Monday, December 24, 2012

Tragedy and Guns

As both a teacher and a parent, tragic events such as the recent Connecticut shooting rattle me greatly. At our school there was increased security for about a week following the shooting. The national and pundit debates have followed similar courses this time as other mass murders involving guns. One broad view is that gun control must be strengthened because precious innocent lives trump the second amendment. Another is that, while what happened was a tragedy, it can't be used as a reason to destroy the constitution. My thoughts followed a different course. I believe that preventing tragic innocent deaths and upholding the constitution are not mutually exclusive. And when practicality and constitutionality go hand in hand, that's a good recipe.

Here is a thought experiment. Imagine that on that day at Sandy Hook Elementary in Newtown, every single mentally capable and emotionally stable adult had been carrying a handgun. Further imagine that they have all been trained to use the handgun! Now, imagine what the result would be under these different circumstances. The murderer, through surprise, might still have killed one or two individuals. But he certainly would not have slain 26, no matter what kind deadly assault weapon the killer had. He would have been stopped by any of those adults, whether a teacher, counselor, school nurse, or even janitor or lunch lady!

Self Defense
The only real and practical way to prevent gun crime in the moment is by having a gun yourself. Is it really practical to have every adult in a school bear a firearm? Probably not. But, I know that where I teach, at a high school, there are several teachers with concealed handgun licenses. By law, they cannot even take their guns to the parking lot, however. What if adults with CHLs had their weapons with them? How is this not a practical solution? There would almost certainly be several responsible, emotionally and mentally stable individuals at every campus in America who would be willing to step up and provide this security secretly from the students. This would incur no cost from the government, it would not be unconstitutional, and it would provide a practical solution. When I took my own CHL class for my Texas permit I found a veritable diversity of individuals - old ladies, young fashionable women, businessmen. In fact, I only saw one or two that I would have thought to myself, "that looks like a Texan good 'ol boy who hunts and loves to shoot his gun on his ranch." Average people are willing to learn how to use a handgun to protect themselves.

The Gun Control Fantasy
Estimates for how many firearms are owned by citizens range from 200 to 350 million. That number is high enough that it must be wishful thinking to believe that there could be a gun control law which effectively prevents criminals from acquiring a gun. By definition a criminal is not going to follow the law, so even if controls are tight enough to prevent them from illegally purchasing a gun, they could steal one or acquire it from the gray or black market. In the end, a person with murderous intent will eventually get a gun.

Here is my challenge: propose a thought experiment in which a particular set of gun control laws or practices could have effectively prevented the Newtown massacre.


Saturday, October 20, 2012

If Nations were People


If Nations were People

The US is like an independently wealthy man who has such a variety of business and investment interests, that no single one can dominate his assets and energy. In other words, If one of his ventures fails, it does not affect him, as he has dozens of others. Thus, he has the freedom to listen to a variety of investment counselors and even crackpots who want to use his money for a business scheme. At times he is an entrepreneur for solid business models, at others, he is a failed venture capitalist. But, only rarely do multiple parts of his personal financial empire stumble at the same time. Even so, his business acuity is strong enough that even harsh times represent but small moments before he rebounds with renewed energy.

Almost every other country is very different. Some are wealthy, some are not wealthy. But even the wealthy ones have much less variety in their means, such that if their primary asset fails, so do they, at least for a significant time. No other nation is like a man who enjoys such financial freedom that they can do with their money precisely what they wish. 

For example, Russia's government receives almost 50 percent of its funding from energy exports. Russia is like the businessman who owns one large firm that represents half of his assets. He will spend much more time obsessing over that one firm than any of the myriad other sources of income he may have - perhaps disproportionately so, as his other assets may aggregate to be slightly more than his largest firm. Thus, Russia tightly controls the energy industry, much more so than the American people would ever allow the US government to meddle in a particular industry.

