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	<title>Elliott Morss</title>
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	<description>Economics, Global Finance, Investment Strategies and Development.</description>
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		<title>US Guns: What Should Be Done?</title>
		<link>http://www.morssglobalfinance.com/us-guns-what-should-be-done/</link>
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		<pubDate>Thu, 16 May 2013 14:36:29 +0000</pubDate>
		<dc:creator>© Elliott R. Morss, Ph.D.</dc:creator>
				<category><![CDATA[Drinking]]></category>
		<category><![CDATA[Drugs]]></category>
		<category><![CDATA[Featured Articles]]></category>
		<category><![CDATA[Obesity]]></category>
		<category><![CDATA[Other]]></category>

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		<description><![CDATA[Efforts to control cigarette, alcohol, auto and overeating deaths are reviewed to determine what should be done to control gun deaths.]]></description>
				<content:encoded><![CDATA[<h4><b>Introduction</b></h4>
<p>Like bombs, guns are dangerous: <a href="http://www.cdc.gov/nchs/fastats/injury.htm">in 2011, 87 people were shot <b>every day</b> – 54 suicides, 30 homicides</a>. In addition, 851 people were shot unintentionally, like what happened a week back &#8211; a 5-year old boy who was given a gun as a present by his parents and unintentionally shot his 2-year old sister.</p>
<p>In earlier pieces, I have reflected on how we have handled other known killers: cigarettes, alcohol, motor vehicles, and overeating. I have also documented how many deaths have resulted because certain drugs are illegal. This article explains how lessons learned from our efforts to control these other killers apply to guns.</p>
<h4><b>Data on Killers</b></h4>
<h4><b>   a. Smoking and Drinking</b></h4>
<p>Every year 400,000 Americans die from smoking. However, it can be argued that alcoholism is even more dangerous. While far fewer die from alcoholism than cigarettes (<a href="http://www.cdc.gov/alcohol/ardi.htm">the CDC</a> estimates that 79,000 deaths annually for the years from 2001–2005 were attributable to excessive alcohol use), <a href="http://www.morssglobalfinance.com/dangerous-addictions-what-are-they-where-are-they-worst/">I have argued</a> that this disease is even more dangerous because of its broader impact &#8211; injuries and deaths from driving, fires, falls, drowning, homicide, suicide, family abuse, and loss of jobs.</p>
<h4><b>   b. Motor Vehicles and Overeating</b></h4>
<p>There are between 30,000 and 40,000 motor vehicle fatalities every year with a significant portion attributed to drunk drivers. <a href="http://www.morssglobalfinance.com/dangerous-addictions-what-are-they-where-are-they-worst/">Overeating has become a real and growing killer</a>. The United Nations reports that even in developing countries, the number of obese children now exceeds the number malnourished. Being overweight contributes getting breast and other cancers, various heart diseases, high blood pressure, high cholesterol and glucose levels, and a wide variety of physical ailments.</p>
<h4><b>   c. Drugs</b></h4>
<p>According to the <a href="http://wonder.cdc.gov/">Centers for Disease Control and Prevention</a>, 38,329 people died of drug overdoses in 2010. Most notably, 22,134 died from legally prescribed drugs. US deaths from illegal drugs were about 17,000, far less than US-supported drug interdiction efforts worldwide.</p>
<h4><b>Restrictions</b></h4>
<p>A brief summary of what has been tried to restrict these known killers is given below.</p>
<h4><b>   a. Smoking</b></h4>
<p>Cigarettes are legal, but there are age restrictions on purchasers and heavy taxes that are in part used to finance anti-smoking information campaigns In addition, smoking is not allowed in most public buildings. This approach appears to be working: the <a href="http://www.cdc.gov/tobacco/data_statistics/tables/trends/cig_smoking/index.htm">CDC reports</a> the percent of adult smokers has fallen from 42% 1965 to 19% in 2011.</p>
<h4><b>   b. Alcohol</b></h4>
<p>The US engaged in a very interesting experiment between 1920 and 1933 &#8211; Prohibition: it banned the manufacture, transportation and sale of alcohol. What was learned?</p>
<ul>
<li>Alcohol consumption did not end, despite significant efforts by Federal, state and local governments;</li>
<li>Making the production and sale of alcohol illegal simply meant the market was served by criminals;</li>
<li>Violence increased as different gangs fought over market control;</li>
<li>Alcohol prices increased significantly;</li>
<li>The quality of the alcohol products varied, creating greater health risks.   </li>
</ul>
<p>After giving up on prohibition, alcohol production and sales became legal again with age limits on buyers. Severe penalties exist for alcohol-related incidents that include motor vehicle accidents and physical abuse. </p>
<h4>   <b>c. Motor Vehicles</b></h4>
<p>Various measures exist to limit motor vehicle accidents: drivers must pass driving tests to get licenses to drive, cars must be registered and inspected annually, a number of driving restrictions are enforced that include speed limits and traffic lights. In addition, all motor vehicles are required to have liability insurance to cover injury and damage to the motor vehicles of others. These regulations appear to be working: <a href="http://www-nrd.nhtsa.dot.gov/Pubs/811741.pdf">motor vehicle deaths per 100 million motor vehicle miles driven have fallen from 3.3 in 1980 to 1.2 in 2012</a>.</p>
<p><b></b><b>  </b><span style="font-size: 1em;"> <strong>  </strong></span><strong style="font-size: 1em;">   d. Drugs</strong></p>
