Anti-Gun Incentives May Not Be What You Expect

In light of recent events, the gun control debate has re-arisen and this has led to a new discussion about the facts of gun control as it relates to gun-related violence.  We see talking heads go back and forth on gun violence and whether or not a ban would prevent future mass shootings in public places.  While these events have spurred passionate cries on either side of the debate it is interesting to think about the economics of the gun control propositions.  For one, gun sales have skyrocketed in the past few years for, what some may call, an apocalyptic fear of a ban on guns in the near future.  This is, of course, understandable.  The President has proposed a ban on assault weapons such as AK-47s as well as decreasing the amount of ammo the gun may hold. 

These proposals adhere to a certain spectrum of cries within the debate.  However, since the public has heard about the proposals it has seemed to spur the opposite desired effect.  As mentioned earlier, gun sales have sky-rocketed.  We see in states like Texas where on-campus concealed carry laws are part of proposed legislation.  Gun businesses have stocked up inventories.  Demand is exponentially higher.  All of these consequences are not intended as part of the proposals (obviously).  However, it wasn't necessarily just the recent proposals by the President that has spurred this boom in the gun industry.  Gun sales have risen over the past year or two!  Some argue that it's because of the anti-gun politicians in control so demand is higher in anticipation of future difficulty.  I may contend that it's an economy in decline.  Given the sluggish "growth" from 2011-2013 perhaps people are settling on a less than par economy for years to come.  A less than par economy tends to spur an increase in criminal activity.  That doesn't mean that criminals are the ones purchasing the guns!  No, they couldn't afford them or pass a background check for that matter.  Rather it's the law abiding citizens purchasing more guns because when people don't have jobs they resort to lesser alternatives.  Hence the correlation between poor areas and high crime rates. 

Ironically, the anti-gun theme has seen the opposite effect and in a round about way-as seems to be the case in almost any economic explanation-it has actually helped a sector of the economy it's aimed to harm.  And hey at least there is some "growth". 

What is There to Know About Education

One of the biggest controversies of 2012 was the vast budget cuts in education spending in Wisconsin by Governor Scott Walker and the newly elected cast of Republicans in the state legislature.  As the nation witnessed swarms of school teachers and their students storm the state capital, Governor Walker didn’t flinch.  He stuck to his stance that the state government needed to make these cuts in order to get its’ fiscal house in order.  Many of the cuts were to teacher pension funds and other benefits paid for by taxpayer dollars.  Eventually, this led to a recall election for Walker and his supporting cast; and in one of the biggest political statements of the year, Walker and every one of the state legislators won their recall election in a huge landslide victory.  The victory marked a strong message to unions and the education system across America.

             Texas education funding, like Wisconsin, was also cut in the last legislative session.  According to politifact.com per-student spending was decreased by an average of $500 per student in Texas.  This number was down from almost $8000 to just above $7000 a year per student.  This decrease in state funding may be due to the trend in the last decade for increased spending by individual school districts in Texas.  The graph below shows this trend.

            In this graph we can see that education expenditures have greatly exceeded enrollment in the last decade by almost 5 to 1 according to this website: http://fastexas.org/study/exec/spending.php

            Recently, the Economist magazine started a project called “The Learning Curve” that aims to help policymakers, educators, academics and others to better understand the factors which go in to having an effective education system (thelearningcurve.pearson.com).  So far, research has shown that there is still a lot we don’t know.  However, one theme the authors hoped to hammer home was that throwing money at a faulty education system will not fix it.  The authors describe the phenomena as multiple factors going into a black box (education) and results pouring out of the other side.  We have no idea what went on inside that black box.  Another point the authors made was that per capita income is affected by the education system, not the other way around.  In other words, better educational outcomes promote higher per capita income, per capita income does not promote better education.  It also said that better educational outcomes are a result of a culture that promotes better educational systems. 

            The fact of the matter is that the trend of the last decade in the Texas education budget begs the question:   Are marginal costs really that steep?  Is another student in the classroom really five times more expensive than the previous amount?  Every year, students in elementary school are required to bring new supplies to be shared by everybody in the class.  My question, what happens to all the scissors every year?