Germany is wealthy, but his assets are tied into a network of corporations that often suck his financial means away to fund projects that have apparently small or indirect impact on himself. At least, that's how he sees it. Those other corporations declare that he is the problem, that his businesses benefit disproportionately from the network and that the rules have been written to ensure his corporation's success, to the detriment of theirs'. And so, it is not really their fault that they constantly require his assistance. To fix this conundrum, the German businessman has recently tried to make a new deal with the Russian businessman. He wants to trade his capital for the Russian's energy. The business network that Germany is tied into does not like this new deal being made, as it will divert resources from the German's considerable assets to another corporation outside of their common network.

China is a like a man who sees his wealth very rapidly expanding, but whose business expenses rise equally as fast, such that he has very little actual profit. Thus, while people are impressed with his firm's growth (he, like the Russian man, has one primary asset), his own home and personal means have not increased proportionately. Consequently, he has recently been attempting to change his business model. His large firm has made its money for more than two decades by industrial manufacturing low on the value added chain. Now, he wants to increase the quality of his business's products. This is because he is beginning to have heavy competition from other small firms that can provide the same product, but cheaper. Unfortunately, he has primarily kept his own costs down by subsidizing his business with his personal finances. And, as mentioned, he has had few actual profits recently, so his personal finances are drying up and he can no longer afford to dip into his own pockets. Consequently, he will lose substantial business to his competitors if he can't shift his business model up the value added chain. An additional problem he has to deal with is that he has not been able to pay his employees as well as in the past. They are wanting more, and he is further hurting his own pockets by providing for them. If he can't get his model and costs under control, many of his employees may start to quit, which could force him to start from scratch, with less capital (though with his physical assets intact, and thus not at a complete loss).

The Japanese businessman went through what his nephew, the Chinese businessman is going through now. But, he went through it decades ago. He transitioned from a rapidly expanding business to a very large, but very stagnant one. It has neither grown nor lost profits in about two decades, but has sat at a plateau. Fortunately, the employees of his businesses have all enjoyed the perks and have had enough company loyalty that they have not jumped ship even in a lack of raises and additional benefits for nearly 20 years. But he is beginning to wonder if this will last. How long can his workers endure a stagnant lifestyle? 

Although these men all have considerable assets, many have liabilities. And they cannot simply shift their wealth at whim to do away with their problems. 

The US economic model is and has been driven primarily by ideas, rather than constraints beyond its control. Most other places do not have the option to let economic theory become reality. Instead, the economic realities of other nations generate their economic theories. Of course, that's a simplistic way of saying it. But there is a reason that the president of France, Francoise Hollande, has been following very similar policies concerning Germany, Libya and in dealing with the EU, as his predecessor Sarkozy. Hollande could hardly be different ideologically as Hollande. Yet, he finds that a competent leader has a fairly clear path to follow for his country. A competent businessman might innovate, but there are many things that he will do based on many outside factors that affect his business - things outside of his control. He may not always be able to do exactly what he wants.

At least, that's what I think when I read about the state of nations in the world today.

Thursday, August 2, 2012

China: A Potential Superpower
This is a layman’s big picture analysis of China’s power status.

It was brought upon by a throw away comment from a friend who, in mentioning that the US and China have each been getting the most medals, noted that it is funny how "superpowers compete through the Olympics."

China, however, only has the potential to be a superpower, as do some other nations, such as Japan and India. The following explains why.

There are at least three areas in which a superpower must be globally formidable: military, economic and political.

Economy

China’s economy is large and expanding rapidly. While this rate of growth cannot endure forever, it is already placing it as the second largest economy in the world. It has fingers in every continent. It has an abundance of resources, and an abundance of the three fundamental aspects of an economy: land, labor and capital (though the latter is not as guaranteed for them as some other economies, as immense capital generation has its own set of constraints).

There are some powerful differences between China and the two superpowers of the last century, however. China’s economy is dominated by exports. It cannot survive without them, because, like any export-driven economy, its own people cannot consume all of its surplus. It literally must export or shrink. This is not a problem for the US, and was not a problem for the Soviets. A superpower’s economy cannot be so constrained and limited in scope. China is currently working to alter this, but it will take time, and will be difficult under the current global economic climate.