<p>The US bans the possession, production and sale of many drugs. Since 1996, the US government has spent more than $150 billion to cut off illicit drug supplies. Last year, the government spent more than $15 billion to reduce supplies, with 36% of that going to “domestic law enforcement” and 16% to “domestic interdiction”. More than $2 billion was spent internationally. Despite these efforts, <a href="http://www.morssglobalfinance.com/us-drug-policies-need-an-overhaul-lessons-from-prohibition/">I estimate US illegal drug sales at $400 billion annually and growing</a>.</p>
<p>Have the bans worked? No. Recognizing that no country has come even close to doing as much as the US has to reduce illicit drug use, the <a href="http://www.unodc.org/documents/data-and-analysis/WDR2012/WDR_2012_Chapter1.pdf">US rankings on prevalence of use</a> (among countries with populations of 1 million and up) are:</p>
<ul>
<li>Cannabis – 4<sup>th</sup></li>
<li>Opiates – 1<sup>st</sup></li>
<li>Amphetamines – 5<sup>th</sup></li>
<li>Cocaine – 5<sup>th</sup>, and</li>
<li>Ecstasy – 11th.</li>
</ul>
<p>The US “drug war” has created a criminal element resulting in nearly 100,000 homicides globally per year. The US has by far the highest incarceration rate of any country in the world (730 prisoners per 100,000 citizens). And 25% of the prisoners are non-violent drug offenders.</p>
<p>   <strong> e. Overeating</strong></p>
<p><a href="http://www.morssglobalfinance.com/dangerous-addictions-what-are-they-where-are-they-worst/">Overeating is a growing killer</a>. The WHO has developed a health risk statistic &#8211; the Disability-Adjusted Life Years (DALYs). It measures years lost both because of a premature mortality and years lost due to time lived in less than full health. The United Nations reports that even in developing countries, the number of obese children now exceeds the number malnourished. Overeating leads to being overweight/obese and that in turn results in high DALYs. It is difficult to infer the importance of being overweight for the following health problems: breast cancers, cerebrovascular diseases, colon and rectum cancers, corpus uteri cancers, diabetes mellitus, hypertensive heart disease, ischaemic heart disease, osteoarthritis, high blood pressure, high cholesterol, high blood glucose, low fruit and vegetable intake, and physical inactivity.</p>
<p>Effective US policies to reduce overeating? None. In fact, <a href="http://farm.ewg.org/region.php?fips=00000&amp;progcode=total&amp;yr=2011">the largest farm subsidies go to starches</a> – corn, wheat, soybeans, rice – and livestock.</p>
<h4><b>Implications for Control of Guns</b></h4>
<p>1. It is clear from efforts to ban alcohol (Prohibition) and drugs (ongoing program) that bans do not work. The US market is just too big and profitable. If an item is banned, a criminal element will supply it. And there will be collateral damage as different criminal groups compete violently for market shares. <b>Banning guns will not work.</b></p>
<p>2. What can we learn from efforts to reduce motor vehicle accidents? Before being allowed to drive, citizens must pass a driving test. <b>People wanting to own a gun should be required to pass a gun proficiency test.</b> And while licenses are issued by states, there is a pretty effective national on-line database that police can access to check on a driver’s out-of-state violations. <b>A national gun registry should be instituted</b> to serve the same purpose. And finally, <b>anyone buying a gun should be required to carry liability insurance that covers any damage done by the gun.</b></p>
<p>3. We know 400,000 Americans will die every year from smoking. But they are not banned. In fact, I view the program to reduce cigarette smoking as about as good as can be done. What features from that program should be incorporated in a program to reduce gun deaths? First, <b>age restrictions on purchases</b>: 5 year old children should not be allowed to buy or own a gun. Second, <b>very heavy taxes</b>: guns kill people, and funds are needed to control gun violence and educate people on the dangers of guns.         </p>
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		<title>Austerity and Growth Perspectives: Europe, the IMF, China, and the US</title>
		<link>http://www.morssglobalfinance.com/austerity-and-growth-perspectives-europe-the-imf-china-and-the-us/</link>
		<comments>http://www.morssglobalfinance.com/austerity-and-growth-perspectives-europe-the-imf-china-and-the-us/#comments</comments>
		<pubDate>Wed, 08 May 2013 14:46:14 +0000</pubDate>
		<dc:creator>© Elliott R. Morss, Ph.D.</dc:creator>
				<category><![CDATA[Economics]]></category>
		<category><![CDATA[Eurozone]]></category>
		<category><![CDATA[Featured Articles]]></category>
		<category><![CDATA[Global Finance]]></category>

		<guid isPermaLink="false">http://www.morssglobalfinance.com/?p=1934</guid>
		<description><![CDATA[This article is the first in a two-part series on the Austerity/Growth debate. Part 1 focuses on the interaction between the IMF and Eurozone countries. The second will focus on the debate in China and the US.]]></description>
				<content:encoded><![CDATA[<p align="center">© Elliott R. Morss All Rights Reserved</p>
<h4><strong>Part 1 – Europe and the IMF</strong></h4>
<h4 style="text-align: left;" align="center"> Introduction</h4>
<p>Over the last two decades, the trade-offs between more rapid economic growth and the need for governments to keep their financial houses in order has been a topic of worldwide debate. Controversy over the issue has intensified recently with governments trying to counter the global recession. In this two part series, the issue is investigated by examining the changing perspectives of four of the most important global economic players: China, Europe, the US and the IMF. Part 1 focuses on Europe and the IMF.</p>
<h4><strong>Austerity/Growth Analytics</strong></h4>
