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Thursday, January 31, 2013

Media Carpet-bombing Violent Crime


Perhaps the most substantive change to the nature of news over the past 30 years is that our use of technology has created an immediacy to news access throughout the chain of events, coupled with the "CNN effect".  Reporters are on the scene, dispatched with satellite uplinks, and the pictures are made available on TV screens at bars, Starbucks, gas pumps, elevators and in the work place.  

Where the crime news of the day would have only been received on the 5pm and 11pm news, and the morning paper previously, we are having it pumped into our pocket via Twitter feeds, SMS messages and news feeds.  This immediacy of news has created mini-markets of opportunity to create market share and gain ad revenue if you can be the major news organ reporting on an issue.  The utter saturation with news means that, as a populace, we are bombarded with stories of tragedies.  It's like we want to soak in it like a hot bath, to revel and steep in the information.  What before might have been confined to 6 column inches in a newspaper 3 months after the fact is now created with 40 hours of coverage.

I think this immediacy, and the saturation of media, is a significant force in fooling the American people into believing that violent crime has gone up over the past 15 years, when the opposite is true.

Mass murder events are relatively flat over the past 30 years. What has changed is the immediacy of learning about it, and the saturation by the media.  The most deadly case of school violence in US history was actually nearly 100 years ago, in Bath, Michigan.  Mass murder is a human problem of mental health and evil.  

Wednesday, January 30, 2013

Media Bias: When the 4th Estate becomes the 6th Man


The public largely understands crime, criminal justice and social effects of crime via the media - just as Perry Mason created a generation of Americans who thought they understood how courts work, Americans indoctrinated by CSI and NCIS believe that DNA tests take seconds, and that crimes are readily solved in days, rather than months or years.  However, this is usually recognized as fiction.  Still, the Fourth Estate provides nearly all the insight the average citizen has to crime, so media selection of stories and opinion articles dramatically shape perceptions of the public, even when the reporting is biased and closer to editorial than objective journalism.

There are ready examples of where crime reporting by media is provided a bias.  ABC ran a story 8-Sept-2010 "Eric Holder Tells Religious Leaders Burning Korans Is 'Dangerous'", and the article clearly makes a case for the growth of hate crimes against Islam, citing several examples (but falling just short of stating the growth), they let uncontested statements by third parties make the misleading statements.  The article quotes Rev. Welton Gaddy, "This may be the civil rights issue of this generation..."   
However, media watch-dogs pointed out that the FBI 2008 crime statistics (most recent at that time) show the following breakdown in religiously-motivated hate crime:
  • 65.7% anti-Jewish
  • 13.2% anti-other religion
  • 7.7% anti-Islamic
  • 4.7% anti-Catholic
  • 4.2% anti-multiple religions/groups
  • 3.7% anti-Protestant
  • 0.9% anti-Agnsotic/Atheism/etc.
In reporting the article about hate crimes against Islam, the journalist should have consulted readily available crime statistics, and would have seen that 8x more anti-Semetic crimes occurred than hate crimes targeting Islam. As both Catholics and Protestants are Christian, hate crime against Christians is actually 10% higher than that against Islam. Further, only 19.5% of all hate-crime is religiously motivated, so this is scarcely the most pressing civil rights issue of our time. (Duzzett 2010)

Violent crime certainly gets attention by the public, and is a particular hot-bed of sensationalistic journalism, and one that creates fear and can drive policy.  "If it bleeds, it leads" has long been the mantra of journalism, and what drove yellow journalism for decades. Sensational stories lead to increased readership and viewing, driving up advertising revenue and profits for the news media.

The current furor over the proposed gun ban and "assault weapon" crime is fraught with inaccuracies and slanted stories, and there are numerous public policy efforts underway, likely enabled by this coverage.  As an example, Rupert Murdoch, CEO and chair of News Corporation (publisher of FoxNews and the Wall Street Journal), citing the Sandy Hook tragedy from that morning asked via Twitter on 12/15/2012, "Terrible news today. When will politicians find courage to ban automatic weapons? As in Oz after similar tragedy."

