Monday, March 25, 2013

Cell phones while driving

As a driver, I am trying to learn why many states feel like it is so important to stop driving with a cell phone (which 100% of all drivers I know do, none of whom have been involved in an accident) yet our gun laws are the weakest in the world. I found a study here: which presents a number of large problems. It is based mostly off a 100 car study (which is a tiny sliver of a fraction of the total number of cars on the road, the people know they are being monitored, so there is no way to prove it isn't anecdotal) and is not clear on who was in this study they put so much emphasis on. Were they all biased towards the Bluetooth Special Interest Group (yes, they are actually called that) all of whose members donate to candidates' campaigns according to Open Secrets? Some of these corporations are not even American! That suggests a major conflict of interest to me.

According to Nationwide 80% of drivers report driving while using a cell phone. What percent of these drivers have actual problems in their driving that lead to an accident? I present the one large example I have been able to find in an hour's research on the subject (it is important to have large studies to avoid anecdotes which are likely to be misleading, like when you have people who know they are being monitored which will effect their patterns in an opt-in 100 car "study") below based on California drivers. While these laws are popular among large groups, there has been widespread media coverage on this issue, which could have a significant affect on people's opinions.

In the study with a much larger sample size, they say
"In the only other study to use phone records directly linked to driving, Young and Schreiner (2009) studied vehicles with OnStar equipment that included a hands-free phone. OnStar call centers record and store all hands-free calls and all airbag deployments. Airbag deployments per driver-minute were lower during hands-free call periods than during call-free periods. Young and Schreiner concluded that “for personal conversations using a hands-free embedded device the risk of an airbag crash is
somewhere in a range from a moderately lower risk to a risk near that of driving without a recent personal conversation. ... These results are not consistent with the large increase in crash risk reported in epidemiological studies using the case-crossover method [referring to the Redelmeier and
McEvoy studies summarized above]”.

While it isn't conclusive, and has a few issues, it isn't any less problematic than the 100 car study which I don't trust because I don't know who was in the study, what other problems existed while driving, potential bias in part of the participants (were they all employees of the Bluetooth Special Interest Group? It doesn't say.), and given time I will think of other potential problems. Also, by placing them in a situation where they know they are monitored their driving will be affected.

They talk about aggregate data studies and the estimated percent of crashes caused by cell phone use ranges from 2% to 25%. This is not conclusive and a large problem.

Another part of this paper is particularly interesting:

"Nikolaev at al. (2010) used county-level fatal and injury crash rates per licensed driver from 1997 to 2007 to study the effects of New York’s 2001 hand-held cell phone law. After the law, injury crash rates were lower in all 62 New York counties and significantly lower in 46; fatal crash rates were lower
in 46 counties and significantly lower in 10. The analysis did not control for other influences on crash rates over this time period, and both fatal and injury crash rates were decreasing in the pre-law period.

Kolko (2009) studied cell phone law effects using FARS data from 1997 to 2005. Cell phone laws during this period were in effect for more than 4 years in New York, 18 months in New Jersey and the District of Columbia, 
and 2 months in Connecticut. This limited experience suggested that the laws 

reduced traffic fatalities, but only in bad weather or wet road conditions, and 
the laws had no statistically significant effect on overall traffic fatalities."

These two studies are extremely important and far larger and important than a simple 100 car study where people know they are being monitored  Is it possible people are getting used to cell phones? This is uncontrolled. While this study gives us some useful data, I would be interested in if the slope changed after the law or if it stayed steady which would conclusively say that the laws have no effect. Not controlling for bad weather etc. is a major flaw that means this research is only one step in a larger process. More research is needed.

Cnet made a post on this and one commenter said:
"A cell phone is inherently no more distracting than a radio, a screaming child or, even, a thought-provoking conversation with a passenger. The actions of a few stupid individuals (whom probably have the same loss-of-control setting their cruise control) should not be grounds for penalizing an entire population."

Studies need to control for these statistics of radios or screaming children and the paper I am reading from the Governor Highway Safety Association doesn't address that problem. Most papers I have found don't.