<p>Most economists agree that at least in the short run, a reduction in taxes and/or an increase in government expenditures will stimulate spending, increase GDP growth, and reduce unemployment. . These actions will also increase the government deficit. The obverse is also believed to be true, i.e., a reduction in the deficit, caused either by an increase in taxes or a reduction in government spending, will at least in the short run reduce spending/growth, and cause unemployment to rise. Austerity advocates point out that government deficits cause government debt to increase and that in turn leads to higher borrowing costs. Consequently, they conclude that governments should use deficits to stimulate growth sparingly.</p>
<p>The fact that all Eurozone countries use the same currency means there are further limits on what they can do. Unlike countries with their own currencies that can print money, Eurozone countries cannot: their money supplies depend on what they take in via taxes/other revenues, international trade and what they can borrow.</p>
<h4><b></b>Europe and the IMF   </h4>
<p>Perhaps the best way to see how the austerity/growth controversy has evolved in Europe and the IMF is to examine the interplay between the IMF, the European Union and the European Central Bank in working to “bail out” the Eurozone’s “weak sisters (WS)”: Greece, Italy, Portugal, and Spain.</p>
<h4>Summary of What Happened</h4>
<p>European banks gambled depositors’ monies to buy risky sovereign debt – most notably Greek debt. These ready buyers of WS’ debt kept interest rates down and gave WS governments the green light to continue down unsustainable economic paths. Since 2010, the European Union, the European Central Bank, and the IMF have negotiated austerity bailout programs for these countries. And since then, the economic condition of all WS countries has worsened. And it is very unclear what the future holds.</p>
<p>With this as a backdrop, consider next how the austerity/growth issue has played out between Europe and the IMF. In Europe, there are only two actors that really matter: Germany and the European Central Bank. Both believe the only solution for WS is austerity. They believed it in 2010 and they believe it now, despite the deteriorating economic conditions in all four WS countries. <a href="http://www.morssglobalfinance.com/austerity-vs-deficits-what-are-the-facts-part-1/">The following quote</a> from Jean-Claude Trichet, the president of the European Central Bank, reflects the views of Germany and the ECB: “the idea that austerity measures could trigger stagnation is incorrect….a credible fiscal-consolidation plan will restore confidence and foster economic recovery.”</p>
<p>The IMF’s job since inception in 1945 has been to get countries to agree to austerity programs. In return for meeting performance targets, mostly having to do with reducing the government deficit and slowing the rate of increase in the money supply, the Fund makes loans to governments. The money is given out in tranches, providing the country continues to meet agreed-upon performance targets.</p>
<p>In recent years, the IMF has been asked to take on assignments that involve growth rather than austerity. A fair assessment of their success on these assignments is that it is a “work in progress”. Unemployment problems have never been a focal point of the IMF. But in 2008, it completed a research study that concluded a 3% reduction in government deficits would cause a 1 percentage point increase in unemployment. In short, the Fund found that austerity increases unemployment.</p>
<p>Focus on Greece: Greece is the extreme case of WS economic problems. EU/ECB and IMF actions there give the clearest picture of their thinking on what should be done to turn around all WS countries. In 2009, the EU and ECB asked the IMF to negotiate and monitor a €110 billion austerity program with Greece. The Germans wanted the IMF involved to specify and police the performance terms Greece would have to meet to get tranches of monies released. What the IMF ended up asking Greece to do was remarkable. It went far beyond the normal IMF agreement calling for a smaller government deficit. In fact, <a href="http://www.morssglobalfinance.com/the-imf-%E2%80%93-german-split-on-what-to-do-about-greece-implications-for-the-other-weak-sisters/">as I later observed</a>: &#8220;In all the years I have been covering the IMF, I have never seen such a long list of policy changes being demanded of any country.”</p>
<p>Reforms were called for in the following areas: fiscal, pensions, health sector, Social Security, government performance, labor and overall economic system. In order to achieve these objectives, the Greek government agreed to foreign technical assistance in more than 20 different fields. This was far from a typical IMF stand-by agreement. This was not just a plan to cut the government deficit. This was a program intended to make the Greek economy competitive with the German economy. Certainly in the short run it was a complete disaster. But for the longer term, the IMF was right: if the Eurozone was not to break up, all four WS would have to implement reforms called for by the IMF if they were to be competitive with Germany.</p>
<p>Estimates made in 2009 in support of the agreement are presented in Table 1 along with actual outcomes. The differences between the projections made in 2009 and the actual outcomes/projections for 2013 and 2014 are shocking, particularly the unemployment estimates. In 2009, unemployment was projected to rise to 14.8% in 2013; it actually increased to 26.4%! It is amazing that the IMF, an organization that has been arranging and overseeing austerity programs for countries for 68 years could be so far off on estimates of the effects of its austerity programs on unemployment.</p>