Military
Now, combine this critical conundrum of China’s economy to the current state of the oceans. The US navy dominates the world’s oceans to a degree unseen in the history of the world. Global trade is literally contingent upon the US navy’s permission. In a war against China, the US navy could catastrophically shut down their export-dominated economy by eliminating critical sea travel. In a hypothetical WWIII with the Soviets, this would not have been possible, as they were far more self-sufficient than China currently is. For historical precedent: the real unsung heroes of the Pacific War were the US submarines which destroyed Japan’s economy and its ability to continue the war beyond a certain point. China has no counterstrike to this, or similar tactic to use on America, despite many Americans' fears that China "owns all our debt."

Any power that has this sort of disadvantage should probably not be considered a superpower yet. There is a reason China has recently focused so heavily on their navy. They know their problem and want to rectify it. But it will take time (blue water navies with significant power projection take more than a generation to produce).

Military analysts believe that the US could prevent China from invading and conquering Taiwan, a tiny island right next door. China could certainly invade and dominate adjacent, small, continental nations - but this is well within the ability of a regional power, which is what China is.

China cannot militarily dominate significant nations at significant distances. The US has consistently done this since becoming a superpower; the Soviets consistently did so as well. The bottom line is that China’s military, despite its fearsome size, simply does not have the capabilities that the military of a superpower has.

Political
China’s political clout is heavy in some areas of the world. But, its own neighborhood is fraught with nations that have the ability to constrain it. By contrast, no nation in the entire western hemisphere can ultimately constrain the determined political goals of the US – nor could the nations surrounding the USSR.

The USSR had a great many lesser powers that it had dominated militarily, and then pretended were in an alliance with them, called the Warsaw Pact. The only real comparison of this to China is its relationship with N. Korea. Though China could attempt to create its own version of a Warsaw Pact, it is far from it, and there are significant barriers to its potentiality. For example, Japan and India would move to prevent this – and their aggregate opposition would probably be enough. There were never two countries (or six or eight or twenty) in Russia’s neighborhood which could have prevented Soviet domination of Eastern Europe.

China wants to, but simply doesn't have the sort of world class political clout that an actual superpower wields.

Monday, March 12, 2012

Killing citizens, 5% GDP, and hating Walmart

Obama targeting US citizens?
A friend of mine recently told me that Obama should be impeached because of the drone attack which he signed off to kill a US citizen named al-Awlaki in 2010. Al-Awlaki was a fairly senior member of Al Qaeda in the Arabian Peninsula (AQAP). My friend’s argument was essentially that no US citizen should be deprived of due process. My retort was that the question must first be answered if this is war, or a matter of law enforcement and criminal prosecution.

A reasonable person could accept Obama's and Eric Holder's position, without feeling like it leads to a slippery slope in which the government can begin to preclude due process in a variety of cases. Obviously that's the implicit worry that a reasonable person would have about this situation - a worry that I don't share because of the following reasons:

The president, by directing the armed forces during war, is authorizing those armed forces to kill all senior al Qaeda members. If this task is successfully executed by the armed forces, this has the same result, regarding al-Awlaki, as him being specifically targeted. (Because either way this US citizen would not have the right to a trial, etc.) In other words, the fact that he was specifically selected as a target is irrelevant in practice.

This means that in order to be consistent regarding the imperative of applying due process to all US citizens in all possible situations, one must necessarily argue that the armed forces must specifically avoid killing him in any combat, since they are aware of his existence.Of course this is impractical for many reasons, not the least because they may not always be aware they are shooting at al-Awlaki during a particular firefight. And this is why it matters whether this is war or not. But even if it were not impractical and US forces could be certain to avoid killing him (a very dubious and theoretical proposition, remember), it still brings up a constitutional dilemma. The conundrum is this:

The constitution authorizes the president to direct the armed forces in war. Warfare is conducted against groups of people (whether nations or, in this case, terrorist organizations). Waging war entails killing combatants of that enemy group indiscriminately. Therefore, by waging war the president is implicitly authorized to kill individual members of that group. As stated above, it doesn't matter whether this authorization is specific or general. It happened to be specific.

On the other hand, all US citizens must also be given the right to a speedy trial and a jury by their peers, etc.

Which part of the constitution is more important?

