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Marc blogged the other day about the New York Times editorial board’s endorsement of repealing federal marijuana prohibition, just months after having rejected that step. Now, this isn’t quite the same as endorsing marijuana legalization – just returning it to the states – but it is a significant step nonetheless. Still, they are well behind the rest of the country. An absolute majority of Americans favor legalizing, taxing, and regulating marijuana more or less like alcohol. Liberal Democrats are overwhelmingly in favor.

Fivethirtyeight recently showed how out-of-step the New York Times is by comparing their position to that of representative Americans with a similar demographic profile. Money quote:

[P]eople with this demographic profile are somewhere around 25 or 30 percentage points more supportive of marijuana legalization than the average American. That implies that back in 2000, when only about 30 percent of Americans supported legalization, perhaps 55 or 60 percent of these people did. The margin of error on this estimate is fairly high — about 10 percent — but not enough to call into question that most people like those on the Times’ editorial board have privately supported legalization for a long time. The question is why it took them so long to take such a stance publicly.

The political class everywhere, regardless of left-right ideology, has been vastly more opposed to marijuana legalization than equivalent Americans. Here in New Hampshire, Democratic governor Maggie Hassan has not only opposed and promised to veto recreational marijuana legalization, she has also opposed and threatened to veto marijuana decriminalization and even allowing terminally ill patients to grow their own medical marijuana plants. Her spineless copartisans in the state senate have gone meekly along. And is anyone really surprised that government bootlicker David Brooks opposes legalization? It’s no accident that the only two states to legalize recreational marijuana so far have been states with the popular ballot initiative. It’s also no accident that medical marijuana started in states with the popular ballot initiative. The people have had to go around the controllers and neurotics in office.

Now the Brookings Institution has come out with a study of marijuana legalization in Colorado. Their quick synopsis? (more…)

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Governments behaving badly… We’ve all seen it. Get a bunch of libertarians from around the world together, and each seems to take perverse pride in proving that her own government is the worst of all. How can we quantify governments’ badness?

On the economic side, we might look to the Economic Freedom of the World index. The Economist has come up with a clever new one: the DOG factor (“discount for obnoxious governments”). It’s the deviation of the price-to-earnings ratio in the domestic market from global standard valuations. Some governments score very high indeed on the DOG factor:

Iran, like Russia a target of Western sanctions, trades on a p/e of just 5.6 and has a total stockmarket value of $131 billion; were it to be rated on a par with the average emerging market, its market value would be $292 billion, so its DOG factor is $161 billion or 55%.

Argentina’s government has manipulated its inflation rate, defaulted on its debt back in 2001 and, thanks to the legal battle that ensued, may do so again in a few days’ time. Its stockmarket trades on a price-earnings ratio of 6.1. As a result, its total value is $56 billion, rather than the $115 billion it might have commanded (a DOG factor of 51%). After its hyperinflationary episode last decade, Zimbabwe’s rating has recovered a bit, although it still lags the emerging-market average.

Someone oughta run a correlation between DOG factor and economic freedom score. I bet there’d be a strong one.

Bonus question: How could you calculate DOG factor equivalents for American states?

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Many people are concerned about income and wealth inequality. I am not concerned about economic inequality as such; I care about absolute poverty (how many people live in misery because of wretched physical conditions), and I care about a broad distribution of opportunity (everyone’s having a “fair shot” at economic success), but I don’t see it as a problem if someone earns vastly more money than someone else, just as I don’t see it as a problem that poorer people tend to have more leisure time than richer people. Only those consumed with envy could see economic (or leisure!) inequality simpliciter as a problem, right?

But I actually don’t think people on the left care about economic inequality or leisure inequality or inequality of looks or appealing personalities or anything else of value, in themselves, either. They care about economic inequality because they think it has negative consequences, particularly for political inequality, and because they think it is a symptom of some deeper problem. I disagree on the first count and agree on the second. Let me explain.

Does Inequality Have Bad Consequences?

The fear of the left is that in an unequal U.S., the rich will “buy” politicians to do what they want. As a result, we will get more pollution and more redistribution that flows from the middle class to the rich. The so-called “oligarchy study” (the term “oligarchy” never actually appears in the paper) went viral recently, showing that the preferences of wealthy Americans (and organized interest groups) matter for policy change in the U.S., while, controlling for the preferences of wealthy Americans, the preferences of other Americans make little difference. But wealthy Americans and average Americans actually have similar views on most issues, and where they diverge, the wealthy often have clearly superior views: less likely to loathe immigrants and gays, to fear free trade, to oppose marijuana legalization, and to be narrowly ideological. In addition, the wealthy tend to be more skeptical of taxation and welfare programs than the non-wealthy — your views on whether that difference is problematic may vary according to your views of the welfare state.