<h4 align="center"><b>Table 1. – Greece: Government Deficits and Unemployment, 2009 – 2014<a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/05/euro4.jpg"><img class="aligncenter size-full wp-image-1943" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/05/euro4.jpg" width="562" height="243" /></a></b></h4>
<p align="center">Source: <a href="http://www.focus-economics.com/">FocusEconomics: Euro Area, Consensus Forecast, March 2013</a></p>
<p style="text-align: left;" align="center">In 2012, Oliver Blanchard, the chief economist of the IMF and Daniel Leigh, another IMF economist, reviewed the IMF’s earlier research findings on the unemployment effects of a reduction in the government deficit. They concluded the earlier unemployment multiplier estimates were too low. Their new research suggested that the effects of a 3% fiscal consolidation would result in as much as a 1.8 percentage point increases in unemployment. Of course, this doubling of the unemployment multiplier does not explain the huge unemployment expansion in Greece. The Greek economy was in a free fall before the EU/ECB/IMF austerity program was introduced. The IMF should have known this and incorporated the free fall into its projections.</p>
<h4>The Two IMF Faces</h4>
<p>The IMF has two faces – the political/public one and what its trained staff really thinks. This became even clearer when Lagarde took over. Lagarde focused on raising money to bail out the European banks. She was not focusing on the austerity/growth issues. But the IMF economists were. And the disaster taking place in Greece resulting from the austerity program had their attention. And gradually, they got Lagarde to give some time to the effects of the austerity programs, in Greece and elsewhere in the Eurozone.</p>
<p>By January 2012, IMF support for austerity in Greece had ended. The Fund never conceded what horrible miscalculations were involved when setting targets for the initial Greek bailout, but it was going in a different direction. Unfortunately, it could not convince its EU/ECB partners to go along. But following a few more months of debate, the IMF at least convinced the EU/ECB to allow weak sister countries more time to reduce their government deficits. Lagarde is going along with the IMF staff on this. She also insisted that the second bailout for Greece needs to be increased by ‘tens of billions of Euros”.</p>
<h4>Switching from Austerity to Growth: What Does It Mean?</h4>
<p>Ever since the now French President Hollande came on the scene, there has been much talk about switching policies for WS countries from austerity to growth. What does this mean in the IMF/EU/ECB context? There is nothing promising in what the IMF is saying on the transition austerity to growth. Growth apparently means WS must get their costs down so they can compete with Germany. How to get there? Greece and Spain must cut jobs and wages. And in return, the IMF/EU/ECB will give these countries a little more time to reduce their government deficits. Putting this all together means unemployment rates will continue to rise.</p>
<p>Arguments between the EU/ECB and the Fund continue. But the Fund has staked out a position on its own. It is saying government debts in excess of “X” percent are not sustainable. Referring back to Table 1, this means the Greek debt burden of 178%, projected to rise to 198% by the <a href="http://www.focus-economics.com/index.php">FocusEconomics Consensus</a> in 2014 is not sustainable. However realistic this position might be, it is not what the EU/ECB wants to hear. It will mean another Greek default and European banks taking another hit.</p>
<h4>Conclusion</h4>
<p>“Sleepwalking” is the best way to describe what is going in Europe right now. The IMF talks of reducing the debt burden while German Finance Minister Wolfgang Schaeuble insists that debt cuts are legally impossible if linked to a new guarantee of loans. But if not linked to new loans, how will the WS find the Euros they to survive over the next few years?</p>
<p>So what is next? More austerity? Reduce the government deficit further? What is the target unemployment rate? 30%? Keep in mind that Greece has no Euros left, so government deficits going forward must be financed by new borrowings. And all of this talk, just to get the Weak Sisters through the current crisis. What then?</p>
<p>Table 2 provides projections from <a href="http://www.focus-economics.com/index.php">FocusEconomics Consensus</a> on key data for the WS for this year and next. Look across the numbers for Greece. Hopeless. Italy is not nearly as bad. But with debt at 128% of GDP, it has to worry about “contagion” from Greece and a spike in borrowing costs. Both Portugal and Spain are projected to reduce their government deficits dramatically. Have the austerity effects of those reductions been factored into its projected GDP growth and unemployment? I doubt it.</p>
<h4 style="text-align: center;"> <b>Table 2. – Economic Projections for the Weak Sisters</b></h4>
<p align="center"><a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/05/euro2.jpg"><img class="aligncenter size-full wp-image-1939" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/05/euro2.jpg" width="966" height="243" /></a></p>
<p align="center"> Source: <a href="http://www.focus-economics.com/">FocusEconomics: Euro Area, Consensus Forecast, March 2013</a></p>
<p style="text-align: left;" align="center"> There are two primary Eurozone imbalances that need to be addressed:</p>
<ul>
<li> Unemployment rates – with some countries at full employment and others with 50% of their younger workers without jobs, how can a “zone” with a single monetary/fiscal policy and little migration get unemployment rates down without causing inflation in countries at full employment?</li>
