Month: June 2021

ProPublica’s Plan for a Poorer America

Mary Pat Campbell

Link: https://www.wsj.com/articles/propublicas-plan-for-a-poorer-america-11623881781?st=0g4wamiq5m5ces3&reflink=desktopwebshare_twitter

Excerpt:

ProPublica substitutes a magazine’s estimate of wealth appreciation, which never appears on the stolen tax returns, to falsify income. Using this deception the site calculates its “true tax rate.” ProPublica laments that taxpayers are acting “perfectly legally” in not paying a federal wealth tax, which doesn’t exist.

That wealth is taxed only when converted into income or on death may be an outrage to those in government who want to spend that wealth, but it is a purposeful, enlightened policy that lets wealth work as the nation’s seed corn, making America the richest nation in the history of the world. That wealth in turn makes it possible for the government today to provide $45,000 a year in transfer payments to the average household in the bottom 20% of American earners.

….

Taxing wealth accumulation will mean less wealth accumulation, lower productivity growth, lower wages and a less prosperous America. If you had to pay a federal property tax on the appreciation of your home and the growth in the value of your retirement assets, farm and business every year, how could you or America ever get ahead? Private investment has created $32 trillion of equity wealth in America. “Public investment” has created $21 trillion of public debt.

Author(s): Phil Gramm, Mike Solon

Publication Date: 16 June 2021

Publication Site: Wall Street Journal

Waking from Bankruptcy Shock, Stockton Comes Back to Life

Mary Pat Campbell

Link: https://www.governing.com/now/waking-from-bankruptcy-shock-stockton-comes-back-to-life

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Excerpt:

The metrics on the OGSP give a high-level view of how progress can be measured, but they are just part of the data that Regan’s office collects. Hundreds of other data points are in a performance scorecard that includes factors that contribute to attainment of large targets such as reduced crime rate.

High-level goals may take time to achieve. The StocktonStat portal, scheduled for launch on June 30, will include data on the number of potholes and streetlights repaired, or square feet of graffiti removed, says Regan. “The stat process, and this shared data, are part of a continuous conversation and relentless follow up toward our performance targets.”

Author(s): Carl Smith

Publication Date: 16 June 2021

Publication Site: Governing

How Costly is Noise? Data and Disparities in Consumer Credit

Mary Pat Campbell

Link: https://arxiv.org/abs/2105.07554

Cite:


arXiv:2105.07554 [econ.GN]

Graphic:

Abstract:

We show that lenders face more uncertainty when assessing default risk of historically under-served groups in US credit markets and that this information disparity is a quantitatively important driver of inefficient and unequal credit market outcomes. We first document that widely used credit scores are statistically noisier indicators of default risk for historically under-served groups. This noise emerges primarily through the explanatory power of the underlying credit report data (e.g., thin credit files), not through issues with model fit (e.g., the inability to include protected class in the scoring model). Estimating a structural model of lending with heterogeneity in information, we quantify the gains from addressing these information disparities for the US mortgage market. We find that equalizing the precision of credit scores can reduce disparities in approval rates and in credit misallocation for disadvantaged groups by approximately half.

Author(s): Laura Blattner, Scott Nelson

Publication Date: 17 May 2021

Publication Site: arXiv

Bias isn’t the only problem with credit scores—and no, AI can’t help

Mary Pat Campbell

Link: https://www.technologyreview.com/2021/06/17/1026519/racial-bias-noisy-data-credit-scores-mortgage-loans-fairness-machine-learning/

Excerpt:

But in the biggest ever study of real-world mortgage data, economists Laura Blattner at Stanford University and Scott Nelson at the University of Chicago show that differences in mortgage approval between minority and majority groups is not just down to bias, but to the fact that minority and low-income groups have less data in their credit histories.

This means that when this data is used to calculate a credit score and this credit score used to make a prediction on loan default, then that prediction will be less precise. It is this lack of precision that leads to inequality, not just bias.

