How Trump Won (yes won) the Shutdown and What We Can Conclude About Immigration, Income and Crime

The general consensus is that Trump lost the government shutdown. I think he won it. Before I explain why, let's look at some data.

There is nothing like data to undermine certainty.

Donald Trump and Ann Coulter believe that more immigrants means more crime and higher unemployment and / or lower wages. Let's take a look.

First, let's look at a smattering of cities with a population between 200,000 and 300,000. 

Median household income varies greatly, from about $34k a year in Buffalo, NY to $96k in Irvine, CA. Irvine's population is about 40% foreign-born, 10X Buffalo's 4%. Irvine's income is nearly 3X as high.

The correlation between these two variables - income and immigration -  is not perfect but is positive through most of the cities. Immigration and incomes rise and fall together.

What about violent crime? Surely it will rise as the percentage of immigrants goes up, no?

Well, in the above table we can again look at the two cities with the highest and lowest percentage of immigrants to see how crime and immigration are correlated. In Buffalo, violent crime is 179% higher than the national average. That is nearly 3X higher. By contrast, in Irvine violent crime is 86% lower than the national average. (It could only be 100% lower for the simple reason that once violent crime drops to zero it cannot go any lower. 86% lower than the national average is kind of amazing.) We can, again, look at a graph to see a line that is the best fit through all those points.

It is obvious that factors other than immigration change crime rates but as the percentage of immigrants in a community rises, crime falls. 

What about the ten biggest cities in America, you ask. Immigration might be good for mid-size cities but what about cities of millions? (And as it turns out, only the country's ten biggest cities have populations of more than a million.) Well, I have a table for that as well.

Of America's ten biggest cities, Philadelphia has the lowest income and San Jose has the highest. And as it turns out, Philadelphia also has the lowest percentage of immigrants and San Jose has the highest. Immigrants make up only 13% of Philadelphia's population and 39% of San Jose's. Median household income in San Jose is nearly $100k and in Philadelphia is just over $40k. San Jose has 3X the immigrants and double the income.

Above is the graph plotting the relationship between these two variables for the cities over a million. 

Finally, we take a look at the relationship between the percentage of foreign born and violent crime rate in America's biggest cities. Chicago is the most violent of America's biggest cities and 21% of its population was born outside the US. San Jose is the least violent (its violent crime runs 6% lower than the national average) and has 39% immigrants.  The graph looks like this.

Now there are a few arguments you could make when faced with this data. One, you could say that immigrants move into more affluent or peaceful cities but don't help to create affluence or safety. Perhaps the best cities would be even better if not for the percentage of immigrants who move there. The data moves together but immigration doesn't cause higher incomes or lower crime, you say. Perhaps. The fact that the median home price in San Jose is over one million dollars and in Philadelphia is only $158k suggests that it is harder - not easier - to move into these safer, more prosperous areas. 

Or you could argue that immigration has a fairly weak correlation to income and crime, even if it is in the right direction for pro-immigration arguments. The R-squared measure is a simple measure of how well a line fits through the data; at best (median income and foreign-born % in cities of ~250,000) these move together about 40% and at worst (the relationship between violent crime and immigration in America's ten biggest cities) about 24%. So you might say, "Well sure, it seems positive but obviously other factors are a bigger determinant than immigration." And you are right. Education, infrastructure, research and development investments, culture, and social connections are all factors that matter. Immigration is just one dimension of what makes a city great. But the data nonetheless suggest that it IS one dimension of what makes a city great.

Those are valid - but fairly weak - arguments that you could make to discount the relationship between immigration and incomes or crime.

What is not valid to conclude from this data? Higher rates of immigration lower household income or raises crime. That simply does not fit the data. Given the data you could (sort of) challenge the claim that immigration makes a city better but you could not argue that it makes cities worse.

