Thursday, August 25, 2011

Texas Unemployment Miracle

Appearance on Aug. 23, 2011 at 12:35 PM.

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Saturday, August 20, 2011

Newest Fox News piece: Liberals and the Texas Unemployment Miracle

If this is the best that the Democrats can do to attack Rick Perry's Texas, the election might already be over. Democrats feel that they have to attack Texas because they don't have any way to defend Obama's policies. This is how my newest Fox News piece starts:

With Texas Republican Governor Rick Perry officially entering the presidential race last week, liberals have started attacking Texas' economic record.
Paul Krugman in the New York Times went first last Sunday. "So what you need to know is that the Texas miracle is a myth, and more broadly that Texan experience offers no useful lessons on how to restore national full employment," Krugman claimed.
With the latest Gallup poll showing that just 26 percent of Americans approve of President Obama's performance on the economy, liberals have little choice but to try to distort what is happening in Texas.
"In June 2011, the Texas unemployment rate was 8.2 percent. That was less than unemployment in collapsed-bubble states like California and Florida, but it was slightly higher than the unemployment rate in New York, and significantly higher than the rate in Massachusetts. . . ."

The Texas unemployment rate is about one percentage point lower than the national average, and it is true that other states such as New York and Massachusetts also have very similar rates (see the diagram here). . . . .

Please leave comments and link to this piece. Thank you.

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Thursday, August 18, 2011

Krugman's ill considered claims about Texas

Krugman makes several claims about why Texas' economy really isn't looking that good. An economist shouldn't be making the mistakes that Krugman does. Here are his claims:

"In June 2011, the Texas unemployment rate was 8.2 percent. That was less than unemployment in collapsed-bubble states like California and Florida, but it was slightly higher than the unemployment rate in New York, and significantly higher than the rate in Massachusetts. . . ."

Anyone who has been following the US unemployment numbers knows that things are a lot worse than the simply unemployment rate number indicates, and they are worse for a simple reason: people have given up looking for work and have completely left the labor force. People can stop being unemployed either when they get a job or when they give up looking for a job. Obviously, everyone wants to lower the unemployment rate through only the first option. Yet, unfortunately, people giving up looking for work has been the hallmark of the Obama administration. People are supposed to start looking for work during recoveries. It is during a recession that Americans give up looking for work. During the Obama "recovery" about 2.8 million more Americans have given up and completely stopped looking for work.

The data for individual states is available at the Bureau of Labor Statistics website. Texas' unemployment rate is better than the national average, and it is true that there are other states such as New York and Massachusetts who have very similar rates.

So how is it that Texas is creating all these jobs but not showing a drop in the unemployment rate? The answer is that unlike Texas workers in the nation as a whole as well as Massachusetts and New York have completely given up looking for work. While Texas' labor force has grown by 350,000 since the recession ended in June 2009, Massachusetts has remained virtually unchanged and New York's has fallen by 140,000. Keeping a similar unemployment rate to Texas isn't quite the wonderful accomplishment when so many people have given up looking for work. The rest of the states will suffer a long term unemployment problem that Texas won't face because eventually when the economy does recover those who have given up looking for work will start looking again.

"It’s true that Texas entered recession a bit later than the rest of America, mainly because the state’s still energy-heavy economy was buoyed by high oil prices through the first half of 2008. . . ."

If Krugman can see significant swings in either the number of people employed or the number in the labor force as gas prices change, he has better eyes than I do. Krugman notes that Texas benefited from gas prices rising in 2008, but he fails to mention how Texas still did well relative to other states even when gas prices plummeted in late 2008 and stayed low through most of 2010.

"Also, Texas was spared the worst of the housing crisis, partly because it turns out to have surprisingly strict regulation of mortgage lending. . . ."

The reason that Texas didn't have a meltdown is largely because it didn't have the huge rise in housing prices preceding it and the reason that happened was because Texas has relatively few zoning regulations that restrict growth.

