasoline Prices: $4.50 per gallon by Memorial Day?

Random chart - unemployment context

Source: CBO: Understanding and Responding to Persistently High Unemployment

Where we are:
  • The unemployment rate reached a very high level, peaking at 10.0 percent in October 2009. That rate has been topped in the post–World War II period only once before—during the severe 1981–1982 recession. From the end of2007 to October 2009, the number of unemployed people rose by almost 8 million.
  • Unemployment has been high for an extended period. As of January 2012, the unemployment rate had been above 8 percent for 36 months and at or above 9 percent for 28 of the preceding 36 months. In contrast, the unemployment rate exceeded 8 percent for 26 months and was at or above 9 percent for 19 months during the recession of the early 1980s.
  • Many people would like to work but have not searched for a job in the past four weeks, or are working part-time but would prefer full-time work. If those people were counted among the unemployed, the unemployment rate in January 2012 would have been about 15 percent.
  • The share of unemployment accounted for by the long-term unemployed (people who have been seeking work for more than 26 weeks) has been at an all-time high. Over 40 percent of people who are currently unemployed have been out of work for more than half a year, as compared with about one-quarter during the 1981–1982 recession.
And the factors that caused the unemployment rate to increase from five percent in December 2007 to 8.5 percent in December 2011 - a three and a half percent increase:

  • Weak demand for goods and services as a result of the recession and its aftermath, which accounts for about two-and-a-half percentage points;
  • Mismatches between the needs of employers and the skills and location of the unemployed, which account for about one-half of one percentage point;
  • Incentives from extensions of unemployment insurance for people to stay in the labor force and continue searching for work, which account for about one quarter of one percentage point; and.
  • Erosion of skills and the stigma attached to long-term unemployment—that is, employers’ perception that people who have been unemployed for a long time would be low-quality workers—which together account for about one-quarter of one percentage point.

Perhaps why it isn't working...

Source: NATO Training Mission-Afghanistan (NTM-A/CSTC-A) Organizational Chart

Saturday, February 18, 2012

Random chart - Iraq, Afghan tribal differences

"... Most US personnel that are serving in Afghanistan have already served a tour in Iraq and are accustomed to doing things “the Iraq way”. Many people are trying to apply the lessons learned in Iraq to Afghanistan, which in many cases is inappropriate. AF2 wants to provide a product to US units to compare and contrast Iraqi tribal structure and Pashtun tribal structure to prevent future missteps by US forces.

The notion of applying ideas that worked in Iraq to Afghanistan is fraught with problems. The “lessons don’t transfer directly,” according to John Nagl, one of the authors of the Army/Marine Corps Counterinsurgency Field Manual (FM 3-24). William McCallister, an expert advisor to the Marine Corps on tribal dynamics in Iraq2 said he is “not a fan of taking the Anbar experience and creating TTPs” for a Pashtun context.

The reasons behind this are legion. For one, the historical experiences of Iraqi and Pashtun societies are so dissimilar as to make comparing them difficult, if not impossible. For another, the specific circumstances of each warzone—one a sectarian conflict, the other a fractured society handling an international insurgency—doesn’t allow for easy generalization between the two.

Furthermore, each society is fundamentally different on a structural level. In Iraq, leadership is in a sense “institutionalized,” or “codified” in the sense that there is a set and identifiable structure for community leadership to interact with each other and with the State. In Afghanistan, however, that system is neither “institutionalized” nor “codified” in any real sense; therefore, structures of community leadership and power relationships within and between tribal groups and the state are much more ad hoc and cannot be discussed in a general sense. Comparing these two societies side-by-side demonstrates this, and shows just how difficult it is to draw lessons from one to the other..."

Sunday, February 12, 2012

Next for Syria?

This blogger has no idea re how this is going to turn out... However, while trying to keep up with the evolving situation in the country, there are a few observations that can be made:
  • One can discount 90 percent plus of what comes from the regime... Unfortunately this also seems to be true for 80 percent plus of what is reported as coming from most "activists"!
  • The news media is mostly pretty much worthless for anyone trying to keep up with events and understand what is going on.
  • None of the external parties have their primary focus on what is best for the Syrian people. Every one has ulterior motives and their own agendas...
  • In the U.S. suggestions range from "do nothing", to demands that Bashar al-Assad step aside (which could lead to an "Egypt" solution if the regime remains), to supplying arms to regime opponents (probably resulting in a "Libya" solution). Easy answers abound, as does crummy analysis.
A sad state of affairs...