What does this mean? It means that Congress should ignore Trump's demands that they take immigration more seriously. Why? Because immigration is - at the least - a non-issue and - at most - is actually a huge positive that we should encourage rather than discourage. And in spite of that, Trump has forced House and Senate members to treat immigration as if it is an important issue to address. (They have three weeks to "resolve" the issue before another shutdown could hit.) It simply is not. And this is an argument that I've made recently here. Trump has won the shutdown because he has forced Congress to take a non-issue seriously. He has won because he has managed to change the focus of DC onto what he imagines is real, like getting your parents to lose sleep in order to fight the monster under your bed. It is such a waste of leadership potential to solve imaginary problems rather than real ones. (And more generally, a waste of leadership potential to fix old problems rather than create something new. Every successful company puts more money into new product development than it does product repair.)

In the minds of Ann Coulter and Donald Trump, you could predict unemployment rates based on immigration rates. Immigrants steal jobs, they tell us. So, if one city of two million had no immigrants its unemployment rate would be zero and if another city of two million had a million immigrants, its unemployment rate would be 50%. And of course this is an inane way to think about an urban economy, almost as if you thought that brown bodies and white bodies were affected differently by gravity. When a person buys gas or groceries, the market hasn't a clue whether they were born within a block of that place or half a world away. 

There are any number of issues that congress should consider if they are intent on raising income, lowering crime and making life better. Immigration is not one of them. If anything, the data suggests that Congress should do what it can to increase immigration, not decrease it.

We're suffering from the worst recorded case ever of an old man talking back to his TV. Terrifyingly, making his narcissism seem justified rather than delusional, his TV then talks back to him. Trump is on a closed-circuit loop with Fox news. Facts have little influence on his thinking. He gets his talking points from Fox and then they report on what he has talked about. Like Hendrix's guitar, the feedback just increases the volume and the distortion as Trump talks to FOX (Frightened Old Xenophobes) and FOX talks back to him and Trump's story escalates from a campaign to a presidency to a Monty-Pythonesque tragedy.

My two cents? Congress should ignore his insistence that they treat immigration as a real problem and instead either insist on studies as prelude to policy or even celebrate immigration as a positive. It's time to de-escalate the feedback with facts before we are all made as crazy as Trump or waste anymore time chasing his hallucinations.

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Quick note: this data is for foreign born. It makes no distinction between legal and illegal immigration; the two move together.
https://cis.org/Report/Connection-Between-Legal-and-Illegal-Immigration

Two Lies to Support the Border Wall

In the late 1990s, illegal border crossings peaked. It was a crisis of near-apocalyptic proportions as immigrants streamed into the US in record numbers.

Wait. Wait. No. That did not happen.

In the late 1990s, illegal border crossing peaked. That's true. It's also true that from 1997 to 1999, the American economy created 3.2 million jobs per year (that's 824k more jobs a year than the economy has created in the last three years). Violent crime had fallen by a third from early in the decade. It was no crisis. No apocalypse. 

And illegal border crossings were 5X what they are now. 5X.

So, two lies in the claim that our current situation is a crisis for which we should close the government. The first lie is that illegal immigration is now high. It's not. The second lie is that illegal immigration drives a spike in unemployment and crime. It does not. 

#factsnotfear

Trump's Bold Solutions to Imaginary Problems: Address to Joint Session of Congress on the last day of February 2017

I did not see Trump's speech but read it. My initial reaction is that it was filled with about equal number of promises that are too general to ever be broken and promises to fix problems that don't exist. He made general promises more akin to "I'll be a great husband," rather than specific, measurable promises like, "I'll massage your back, do the laundry but not cook dinner." He is going to be a great president but we don't really know what he means by that. And he repeatedly framed improving situations as awful, promising to fix what hardly seems broken.

What Trump said ...

My commentary ...

A new chapter —
(APPLAUSE)
— of American greatness is now beginning. A new national pride is sweeping across our nation, and a new surge of optimism is placing impossible dreams firmly within our grasp. What we are witnessing today is the renewal of the American spirit. 

That's an interesting spin on lowest approval ratings ever for a president''s first month. Or maybe he meant to say that a new surge of optimism is the impossible dream when so many Americans disapprove of your performance.