However, no automatic weapons were used in the murder, and automatic weapons are already stringently regulated in the US to the point that they can be considered banned.  Though technically legal, they are exceptionally difficult to procure, and are regulated similarly to grenades and C4 plastic explosives. Only automatic weapons that were imported and registered with the BAFTE prior to 1986 can be bought, owned or sold. (Bennett, 2012)  

The media jumped on the story.  The Huffington Post reported, "Rupert Murdoch demanded tighter gun control in the aftermath of the horrific shooting in Newtown, Connecticut" (Huffington, 2012).  Dan Byers of Politico also ran the story, "Murdoch calls for automatic weapons ban", again without mention of the actual state of gun laws forbidding automatic weapons, nor the fact that automatic weapons had nothing to do with the COnnecticut shooting.  (Byers, 2012)

These articles, and others, established in the mind of the public and policymakers that "Assault Rifles", "Assault Weapons" and "Automatic Weapons" were utilized in the shooting, when that was not the case.  This has created a furor to reinstate the failed 1994 Assault Weapons Ban with the stated purpose of stopping crime, despite FBI crime statistics showing rifles, of ALL types, committing 3%, 2.7%, 2.6%, 2.8% and 2.6% of murders in the years 2007-2011.  (FBI UCR, 2012) 

Naturally, public opinion shapes public policy.  President Obama, when he introduced his 23 Executive Orders intent on implementing sweeping policy changes and constitutional challenges stated,
"The type of assault rifle used in Aurora, for example, when paired with high-capacity magazines, has one purpose, to pump out as many bullets as possible, as quickly as possible.... Weapons designed for the theater of war have no place in a movie theater." (Reuters, 2013)
President Obama is guarded by soldiers with assault rifles and high-capacity magazines.  Presumably, those guards aren't there with the express purpose of killing as many people as possible, even though Mr. Obama had made that statement.  It is demonstrable that the purpose of those firearms are defensive in nature.  Further, an assault rifle was not used in Aurora, nor was that rifle or the firearms used in Connecticut designed for the theater of war, as no modern military issues semi-automatic civilian rifles as main battle rifles. (Morrissey 2013)  Yet, those were the highlights that Reuters called out in their article "Obama: 'weapons designed for the theater of war have no place in a movie theater" (Reuters, 2013).  The video clip was edited to focus on those claims, without commentary that those statements are incorrect or any fact checking.  Many other articles abound with that same spin.

The same sensationalistic media coverage in the wake of a mass shooting, again where firearm policy changes were stridently suggested, was reported following the shooting of Rep. Gabrielle Giffords, D-Ariz, two years ago.  Pierre Thomas on the Sunday, 9-Jan-2011 ABC News' "This Week with Christiane Amanpour", reported:
"Saturday's shootings reflect a disturbing trend. Mass shootings have become commonplace since the virginia Tech massacre in 2007. There have been dozens of incidents where three or more people have been fatally wounded. Hundreds have died."  (Thomas 2011)
Checking the FBI UCR doesn't provide data for mass shootings, nor does the Bureau of Justice's National Crime Victimization Study.  However, criminologist James Alan Fox with Northwestern Universary has tracked down the numbers, and reported that the number of crimes in which four or more had died in shooting incidents were 23, 29, 27 in the years 2007-2009, the years for which Pierre Thomas would have been reporting (citing that criminologists typically establish a cut-off in these cases of four, not three). 