<li>The competitiveness gap – without using the devaluation adjustment mechanism, how will Greece et al ever be able to compete with Germany?</li>
</ul>
<p>I don’t see how. Of course, a breakup of the Eurozone will have its own risks and consequences.  But until then, the Eurozone remains a ticking time bomb. Riots, political turmoil, contagion and general uncertainty will continue. </p>
<p align="center"> </p>
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		<title>Democracy Is Broken: The Shameful Gun Vote of the US Senate</title>
		<link>http://www.morssglobalfinance.com/democracy-is-broken-the-shameful-gun-vote-of-the-us-senate/</link>
		<comments>http://www.morssglobalfinance.com/democracy-is-broken-the-shameful-gun-vote-of-the-us-senate/#comments</comments>
		<pubDate>Mon, 22 Apr 2013 15:29:02 +0000</pubDate>
		<dc:creator>© Elliott R. Morss, Ph.D.</dc:creator>
				<category><![CDATA[Featured Articles]]></category>
		<category><![CDATA[Other]]></category>

		<guid isPermaLink="false">http://www.morssglobalfinance.com/?p=1927</guid>
		<description><![CDATA[The recent Senate vote on gun background checks is the latest evidence on how badly out of whack US democracy is. I document this and offer suggestions for reform. ]]></description>
				<content:encoded><![CDATA[<h4><b>Introduction</b></h4>
<p>For more than I year, <a href="http://www.morssglobalfinance.com/obama-vs-romney-does-it-really-matter/">I have been documenting</a> that special interests groups rather than the will of the people determine what Congress legislates and what actions the US takes internationally. It does not matter whether it is health policy, bank reform, educational standards, energy, or where/when the US launches the next war.</p>
<p>Last Wednesday, the 17th, the US Senate documented better than anything to date just how broken the US democracy has become. In a series of votes, interests of the gun producers and their lobbyists prevailed.</p>
<h4><b>The Polls</b></h4>
<p>The polls indicate that most Americans want improved background checks as a pre-condition for buying a gun. <a href="http://www.gallup.com/poll/160085/americans-back-obama-proposals-address-gun-violence.aspx?version=print">A recent Gallup poll found 91% of Americans favoring background checks for all gun sales</a>. <a href="http://politicalticker.blogs.cnn.com/2013/04/10/cnn-poll-popular-background-checks-also-cause-worry/">A CNN/ORC poll found 86% of Americans favoring increased background checks</a>. These and other polls found strong support for the checks from Democrats, Republicans, and independents. In short, the American people wanted improved background checks.</p>
<h4><b>The Bill</b></h4>
<p>In hopes of getting a bill approved, Senator Joe Manchin of West Virginia, a Democrat and Republican Senator Pat Toomey of Pennsylvania worked out a compromise that was less comprehensive than Obama’s proposal but still had his support. The Manchin-Toomey plan would have expanded background checks to include private sales at gun shows and all Internet sales, while continuing to exempt most sales between family members and friends.</p>
<h4><b>The Vote</b></h4>
<p>A majority of Senators supported the bill (54 to 46) but 60 votes were needed for it to be enacted. The last of Senators who voted against the bill is presented below with the Democratic Senators highlighted. It was reported that Harry Reid voted against it for procedural reasons (so he can bring it back to the floor for a later vote. It is notable that John McCain’s name is not on the list. He is the only Republican in addition to Toomey who voted for the bill.</p>
<p><a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/gun1.jpg"><img class="aligncenter size-full wp-image-1929" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/gun1.jpg" width="510" height="509" /></a></p>
<p>&nbsp;</p>
<p>One final interesting point on the vote: the populations of states where both Senators opposed the bill 78 million; state populations where both senators supported checks – 176 million.</p>
<p>The President and others vow not to give up. Forget it. It is over. The gun producers, represented and funded by the National Rifle Association, control Congress on gun issues.</p>
<h4><b>What Can Be Done?</b></h4>
<p>The gun issue is not unique. Special interest groups get what they want at all levels of government. Consider a state example: I live in Massachusetts and am not allowed to buy wine from out-of-state. In 2009, Federal courts ruled this was in violation of the Interstate Commerce Clause of the US Constitution. Has Massachusetts passed laws to remedy this? No. Why? <a href="http://www.morssglobalfinance.com/massachusetts-wine-laws-violate-the-us-constitution/">Because as I have pointed out</a>, the Massachusetts alcohol distributors like the monopoly position they now have.</p>
<p>So what can be done? Special interest group control of politicians must be dramatically reduced. Politicians should vote in accordance with the wishes of the people that elected them. But politicians forget very quickly about the people they are supposed to represent once they are elected.</p>
<p>Special interest groups control politicians because the politicians see their campaign support as critical to getting re-elected. To eliminate this influence, two things can be done:</p>
<ul>
<li>Term limits can be imposed so that at least in the elected official’s last term, s/he won’t be beholden to these groups;</li>
<li>Spending on behalf of candidates by individuals or institutions has to be dramatically reduced.</li>
</ul>
<p>It can be argued that each of these changes would violate the US Constitution. Well, the US Constitution is not now serving the interests of its people so it should be changed. </p>
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		<title>Judgments of Paris, Princeton, and Lenox, Part 5</title>