Dying industries will come roaring back to life ... Our terrible drug epidemic will slow down and ultimately stop, and our neglected inner cities will see a rebirth of hope, safety, and opportunity.

Trump continues to play the role of economic savior, promising to bring back the dead or dying. There's a little problem with this plan: manufacturing as a percentage of the American workforce has been steadily falling since about 1930. It's not a product of NAFTA or China joining the global economy. It's a product of our industrial economy becoming an information economy and of manual work being steadily automated.  He's exaggerating inner cities' plight - rural America is shrinking faster than any downtown - but if he really wants to revive an area he won't do it with manufacturing and mining jobs.

Since my election, Ford, Fiat, Chrysler, General Motors, Sprint, Softbank, Lockheed, Wal Mart, and many others have announced they will invest billions and billions of dollars in the United States and will create tens of thousands of new American jobs.

For reference, each month the America economy creates (and destroys) millions of jobs. Millions. (The difference between the number created and the number destroyed gives the net number of jobs gained, which is typically between 100,000 to 300,000 during a healthy expansion, as we've had in the 6 years.) Making deals with companies that may add tens of thousands of new jobs is a rounding error in a typical month - much less in a 4 year term - in this delightfully dynamic economy. 

The stock market has gained almost $3 trillion in value since the election on November 8, a record.

This is great. It also has pushed P/E ratios to a heady level that suggests it'll be tough to continue at this pace for another four years. Even so, this rise is rational: with tax cuts and deregulation, short-term profits should go up. It will take longer to find out what sort of trade deals he'll make and what that will do to the economy.

We have begun to drain the swamp of government corruption

Trump continues to make personal deals with foreign countries. The most suspicious example of this was China granting him a coveted and long-denied trademark just days after his win. This trademark will be worth millions to Trump.

We want all Americans to succeed, but that can’t happen in an environment of lawless chaos.

Lawless chaos? Violent crime has been steadily dropping since about 1980. Illegal immigration has been steadily dropping since at least the Great Recession. Trump is determined to take drastic measures to solve two imaginary problems: lawless chaos and a surge in illegal immigration. It's like a the father of a teenager cracking down on bed wetting, a problem that had disappeared about ten years earlier. 

Not only has illegal immigration slowed in the last 8 years or so, immigrants are less likely to commit crimes than native born Americans, as can be see in this graph.

Tonight, as I outlined the next steps we must take as a country, we must honestly acknowledge the circumstances we inherited. 94 million Americans are out of the labor force.

The economy Trump inherited is in stark contrast to the one Obama inherited. 76 months in a row, the economy has created jobs; breaking the old record of 48 months by roughly 2.5 years. In the year before Obama took office, the economy lost 4.4 million jobs; in the year before Trump took office, it created 2.2 million jobs. Put differently, the economy created 6.6 million more jobs in the year before Trump took office than it did in the year before Obama did. So how can Trump make it sound like he's inherited economic carnage? 

This 94 million out of the labor force number is one of the weirdest that Trump has cited. How does he arrive at this number he's repeatedly mentioned? He uses the labor force participation rate. This is a measure of folks not working or looking for work who are over the age of 16. If you are a 28 year old house husband or retired at the age of 71 or a 19 year old at university, you are counted as a non-participant. My 81 year old, retired mother is part of this 94 million. If you are over 16 and are not working or looking for a job, you are part of Trump's 94 million.  

We have measures of the labor force participation rate that date back to January of 1948. That year, life expectancy for men was 64.6. Today life expectancy is 76.2. The percentage of people who are retired now is higher than it has ever been - in part because people are living longer and in part because people are so much more affluent than they were in 1948. This alone would drive down labor force participation rates. But to offset that, women have joined the workforce in larger numbers.  These are just two of the demographic changes over time that have shaped this number since 1948. What is the net effect of these and other factors? 

