Gun Fears

Paul Krugman has an interesting non economics column in Friday's New York Times entitled "The Big Hate".
An excerpt:

Yes, the worst terrorist attack in our history was perpetrated by a foreign conspiracy. But the second worst, the Oklahoma City bombing, was perpetrated by an all-American lunatic. Politicians and media organizations wind up such people at their, and our, peril.

Check out the whole column. It is incredible that even with Democrats in control of the Presidency and the Congress, Tom Coburn, Republican from Oklahoma, was able to get through an amendment, to a credit card bill of all things, that allows concealed handguns in national parks. Really? Are we that paranoid of a nation that we think it is necessary to carry handguns wherever we go. Recent legislation in Tennessee would allow guns to be carried into bars. Great idea, or not. From the AP:

The legislation that takes effect July 14 retains an existing ban on consuming alcohol while carrying a handgun, and restaurant owners can still opt to ban weapons from their establishments.

Also, it is quite disturbing that gun sales are at record levels since Obama was elected. From the Pittsburgh Post Gazette:

On the gun counter at Ace Sporting Goods in Washington County, customers are greeted with a picture of President Barack Obama next to the caption, "Salesman of the Year."

"Obviously it's a little bit of humor," said owner George Romanoff. "But any time our politicians start discussing gun control, it has the adverse effect of what they intended. It's true across the country."

"I've been in this business for 33 years," said Mr. Romanoff, "and there's never been this demand."

Democrats don't want to outlaw gun s completely but we do want to renew the assault weapons ban. Could somebody please explain to me why any American other than a soldier needs an assault weapon? I just don't understand.

Learned Helplessness and the Age of the SUV

I just came upon an essay Malcolm Gladwell wrote for The New Yorker back in 2004 entitled "Big and Bad: How the S.U.V. Ran Over Automotive Safety". It is a fascinating look at the claim that SUVs are safer than cars Below are a few excerpts. I highly recommend reading the whole essay.

In the parlance of the automobile world, the TrailBlazer is better at "passive safety. " The Boxster is better when it comes to "active safety," which is every bit as important.

The S.U.V. boom represents, then, a shift in how we conceive of safety—from active to passive. It's what happens when a larger number of drivers conclude, consciously or otherwise, that the extra thirty feet that the TrailBlazer takes to come to a stop don't really matter, that the tractor-trailer will hit them anyway, and that they are better off treating accidents as inevitable rather than avoidable.

S.U.V.s are unsafe because they make their drivers feel safe. That feeling of safety isn't the solution; it's the problem.

Read the whole thing.

Books by Malcolm Gladwell:



The Tipping Point: How Little Things Can Make a Big Difference

Blink: The Power of Thinking Without Thinking

The Profitability of SUVs

James Kwak from The Baseline Scenario asks Why are SUVs more profitable?:

Many discussions of auto company economics include the assertion that SUVs and pickup trucks are more profitable than small cars, and so a shift from the former to the latter – as discussed by Felix Salmon, for example – will not be good for the auto companies, particularly GM and Chrysler (since they are in the news these days). I accept that as a historical statement, but I don’t understand why that is the case.

Textbook micro tells you that price equals marginal cost, so the gross margin on every product is zero; that’s clearly no help here. Profit margins should be higher in product segments with less competition, but basically every manufacturer makes a small, midsize, and large SUV, so I don’t think that’s the explanation.

He goes on to give several other reasons why SUVs might be more popular. There are a lot of good comments to the post and I found the exercise of answering the question very intellectually stimulating. Here is my response to the question why are SUVs more profitable?:

The answer to the question has a lot to due with consumer preference. SUV’s are, in a low cost of fuel environment, preferred to cars. The only reason people would rather buy a Civic than a truck/SUV is the low cost of a Civic. A minority would buy the Civic due to environmental reasons but most people won’t sacrifice comfort for the environment. SUV’s fit more people/stuff, make people feel powerful when they are able to look down on cars, and are safer (or at least perceived to be) in case of an accident. Car companies realize this so, since building cars has a high barrier to entry, the existing competitors compete on features rather than price for SUV’s and compete on price rather than features for small cars. This is one reason why Japanese automakers were late introducing multiple models of SUV’s. They had to understand the design aesthetic and features that Americans required for SUV’s and build the capabilities to meet the requirement whereas with a small car they could use their low cost advantage to profitably sell small cars and gain acceptance in the marketplace.