So, with a 3-year total of 79 people in 4+ person shootings, reporting that "dozens of incidents" is inaccurate and does not appear a statement supported by research or statistics, since the most generous reading of the statistics would provide 79/4 = 19 incidents.  Nor does the trendline support the statement that it is a "disturbing trend" or commonplace.  In fact, the trend for 5 year periods starting 1976-2009 show 20.6, 16.8, 18.2, 23.0, 20.0, 21.0 and 25.5 average _incidents_ per year, so the actual trend seems to be within normal variance. Considering the population growth in the US over that period, the actual trend is flat to declining, on a per-capita basis. (Politifact 2011)  
See chart, the trendline per capita is not an upwards trend:
multiple murder rate flate  
(image created via Excel using data from article Politifact article and US Census data 1980-2010.)
__
ABC, 8-Sept-2010. "Eric Holder Tells Religious Leaders Burning Korans Is 'Dangerous'" ABC News. Retrieved 22-Jan-2013 from http://abcnews.go.com/Politics/eric-holder-calls-pastors-plan-burn-korans-dangerous/story?id=11579359
Duzett, Allie Winegar, 8-Sept-2010.  Media Artificially Inflate American "Islamophobia". Retrieved 22-Jan-2013 from http://www.aim.org/on-target-blog/media-artificially-inflate-american-islamophobia/
Huffington Post 12/17/2012 "Rupert Murdoch on Newtown Shooting: When Will We 'Ban Automatic Weapons'?" Retrieved 22-Jan-2013 from http://www.huffingtonpost.com/2012/12/17/rupert-murdoch-gun-control-newtown_n_2315422.html
Byers, Dan. Politico.com 12/17/2012 "Murdoch Calls for Automatic Weapons Ban". Retrieved 22-Jan-2013 from http://www.politico.com/blogs/media/2012/12/murdoch-calls-for-automatic-weapons-ban-152057.html
Morrissey, Ed, 17-Jan-2013 "NYT: Say, what exactly is an 'assault weapon,' anyway?" HotAir. Retrieved 22-Jan-2013 from http://hotair.com/archives/2013/01/17/nyt-say-what-exactly-is-an-assault-weapon-anyway/
Bennett, Brian, 16-Oct-2012. "Fact Check: Romney says it's illegal to have automatic weapons", Los Angeles Times. Retrieved 22-Jan-2013 fromhttp://articles.latimes.com/2012/oct/16/news/la-pn-romney-illegal-automatic-weapons-20121016
Politifact, Publication date unknown. "'This Week' report says hundreds have died in multiple-victim shootings". Tampa Bay Times, Politifact.com. Retrieved 22-Jan-2013 fromhttp://www.politifact.com/truth-o-meter/statements/2011/jan/11/pierre-thomas/week-report-says-hundreds-have-died-multiple-victi/
Reuters, 15-Jan-2013. "Obama: 'weapons designed for the theater of war have no place in a movie theater" Retrieved 22-Jan-2013 fromhttp://www.reuters.com/video/2013/01/16/obama-weapons-designed-for-the-theater-o?videoId=240532378
FBI Criminal Justice Information Services Division, "Uniform Crime Reports- Crime in the United States 2011: Expanded Homicide Data Table 8" (Pub. date unknown, 2012?) Retrieved 22-Jan-2013 from http://www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2011/crime-in-the-u.s.-2011/tables/expanded-homicide-data-table-8

Monday, January 28, 2013

Lies, Damn Lies and Crime Stats


I reviewed two articles designed to better illuminate sampling and coding bias in US crime statistics, and thought I'd share.  I had always quoted the FBI UCR as gospel, and am now shamed that I had been so ready to accept granular numbers at face value.  After all, doesn't 14,467 seem far more precise than 15k?

Read them for yourself, and see if you agree...

In their article "Reporting Crime to the Police, 1973-2005: a Multivariate Analysis of Long-Term Trends in the National Crime Survey (NCS) and National Crime Victimization Survey (NCVS)", Baumer & Lauritsen provide an illuminating overview of the difficulties in providing succinct statements about long-term crime trends in the United States.  The authors consulted diverse data sources to provide broad attribution to changes on reporting rates of crime, from improved police/community relations and trust, 911 network improvements and pervasive mobile communications to victimization efforts and reclassification of activity into crimes (e.g. date rape).  McGruff the Crime Dog, neighborhood watch programs and even America’s Most Wanted provided reminders to citizens that they should remain alert and to report crimes.  However, the authors likewise pointed out negative forces in the reporting of crime, including “anti-snitch” culture shifts, changes in organized crime and decreased belief in the general population that reported incidents would lead to prosecution.

I appreciated that the authors shared the coding information, and normalization assumptions they had made, this was vital to understanding sampling bias.  There were various interesting anomalies in coding that I noted where I would have liked further information about the choices made by the researchers – overall, “unknown” was glaringly missing, since offenders’ ages, race and gender are not always known, nor sometimes the victims’, so explanation of assumptions for where “unknown” was mapped would have been helpful.  

Likewise, additional demographic coding for analysis was not as granular as I would have expected. Both gender and household coding were binary, apparently not providing transsexual/ambiguous/undeclared/other gender identification to be represented in the information.  Marriage was also encoded as a binary value, not representing non-intimate cohabitation, intimate co-habitation or homosexual relationships in the analysis.  I found these curious omissions without commentary by the authors.  Likewise, the White/Black/Other racial coding was very coarse, though the footnote (6) made this fairly clear why this limitation was imposed.  Further exploration of more granular demographics might prove interesting.  I would have also liked to have understood why they coded a multiple-offender mixed gender incident as all-male, which seems rather odd.