We need a new study before our governments continue their laws in favor of bluetooth, I would propose a study like this to be as wide-ranging and inexpensive as possible. It needs to be a longitudinal study across the United States at a minimum stretching back as far as possible. We need to look at the number of traffic accidents and fatalities reported in as many areas as possible over a long period of time, and find what percent of recent traffic citations involve cell phone use, and if there has been an increase since driving with cell phones has come into play relative to the increased number of drivers on the road. If it isn't adjusted for population increase it will be completely useless. This will tell us the following:
  1. Do people get in more accidents today with cell phones and Bluetooth than before?
  2. What percent of accidents involve phones?
  3. What percent of accidents involving phones had other factors at play, bad weather, screaming kids, etc.?
  4. Do Bluetooth laws have any substantial effect?
  5. What is the impact of cell phone use on people of different ages?
  6. What other distractions are in the car at the time of impact and what is the relative frequency of these causing accidents compared to cell phones? E.g. children, radios, talking to passengers etc.
  7. What is the weather when the accident occurs?
This will tell us conclusively whether there is any effect of laws on cell phones, which the paper I link to at the top says is a major problem with the current research. If we are going to make laws we need to have conclusive evidence from a large sample that isn't aware it is being monitored to make the best possible decision which despite all the laws hasn't been done yet. This is most easily done through police reports. has some really good information, and in it demonstrates a hard statistic that out of 491,000 crashes in 6 months in California only 600 or 0.12% were attributed to cell phone use. That is insignificant in my opinion. The other references which are railing against cell phone use are absent of hard statistics. Out of 23 million drivers, only 0.000026% of drivers in California had accidents regarding cell phone use assuming they were all instate. Considering the other statistic I found which shows that 80% of all drivers use cell phones while driving, this percent of total drivers getting into accidents while driving is completely unremarkable. I bet other factors of the same frequency or higher could be found regarding accidents, namely bad weather. This hints we should outlaw driving in bad weather to keep people safe, which of course is absurd. Most papers I find don't give such clear numbers on the percent of accidents attributed directly to cell phones.

A point I wish to make is that surveys do routinely show that a majority of people interpret cell phones as dangerous, but a survey of Europeans during the 1300s on the shape of the Earth would conclusively show that the Earth must be flat because most people agreed on it, which didn't make them right. There are many more examples I can give where a large survey of people would give inaccurate or downright incorrect results. When making policy, leaders need to focus on the most unbiased ways of gathering information. Given the tremendous amount of coverage this issue has received over a long number of years stating how it is dangerous, it is not surprising that large numbers of people are convinced it is dangerous, even though the evidence I have found is to date inconclusive or potentially anecdotal.

This isn't the first time many people have made claims about cell phones being extremely dangerous. Back in the 1990s many people were very worried about them causing cancer based on results from numerous small, inconclusive studies that were heavily publicized; similar to the studies showing how cell phone use is bad for driving. The FDA did an extensive thorough study in 2000 which then conclusively proved that cell phones have a negligible effect on cancer. I feel that this is similar to cell phones and driving, large media coverage on a new tool using small inconclusive studies that don't control for other variables, ignoring wide studies like the California study I cited.

The only thing I have been able to conclusively prove looking at evidence regarding this issue is that there is a massive conflict of interest in our government in forcing people to use Bluetooth while driving given the large amount of money coming into their campaigns. Everything else is inconclusive and needs further research before more laws are made on something we clearly don't understand. Before making a law against all people driving with cell phones we need to prove that it really has an impact in a large study. I would be in favor of making laws on ticketing people who get into accidents due to cell phone use, so that less experienced drivers who are more easily distracted have an incentive to be safe, at least until we have sufficient research from at least one large rigorous study to determine the true effect of cell phone use on driving.