With their low cost structures, why didn’t the Japanese manufacturers lower prices on SUV’s to further pressure domestic manufacturers? The Japanese manufacturers probably realized that the domestic manufacturers didn’t want to risk lowering prices on SUV’s and not seeing a subsequent uptick in sales because the domestics had to make up the money they were losing on the small cars required by the CAFÉ standards. Thus the number of competitors that could compete on price was essentially cut from 6 to 3. With rebates an accepted practice in the car industry, Honda, Toyota, and Nissan could just start offering rebates if there was any real pricing pressure. Combined with the fact that until the past year or so foreign manufacturers did not have excess SUV manufacturing capacity, there was no real incentive to cut prices. Brands such as Hyundai are starting to build quality cars and gain a good reputation so it will be interesting to see if the profit margins continue to stay high.

Phosphorus Famine

Scientific American - Phosphorus Famine: The Threat to Our Food Supply:

Land ecosystems use and reuse phosphorus in local cycles an average of 46 times. The mineral then, through weathering and runoff, makes its way into the ocean, where marine organisms may recycle it some 800 times before it passes into sediments. Over tens of millions of years tectonic uplift may return it to dry land.

Harvesting breaks up the cycle because it removes phosphorus from the land. In prescientific agriculture, when human and animal waste served as fertilizers, nutrients went back into the soil at roughly the rate they had been withdrawn. But our modern society separates food production and consumption, which limits our ability to return nutrients to the land. Instead we use them once and then flush them away.

...And flood control contributes to disrupting the natural phosphorus cycle. Typically river floods would redistribute phosphorus-rich sediment to lower lands where it is again available for ecosystems. Instead dams trap sediment, or levees confine it to the river until it washes out to sea.

Budget Airline to Charge for Toilet Use

Its no joke. Ryanair, the Irish low cost airline, is going to remove 2 of the 3 toilets currently on their Boing aircraft and start charging $1.50 to use the remaining toilet. They are also thinking about implementing “'new baggage measures, which would see passengers replace baggage handlers to load luggage onto aircraft” are “under discussion”' and charging for "the privilege of checking themselves in online"

Here are the money quotes, and really the reason for this post, from the NY Times discussing the decision:

“We are flying aircraft on an average flight time of one hour around Europe,” Mr. O’Leary argued, “what the hell do we need three toilets for?”

Mr. O’Leary added that Boeing’s research department should have time to focus on his new toilet concept soon, since the “war in Iraq and Afghanistan is winding down.”


I think I'm going to start paying attention to what the CEO of Ryanair, Michael O'Leary, has to say. He seems pretty hilarious.

Another example of how Republicans are scared of science

In a Washington Post story about the delay in confirming Kathleen Sebelius due to Republican concerns, one paragraph caught my eye.

Sen. Jon Kyl (R-Ariz.) opposes Sebelius because of the Obama administration's support for research on the comparative effectiveness of disease treatments. He said he fears the evidence-based approach, coupled with information on price, could lead to rationing of care.

Wow, absolutely unbelievable.  WTF?  Science and facts can be scary and make us face the hard truth that America isn't perfect which scares Republicans so much that they try to frighten us into ignoring science or as they call it "schmience".  Isn't the free market blindly espoused by Republicans suppose to be all about transparency so consumers and businesses can make the right decision.  Sure health care could be rationed or regulating emissions could destroy our economy but the country is much more likely to benefit from science.  

I know that when I go to the doctor I want the doctor to have as much information as possible on the best ways to treat me.  Quite a bit of research has been done documenting regional differences of the quality of health care and how some doctors prefer treatments they are familiar even when they are not the most effective.  From an article in Time by Michael Grunwald entitled "How Obama is Using the Science of Change":

More information can make us healthier too, which is why the stimulus poured $1.1 billion into "comparative effectiveness" research. Orszag has reams of charts showing that medical tactics and costs vary wildly across the country, with little regard for what works. He'd like to document best practices — from emergency-room to-do lists that dramatically reduce infections to protocols for when pricey tests and surgeries really help — and then have all medical providers adopt them. This approach has helped American anesthesiologists reduce deaths as well as costs.   

What Republicans will probably point to when arguing against comparable effectiveness research is how the UK's National Institutes of Health and Clinical Excellence judges the cost effectiveness of therapies.  From a Harvard Business School blog post:

For years, the UK's National Institutes of Health and Clinical Excellence (NICE) has decreed whether certain therapies are more effective than others. It has gone so far as to judge the cost effectiveness of such interventions, e.g. that prolonging life for 6 months for $100,000 isn't worth the expense. The US government won't provide cost effectiveness edicts (at least not directly — payors will interpret the data and make their own decisions), but it will sponsor head-to-head trials.