The dramatic changes over the study in reporting rates for criminality were very surprising, as I had not thought that there would be much, if any, positive change.  The incidence of reported crime within the family was in the direction I had thought, but was a dramatic (and rather encouraging) indicator.  I must confess that my skills at reading raw statistical regression tables and drawing conclusions kept me from getting as much from this article as I would have liked, but overall it was very eye-opening nonetheless.  To truly understand crime, it seems this avenue of research must be encouraged and repeated to capture changes in reporting of crimes caused by broad societal changes.

The second article, “The Use of Official Records to Measure Crime and Delinquency” by Lofton and MacDowall, provides for a stark and shocking coverage of the UCR, and I was floored by the graph showing zero (0) report of criminal homicide for Florida for so many years.  What was heartening was the increase in additional sources of information, as well as the raw UCR data, which are made available for more informed evaluation.  The article also details the changes in crime reporting due to development and use of the National Incident Based Reporting System (NIBRS), which I had not understood.

It seems that, as the YouTube video “Crime Trends and Measurements” by gscottpleasants indicates, a blended use of reports likely leads to a more normalized view of crime trends in the US.  Analyzing the raw data as well can help identify inexplicable gaps in data.  By ensuring a blended view of the UCR, UCVS and other surveys, anomalous indicators could more likely be identified to avoid dramatic error.  Additionally, the data must be viewed with skepticism in other than very broad trending information.  Unless data are viewed with a critical and skeptical eye, errant inputs will create invalid conclusions.

Based on the articles, and a study of the UCR graphs, it seems that crime has been in a steady decline, as a general trend (though I feel conflicted reporting that, with the known errors in the UCR).  Based on the Baumer & Lauritsen article that shows a demonstrated increase in the likelihood that crimes will be reported, this gives credibility to the declining graph, since a flat crime rate with a year-over-year increase in reporting of crimes should create an elevated UCR.

I was not surprised by this information, because I had already done the UCR research (though I was ignorant of the various flaws until I read the other articles).  Because I am an advocate for Concealed Carry and self-defense, and have done extensive armchair analysis of crime statistics, I was already aware of the trending information.  I had also done several hours of analysis cross-correlating gun control information (e.g. Brady Campaign State ScoreCard cross-referenced with state-by-state violent crime statistics).  

Please don't mistake this for arrogance, my knowledge is proof that, "In the land of the blind, the one-eyed man is king", and my rumination is of suitable rigor for coffee shop discussions.  My research has not had the rigor of peer-reviewed research.  Because I have engaged hundreds in conversations on these issues, and largely find advocates for gun control to be ill-informed, I was aware that the crime statistics were broadly misunderstood.  However, I had ignored sampling error, bias, discretionary policing and politics in the formation of the UCR data.

Sunday, January 27, 2013

When Qualitative Data is MORE Accurate: Death by Data

Aaron pinged me with follow-up questions, telling me I'd been sniffing glue if I thought that quantitative data was less reliable than qualitative.  Gifted and respected colleague, I don't think you can ever say that one method is inherently superior to the other -- much like you can't say that Linux is more/less secure than Windows.  Both can be very highly secured, and both can be as secure as a wet paper sack.

I think that there can be cases where qualitative data is actually more reliable than quantitative data.  Quantitative research can create the illusion of reliable fact, because it has numbers, which makes is seem concrete and absolute.  However, due to bias and errors, quantitative data can be wildly inaccurate.  


As one example, the Space Shuttle Challenger loss (which occurred 27 years ago today, 27-January) was due to catastrophic failure of O-ring seals, and was precipitated by erosion of the O-rings on prior flights. The erosion of the seals by hot gases should never have occurred, and was an indicator of a failed test, and a failure mode of the O-ring.  However, because the engineers presumed that eroding completely through the O-ring was required in order for a failure to occur, and the erosion had only eaten through 1/3 of the O-ring after the timed test, they presumed that the duration and erosion were correlated.  The engineers made an unsupported leap of faith on very few data points that appeared to fit a linear progression (since humans are nothing if not pattern-matching machines, so they found a pattern where none existed, like a Rorschach ink blot).  From this erroneous extrapolation, they created an "erosion model" for the margin of safety.  After an additional test caused the data point for erosion to fall near the curve, they believed the bogus model was predictive, and treated failure modes as an actual Margin of Error.  This was quoted in a section of the Rogers Commission Report on the Space Shuttle Challenger by R.P. Feynman (http://www.ralentz.com/old/space/feynman-report.html) as having been a contributing factor to the disaster.  It was qualitative, fit a curve, and seemed to have significance (because they backed into the curve from the numbers), so seemed reliable.  However, it was really a chart of failure modes, not of safety, and was uncorrelated.