Random picture

Aerial view of a system of trenches dating from World War I, recently uncovered in eastern France near the town of Carspach.

From The 'Pompeii' of the Western Front: "The bodies of 21 German soldiers entombed in a perfectly preserved World War One shelter have been discovered 94 years after they were killed... French archaeologists stumbled upon the mass grave on the former Western Front in eastern France during excavation work for a road building project... Many of the skeletal remains were found in the same positions the men had been in at the time of the collapse, prompting experts to liken the scene to Pompeii... As well as the bodies, poignant personal effects such as boots, helmets, weapons, wine bottles, spectacles, wallets, pipes, cigarette cases and pocket books were also found..."

Thursday, February 9, 2012

Or not quite... (updated 2/11)

The August 10th, 2011 blog entry, 'Great quotes', highlighted a quote by Marine Gen. John R. Allen, the top commander in Afghanistan, who claimed that “All across Afghanistan, the insurgents are losing. They’re losing territory, they’re losing leadership, they’re losing weapons and supplies, they’re losing public support. More and more, the insurgents are losing resolve and the will to fight.”

Hmm, as suspected, this turns out to be a slight (?) exaggeration. An Army Lieutenant Colonel recently penned an article - Truth, lies and Afghanistan: How military leaders have let us down - which notes the "discrepancy between official statements and the truth on the ground" and takes senior military leaders to task... Some brief quotes:

"... What I saw bore no resemblance to rosy official statements by U.S. military leaders about conditions on the ground... I witnessed the absence of success on virtually every level... I heard many stories of how insurgents controlled virtually every piece of land beyond eyeshot of a U.S. or International Security Assistance Force (ISAF) base..." A must read.

Updated 2/11:

Here's a link to the unclassified version of the report: Dereliction of Duty II: Senior Military Leader’s Loss of Integrity Wounds Afghan War Effort84-page PDF

Wednesday, February 8, 2012

Sunday, February 5, 2012

Brief update II (Afghan fauna)

Source: NatGeo

The July 24th, 2011 bog entry, 'Brief update (Afghan fauna)', linked to an Al Jazeera article reporting that the Wildlife Conservation Society had found "...a surprisingly healthy population of snow leopards... in northeastern Afghanistan’s Wakhan Corridor..."

Here are a couple of National Geographic articles with additional information and photos:

Random charts - U.S. and MENA

Source: U.S. Trade and Investment in the Middle East and North Africa: Overview and Issues for Congress (41-pg CRS PDF)

Random charts - mobile action codes

Source: Mobile Action Codes In Magazine Advertising 2011

From Advertisers Drive Growth in Mags’ Use of Mobile Action Codes: "... Magazines’ use of mobile action codes, including all 2D barcodes, QR codes, Microsoft Tags, and watermarks, exploded in 2011, rising 439% from Q1 to Q4, according to [download page] a January 2012 study from Nellymoser. The total number of action codes in the top 100 US magazines by circulation jumped 64% quarter-over-quarter in Q4, rising from 1155 to 1189. November’s 681 action codes was the most of any month in 2011, up from 278 in July and 88 in January..."

Saturday, February 4, 2012

Random charts - Income and taxes

A number of charts re taxes:

Source: The Struggling Middle Class

Source: Table H-2. Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households


Source: Summary of Latest Federal Individual Income Tax Data

Source: Misconceptions and Realities About Who Pays Taxes

And some articles:
Who Pays the Taxes in the USA ?
Class warfare: Who pays their fair share of taxes?
9 Things The Rich Don't Want You To Know About Taxes
By the Numbers: What the 47 Percent Who Pay No Income Tax Look Like
Millionaires Don't Pay Taxes? 1,470 of America's Richest Didn't, According to IRS

Aah, the sound and fury resulting from arguments and disagreements about taxes! Terms like "fair" and "unfair" are bandied around.... It's a very complex subject and you can 'slice and dice' the numbers many different ways. Be a little vague about exactly what you are quoting or comparing (when it comes to contrasting the rates and/or amounts paid by folks at different levels in the economy), and you can selectively "prove' almost any proposition... Is it magnitude or rates that you are citing, and when you talk about taxes are you referring to federal incomes taxes, all federal taxes (i.e. including payroll taxes, etc.), or the total tax burden (e.g. including state taxes)?