Sunday, March 17, 2013

It's easy to go too far

The new story that people are talking about is how Switzerland just voted to implement wage controls on CEOs. I am as in favor of increasing the minimum wage as the next progressive, and wish to see that taxes on the super rich rise substantially to where they used to be in this country. I suspect they are doing this so that they will pay workers more. They also say they are angry at the corporate fraud that has been going on worldwide over the past few years. However, this method won't work for a few reasons. News story here
  1. The Stock Market. Warren Buffett is the richest man in the world and his annual salary is $100,000, which is a middle class income level. He gets almost all of his gains from capital gains through Berkshire Hathaway's stock, so he mostly pays himself by taking his company's gains and putting them into stock which is where he keeps over 99% of his wealth. Curbing CEO pay will not substantially affect their wealth.
  2. It doesn't affect minimum wage. Since they are just going to put their money in the stock market where most of their money already is, they have no extra incentive to increase the pay for their workers, because they haven't raised their minimum wage, that would be the real step towards improving Switzerland's economy. (which is already pretty good)
  3. It doesn't effect corporate fraud. I completely agree that there need to be strong regulations against fraud from corporations, and that the destruction of reasonable regulations  over the past 30 years in America and Britain (among others I am sure) needs to be reversed. This change in law doesn't effect that massive problem at all, so will be ineffective towards their stated goals.
There also is the possibility that such a radical change in how the uberrich are treated by the Swiss government will cause them to leave Switzerland and move to Germany, France, Austria, Liechtenstein, or Italy where they won't have the regulation, which will mean the Swiss government could potentially lose a lot of revenue. This isn't the case with income tax increases however, because taxes on capital gains only come into effect when you pull the money out; not to mention that Australia already has the most progressive capital gains tax, the most stable economy in the world, and the fifteenth highest concentration of billionaires in the world despite having the most (one might successfully argue only) progressive income tax globally; but capping wages is a totally different matter, even in the unlikely case of it working. It would be far more reasonable to make a balanced approach through taxing capital gains at a progressive rate and cracking down on tax fraud and other international crimes that Swiss corporations commit every year. In short, this is a poor solution and they need to be more rational and less reactionary.

A statistic where America is doing better than counterparts

There are many ways to measure a country's socioeconomic standing, health care markers, suicide rate, unemployment, wages, GDP, GDP per Capita, Geni coefficient, Human development Index, and many many more. In many of these Scandinavia usually comes up on top... except for one...

When it comes down to average household disposable income, the United States comes out on top. We do not come out on top in terms of GDP per Capita, but when it comes down to household income we are number one, ahead of every other country. When it comes down to consumer price index we also beat most Scandinavian countries. Basically, when people say that the United States has an extremely high quality of living in regard to Europe when it comes to consumable goods there is truth in that.

When it comes down to how well this is spread across the economy, the answer of who is better off becomes less apparent. That is the problem with the mean, you can have people at the top who throw the whole scale off, which isn't immediately apparent. This is why comparing with the median household income is so important. Then you see Luxembourg surpasses us. The second problem I wish to present is that it doesn't take into effect how much of the pay goes into paying for expenses, say taxes, houses, transportation, utilities, etc. which makes the whole question a lot more complicated. That is one of the big problems in economics. While a lot of people want to say that one statistic is the #1 holy grail of economic well-being, they forget a few possible situations such as; it doesn't matter if your wage is going up if prices are rising higher, the median wage is rising but most people are worse off, and it truly isn't dreadful that you have a deflation rate of -0.1% if your population is diminishing at -0.5%, which would be a case where the mean wealth per capita is increasing which is good in any case I can think of.

Economics has a lot of parts to it, and it is very important to not get so obsessed with one variable or another that you forget all other variables. They are all important, and they all must be taken in perspective to everything else.

Monday, March 11, 2013

A few issues Obama has failed on.

Now, I agree with President Obama on a number of issues, especially health care, closing GitMo, repealing Don't Ask Don't Tell, free trade with conditions, the stimulus package, and a few other major deals.

However, Obama has made some major mistakes during his Presidency, and nothing is as large as his support of drone bombings. I am currently listening to Rand Paul's filibuster (the first one I have listened to, and he has some good points) and I must agree with him on boycotting John Brennan. The Democrats have failed to stand up for what should be a very easy issue for social liberals. President Obama need to reanalyze his policy, and for people who do not know about the situation, this documentary has a lot of great information as a start.

