"All I Want is a Good Plain American Meal"

Here's a clip about "Good Plain American Food" from the movie Prince of Tides. This early scene from the movie sets up the struggle that Tom Wingo (Nick Nolte) has overcoming the psychological damage inflicted by his parents. The father, Henry Wingo (Brad Sullivan) is a shrimp boat captain fishing off South Carolina tide waters. He works hard all day and wants dinner on the table when he comes home. His neurotic wife, Lila Wingo (Kate Nelligan), dreams of a better life for herself preparing "elegant food". She prepares him a dinner of Shrimp Newburg which he spits out, gets angry and starts ruffing up the kids, especially young Tom.

Mom intervenes and prepares dad a good American meal of Red Heart Dog Food which dad, and the dog, stick their faces into. The scene is played as a flashback brought on by Tom Wingo preparing a meal after a session with his suicidal sister's psychiatrist Susan Lowenstein (Barbra Steisand).

We recently picked up a three video set of Streisand Movies (Prince of Tides, The Way We Were, and The Mirror Has Two Faces) for $6.95 at Sentry Foods. I had never seen The Mirror Has Two Faces (it was OK) but I have seen the Prince of Tides many times and it seems to wear very well. The extended love scene between Tom Wingo and Susan Lowenstein at a cabin in upstate New York is the only part that seems a little slow given that we viewers know it isn't going to work. We are waiting to watch The Way We Were since I've always found the movie way too sentimental. Maybe the longer we wait and the older I get, the more I'll like the movie! In any event, the "Dad Gets Dog Food" clip from Prince of Tides is one of my favorite movie scenes.

Decoding the Right Wing's Social Security "Facts"

Ron Johnson, R-WI, claims that the Social Security Trust Fund (the fund that accepts payroll tax contributions, loans the money back to the government for interest and pays benefit to Social Security recipients) is a "myth" because "the government is essentially writing itself a check." Economist Paul Krugman points out that if  Rep. Johnson's assertion was right then the entire Federal Budget is a myth and that "your facts are false". What's going on here?

I actually think everyone understands the facts of how Social Security works (I'm being generous to Rep. Johnson because he's from my home state). What Rep. Johnson is saying is that the Right Wing has no intention of paying the Social Security Administration back the money it has loaned the Federal government. He is right on this "fact". Ever since the Social Security Administration was formed in 1935 by the New Deal, the Right Wing has vowed to destroy it. Refusing to pay the funds back or using a crisis (such as the Subprime Mortgage Crisis created by Right Wing Bush II Administration policies) to argue that the government is broke and cannot pay Social Security back, all of this would be a great way to destroy Social Security.

Think Progress ends their piece with the following factual statement:

The Social Security trust fund is solvent 

through 2038, and the program would almost certainly have long-term solvency were it not for the Republican-backed cap on payroll taxes for income above a certain level.

Causality and the Voting Rights Act

The Supreme Court is currently hearing a case that challenges Section 5 of the Voting Rights Act of 1965. Section 5 requires states, counties and townships with a history of racial discrimination to get pre-approval from the US Justice Department before making changes to their existing voting laws. NY Times columnist and statistician Nate Silver recently wrote a post (here) on the statistical fallacies being offered in court to demonstrate that the Voting Rights Act is no longer needed.

In oral arguments before the court (here), Justice Roberts made some questionable comparisons between percentage of Black voters in Mississippi and Massachusetts to argue that the Voting Rights Act is no longer needed (Black voting percentages are currently higher in Mississippi). Nate Silver points out that selecting two (possibly outlier) States for comparison is basically cherry picking. Silver goes on to conclude:

... the fact that black turnout rates are now roughly as high in states covered by Section 5 might be taken as evidence that the Voting Rights Act has been effective. There were huge regional differences in black turnout rates in the early 1960s, before the Voting Rights Act was passed. (In the 1964 election, for example, nonwhite turnout was about 45 percent in the South, but close to 70 percent elsewhere in the country.) These differences have largely evaporated now.

How much of this is because of the Voting Rights Act, as opposed to other voter protections that have been adopted since that time, or other societal changes? And even if the Voting Rights Act has been important in facilitating the changes, how many of the gains might be lost if the Section 5 requirements were dropped now?

These are difficult questions that the Supreme Court faces. They are questions of causality – and as any good lawyer knows, establishing a chain of causality is often the most difficult chore in a case.

I would like to pick up on the point about causality.  From the directed graph above and using Judea Pearl's notation, the Voting Rights Act was an experimental manipulation (Pearl's "do" notation) of voting laws in States with a history of racial discrimination and voter suppression. From the standpoint of causality, the issue does not involve increases in Black Turnout. The important question is whether Right Wing Voter Suppression and racial discrimination has ended. If the forces that have reduced Black Turnout have not changed then removing the Voting Rights Act will suppress Black Turnout again.

What evidence do we have about Right Wing Voter Suppression? We have the last presidential election when the Republican party actively attempted to suppress minority voting in an attempt to win the election for Mitt Romney. Does anyone think this will be obvious to the Right Wing Justices on the Supreme Court?

Austerity Hits the US! Really?

On March 1, 2013 President Obama signed the Budget Sequestration order that cuts federal government spending. The video clip above, from Russia Today (really), takes a good look at what the effects might be on the World Economy (not good).