		<link>http://www.morssglobalfinance.com/judgments-of-paris-princeton-and-lenox-part-5/</link>
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		<pubDate>Sat, 20 Apr 2013 15:17:55 +0000</pubDate>
		<dc:creator>© Elliott R. Morss, Ph.D.</dc:creator>
				<category><![CDATA[Drinking]]></category>
		<category><![CDATA[Featured Articles]]></category>
		<category><![CDATA[Wine]]></category>

		<guid isPermaLink="false">http://www.morssglobalfinance.com/?p=1917</guid>
		<description><![CDATA[The Lenox Wine Club just completed its 5th wine tasting of the season - "Light Whites". A Picpoul got the top score (what is a Picpoul?) and a "Box" again got a high rating. ]]></description>
				<content:encoded><![CDATA[<h4><b>Introduction</b></h4>
<p>As <a href="http://www.morssglobalfinance.com/judgments-of-paris-princeton-and-lenox-part-3/">I have written</a>, it was striking in 1976 when Californian wines “sort of” beat French wines in Paris tastings. I say “sort of” because Orley Ashenfelter and Richard E. Quandt found that while Californian wines got the highest ranking in both red and white categories, judges found very little difference between the French and US red and whites overall. The <a href="http://www.wine-economics.org/">American Association of Wine Economists</a> arranged a re-enactment of the Paris tasting in Princeton last summer. But in Princeton, French wines were compared to New Jersey wines. <a href="http://www.wine-economics.org/the-judgment-of-princeton/">The New Jersey wines did quite well, but again, the judges’ rankings differed significantly</a>.</p>
<h4><b>The Lenox Wine Club</b></h4>
<p>In November 2012, the Lenox Wine Club (LWC) was created. Consisting of 14 “veteran” wine drinkers, it decided to start with four tastings: “heavy whites”, “heavy reds”, “light whites”, and “light reds”.  Later, they decided to complement these tastings with one for “heavy red blends”. All tastings address the following questions:</p>
<ol>
<li>Among comparably-priced wines, are the judgments of the tasters similar enough to identify a significant preference among the wines, and</li>
<li>Does price matter?</li>
</ol>
<p>LWC does its blind tastings are at a restaurant with hors d’oeuvres followed by dinner. Tasters are asked to score 5 wines with 5 best, 1 worst. <a href="http://www.morssglobalfinance.com/judgments-of-paris-princeton-and-lenox-part-2/">As reported earlier</a>, 3-liter boxes have done well. They wines got the best scores for the “Heavy Reds”, “Light Reds (tied for best)” and “Heavy Whites” tastings. In all three cases, the boxes (priced at $4/750 ML) beat out wines costing as much as $80+. In the “Heavy Reds Blend” tasting, a Box also did well (tied for second place. But just as was the case at Paris and Princeton, the results were hardly definitive because of the scoring differences among judges.  </p>
<h4><b>The “Light White” Tasting</b></h4>
<p>On April 18<sup>th</sup>, The Lenox Wine Club tasted “Light Whites”. They included:</p>
<ul>
<li>a two Chenin Blancs: a Vouvray and a South African;</li>
<li>a Pinot Grigio;</li>
<li>a New Zealand Sauvignon Blanc, and</li>
<li>a Picpoul.</li>
</ul>
<h4><b>The Chenin Blancs</b></h4>
<p>We drank a 2011 De Morgenzon Chenin Blanc from Stellenbosch, South Africa. Efforts were made to get the 2010 vintage because it earned a 92 rating from Wine Spectator (WS). No luck. Why? Because <a href="http://www.morssglobalfinance.com/massachusetts-wine-laws-violate-the-us-constitution/">as I have explained</a>, restaurants in Massachusetts must buy all their wines from distributors, and the distributors used by our restaurant did not have the 2010 vintage. So we settled for the 2011 (WS rating 91).</p>
<p>Our second Chenin Blanc was a Guy Saget Marie de Beauregard Vouvray produced in the Touraine district of the Loire Valley. Again, we tried for the 2010 vintage (WS 92 rating) but had to settle for the 2011 vintage (WS 91 rating).</p>
<h4><strong>Sauvignon Blanc</strong></h4>
<p>What would a Light White tasting be without a Sauvignon Blanc? New Zealand is known for its Sauvignon Blancs and we tasted a Greywacke Wild Sauvignon Blanc. Greywacke was started by Kevin Judd. Judd was instrumental in the startup and success of Cloudy Bay, one of the best-known New Zealand wineries. On the vintage, exactly the same story. Tried to get 2010 because of a WS 92 rating. Could not. Had to settle for the 2011 vintage (no rankings as yet).</p>
<h4><b>Pinot Gris</b></h4>
<p>The Pinot Gris grape is dominant in Pinot Grigio wines, the most popular of all Italian whites. We drank a 2011 Bota Box Pinot Grigio. LWC has already had a Bota Box winner: the Bota Box Cabernet Sauvignon won our Heavy Red tasting.</p>
<h4><b>Picpoul Blanc</b></h4>
<p>The Picpoul Blanc grape is grown in the Languedoc region of France. The Domaine St. Peyre Picpoul de Pinet won a large following in the Boston area after it “won” the <a href="http://www.boston.com/lifestyle/food/articles/2010/10/27/by_a_nose_the_experts_pick_the_winners/">2010 tasting done by the Boston Globe</a>. The tasting involves 4 judges tasting 50 wines: 25 white and 25 red. The judges then choose their top 5 reds and whites. The St. Peyre was in the top 5 for all four judges. The chance of getting such good ratings by chance is very low – less than 1%!</p>
<p>Unfortunately, none of our restaurant’s distributors carried the St. Peyre, so we again drank a substitute: the 2011 Guillemarine Picpoul de Pinet.</p>
<h4><b>A Test of the Tasters</b></h4>