Still, let’s assume that the influence of the wealthy on U.S. politics is baleful; does that mean that growing economic inequality would reinforce that baleful influence? It remains unproven whether more inequality will mean that the rich pay more in campaign contributions and get more out in policy terms. The most likely explanation for why the rich are influential is simply that they have similar levels of education and status to politicians and move in the same social circles and care about the same sorts of things. Studies looking at how campaign contributions “buy access” to legislators generally come up with very weak results. To take just one policy example, federal air pollution regulations have always ratcheted up, and air quality in the U.S. is vastly improved relative to 50 years ago, in part due to regulation and in part to technological changes. Rising inequality certainly doesn’t seem to explain these trends.

A bigger problem with the U.S. political economy (more…)

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The New York Times had a wonderful piece earlier this week on the disposal of war surplus to state and local law enforcement agencies under the Department of Defense Excess Property Program (1033 Program). Since 2006, the Department of Defense has sold or given away (at minimum):

  • 432 MRAPs (mine-resistant ambush-protected vehicles)
  • 435 other armored vehicles
  • 44,900 night vision pieces
  • 533 aircraft
  • 93,763 machine guns (these are real machine guns, BTW, not “assault weapons”)

The story has draws on the example of Neenah, Wisconsin, described as “a quiet city of about 25,000 people” that “has not had a homicide in more than five years.” (I have been to Neenah, and I can testify that the word “quiet” should be capitalized). The Neenah PD has recently acquired its own MRAP. Designed for Afghanistan, these wonderful trucks proved a bit too top heavy for the terrain. So the vehicles are now available for local law enforcement for a song (or free). This is not a bad deal. The original price tag varies, but the top end model cost about $750,000 to produce.

MRAP 6x6

A quick web search reveals a few other locations that have secured their own MRAPs, including Nixa, Missouri, Fort Myers, Florida, Klamath County, Oregon, Christian County, Missouri, Boise, Caldwell, Preston, Nampa and Post Falls (all in Idaho). Even Ohio State University Police Department has one.

Why would Neenah need an MRAP? Simple: the possibility of violence. As the Neenah Police Chief explains: “We’re not going to go out there as Officer Friendly with no body armor and just a handgun and say ‘Good enough.’ ” After all, maybe there have been five years without a homicide, but what about next year…? Reason has similar piece on the sheriff of Pulaski County Indiana who has secured his own MRAP for a simple reason: “it’s a lot more intimidating than a Dodge.”

Speaking of Indiana, the New York Times story has a rather striking paragraph that provides another reason to get that MRAP:

“You have a lot of people who are coming out of the military that have the ability and knowledge to build I.E.D.’s and to defeat law enforcement techniques,” Sgt. Dan Downing of the Morgan County Sheriff’s Department told the local Fox affiliate, referring to improvised explosive devices, or homemade bombs.

I will let that one sink in for a moment. The police need MRAPs to protect themselves from veterans.

For a host of reasons, the US murder rate is at a 40-year low. Yet, our law enforcement has never been more militarized thanks to our endless wars abroad and our policy to distribute our surplus tools of war at fire sale prices. With all the surplus yet to be disposed of, this is one trend that is likely to continue for some time.

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Early Friday morning, the House passed an important amendment to the  appropriations bill for Commerce, Science, Justice and Related Agencies. As Billy House reports (National Journal):

Using states’ rights as a bipartisan rallying cry, the House voted 219 to 189 early Friday to prohibit the Justice Department from using federal funds to conduct raids or otherwise interfere with medical marijuana activities that are legal in the states.

The amendment, which was sponsored by Rep. Dana Rohrabacher (R-CA), passed with the support of 49 Republicans and 170 Democrats.

“Despite overwhelming shift in public opinion, the federal government continues its hard line of oppression against medical marijuana,” Rohrabacher said. But he said the Drug Enforcement Administration would be blocked from using any money in this appropriations bill to conduct raids on state-legal medical marijuana operations or dispensaries, or otherwise interfere with state medical marijuana laws or doctors or patients abiding by them.