There are a number of excellent reason why President Obama and the Democrats need to change their policy on drone strikes and people need to pressure their congressmen to change their policy.

  1. There need to be clear laws on how the government may not kill people like this without a warrant to fulfill the 4th amendment, because otherwise there is no way to empirically determine whether a person is guilty besides trying the person in court.
  2. The 4th amendment is being violated with drone strikes.
  3. There should not be a difference in drone strikes within the United States and abroad. When the government starts killing foreigners without the proper due process of law, it is violating the principle of the Constitution. What would we do if all of a sudden Russia started doing drone strikes in other countries, perhaps Alaska, but they do the same excuse our government has made that they are not within their country hence have no protections. This is an inexcusable and pathetic excuse, and it is tragic that there is no party that can form in our country due to our election system that can take seats from Democrats that can reverse this policy.
Indefinite detention is another issue where the President has not made great progress in, especially when it comes to immigration. Frontline made an excellent documentary on this topic. With little coverage of this issue, and no front page coverage in any major news paper, there is no surprise it has not become a major political issue, and with no third party to make it an issue, it is no wonder that the Democrats have no found it reasonable to make it into a major issue, with the constant showdown on debt. No wonder so many Americans feel so disillusioned about our political issue. The Democrats will attack Republicans when they break the law in this way, and a few Republicans will attack the Democrats when the Democrats break the law yet again. This is why we need a third party that will push it through even when they are not in power and that people will be behind the movement and push for very reasonable regulations and this clash between Democrats and the new party will keep each other in check, instead of only clash between the Democrats and Republicans, one of whom always tries to compromise, and one of whom always tries to fulfill as much of their agenda as possible. That is not a good combination, and having a left-wing third party to clash with the Democrats when they fail to follow through with the campaign promises which has happened with Obamacare, repealing Gramm-Leach-Bliley, closing Gitmo, immigration reform, and other important issues.

Another issue that no one has been willing to take up is homelessness, especially homeless veterans. We have failed them 100%. There needs to be a major effort towards eliminating homelessness here in the United States, and when local governments make laws that drive homeless people from the streets while the churches that do help homelessness are stretching their resources to their maximum, never have enough. As a side note, this is why I find Libertarianism to be an untenable downright absurd position, that you can't truly support the quality of life of people without reasonable programs so that people can maintain high qualities life. This is why we need reasonable programs so people can find work, have health care, and access to housing, which the Democrats don't have the political will to pass through, and no incentive to work harder towards their campaign promises. I hope this post will be obsolete soon, but right now it is completely accurate.