<p><a href="http://www.wine-economics.org/journal/details-content/volume-7-2012-no-2/">Neal Hulkower, a friend/expert on wine scoring/rating/ranking methods</a>, recently introduced me to the writings of <a href="http://www.wine-economics.org/journal/details-content/volume-4-2009-no-2/">Robert Hodgson</a>. Hodgson has his own winery and has been troubled by appeared to be erratic ratings his wines were receiving from judges at tastings. As a consequence, he has been analyzing judge performance at the California State Fair for over a decade. The key result is that only about 10% of the judges are consistent in their ratings, and this 10% are not the same judges year to year.  He concludes that competition awards have a major random component. To correct this problem, Hodgson has come up with a method to judge judge candidates. The key to his method? Have the candidates do blind tastings that include more than one glass of the same wine in each tasting. If the candidates do not score glasses of the same wine nearly the same, they do not become judges. Hodgson’s suggested overall scheme is quite rigorous: candidates must do four blind tastings of ten glasses each. At each tasting, there are three glasses from the same bottle. And for a candidate to qualify as a judge, the scores given on the glasses on the same wines must be “close”.</p>
<p>If you think about it, Hodgson’s rationale is quite compelling: judging the same wine quite differently means you do not have the ability to distinguish between wines. And as a consequence, you should not be a judge.</p>
<p>But beyond being a method by which to judge candidates for tasting contests, members of LWC thought it would be interesting to see whether their ratings should be trusted. So for this latest tasting, they employed a radically “stripped-down) version of the Hodgson method: only one flight of five wines but an additional glass containing one of the five wines.</p>
<h4><b>The Results</b></h4>
<p>The results for the tasting are presented in Table 1.</p>
<h4 style="text-align: center;"><strong>Table 1. &#8211; Lenox Wine Club Scores, &#8220;Light Whites&#8221; (6 &#8211; best, 1 &#8211; worst)</strong></h4>
<p><a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/jp41913a.jpg"><img class="aligncenter size-full wp-image-1919" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/jp41913a.jpg" width="870" height="429" /></a></p>
<p>&nbsp;</p>
<p>The Picpoul and one of the glasses of the Bota Box got the highest scores. That means that in our five tastings this year, a Box has either won or tied for the best.</p>
<p>From a statistical standpoint, there was very little difference between the scores of the Picpoul, Pinot Grigio, Vouvray and South African Chenin Blanc. Quite surprisingly after its high Wine Spectator rating, the Greywacke Sauvignon Blanc from New Zealand got the lowest score and by a significant amount. And as has been usual, in our tastings, there was a negative correlation between price and score.</p>
<h4><b>Testing the Tasters</b></h4>
<p>We tasted two glasses of the Bota Box Pinot Grigio. So I have listed separately the scores for the tasting of each glass along with their average. The &#8220;Spread&#8221; is the absolute difference of each taster&#8217;s score for the two glasses. Three tasters gave the two Bota Box glasses the same rating – I (EM) scored them almost the same. In actual fact, all our &#8220;spreads&#8221; were low.</p>
<p>Table 2 shows how well our tastings correlated with one another as well as with the overall total. PP&#8217;s scores were closest to the average scores while JR was the &#8220;rogue&#8221; for this tasting.</p>
<h4 style="text-align: center;"> <b>Table 2 – Correlation of Tasters’ Scores</b></h4>
<p><a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/jp41913b.jpg"><img class="aligncenter size-full wp-image-1920" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/jp41913b.jpg" width="620" height="295" /></a></p>
<p>&nbsp;</p>
<p>In Table 3, the correlation between each taster’s choices and the average scores for all the LWC tastings are given. A high positive number indicates a taster is close to the overall average. For example, KM’s correlation of 1.00 in the “Heavy Reds” tasting means KM’s scores are exactly the same as the overall average. Low or negative numbers indicates the opposite. If you look at the average for individuals, it appears that 6 or 7 members had scores that corresponded at least to some extent to the overall average. The others? Not so  much.</p>
<h4 style="text-align: center;"><strong><b> </b><b>Table 3. – How Tasters’ Scores Correlated to Average Scores</b></strong><b> </b></h4>
<p align="center"> </p>
<p><a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/jp41913c.jpg"><img class="aligncenter size-full wp-image-1921" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/jp41913c.jpg" width="522" height="509" /></a></p>
<p>&nbsp;</p>
<p>One other measure is worth mentioning. The Kendall W statistic indicates how much congruence there was among the ratings of the tasters. The Kendall W for the “Light Whites” was .159, up from the “Heavy Red Blends” of only 0.022, but not nearly high enough to instill much confidence in the tasters’ overall ratings.</p>
<h4><b>Wine with Food</b></h4>
<p>Since more wine is consumed at meals, it is odd that most wine tastings are done without food. In our Light Reds tasting, we asked tasters to indicate whether there were any changes in their scores after consuming the main course. We abandoned this approach for the Heavy Red Blends tasting because “it got in the way”. In the Light Whites tasting, tasters were not asked to hand in their scores until we were well into the main course.</p>
<h4><b>Conclusions</b></h4>
<p>Aside from the robust scores of the Box wines, our results reflect the common pattern of most tastings: the ratings/scores of the tasters are all over the map. As noted in my earlier reports, this could be either because the taste differences of the wines could not be picked up by the tasters or because the ratings/scores are dominated by the different taste preferences of the judges. Hodgson’s work suggests it could also be because LWC members cannot really distinguish between wines. But by our “stripped down” version of the Hodgson test of judge candidates (two of six glasses being tasted contain the same wine), our tasters did OK.</p>