In this instance, the quantitative research was bogus, but believed because measurements and the fit to forecasted curve gave the illusion of science.

Friday, January 25, 2013

Quantitative v. Qualitative



"Science is what we understand well enough to explain to a computer.  Art is everything else we do."
-Donald Knuth

Quantitative research is conducted using empirical information that can be sensed and measured.  The intent for quantitative analysis is to provide for a means of analysis via mathematics, statistical, or computational analysis.  Quantitative research is often, but not exclusively, based on establishing a hypothesis, and conducting experiments provides for a testable hypothesis based on the ability to measure.  By its nature, quantitative research provides for (presumably) precise measurements within a sample of the whole problem space, and uses inference to make assumptions about the state of the whole.  Quantitative analysis gives up on being able to measure the complete state of the whole, so that precise measurements can be made.
Qualitative research is comparatively new as a means of conducting research yielding truth.  Through the use of qualitative research methods, researchers are able to create new understandings of problems that can be quite useful.  It seems that qualitative research tries to get a sense of the whole picture, painting a landscape of the entire problem space, then seeking to fill in the missing gaps to develop a working hypothesis.  Qualitative analysis abandons the notion of precise measurements, preferring instead to gain a sense of the complete state of the whole problem space.
To provide a gross generalization, I think of two people shooting arrows at a target, Jane and Bob, who both score 50 points in an archery competition.  Jane has the finest archery equipment, but poor eyesight.  Bob has the eyes of an eagle, but poor equipment.  When the two shoot, Jane gets consistently tight patterns, grouping 10 arrows in a few square inches, but her shot misses the bullseye entirely, and she scores 10 scores of 5.  Bob's poor equipment means his arrows aren't going precisely where he is aiming, but his aim is true.  Bob has arrows across the target, including one in the target bullseye, but his arrows are very far apart.  Jane is a model of quantitative research, where great precision can be delivered, but it might not be on target.  Bob is the model of qualitative research, where significant analysis of the whole yields truth, but with imprecision.  In my mind, quantitative analysis is focused on precision, while the focus of qualitative analysis is accuracy, even if the answers are not precise.  Both can deliver substantive results and provide for the truth, but qualitative seems far more suitable in areas where there are insufficient measurements available.
I must admit that I am far more comfortable with the idea of quantitative data... but experience has taught me that it is no more or less authoritative than qualitative, since both are at the mercy of measurement error, sampling error and reporting bias, which create bad data.  I think the curse of qualitative research is that the numbers make the answers seem more precise, but understanding how the research was conducted is often more important than the numbers.  I stopped believing Gallup polls when I learned 20 years ago that their most significant polling audience were college students 18-24 (as easiest to get to participate in a poll), and that they had discarded several areas of the country as too conservative, including Ohio. By targeting specific demographics, they had tainted their inputs, and ruined their ability to forecast the opinion of the whole due to their sampling error.  Gallup may have fixed their sampling process since then, but it ruined their credibility with me.

At a more basic level, understanding the sequence of questions in a survey, and the specific phrases used to introduce and explain the survey is important to understanding what bias may have been introduced to the survey experience... just one more area where quantitative research can gather information that has had bias injected at the sampling source.

In Information Security, we often struggle with a dearth of quantitative data, and there has been great lament in the community over that.  We've been left for 30+ years with expert opinion and standards of good practice, which have to necessarily make gross assumptions about what "good" is, since all industries place a different value on differing qualities of desirable outcome.  However, that doesn't mean that there aren't good answers, just that it takes more research and expert knowledge to discern the truth.

Consider that the area of cybercrime goes largely unreported, and that even acts of embezzlement are substantially under reported (typically 10%), even though withholding knowledge of the crime harms society (Tragedy of the Commons). Due to lack of quantitative data (and the Holy Grail, actuarial tables), we're not able to state authoritatively what can stop cybercrime.  I have faced suppression of reporting cybercrime occurring in my organization many times in my career, and it's always a bitter pill. When the Russian mob or Chinese hackers take down databases and grab consumer financial information, society (and those consumers) should know.  Yet, it often is unreported, or whitewashed.
The most repugnant, and one that caused me nightmares, was when I had caught a pedophile with GIGS of child porn images, It was the most abhorrent thing I've seen professionally, a true face of evil. He was fired, his pr0n files erased, and it went unreported, and that was hard to live with, because I fear what may have happened to a child as a result of this predator-in-training walking free.  That would now be a crime, to not report, but was not at the time. I lost a lot of sleep over that.  Anyway... Just one example of why there are gaps in cybercrime stats.