The Washington Post's Brad Plumer and Harold Meyerson largely get marching orders from Krugman, mentioning Texas' "oil boom" economy and then going after the high rate that Texans earn the minimum wage.
Plumer: "And Texas’ job surge hasn’t necessarily led to high-paying jobs: The state boasts the highest percentage of minimum-wage workers in the country, and its per capita income still sits below, say, California’s. . . ."

Meyerson: "It has the fourth-highest poverty rate of any state. It tied with Mississippi last year for the highest percentage of workers in minimum-wage jobs. . . ."

Unfortunately, neither of these writers really understand what these numbers mean. The biggest problem with both sets of claims is that Texas has the second largest percent of its population under age 18 at almost 28 percent. (Mississippi by the way is 8th.) Children ages 0 to 17 don't make much income if any, but obviously they go into calculating per capita income numbers. If you want to compare what people are making across states, a much more useful approach is to compare GDP per adult and in 2008 Texas ranked 8th, not too shabby. California ranked at 11th. This high rate of young people also dramatically raises the rate that people in the population are earning the minimum wage. Given that single women with kids make up such a large portion of those in poverty, it isn't surprising that this high rate of having children also drives up the poverty rate.

Another discussion of Krugman's claims can be found here.


Friday, August 12, 2011

The Dennis Miller Posts interview on "The Danger of Gun-Free Zones"

For those interested, I had an interview with Dennis Miller available here. Dennis was nice enough to have me on his show again, and he was extremely nice to let me talk as much as I did (I probably talked much too much). Anyway, it is well worth it to subscribe to Dennis's show.

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Monday, August 8, 2011 Should Students Be Allowed to Carry Guns on College Campuses?

Students for Concealed Carry had their National Convention today. There were a range of different talks from victims of gun-free zones; a debate that I participated in with a representative of the Brady Campaign starts about 28 minutes into the clip and lasts for 50 minutes; some academics such as Nelson Lund, Bob Cottrol, and Jim Purtilo; and Alan Gura. The link to their video of the event is available here. The entire video is 3 hours and 32 minutes. I think that this convention went very well.

C-SPAN has placed this event at the top of its website page right now.

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Sunday, August 7, 2011

Responding to Jack D'Aurora's piece in the Columbus Dispatch

A little over a week ago, Jack D'Aurora had a pretty amazing piece in the Columbus Dispatch (available here), where Mr. Jack D'Aurora made the mistake of accepting what Ayres and Donohue wrote in their 2003 law review piece as being accurate. The mistakes listed below are basically mistakes in the Ayres and Donohue paper. My Letter was finally published on Saturday (available here).

Will letting law-abiding citizens carry concealed handguns deter criminals and offer protection? Or is Jack D'Aurora right (Forum column, July 29) when he states that “heated arguments can escalate into shootings” and that criminals will become “more inclined to pack heat”?

He alleged that my research, published in my book More Guns, Less Crime, ignored such concerns. But obviously D'Aurora did not trouble himself to actually read any edition of my book.

According to D'Aurora, my research found a benefit from concealed-handgun laws merely because it covered the time period from 1977 to 1992, and, supposedly, if I had studied the seven years up to 1999, the results would have been different.

This is absurd. Even the first edition of my book covered up to 1994. I updated the evidence with each new edition, and by the third edition in 2010, I covered county- and state-level data for all the years from 1977 to 2005. No matter the time period, the results remained very similar.

D'Aurora also conveniently ignored the massive amount of work by other researchers during the past 15 years. Among peer-reviewed studies in academic journals by criminologists and economists, 18 studies examining national data found that right-to-carry laws reduce violent crime, 10 indicated no discernible effect, and none — absolutely none — found a bad effect from the law.

D'Aurora further mischaracterized the law-review article he cites by Ian Ayres and John Donohue. That paper claimed to find a small temporary increase in crime, subsequently followed by a downward trend in crime rates. Other evidence of theirs shows no temporary increase.

His accusation that I “did not account for the large increase in crack cocaine use” is false: I did so in five different ways, such as studying county-level cocaine prices.