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		<title>Bombings and Shootings: What Are the Facts?</title>
		<link>http://www.morssglobalfinance.com/bombings-and-shootings-what-are-the-facts/</link>
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		<pubDate>Wed, 17 Apr 2013 16:14:23 +0000</pubDate>
		<dc:creator>© Elliott R. Morss, Ph.D.</dc:creator>
				<category><![CDATA[Drugs]]></category>
		<category><![CDATA[Featured Articles]]></category>
		<category><![CDATA[Other]]></category>

		<guid isPermaLink="false">http://www.morssglobalfinance.com/?p=1907</guid>
		<description><![CDATA[Current attention is focused on the Boston bombings. Data on shootings and bombings are examined in this article.]]></description>
				<content:encoded><![CDATA[<h4><b>Guns and Bombs</b></h4>
<p>We are all at least temporarily stunned by the bombings at the Boston Marathon where tragically three people were killed and many injured. And before that, it was mass shootings. And as a result of the shootings, attention is focused on more thorough background checks, limitations on the number of bullets a gun can shoot without reloading, whether or not assault weapons should be banned, the Second Amendment, etc. In short, there is a sense is that something more is needed to curb gun deaths. And most certainly something more should be done: three people dead in Boston, but every day in the US, <b>an average of 85 people die of gunshots</b>. But that is not newsworthy gun deaths are an all too common occurrence to interest the media. Just remember: 85 gun deaths daily.</p>
<h4><b>Homicides and Suicides</b></h4>
<p>We are troubled by homicides, but how about suicides? If someone chooses to take their own lives, is that okay? It is worth discussing because in the US, there are twice as many suicides shooting deaths as homicides. Internationally, that ratio is low. For countries that have data on gun killings by type, there are <b>six times</b> as many suicides as homicides.</p>
<p>Table 1 provides data on suicide and homicide gun deaths for most developed countries. You will note there is no country on this list where homicides exceed suicides. So how do we feel about gun Suicides?</p>
<h4 style="text-align: center;"><b>Table 1. – Suicide and Homicides Rates, Developed Countries</b></h4>
<p><a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/bs1.jpg"><img class="aligncenter size-full wp-image-1909" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/bs1.jpg" width="422" height="641" /></a></p>
<p style="text-align: center;"> Source: <a href="http://www.gunpolicy.org/firearms/home">GunPolicy.org</a></p>
<p style="text-align: left;" align="center">While I most definitely want control over when and how I die, I don’t like the idea of having to buy a gun to shoot myself. I live in Massachusetts, and a referendum legalizing physician-assisted suicides almost passed last year, despite the opposition of the Catholic Church.</p>
<p>I was troubled by an incident this week in Lenox where I live. A 58-year old lady, living in a low income apartment building, apparently decided to take her life. How? By lighting a fire in her apartment. The Fire Department was able to save her and put out the fire, but not before the fire did $500,000 worth of damage and 50 other apartment residents will have to live elsewhere for an indefinite period of time. The thought crossed my mind that there would have been less collateral damage if she had been able to use a gun.</p>
<h4><b>Countries Where Gun Homicides Are Highest</b></h4>
<p>Table 2 lists the countries where gun homicides are highest. Notable are the large number of Latin American countries on the list. This is undoubtedly related to the criminal drug industry made extremely profitable by the US war on drugs. <a href="http://www.morssglobalfinance.com/us-drug-policies-need-an-overhaul-lessons-from-prohibition/">As I have noted</a>, this “war’, like most recent US wars, has been a complete failure.</p>
<h4 style="text-align: center;"><b>Table 2. – Countries with Highest Gun Homicide Rates</b></h4>
<p><a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/bs2.jpg"><img class="aligncenter size-full wp-image-1910" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/bs2.jpg" width="324" height="587" /></a></p>
<p align="center">Source: <a href="http://www.gunpolicy.org/firearms/home">GunPolicy.org</a></p>
<h4><strong>Frequency of Gun Use To Kill</strong></h4>
<p>While the US has by far the highest number of guns for its population size (89 guns per 100 people), they are not used to kill people nearly as often as is the case in countries with fewer guns per capita. These data are presented in Table 3 for the countries where guns are used most often to kill. Once again, the “drug” countries are well-represented. The US guns to deaths ratio is only 0.11.</p>
<h4 style="text-align: center;"><b>Table 3. – Frequency of Gun Use to Kill, Leading Countries</b></h4>
<p><a href="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/bs3.jpg"><img class="aligncenter size-full wp-image-1911" alt="" src="http://www.morssglobalfinance.com/wp-content/uploads/2013/04/bs3.jpg" width="546" height="719" /></a></p>
<p align="center">Source: <a href="http://www.gunpolicy.org/firearms/home">GunPolicy.org</a></p>
<h4><strong>Conclusion</strong></h4>
<p>Understandably, the media focuses on new disasters. Three people died in the Boston bombing. Guns kill 85 people daily, with twice as many suicides as homicides. The latter is hardly newsworthy. It happens every day.</p>
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