Tuesday, March 5, 2013

The Eight Countries, what we can learn from Japan

The following pieces of common wisdom that I hear in today's political debate bother me:
  1. Debt kills economies. I can understand how a deficit that is really high could be a real drain on tax revenue eventually through the marvel of compound interest, but no country is to that point yet, there are other factors at play in Greece.
  2. To have a developed nation you will have a high debt.
  3. The Euro is a doomsday machine, countries need to maintain their own currencies to be viable, to merge countries in one currency is a terrible idea.
I have chosen seven different countries in very different and some very similar economic situations very deliberately to examine this point. When I have extended certain comparisons here I have found that the examples below are not anecdotes. The information here is mostly from the CIA, IMF, and World Bank via Wikipedia:
  1. Australia is one of the most developed nations in the world, ranks second on the human development index, has the 17th highest GDP in the world (top 9%), has universal health care, a debt that is 20% of their GDP, and is currently increasing their domestic investment in mass transit. Their currency is one of the most traded in the world. Their Ease of Doing Business Ranking is 9th. They are a net importer of oil.
  2. Japan is one of the most developed nations in the world, ranks 12th on the human development index (top 6%), has the third highest GDP in the world, has universal health care, a debt worth over 200% of their GDP, unemployment under 5%, and is currently increasing their domestic investment in mass transit. Their GDP Growth rate is -0.7%, and their population growth rate is -0.4%. Their currency is one of the most traded in the world. Their Ease of Doing Business Ranking is 13th. 70% of their energy is from fossil fuels, and are a net importer of oil.
  3. Greece is one of the most developed nations in the world, ranks 29th on the human development index (top 15%), has universal health care, a debt worth 160% of their GDP, unemployment over 20%, and is currently divesting their domestic investment in mass transit. their GDP Growth rate is about -6%. Their Ease of Doing Business Ranking is 78th. They are a net importer of oil.
  4. Germany is one of the most developed nations in the world, ranks 9th on the human development index (top 5%), has universal health care, a debt worth 81% of their GDP, unemployment around 5%, and they have one of the world's best transportation systems. Their GDP Growth rate is between 0% and 1%. Their Ease of Doing Business Ranking is 20th. They are a net importer of oil.
  5. Brazil is one of the fastest growing economies in the world, ranks 85th on the human development index (top 45%), has a mixed health care system, a debt worth 54% of their GDP, unemployment around 5%, and are currently growing their transportation system. Their currency is growing in importance. Their GDP Growth rate is over 2%. Their Ease of Doing Business Ranking is 127th. They are a net exporter of oil.
  6. Equatorial Guinea is one of the fastest growing economies in the world after the discovery of oil, ranks 136th on the human development index (bottom 27%), their health care system is undeveloped, a debt worth 3% of their GDP, and their transportation is aged. Their GDP Growth rate is 18.6%. Their Ease of Doing Business Ranking is 155th. They are a net exporter of oil. They use the CFA Franc with 5 other countries.
  7. Chad is one of the most undeveloped countries in the world, rank 183rd on the Human Development Index (bottom 3%), their health care system is non-existant except for international aid, a debt worth 9% of their GDP, and their transportation is decrepit. Their GDP growth rate is 1.6%. Their Ease of Doing Business Ranking is 184/185. They are a net exporter of oil. They use the CFA Franc with 5 other countries.
  8. Mauritania is another one of the most undeveloped countries in the world, rank 159th on the Human Development Index (bottom 15%), a debt worth over 90% of their GDP, and their transportation network is decrepit. Their GDP Growth rate is 1.5%. Their ease of doing business ranking is 159th. They are a net exporter of oil. They have their own currency.
What can we learn from the standings of these seven countries? First of all, the common beliefs about debt do not hold up to these samples, or any large collection of countries. Rich countries have high debt and poor countries have high debt. Rich countries have low debt and poor countries have low debt. Rich countries spend significant money on education and health care and poor countries don't. The belief that sharing a currency between different nations will harm countries holds no water. 

The trend between these different countries shows that investment from a government can make or break an economy. Chad has almost no economy to speak of after years of war and bad government. Japan has the #1 highest debt in the world measured relative to GDP yet still is seen as a good investment. It is easy to do business in Germany, Japan, and Australia, and they have three of the most vibrant economies in the world and are quick to recover. Australia didn't even have a measurable effect from the recession that occurred outside of Australia. Greece, Chad, and many other African nations have had bad government for a long time, and their economies are suffering. This correlation is very strong. The correlation with debt is non-existent, no matter how large the sample is.

Then why is Japan in so much debt and seeing their economy decrease? First of all, their economy for the majority of the last decade has grown, they have been slower to pull out of this current recession but are on the upward slope at this point, in two or three years the Japanese economy will probably be growing again with or without government intervention, alongside a population that will inevitably continue to shrink. Japan also has one of the lowest tax rates in the world as opposed to Australia which taxes Capital Gains at a very progressive rate. The Japanese stock index fell 50% in 2008, and the people who withdrew those funds have seen very low taxes, which means there is no short-term incentive for keeping your money invested during the hard times because you won't have to pay a lot of taxes, compared to Australia where withdrawing all of your funds in one calendar year will mean you will pay a very high rate of taxation. This means that over the past 4 years Japanese companies have not had the financial resources they need to grow and hire more people, which has caused their economy to slow down, as opposed to Australia's which is still growing. Every other major factor is equal in this situation.