My answer is that warfare is clearly different from criminal prosecution and therefore operates under a different set of rules. Due process is irrelevant in this situation.

But there’s another answer that meets both specifications. According to my friend, someone who does not live in the US, and actively fights against it, would be in effect giving up his citizenship. This should end the question too, since al-Awlaki absolutely meets these conditions.

5 percent GDP growth
Larry Kudlow recently said we have a post-war GDP growth average of 4.6 percent. Last year I was ridiculed by friends because I said with the right president and Congress we can have 5 percent. I said this because one of the GOP candidates (of back then, someone not in the race anymore) said that we must have 5 percent GDP growth for the next ten years. I understand that is not easy to do – but if we’ve almost averaged this for the past 60 years, why should it be hard? Because we’re in a recession? Well, that will soon change, and I think that was the point of the candidate. In any case, I wish one of our leading presidential candidates would again say, “it’s time for America to have 5 percent GDP growth!”

Economies are built upon four principle things: land, labor, capital and innovation. America has more useable land than any other nation, or nearly so. It has an extremely low relative population density, in any case. We are replete with a large labor pool and have a tradition of immigration to increase it over time – plus we have a higher birth rate than almost every other developed nation. We are consistently flush with capital, and unlike Europe and many other places, we rely less on banks to fund new enterprises, and entrepreneurs have more diverse options for getting their businesses going. And finally, not only has America driven the technological progress of the previous century, but we are by no means becoming a second rate engine of innovation. The big picture seems to show that America has the potential for high GDP growth. So, why is it so hard to believe that with the right leadership we can’t have it?

Disliking Walmart
A lot of people dislike Walmart. I don’t. A few years ago they started the whole generic prescription for 4 dollars, some for 10 dollars, making millions of person’s lives easier to get needed medication at extremely low prices. Every other major pharmacy followed suit. At the time a friend who dislikes Walmart said “they were just reacting to market forces, don’t praise them for that.” Well, no other major pharmacy did this, so even if they were merely “reacting to market forces,” they didn’t have to do this (on the other hand, all the other pharmacies clearly followed suit so they wouldn’t lose all their business to Walmart). But medication, I would imagine, is a pretty inelastic commodity relatively speaking. You either need it or you don’t, and price change isn’t going to affect demand drastically. Sure, Walmart probably make this price change to snatch up a larger share of the pharmaceutical market, but I don’t care about motives – I care about how it affects me as a consumer! No business is an exercise in altruistic philanthropy. I only care that it provides service for me that I want at a low price. And they led the way in doing this.

If you can only think of businesses as good for altruistic reasons, then what about this:
I remember five years or so when they donated an equal amount of land to the federal government for conservation to all the land of every retail and corporate real estate that Walmart owned. Essentially, they doubled the amount of land they owned, and then donated half of it for national and state parks and wilderness preserves. There’s no possible way this could give them enough tax breaks to offset this plan (otherwise wouldn’t lots of other businesses do it too?). They weren’t praised for it, even by many environmentalists as I recall at the time! I like businesses that do things like this.

So, then my friend argues that Walmart forces vendors to lower their prices (if you can sell to Walmart, you’re gold as a vendor, so it’s in their interest to give Walmart a great price). But by forcing vendors to lower their prices, it encourages lower product quality. (My friend has an uncle who owns a company which actually sells a nice quality product to Walmart – but is constantly having to lower its quality to meet Walmart’s low price demand). However, while I would feel bad for the vendor if he were my uncle too, isn’t the vendor just a business like Walmart? Why should the average consumer feel empathy for him? You see, from the consumer’s point of view, if Walmart has low quality products, then the consumer can go to another store to buy higher quality products at higher prices! That’s what I do – I don’t buy everything at Walmart because some things are lower quality there. And that’s fine. If Walmart sold things of better quality they couldn’t sell things at their low prices. This is all just economic common sense. I’m glad I have the option of going to different stores with different products. It is our competitive market which allows this freedom for the consumer. Why should Walmart get some kind of special blame for anything? They are a good store that sells products commensurate to their prices. And that’s all they are. Stop hating! It’s unamerican!