Fortunately, my profession is starting to get to predictive methods, and use actual quantitative analysis using sampling, Monte-Carlo simulations, game theory simulations, and Bayesian stats, and the tide is starting to turn.  However, most of our public measurements about cybercrime are based on qualitative methods (e.g. survey) that purport to provide hard numbers (quantitative measures), so we have a ways to go before we are able to speak with authority and not have our methods (rightly) challenged by criminologists.

That is what is comforting about the Donald Knuth quote I started this posting with -- because both art and science have a place in our field, and I think one of the markers of a risk professional is when you are able to be comfortable with both approaches.  Neither quantitative nor qualitative are inherently inferior, as both provide pathways to arrive at the truth, but the art comes in knowing when to pick which approach.


Thursday, January 24, 2013

Justice, Social Justice, Mores and Deviancy

NOTE: This has some NSFW elements, but frank discussion of deviancy is sometimes required if you are to discuss justice. Let's face it, sexual deviancy is one of the easiest to discuss, so, yes, this is 75% about sex.  You've been warned...

----
No, this is not a furthering discussion of Forking DongleGate.

Justice is the pursuit of truth, and equality under the law.  Social justice is the ideal state where fairness in the social system gives everyone an equal opportunity and is based on cultural mores and values for fairness and morality.  As cultural systems create their own ideas of right and wrong (e.g. contrasting Islamic Sharia principles, Judaeo-Christian values and Shinto), there cannot be a single version of social justice.  Ready examples would be the treatment of women in different cultures, and what kind of social justice is presumed in that society to be fair and equitable.  The sense of honoring a woman and social justice for her in Israel will be different from that in Kenya, China and the UK.  One ready example made the newspapers this morning about women in combat - some cultures would view that as highly dishonorable and unjust.


Criminal justice is inexorably tied to the concepts of justice and social justice, because crime is a social problem, and operates within a culture and society.  Cultures will decide for themselves what is deviant behavior.  

In Amsterdam, the red-light windows where prostitutes earn their trade is seen as a necessary and, if not honorable, a relatively dignified answer to a social issue, and sex is viewed quite differently in other parts of the world.  Japan sees pornography as obscene, so has rigorous censorship, yet infamously has vending machines selling used undergarments, and bars where oral sex is purchased along with a beer, since oral sex isn't considered "sex" in Japan.  Purchasing used undergarments would be seen as deviancy in other cultures, and oral sex is a crime in some of them (e.g. Malaysia, Hong Kong).  So, the very notion of crime is tied to the social mores.  

The women of Amsterdam's infamous red windows would be committing crimes in Saudi Arabia, yet gay sex isn't seen as sex, according to reports I've received from soldiers returning from the Middle East.  A friend of mine was officer in the US Marines deployed to the Middle East, as a liaison officer with other NATO units. The number one morale issue he had to deal with regularly were the officers in the army of that country who were raping their own troops, and saw nothing wrong with it, though male-male rape would be a crime in most countries, and is against the Uniform Code of Military Justice of the US armed forces.  

We can see this in the changing work environment, where harassment and sexual harassment charges for behaviors today were just "part of the office" of the past.  Before you immediately jump to the conclusion that that was due to the oppression of women workers, let me share a story. I worked with an older woman from 1995-1999, let's call her Barbara.  Barbara was a collector of stories, and had some great experiences - one of her jobs was to book acts into the Sands casino in Vegas, and it seemed her primary job was keeping the Rat Pack sober enough to perform.  Barbara shared with me that, in her workplace in the 60s, they frequently (weekly?) played a game in the office where someone would yell some phrase I've forgotten (maybe "Grab Ass!" ??).  That would start the game, and the men would chase the women around, jumping over desks, chairs, whatever, with the goal being to tackle and remove the panties of the woman being pursued, and her goal was to avoid it.  The last woman with panties on won for the women's team, and the man with the most panties won on the men's team.  The TRULY unbelievable part was the sincere way in which she swore that this was a fun game for all, and was just some harmless fun.  I was floored.  I asked for clarification on that whole, "It was cool with the women, and they thought it was great" part.  Twice.  Not only were they fine with it, but looked forward to it as fun competition.  No, really.  With my 90s PC ears burning and brain on fire, I wondered at the time if I could be fired for just HEARING that story.  Tackling women to rip their panties off in the workplace would result in prosecution nowadays, but was apparently in accordance with the mores of the time and place, and not considered deviancy or illegal. #brainonfire #derp #reboot

