Putin's gambit, Obama's puzzlement

Here is a link to a column by Charles Krauthammer on Putin's strategy in Syria.

Krauthammer is on target.

Don Boudreaux gets it right about Pope Francis

Here’s a letter to the New York Times:

You describe Pope Francis as “humble” (“A Humble Pope, Challenging the World,” Sept. 19).  I disagree; the Pope is a gusher of hubris.

A truly humble person does not pronounce dispositively upon matters about which he knows nothing – and Francis, who is forever pronouncing dispositively upon economic matters, knows nothing of economics.  A truly humble person does not presume that entire societies should be remade through the use of force to conform to the details of his ethical fancies – especially when many of the details of those fancies are highly controversial.  A truly humble person does not jet ostentatiously around the globe to advocate the forcible imposition of policies that would deny economic freedom to billions of people – especially when a great deal of economic scholarship and history (including the history of Francis’s own native continent) warn that such a denial of freedom will impoverish the masses.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

Twelve reasons to like Jeb’s tax plan

Here is a comment from Greg Mankiw on his blog.

Twelve reasons to like Jeb’s tax plan

Jeb Bush has released a tax plan.  Here are some elements of it that I find attractive:

1. It lowers the top rate on personal income to 28 percent, the same rate as the bipartisan 1986 tax reform.
2.  It broadens the base by capping the use of itemized deductions.
3.  It eliminates the deductibility of state and local taxes, so low-tax states and towns no longer subsidize high-tax ones.
4.  It maintains the deductibility of charitable giving, encouraging private solutions to social problems.
5.  It reforms the tax treatment of secondary earners and seniors, who are more responsive to tax incentives than primary earners.
6.  It eliminates the stealth marginal tax rates from PEP and Pease.
7.  It eliminates the estate tax, so the tax system no longer penalizes those who want to help their children and grandchildren.
8.  It lowers the corporate tax rate to be close to international norms.
9.  It moves from a global to a territorial tax system, like most other nations have.
10.  It eliminates the deductibility of interest expenses, putting debt finance and equity finance on a more level planning field.
11.  It includes full expensing of investment expenditure, moving the system toward a consumption-based tax.
12.  It expands the earned income tax credit for childless taxpayers, strengthening the social safety net.

Here is an assessment of the plan by John Cogan, Martin Feldstein, Glenn Hubbard, and Kevin Warsh.

"Food insecurity" doesn't mean what you'd think

James Boyard takes the Agricultural Department to task for doing one of the things Government excels at - misleading you.  So, when you end up in a discussion about food insecurity and how many people in the US are starving, etc., Speak up.

Here is the link.

Rob Holland shows you what freestyle aerobatics is about

Here is a link to Rob Holland's third freestyle victory at the World Aerobatic Championship.  Check out the video and the article.

This is flying!!!!

Computer software bugs caused the air traffic control problems at Washington Center

Here is a link to the FAA press release.

There is a moral to this story - and it involves trusting automated systems to do what you expect them to do or the appropriateness of what they are programmed to do.

The Washington Center air traffic control problems and the crash of Air France 447 both involved computer software problems.

The Washington Center problems were caused by a bug - the software had an error that prevented it from doing what the programmers intended.

The Air France crash was caused in part by software that did what the programmers intended.  There, the problem was the failure of the programmers to appreciate how confused pilots would be from computer responses they intended.  One example concerned the stall warning system.

The angle the wing makes with the air is called the angle of attack, AOA.  You can think of it as the angle the wing makes with the direction of travel in the air.  Roughly, wings generate lift that is proportional to the AOA, up to a critical AOA.  Beyond the critical AOA, the airflow over the wing becomes turbulent and the lift is enormously reduced, resulting in a descent in an unstable condition.  This regime is called a stall - the wing is stalled.

The AOA control in an airplane is the stick.  Pulling it back increases the AOA and pushing it forward decreases the AOA.  Thus, the pilot will induce a stall if he holds the stick too far back.  To avoid unanticipated stalls, airliners have what is called a stick shaker and/or stick pusher, along with a computer generated voice that says "stall" or something equivalent.  These safety features operate when the computer senses too high an AOA.

The Air France 447 computer system had these safeguards.  However, the warnings were programmed to stop if the sensed AOA was way too high.  This  reflected the system designers' thinking that such a high AOA indication was more likely due to a system failure than an actual AOA that high.

So, as the pilots pulled back on the stick, they got a stall warning, but due to the weather, the wing went to a way higher AOA and the warning stopped and they no longer thought they were stalled - but they were.  They rode the stall all the way down to the Atlantic, never realizing the problem with the aircraft's responses was that it was stalled.

Coffee Intake, Recurrence, and Mortality in Stage III Colon Cancer: Results From CALGB 89803 (Alliance)

Here is a link to an article about coffee and colon cancer in the Journal of Clinical Oncology.  The article's conclusion reads:

Higher coffee intake may be associated with significantly reduced cancer recurrence and death in patients with stage III colon cancer.

The abstract suggests that the "may be" may be "may not be". :-)

Here is the abstract.