Between 1948 and 2017, labor force participation rate has averaged 62.9%. What is it as of January 2017? 62.9%. Since 1948, the rate has ranged from 58.1% to 67.3% but the labor force participation rate for our most recent month is exactly what it has averaged since we began measuring it. To say that it's a problem now is to say that it has been a problem since just after World War II. Funny that no one has mentioned it before Trump, much less used it as proof that they'd inherited an economy in terrible shape because by that measure, every president has inherited an economic mess.

When Trump says that 94 million Americans are out of the labor force, he's decrying the fact that young mothers, old retirees, the idle rich, the handicapped and others have chosen not to work- in roughly the same proportion as they have since the end of World War II nearly 70 years ago. But how else to make an unemployment rate of 4.7% (a rate one standard deviation below average) sound bad? To say that he's inherited an awful economy is like saying that nobody since Reagan won by a wider margin of electoral college victory; it's wrong unless you discount all the other data points.

Summary

Trump's speech promised bold solutions to the imaginary problems of labor force participation rates, illegal immigration rates, violent crime and a loss of manufacturing jobs. Labor force participation rates are exactly at their historic average, and violent crime and illegal immigration have been steadily trending downwards for decades. A dwindling number of manufacturing jobs is a sign of progress in the same way that a dwindling number of farming jobs was. During the 1800s the American economy transitioned from an agricultural to industrial economy; during the 1900s, it transitioned from an industrial economy to an information economy.  These two transitions have meant a dwindling percentage of the workforce has been needed for farming and manufacturing. It's not a sign of economic apocalypse that we no longer have 90% of the labor force farming; it's a sign of progress.

Trump has consistently shown a disinterest in facts but even when he does pay attention to a current number he fails to put that within larger trends. It's tough to understand what should happen when you don't even understand what has happened. Trump's grasp on the situation is about as tenuous as his grasp on the facts.

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This from CBS news on the 94 million not in the labor force.

https://twitter.com/CBSEveningNews/status/837085323679105028
14.6 million are students, 43.7 million are retired, and 28.4 million are disabled or out of work for family reasons (looking after a family member like a child or elderly parent).

Judge Incarcerates 4,000 Children (Some as Young as 10) for Profit and Is Fined Less Than His Profit

US judge receives 28-year jail term for his role in kids-for-cash kickbacks

Mark Ciavarella Jnr ordered to pay $1.2m in restitution after he was found to be a 'figurehead' in the conspiracy

This poor excuse for a human being, Judge Mark Ciavarella, was putting kids as young as 10 years old into prison. Not for the crimes they'd committed but instead for kickbacks from the for-profit prison system into which the kids were sent.  Hard to imagine a more vile piece of humanity than Ciavarella. The Pennsylvania Supreme Court overturned 4,000 of his convictions. 4,000. I guess it's easier to do such things when you've already sold your soul.

His sentence was not harsh enough. A 28 year sentence to a 61 year old man might be enough, but a million dollar fine for a million dollar profit is not. For other judges and for-profit prisons, this could just be seen as a cost of doing business, and not even a high enough cost to stop such practices.

The reason it is not enough is because the odds of getting any sort of fine are so low.

The odds that Ciavarella would be caught were less than 100%. There was maybe a 20% chance, say. The odds that the DA would decide to prosecute were less than 100% - perhaps about 50%? And finally, the odds that he'd be found guilty were less than 100% - again, maybe 70%? (And yes, I'm making up these numbers; the only thing that I know for sure is that the odds of his making it to each stage are less than 100% and by 10's of percent.) So by these calculations, the odds that Judge Ciavarella would be caught, prosecuted, and found guilty were about 7% (20% X 50% X 70%). 

So if you are another judge who is amoral enough to look at the incarceration of the young as a for-profit venture, you could easily make the following calculation. "I could make a million dollars by giving out the maximum sentence to these kids. Money I'd get in kick backs for the cost of their incarceration. Money paid by taxpayers to the for-profit prison company." Then you'd have to ask about possible costs. By the above calculations, the probable cost of this venture would be about $70,000 (7% of the million). Now you can make your own calculations about probabilities but no matter how you do it, you'll find that a fine equal to the reward for criminal behavior is inadequate. It would only make sense if the odds of being caught, prosecuted, and found guilty were 100%. They're not. 