Traditionally, therapies have been judged against placebos, which is not a very realistic comparator. This (comparable effectiveness research) is good news for medicine, but it is likely bad news for many drugs and devices

I don't think many people are arguing that the U.S. government tell us if a certain treatment is not worth living a few months but rather making sure that all health care participants have the appropriate information to reduce negative outcomes.  Don't let Republicans get away with scare tatics to eliminating effectiveness research.

I came across the following piece thanks to the Economist's View blog.  Below the excerpt are my comments. 

A breakthrough against hunger by Jeffrey D. Sachs 

Today's world hunger crisis is unprecedentedly severe and requires urgent measures. Nearly one billion people are trapped in chronic hunger - perhaps 100 million more than two years ago. Spain is taking global leadership in combating hunger by inviting world leaders to Madrid in late January to move beyond words to action.

The benefits of some donor help can be remarkable. Peasant farmers in Africa, Haiti, and other impoverished regions currently plant their crops without the benefit of high-yield seed varieties and fertilizers. The result is a grain yield (for example, maize) that is roughly one-third less than what could be achieved with better farm inputs. African farmers produce roughly one ton of grain per hectare, compared with more than four tons per hectare in China, where farmers use fertilizers heavily.

African farmers know that they need fertilizer; they just can't afford it. With donor help, they can. Not only do these farmers then feed their families, but they also can begin to earn market income and to save for the future.

There is now widespread agreement on the need for increased donor financing for small farmers (those with two hectares or less of land, or impoverished pastoralists), which is especially urgent in Africa. The UN Secretary General led a steering group last year that determined that African agriculture needs around $8 billion per year in donor financing - roughly four times the current total - with a heavy emphasis on improved seeds, fertilizer, irrigation systems, and extension training.

Dozens of low-income, food-deficit countries, perhaps as many as 40-50, have elaborated urgent programs for increased food production by small farms, but are currently held back by the lack of donor funding.

Many individual donor countries have declared that they are now prepared to increase their financial support for smallholder agriculture, but are searching for the appropriate mechanisms to do so. The current aid structures are inadequate. The more than 20 bilateral and multilateral donor agencies for agriculture are highly fragmented and of insufficient scale individually and collectively.

Despite the dedicated efforts of many professionals, the response to the hunger crisis remains utterly inadequate. The 2008 planting seasons came and went with much too little additional help for impoverished small farmers. African countries search endlessly, and mostly fruitlessly, for the small amounts of funding needed for their purchases of fertilizer and improved seeds.

My colleagues and I, serving on an advisory committee for the Spanish initiative, have recommended that donors pool their funds into a single international account, which we call the Financial Coordination Mechanism (FCM). These pooled funds would enable farmers in poor countries to obtain the fertilizer, improved seed varieties, and small-scale irrigation equipment that they urgently need.

Poor countries would receive prompt and predictable financing for agricultural inputs from a single account, rather than from dozens of distinct and fragmented donors. By pooling financial resources into a single-donor FCM, aid programs' administrative costs could be kept low, the availability of aid flows could be assured, and poor countries would not have to negotiate 25 times in order to receive help.

The time for business as usual is over. The donors promised to double aid to Africa by 2010, but are still far off track. Indeed, during the past 20 years, they actually cut aid for agriculture programs, and only now are reversing course.

Meanwhile, a billion people go hungry each day. We need a breakthrough that is demonstrable, public, clear, and convincing, that can mobilize the public's hearts and minds, and that can demonstrate success. History can be made in Madrid at the end of January, when the world's richest and poorest countries converge to seek solutions to the global hunger crisis. The lives of the billion poorest people depend on it.

Jeffrey D. Sachs is Professor of Economics and Director of the Earth Institute at Columbia University.

China might have much higher crop yields than Africa but they also have a huge pollution problem caused partly by agricultural run-off. Studies have shown that organic crops yield more than conventional during droughts but yield 9-20% less during normal years (1). Given the occurence of droughts in Africa it seems growing organic in Africa should be looked at closer. I think Africa certainly needs intense agricultural education and improved seed varieties among other things but I strongly question whether heavy fertilizer use should be part of the best course of action. Soaking the soil in fertilizers might be the quickest solution but not the most effective long term.