Sequestration is essentially a great natural experiment in which Keynesian arguments about the role of countercyclical government spending could be tested. My best guess is that the experiment will never be run. You can read my full analysis here. The role of government spending is the great macroeconomic question of the 20th Century and it won't be resolved in 2013.  We will certainly still be arguing about it 100 years from now.

New Facts About The State Pension Funds

Morningstar recently did a review of the US State Pension Funds for their investors (here and in the video above). The review found that the Wisconsin Retirement System (WRS) was the strongest fund in the country with a funding ratio of 99.8%. This means that Wisconsin's unfunded liability per resident is $23, the lowest of any public pension fund in the US. The results beg a lot of questions: How is Wisconsin able to have a solvent Public Pension Plan? Why can't the other States?

Before answering these questions, there is a simple takeaway from these findings: States can afford to offer solvent Pension Funds for their employees. What is more, States could offer solvent Pension Plans to all their citizens. And, corporations could also offer solvent Pension Plans to their employees. The Right Wing simply does not want to provide pensions (the same Debt Alarmists that would think $23 is too large an unfunded liability) and any other form of social security to workers.

Watch Henry Ford Preview on PBS. See more from American Experience.

If you want some insight into why the Right Wing opposes solvent Pension Plans (Public or Private) watch the PBS American Experience documentary on Henry Ford (here). Ford is one of the Titans of Industry and had opinions befitting his class: anti-union, anti-worker, anti-Semetic, etc. The Ford River Rouge Complex was run like a police state, a model for Right-Wing US industry. The Ford Pension Plan was the result of UAW labor disputes and bargaining, not enlightened, financially adept management.

Why are the State Pension Plans in trouble? Two reasons: The Subprime Mortgage Crisis and years of underfunding or outright stealing from Pension Plans by politicians. The goal of all this is to wake up one day during a financial crisis and claim that the State can no longer pay its pensions even as the real reason is years of deliberate fund weakening. Why is Wisconsin able to provide its employees a solvent Public Pension Plan? By law, politicians cannot touch the WRS. It's that simple. One more thing, it's not because the Public Sector cannot afford to provide pensions. Wisconsin currently has a $484 million surplus (here) none of which is needed to provide continued Pension Plan support.

Software Development Recap 2012

I have been working on a number of statistical packages written in the public domain R programming language. Last year I put two packages together. A package is a collection of R functions, usually built on other R packages, that implement a statistical procedure. The two packages were:

• hlmmc In the late summer of 2012, I taught a graduate-level class in Hierarchical Linear Models (HLMs, sometimes called Multilevel Models) at the University of Tennessee (UT-Knoxville). The hlmmc package was developed for the course to facilitate Monte Carlo studies (computer-intensive methods for the numerical analysis of messy problems) and teaching HLMs. More information about hlmmc (also a public domain package) is available here. I am also serializing my course lectures (here). The lectures were essentially demonstrations of the hlmmc package.
• ws This package allows state-space time series models I have developed to be simulated, re-estimated or extended. I have used the ws package to develop models of the world system (WL20), the US economy (USL20), other countries in the world system and various forecasting models (see examples of the forecasting models here and the US Stock Market models here). More information about the ws package is available here.

I use another set of routines to develop the models made available with the ws package. These routines  select the best model using the AIC criterion from a number of models starting with a Random Walk as the null hypothesis.  I believe that the routines I am currently using could be simplified for general use, but there is still some testing that needs to be done to make sure the simplified functions generate similar "best" models. For 2013, I should be able to complete the rw package, depending on how the testing goes.

As I developed this software, I realized that the I needed another outlet to develop the theory and rationale underlying the programs. In 2012, I created a number of other blogs for this purpose. As time permits in 2013, I will post results to these blogs:

• Economic Bubble Machine The world-system models can be used not only to produce forecasts but also to do counterfactual analysis. In a counterfactual analysis, we change the model parameters or something about how the model works and then run a new "fictional" simulation to generate counterfactual history. In the Economic Bubble Machine blog I will explore the use of counterfactual history to identify economic bubbles such as the Great Depression or the Subprime Mortgage Crisis.
• World System Conjectures Since I am developing world-system models, I need a place to test the models against world-system theory. The World System Conjectures blog will be devoted to that effort in 2013. The project involves historical analysis with quantitative models.
• Causal Macrosystems Finally, the Subprime Mortgage Crisis and the IPCC Emission Scenarios have pointed out the weaknesses of current quantitative macrosocietal models. During the current financial crisis, large-scale econometric models did not seem to provide enough (or any?) short-term early warning about potential problems. The IPCC emission scenarios that attempt to link climate change to human activity challenge the other extreme, that is, the ability of quantitative models to predict decades into the future. The Causal Macrosystems blog will expand some early attempts (here and here) to evaluate state-space models against their competitors.

NOTE: My major area of interest involves state space models and the application of systems theory to statistics, computer simulation and societal development. I have been working in this area since the late 1970's (here). For many years I had used my own software package to do state-space analysis. It was a collection of Fortran subroutines (see John Nash's book Compact Numerical Methods for Computers plus other routines from other sources) driven by an interpreted, stack-based RPN (Reverse Polish Notation) language similar to Postscript and also written in Fortran (based on A. Colin Day's Book Fortran Techniques: With Special Reference to Non-numerical Applications). When R became available in the late 1990's, I started writing the routines I am currently using in the R language.