Purpose
Observational studies have demonstrated increased colon cancer recurrence in states of relative hyperinsulinemia, including sedentary lifestyle, obesity, and increased dietary glycemic load. Greater coffee consumption has been associated with decreased risk of type 2 diabetes and increased insulin sensitivity. The effect of coffee on colon cancer recurrence and survival is unknown.

Patients and Methods
During and 6 months after adjuvant chemotherapy, 953 patients with stage III colon cancer prospectively reported dietary intake of caffeinated coffee, decaffeinated coffee, and nonherbal tea, as well as 128 other items. We examined the influence of coffee, nonherbal tea, and caffeine on cancer recurrence and mortality using Cox proportional hazards regression.

Results
Patients consuming 4 cups/d or more of total coffee experienced an adjusted hazard ratio (HR) for colon cancer recurrence or mortality of 0.58 (95% CI, 0.34 to 0.99), compared with never drinkers (Ptrend = .002). Patients consuming 4 cups/d or more of caffeinated coffee experienced significantly reduced cancer recurrence or mortality risk compared with abstainers (HR, 0.48; 95% CI, 0.25 to 0.91; Ptrend = .002), and increasing caffeine intake also conferred a significant reduction in cancer recurrence or mortality (HR, 0.66 across extreme quintiles; 95% CI, 0.47 to 0.93; Ptrend = .006). Nonherbal tea and decaffeinated coffee were not associated with patient outcome. The association of total coffee intake with improved outcomes seemed consistent across other predictors of cancer recurrence and mortality.

Conclusion
Higher coffee intake may be associated with significantly reduced cancer recurrence and death in patients with stage III colon cancer.

Here are some reasons that strike me as justifying skepticism.

The study is a prospective study with no controls.  It is possible that patients who are doing the best and feeling the best drink more coffee.  In that case the causality runs from health to coffee, not from coffee to health.

131 items were examined for a possible relationship.  In a 131 variable regression, the probability that at least one variable will have a statistically significant estimated relationship with the dependent variable is high, even if the there is really no relationship between any of the 131 independent variables and the dependent variable.  The study quotes measures of statistical significance that appear to be unadjusted for this.  If so, they are wildly overstated.

Fraudulent study in the American Journal of Public Health inaccurately claims that states with more guns have more police deaths

Here is a link to a critique of an American Journal of Public Health paper that claimed that states with more guns have more police deaths.

The authors note that the AJPH paper uses faulty statistics, and that the correlation is reversed if better statistics are used.

Stuart Anderson: Trump The Hypocrite: Investing Overseas Fine For Him

Here is a link to Anderson's column in Forbes.

Anderson is right.

A lot of what Trump says about international trade is ridiculous, and he does the things he berates others for doing.  It is not that he and others are doing something bad, it is that they are doing something good and Trump is calling it bad.

John Cochrane: The wrong austerity

Here is a comment from John Cochrane about the Greek version of "austerity".  The message is that Government is dysfunctional again.

Bailout deal brings wave of tax hikes - Ekathimerini.com

A barrage of new tax measures are contained in the new bill presented to Greece’s Parliament

...diesel fuel tax for farmers going from 66 euros per 1,000 liters to 200 euros/1,000 liters from October 1, 2015, and to 330 euros by October 1, 2016. Farmers’ income tax to be paid in advance will rise from 27.5 percent to 55 percent. Income tax for farmers is set to rise from 13 to 20 percent for 2016 and to 26 percent for 2017.

Freelancers will be subject to a gradual increase from 55 to 75 percent in advanced tax payments for income earned in 2015, increasing to 100 percent in 2016. The 2 percent tax break for single payments on income tax is also being abolished from January 1, 2015.

Private education, previously untaxed, will be taxed at 23 percent, including the tutoring schools (frontistiria) that most Greeks send their children to but excluding preschools.

Greece’s vital shipping industry will also be subject to new tax rises. Among other measures, tonnage tax is to increase by 4 percent annually between 2016 and 2020. A special contribution by foreign cargo carriers will remain in place until 2019.

"Austerity" has been a contentious and vague word, descending to an all-purpose insult from the pen of Krugman et al.

But on one point I think we can agree. Steep tax increases, especially steep increases in marginal tax rates on people likely to work, save, invest, start new businesses, and hire others, are an especially bad idea right now. The only hope to pay back debt is growth, and this sort of thing just kills growth. Part of growth is also keeping smart young Greeks in the country, which they are leaving in droves.

Sure, I look at the margins,  incentives, and "supply," while Keynesians look at taxes as just "money in pockets" that drives consumer spending and "demand."  But looked at either way, this is really counterproductive.

In practical terms, there is a Laffer curve, whether of supply side incentives or demand side multipliers. And for paying back debts, the long-run Laffer curve matters:  the effect of taxes on business formation, expansion and growth; on people moving to and from a country. The contentious short-run Laffer curve is on the question whether people with jobs work fewer hours at high taxes. Maybe yes, maybe no, but that's not the issue for Greece or for her creditors.

I think the Europeans think they can just raise tax rates and produce more interest payments. Alas, you have to let a garden grow before you harvest the fruit.