The differing mores for deviancy provide for the criminality of some behaviors, and create differing views of social justice - Amsterdam sees dignity in prostitution, at least one Middle Eastern country sees normalcy in high-ranking officers raping their troops, and Japan sees oral sex from a sex worker as not breaking marital vows, because it's in the realm of a "massage", so there is no adultery, a form of social injustice, perceived in the act.  Yet, Japanese pornographers are breaking the law, and porn stars are deviants in that culture.  As notions of right and wrong effect both the opinion of social justice and criminality, how those deviancies are pursued and prosecuted creates a system of justice.

Monday, January 21, 2013

Why I went dark there

So, I switched jobs, and my new job didn't allow blogging of any kind.  That sucked on many levels. So, I deleted all but 2 blog postings, and my blogging parked for a few years.  Now, I'm back.  :-)

Thursday, January 17, 2013

Why a national sales tax can't be implemented

From the political news bag, someone asked the question, "There is a lot of press now about undocumented citizens.  Since one of the arguments is to get them to pay taxes, wouldn't a national sales tax solve that problem?"  

Ok James, first, let's set the record straight here - your question is based on two false assumptions.  One is that illegal immigrants aren't paying their fair share of taxes.  Actually, more than half of illegal immigrants do pay their taxes, according to the Congressional Budget Office.  The reason they're a burden from a tax perspective isn't because they consume more services than paying taxes, it's because they earn so little that they have very little to tax, due to poor education/skills.  As unskilled workers, they earn peanuts.  However, I might point out that your 1st generation immigrant ancestors probably looked identical as far as economic status.

The other false assumption is that a federal sales tax can be implemented, and I believe it cannot be done.  I'm in favor of instead implementing a zero-loophole flat tax, with only 3 exceptions permitted: 
  • capital gains remain untaxed, to encourage savings and investments
  • higher education tax credit for first-time college students or trade schools, to encourage uneducated/unskilled worker training
  • charitable donations