You also can throw in a little sleight of hand - talk about a certain level and then when it comes to making tax law changes you can "extend" your solution. Thus Warren Buffet in his famous editorial sets the stage by referencing the "super rich", penning 873 words about himself, the "top 400" and his "mega-rich" friends, then proposing increased taxes for those who have total incomes of less than 14% of what he pays in total federal taxes. Similarly, following all the talk of "millionaires" the tax rate increases proposed by the President kicked in at the individual level of $125,000 and the family level of $250,000!

The President and politicians of all stripes bemoan the state of the nation's tax laws that allow the various examples of "unfairness" that they like to point out. Every one of them act as if the tax code miraculously appeared out of the blue and that they had no role in its provenance, when in reality it is their creation. They shed tears about rich people and companies abusing the existing tax code at the same time that they propose the layering on of new changes encourage or discourage outcomes that they favor.

So President Obama in his latest State of the Union can decry "... loopholes and shelters in the tax code..." while simultaneously proposing to tweak the tax code a) to remove breaks for companies moving jobs and profits overseas, b) to redirect them to companies that insource jobs, c) to add a tax cut for manufacturers, which doubles if the company is in a high-tech sector, d) to include financing help for companies relocating to hard hit communities, e) to support retraining programs, f) to extend the tuition tax credit, g) to expand tax relief to small businesses that are raising wages and creating good jobs, h) to pass clean-energy tax credits, and so on...

As suggested on TaxVox "... We seem to have forgotten that the fundamental purpose of our tax system is to raise revenue to fund government. The current system is riddled with tax provisions that favor one activity over another or provide targeted tax benefits to a limited number of taxpayers. Whether permanent or temporary, these provisions create complexity, impose enormous compliance costs, breed perceptions of unfairness, create opportunities to manipulate rules to avoid tax, and lead to an inefficient use of our economic resources. The tax code has become less stable, increasingly unpredictable, and more and more difficult for taxpayers to understand..."

However, I'm not holding my breath...

Friday, February 3, 2012

Random charts - federal compensation

Source: Comparing the Compensation of Federal and Private-Sector Employees

Politicians (and others) have long argued whether federal employees are paid better, as well as, or worse than similar public sector employees. This CBO study looks at the questions, and concludes:

CBO combined its analyses of wages and benefits to assess differences between the federal government and
the private sector in total compensation for workers with certain similar observable characteristics:
  • Among people with a high school diploma or less education, total compensation costs were 36 percent higher, on average, for federal employees than for similar private-sector employees.
  • Among people whose education ended in a bachelor’s degree, the cost of total compensation averaged 15 percent more for federal workers than for similar workers in the private sector.
  • Among people with a professional degree or doctorate, by contrast, total compensation costs were 18 percent lower, on average, for federal employees than for private-sector employees with similar attributes.

Thursday, February 2, 2012

Random chart - Area C

  • Over 60 percent of the West Bank is considered Area C, where Israel retains control over planning and zoning among other issues.
  • An estimated 150,000 Palestinians live in Area C, including 27,500 Bedouin and other herders.
  • More than 20% of communities in Area C have extremely limited access to health services.
  • Water consumption dips to 20 litres/capita/day (l/c/d) in communities without water infrastructure, one-fifth of the World Health Organisation’s recommendation.
  • Communities depending on tankered water pay up to 400% more for every liter than those connected to the water network.
  • 70% of Area C is off-limits to Palestinian construction; 29% is heavily restricted.
  • Less than 1% of Area C has been planned for Palestinian development by the Israeli Civil Administration.
  • 560 Palestinian-owned structures were demolished, including 200 residential structures and 46 rainwater cisterns and pools , by the Israeli authorities in Area C in 2011.
  • 1,006 people, including 565 children, lost their homes in 2011, over twice as many as in 2010.
  • Over 3,000 demolition orders are outstanding, including 18 targeting schools.
  • The planned expansion area of the around 135 Israeli settlements in Area C is 9 times larger than their built-up area. (B’Tselem).
  • Approximately 300,000 settlers currently live in Area C.