Questions about whether heated arguments can escalate into shootings were not ignored. If permit holders did these things, they would be put in jail and lose their permits. But permit holders are extremely law-abiding. In Ohio, about 178,000 had concealed-handgun permits last year, but just 206 — 0.1 percent — had their permits revoked. Most revocations involved people losing their permits because they moved out of state, died or decided not to hold their license anymore.

Other states provide more detailed data. Florida is typical. From Oct. 1, 1987, to June 30, 2011, more than 2 million people were issued permits, with the average person possessing one for more than a decade. One hundred sixty-eight (about 0.01%) had their permits revoked for any type of firearms-related violation, mostly for accidentally carrying a concealed handgun into a gun-free zone.

There is no research showing that criminals are more likely to “pack heat.” In fact, right-to-carry laws cause gun crimes to drop more than non-gun crimes.

Finally, the most telling fact may be this: No state that has adopted a right-to-carry law has ever even held hearings on rescinding it.

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Friday, August 5, 2011

Newest Fox News piece: Looks Like We're In a Recession, Not a 'Recovery'

My newest piece at Fox News starts this way:

There seems no place to hide. Americans have seen the value of their stock portfolios crash this week. The S&P 500 and NASDAQ have both lost about 8 percent of their values, and they are headed down again today.
This week the Japanese NIKKEI stock market also lost over 9 percent of its value. And the UK's FTSE has lost over 11 percent. The German DAX about 13 percent.
So much for promises that if we only passed the debt ceiling increase the stock markets would be calmed.
Everyone was waiting for today's unemployment numbers to be released. The 117,000 new jobs temporarily lifted spirits because the number was better than what many had expected, but it was still not enough new jobs to even absorb more than three-quarters of the growing working-age population. Unemployment fell because 193,000 more people simply gave up looking for work.
Indeed, people giving up looking for work has been the hallmark of the Obama administration. . . . .

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Newest Fox News piece: The S&P Downgrade Is a Wake Call for All Americans

My newest piece at Fox News starts this way:

When Standard & Poors downgraded Spain's bonds from AAA to AA+ in January 2009, its interest rates increased from 4.1 to 4.3 percent.
When the same ratings agency downgraded Ireland's from AAA to AA+ in March 2009, their interest rate rose by about 0.4 percentage points.
So what does that mean for Standard & Poors in terms of downgrading the U.S. bond rating?
With our $14.6 trillion in national debt, raising the U.S. government interest rates by the same amounts would eventually add about $29 to $58 billion a year in increased interest costs -- small change when we are already facing a $1.63 trillion deficit this year. And not all of that increase would be immediately felt since we only face the higher interest rate on newly issued bonds.
The problem with these downgrades is that they have a tendency to quickly spiral out of control. . . .

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Tuesday, August 2, 2011

Newest Fox News piece: The Debt Deal's Three Biggest Winners and Losers

My newest piece starts this way:

With a debt ceiling agreement finally in place and the Senate on track to approve it today congratulations are being handed out all around. 

Armageddon and catastrophe has supposedly been averted. And politicians are rushing to put the best face on the deal. 

Unfortunately, the new agreement does not accomplish as much as many had hoped, or as much as it should have, in terms of curbing spending and continued deficits. This explains why stock markets continued to fall despite the supposedly "good" news. The reason is because, once again, politicians are continuing to push the problem to the future. 

Here's a look at the winners and losers in the aftermath of the "catastrophe" that's just been averted: 

The Winners:

1. Stimulus Recipients and Big Government: President Obama’s “Stimulus” was supposed to just be temporary. Alas, the debt agreement locks in big government and the extra spending President Obama initiated will continue. 

After government spending soared by 28 percent from 2008 to 2011, the debt deal only starts cutting a meager $22 billion next year. That is an incredibly trivial cut -- just 0.6% of expenditures planned for next year. The cuts agreed on are heavily back-loaded towards the end of the 10 year budgeting cycle, when President Obama and many members of Congress will be out of office. 

Short of a constitutional amendment mandating balanced budgets, . . .

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