One might have hoped that more Republicans would have dusted off their support for the 10th amendment to cast a yea vote. But GOP support was far weaker when similar amendments were offered in the past (there have been six failed attempts since 2003). As the Marijuana Policy Project’s Dan Riffle (Reason) notes: “This measure passed because it received more support from Republicans than ever before…It is refreshing to see conservatives in Congress sticking to their conservative principles when it comes to marijuana policy. Republicans increasingly recognize that marijuana prohibition is a failed Big Government program that infringes on states’ rights.”

These days you take victories—even small ones—wherever you can find them. On to the dark hole of the Senate!

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Graduation is upon us. Many of my students are graduating with higher student loan debt than they would have imagined and limited job prospects. A few weeks back when I discussed future plans with several graduating seniors, there was a sense of dismay and a sense that the odds were against them given the poor economy and, more importantly, the trends in inequality.

The good news (which I guess could also be bad news, depending on the depth of your commitment to equality) is that the degrees they are earning may well contribute to inequality. A new paper by MIT’s David H. Autor turns attention to inequality among “the other 99 percent.” We have heard quite a bit about the growing concentration of wealth in the top 1 percent. As Autor notes:

Between 1979 and 2012, the share of all household income accruing to the top percentile of U.S. households rose from 10.0% to 22.5% To get a sense of how much money that is, consider the conceptual experiment of redistributing the gains of the top 1% between 1979 and 2012 to the bottom 99% of households. How much would this redistribution raise household incomes of the bottom 99%? The answer is $7107 per household—a substantial gain, equal to 14% of the income of the median U.S. household in 2012.

But what if we look at the “other 99 percent?” Here we have a story of the wage premium associated with higher education. And these gains simply dwarf the above-mentioned figures.

consider the earnings gap between a college-educated two-earner husband-wife family and a high school–educated two-earner husband-wife family, which rose by $27,951 between 1979 and 2012 (from $30,298 to $58,249). This increase in the earnings gap between the typical college-educated and high school–educated household earnings levels is four times as large as the redistribution that has notionally occurred from the bottom 99% to the top 1% of households. What this simple calculation suggests is that the growth of skill differentials among the “other 99 percent” is arguably even more consequential than the rise of the 1% for the welfare of most citizens.

Obviously there is a difference between cognitive ability and credentialing. My students who have majored in the “department of fashionable studies” will likely not make as great a contribution to inequality as might have been the case with a different major.

Bottom line: the paper is interesting throughout, engaging some important issues such as intergenerational mobility and the policy implications.

For additional coverage of the paper, see Jim Tankersley, Wonkblog. An interview with Autor can be found here.

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The War on Drugs

The London School of Economics has released a new report entitled Ending the Drug Wars and it is available here. The report is collection of papers that might be of some help for those hoping to think through the issues. The forward takes the form of a statement signed by a long list of notables (including several recipients of the Nobel Prize in economics):

It is time to end the ‘war on drugs’ and massively redirect resources towards effective evidence-based policies underpinned by rigorous economic analysis.

The pursuit of a militarised and enforcement-led global ‘war on drugs’ strategy has produced enormous negative outcomes and collateral damage. These include mass incarceration in the US, highly repressive policies in Asia, vast corruption and political destabilisation in Afghanistan and West Africa, immense violence in Latin America, an HIV epidemic in Russia, an acute global shortage of pain medication and the propagation of systematic human rights abuses around the world.

The strategy has failed based on its own terms. Evidence shows that drug prices have been declining while purity has been increasing. This has been despite drastic increases in global enforcement spending. Continuing to spend vast resources on punitive enforcement-led policies, generally at the expense of proven public health policies, can no longer be justified.

The United Nations has for too long tried to enforce a repressive, ‘one-size-fits-all’ approach. It must now take the lead in advocating a new cooperative international framework based on the fundamental acceptance that different policies will work for different countries and regions.

This new global drug strategy should be based on principles of public health, harm reduction, illicit market impact reduction, expanded access to essential medicines, minimisation of problematic consumption, rigorously monitored regulatory experimentation and an unwavering commitment to principles of human rights.

The war on drugs has been used to justify any number of infringements on human rights and civil liberties and has been a failure on every imaginable dimension. While there may be little that is genuinely new to those who have been thinking about drug policy, one can only hope—perhaps beyond hope—that the report will generate some media attention and support for genuine reform.

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