I'd suggest that the judge's fine should have been at least $15 million, not merely $1.2 million. And who could make up the difference? The for-profit prisons. 

Fewer Women - More War & Crime?

From the Guardian

Unnatural Selection by Mara Hvistendahl charts how the trend towards choosing boys over girls, largely through sex-selective abortions, is rapidly spreading across the developing world.
While the natural sex ratio at birth is 105 boys born for every 100 girls, in India the figure has risen to 112 boys and in China 121. The Chinese city of Lianyungang recorded an astonishing 163 boys per 100 girls in 2007.
The bias towards boys has been estimated to have caused the "disappearance" of 160 million women and girls in Asia alone over the past few decades. The pattern has now spilled over to Azerbaijan, Georgia and Armenia, the Balkans and Albania, where the sex ratio is 115/100.
The unnatural skewing towards male populations has become so pronounced in recent decades that Hvistendahl, a writer for Science magazine, says it has given rise to a new "Generation XY". She raises the possibility that with so many surplus men – up to a fifth of men will be single in northwestern India by 2020 – large parts of the world could become like America's wild west, with excess testosterone leading to raised levels of crime and violence.
"Historically, societies in which men substantially outnumber women are not nice places to live," Hvistendahl writes.

While parents in some countries seem to prefer boys to girls, it is men who commit most crimes, particularly violent crimes. Men are 4X more likely than women to commit a violent crime here in the US. History suggests that these numbers worsen as the percentage of men rises. This doesn't bode well for the the safety of China's streets or even the world, as China becomes an even stronger military power.

Vick and the Humane Treatment of Animals

"Our beef was raised humanely," is the kind of line you're increasingly likely to read in the finer restaurants. I have to confess to feelings of ambivalence on this. One, they are animals so what does it mean to raise them humanely? Two, if you are going to slaughter the poor creature for food, is it really better to end a happy life than a miserable one?

Which brings me to Michael Vick, the talented quarterback who did time in prison for sponsoring dog fights. I know that the dog lovers are going to hate me for this, but in a country of carnivores, how egregious is it, really, to sponsor such fights? I'm sure of two things: the dog fights are beastly affairs and they are less repulsive than what goes on in a slaughterhouse, something some of us condone each time we eat meat.

Vick spent time in prison for his crime. And then, finally, a team has signed him - while people protest. I'm not sure why this is so controversial. He is supposed to have his life ended because of this crime that already took, what, two years of his life?

I am weary of protesters who essentially wish they were the judge who sentenced the criminal. Some folks wish the sentence had included more time (what? life for a dog fight? really? if not life, how many more years or months would have made you happy?) or prohibited him from making a living once he was released (another absurdly punitive sentence). Vick did time. Lost a lot of money. Lost the opportunity, likely, to set some career records. And now he's out, ready to work again. This issue is over. The point has been made. Let the man get on with his life.

The World Series and Instant Karma

A couple of weeks ago, I heard an amazing story from my old buddy Jim. He lived in the Bay Area during the 1989 Earthquake. His roommate had just bought a BMW and went to watch the San Francisco Giants - Oakland A's world series game. As if it were not drama enough to have teams from across the Bay play each other, the earthquake hit just before the game - an earthquake that was so severe that officials decided to postpone the game until later. (We Californians scoff at Pennsylvanians who think that rain is reason enough for a delay - we play until devastating earthquakes hit.)

Jim's roommate went out to the parking lot to drive home. There was, however, a little problem. His car had been stolen.

It took the police only hours to find his car. When the earthquake hit, the four men who stole it were driving on a section of bridge that collapsed. The car had been crushed down to about two feet high and the car thieves were instantly killed.

Yesterday, the Phillies completed a game that spanned three days because of weather. It is not obvious that the good people of Philadelphia believe in karma the way folks in the Bar Area do; I have heard no reports of car thieves whose enjoyment of the series was interrupted by this same bad weather.