The difference between Germany and Japan is that the German stock index has not plummeted nearly as much as the Japanese stock index, and had a shorter distance to grow back after the collapse. German companies still have capital to grow with, while Japanese companies are strapped for cash. The American market is more like the German market, because the stock markets here in America have rebounded already since 2008 while Japan has yet to finish their recovery.

The root of the matter between the Japanese, Greek, Australian, and German government debts is linked very closely to taxation. All of these countries have very solid safety nets, and the countries whose economies are struggling have very low taxes for capital gains. Risky and dangerous group mentality in these two countries have left businesses with little cash. In Australia, the higher taxes for large withdrawals within a single calendar year have made a very stable stock market where no one would even consider withdrawing their entire stock accounts because of the taxes that would come into place. German banks still have a lot of confidence in them and have capital to work with which means that Germany hasn't collapsed. If there was a panic in the Frankfurt stock exchange like the Tokyo stock exchange (which we haven't seen yet) it would be disastrous to the German economy. That hasn't happened yet which is why German companies are still growing and the German GDP is still rising.

There are a few major points I want to make that follow this data:
  1. Good government matters! Having a good government with responsible policies is good for the economy and makes a tremendous difference.
  2. If you have a debt, the answer is really simple, you are spending more than you take in, and you need to either cut spending or raise revenue. The answer will usually include raising revenue since most government services go to things that must be done and are public goods in developed countries. This means taxes might rise, but on who will always be a matter of contention between greed and economic efficiency.
  3. Progressive capital gains taxes make a huge difference in the way people act in the stock market.
  4. Most economic collapses are due mainly to CONFIDENCE which is why Germany hasn't gone to the dogs but Greece has.
  5. Low barriers of entry to the market are important, as can be seen in this selection (and once again, any large selection) where countries with high barriers to small businesses forming have routinely depressed economies, as opposed to developed countries. When Georgia moved from high barriers of entry to low barriers their economy boomed, and have been seeing GDP growth around 10%.
Paul Krugman alluded to this in one of his posts last month, and didn't have as much data as I have done... it seems the house of cards that is laissez-faire/Reaganomics/austerity is falling down in data. He also reported that austerity apparantly hurts the economy. It feels good to be validated.

Update on 13 December 2013: I claimed Australia is one of the few countries that taxes capital gains as regular income and their economy didn't collapse, but on closer examination while their economy didn't see a recession, their stock market did collapse, making me doubt the accuracy of my previous statement, so it has been retracted. Apologies.

Monday, March 4, 2013

The Left has a choice to make on peace

Foreign policy usually takes the back burner when it comes to politics. Neither party in America pushes hard for a solution to the Palestinian-Israeli conflict, human rights in China or North Korea, or other important issues. The left however has a large split today, and that is between people who support free trade and people who support tariffs, because of the negative effects of some free trade agreements.

Free trade has a number of large benefits. It allows people to find work in places that pay better and escape poverty in poorer countries (which has some disadvantages, nothing is perfect), it allows free travel to come on the scene which can fight the interethnic tensions and wars that often rise when travel is restricted. To have free travel you need free trade.

Free travel, the eventual elimination of customs between different countries and allowing people to move freely will have a lot of power to eliminate hatred between different groups of people. I strongly believe that if the people of Israel and Palestine could talk to each other and there were fewer restrictions on movement the conflict would diminish and they would find they have more in common than they believe. The same political debates, the same hopes, the same dreams, and the far right in both Israel and the PLO will fall making peace possible. I believe that if people from America and Mexico could easily talk to each other and we helped them fight the violence that ravages so many communities the racist tensions that exist with the far right in my country will have less influence. There are reasons why the southern border is a very Democratic area, even in Texas.

To do this requires free trade. Free trade will be the start, and then the left needs to get together and support free travel, and within the mechanisms of free trade labor needs to demand a living wage for an honest day's work. The status quo of no communication between nations brought more conflict and allowed people like Hitler to get entire nations to do the unspeakable, because most people didn't know what the other side was actually like. There is a reason there have been no wars within the EU (an previously EC) since World War II. Personally, I believe free travel is a critical part to world peace, and is worth the costs of free trade. I also don't see how the costs of free trade are permanent.