Now as to why it is my opinion that a federal sales tax cannot be implemented.
At the risk of turning a short question into a very long answer, let me illustrate why, with a predictive tale that will have you thinking me quite the pessimist…
Suppose we heard tomorrow that, as of 1-Jan-2014, there would be no more federal income tax, and everyone would pay a 25% sales tax on non-food items.  This would create some very undesirable behaviors:
  1. People would quickly realize that they will be making 25% more NEXT year, but goods will cost more as well.  If they can buy something in December, and pay for it in January, it's like getting a 25% off coupon…. but delaying until January means they'll have to pay "full price".  Excitedly, they realize they can get 25% ROI in just a few months from investing!  Except, consumption isn't investing.
  2. People would plunge into personal debt as deep as they possibly can, purchasing durable goods, such as cars, electronics, boats, vacation homes, jewelry, gosh, whatever they want, because they're getting a 25% pay raise next year.  I believe this would be a staggering amount of debt.  This consumption would occur sooner rather than later, as the lure of "free" consumption will be too great, and the ski boat would look SO much better on the water this Summer rather than deferring enjoyment an entire year.
  3. Massive consumption, essentially pulling 4 years of buying forward into 1 year would create a huge benefit in jobs, as the full economy would be cranking full-tilt.  Full employment provides even more discretionary income, and things seem pretty rosy.  However, laws of supply and demand would do this same thing that has happened to ammo since Thanksgiving, going from $.30 a round to $1 a round in a few short weeks.  The price of goods would shoot up in a few short weeks, as shelves quickly emptied.  
  4. Escalating prices may give a few pause.  However, they will still need shoes, belt, dress, pants, shirts, socks and toiletries.  If $3 mouthwash is now $5, it will likely jump to $6.25 with tax next year, so they capitulate and buy anyway.  The 75% who are less prudent will decide the definitely "need" big TVs, nice cars, shiny new GXR, and will make that purchase 1-4 years earlier than they intended (and, looking at lottery winners, with reckless abandon).  From Apple computers to staples and glue, shelves are picked clean.  It would be like groceries when a disaster is declared, but it would be every mall in America, hitting all aspects of durable goods.  Transportation costs would escalate, gas prices would jump dramatically as consumption of fuel increased from the supply chain ripple effect.  Food delivery is effected, and food prices climb, but don't worry, next year, everyone is getting a raise. 
  5. Companies get into the game with less abandon, but recognize the same cycle, so pull all computer, vehicle, office supplies, light bulbs, parking lot repairs and consulting forward into 2013.  The computer market had a big hit 4Q1998 - 2Q2000 because corporations had pulled 3 years of purchases into 1998 in preparation for Y2k.  That push helped cause the Internet "bubble" to collapse in Spring 1999.  This time, it's not the tiny software market, it's consumer goods spending, which is 30% of the GDP.
  6. With massive consumption and short supply, inflation passes 20%, perhaps more… while some realize "pre-purchasing" next year brings a theoretical 25% benefit, others with poor math skills think 25% + 25% = 50%, so are willing to pay as much as 50% more for goods, so inflation could readily top 30%, but full employment keeps the bull roaring.  The poor couldn't raise financing or personal credit, and live in fear, as prices climb but fixed income does not. Many Americans are having a hard time finding needed durable goods, and now non-durable good such as gas and food.  Crime rises as people go hungry.  Spending is out of control.  Some banks might get caught in an unstable state, and go under.  Investments slow dramatically, as 401(k) and IRA contributions drop to zero, and savings accounts are sucked dry, and the only pump is consumer spending, but the end is looming.
  7. In the final groaning days  of 2013 the spending hits frenetic levels, and December is the Christmas to save all Christmas splurges.  The recovered supply chain is smacked again.  Now however, non-durable goods and services take the hit as well.  Everyone wants to get a hairstyle, manicure, painting, redecorating, plumbing, all the home repairs they've been putting off. After all, it needs done anyway, but will cost 25% more next year, but they'll be rich when it comes time to pay. In total, the GDP impact of goods and services is typically 69% of GDP.  In the final months of 2013, it climbs North of 80%.  Runs on food hit, with flour, oil, sugar, vanilla, and other relatively shelf-stabilized products running dry.  Every gas tank is topped off, and gas climbs above $6 a gallon.  
  8. Wheat, corn, rice, pork belly, and crude oil markets jump.  All the commodity brokers saw this push coming, and prices on food are now double the year prior.  Perhaps corn and wheat shipments to third-world countries would slow, and famine might be the result, as we choose to feed our populace with our own wheat rather than exporting.  Unemployment, at 0% for the prior 10 months, suddenly jumps to 10% in December as employers brace for the impact of the decline they know is coming.
  9. January 1 hits, and the orgy of excess is over.  Now nobody is buying anything except food, because they already made their purchases. In fact, only fresh food is being purchased, but sparsely, because flour, sugar, salt and the like are still scarce.  Restaurants make a modest comeback but the food supply is still uneven and shortages remain.  The poor are now both hungry and cold, as heating oil prices and food prices provide the double punch with Winter in full swing.  Massive layoffs already started in December, and continue on through Spring.  Car, motorcycle and boat dealers close, as nobody comes to the lots for months. Malls are shuttered, and look like a zombie apocalypse movie, with nearly empty shelves and no shoppers.  The retail sector tanks, and supporting industries are hammered - transportation, warehouses, restaurants, jobbers, marketing, entertainment, all take a big hit as staggering debt load brings all discretionary spending to a halt.  Gas stations close, airline travel slows to a drizzle, and airlines collapse their routes, or fail entirely.
  10. The only two sectors booming are package delivery and ports.  With the 25% sales tax creating a 25% tariff against United States businesses, Americans hit the Internet, and seek to purchase goods from Canada, Mexico, China or Europe.  Taxes grind to near-zero, and the US is near default.  Congress tries unsuccessfully to move the debt ceiling, then moves the income tax higher, and reinstates 10% income taxes, to keep the government afloat.  This tips the economy from Recession into a Depression.  The bleak outlook dries up the final sources of institutional investments, and more companies flounder without revenue, necessary cash flow or ability to borrow.  
  11. Lack of investment and R&D causes a domino effect, and employment creeps higher.  The wealthy have gotten even more wealthy from investment analysts that positioned them well for the 2013 bubble. The poor and middle class can't remember ever being this poor before.  Defaults and foreclosures accelerate, and recently purchased cars, boats and LED TVs are recaptured, but with little market to move them.
  12. Consumer spending has pushed inflation to 30% and beyond, but salaries fall, instead of climbing, since unemployment shoots past 30%.  

Sadly, this would probably "solve" the illegal immigration problem, as undocumented workers would leave to return to their home country, where job opportunities were better.
Dan