…..

But Blattner and Nelson show that adjusting for bias had no effect. They found that a minority applicant’s score of 620 was indeed a poor proxy for her creditworthiness but that this was because the error could go both ways: a 620 might be 625, or it might be 615.

Author(s): Will Douglas Heaven

Publication Date: 17 June 2021

Publication Site: MIT Tech Review

Python for Actuaries

Mary Pat Campbell

Link: https://www.pathlms.com/cas/courses/15577/webinars/7402

Slides: https://cdn.fs.pathlms.com/p3Z78DJJRFWoqdziCQyf?_ga=2.2405433.801394078.1623949999-2118863750.1623949999#/

Graphic:

Description:

Explaining why actuaries may want to use the language python in their work, and providing a demo. Free recorded webcast, from the CAS.

Author(s): Brian Fannin, John Bogaardt

Publication Date: 6 February 2020

Publication Site: CAS Online Learning

CDC says vaccine link to heart inflammation is stronger than previously thought

Mary Pat Campbell

Link: https://thehill.com/changing-america/well-being/prevention-cures/558321-cdc-says-vaccine-link-to-heart-inflammation-is

Excerpt:

Males under 30 may face heart problems after getting vaccinated.

Myocarditis and pericarditis share the same symptoms.

Treatment for myocarditis can be solved with over-the-counter medication or resolve itself.

Author(s): Christian Spencer

Publication Date: 14 June 2021

Publication Site: The Hill

Covid vaccine: How many people in the UK have been vaccinated so far?

Mary Pat Campbell

Link: https://www.bbc.com/news/health-55274833

Graphic:

Excerpt:

The UK has four vaccines approved for use: Pfizer-BioNTech, Oxford-AstraZeneca, Moderna and Janssen; three of which require two doses for maximum protection.

The campaign to reach as many people as quickly as possible was boosted by a shift in policy in early January – to prioritise the first dose of a vaccine, with a second dose up to 12 weeks later, a bigger gap than originally planned.

Progress made in the UK so far means the country continues to be among those with the highest vaccination rates globally.

Author(s): The Visual and Data Journalism Team

Publication Date: 15 June 2021

Publication Site: BBC

Looming fiscal cliff could reignite CT’s tax fairness debate

Mary Pat Campbell
Looming fiscal cliff could reignite CT’s tax fairness debate

Excerpt:

Even though the state’s coffers, for now, are awash in money, a huge fiscal cliff looms two years from now, when billions of dollars in federal stimulus grants expire.

Despite a record-setting rainy day fund and a new biennial state budget free of major tax hikes, unprecedented unemployment and deep pockets of urban poverty could easily shift Connecticut’s tax fairness debate — which accelerated this past spring — into high gear in 2024.

“We came out of a year from hell, and I think it was really important we came together in terms of our budget,” Gov. Ned Lamont said last Thursday, one day after lawmakers had adjourned a session that adopted a $46.4 billion, two-year state budget that makes big investments in municipal aid, education, health care, social services and economic development — all without major tax hikes.

But about 4% of that plan, nearly $1.8 billion, was propped up by one-time federal coronavirus relief, most of which will have expired after the coming biennium, which starts July 1.

Author(s): Keith Phaneuf

Publication Date: 16 June 2021

Publication Site: CT Mirror

Why Engine No. 1’s Victory Is a Wake-up Call for ExxonMobil and Others

Mary Pat Campbell
Why Engine No. 1’s Victory Is a Wake-up Call for ExxonMobil and Others

Excerpt:

Over the past two weeks, activist hedge fund investor Engine No. 1 scored a victory for the climate change movement by wresting three board seats at ExxonMobil with the support of the “Big Three” institutional investment firms BlackRock, Vanguard, and State Street. But the episode also marks a failure in ExxonMobil’s “corporate diplomacy” because of its inability to convincingly demonstrate that it is committed to mitigating climate risks and protecting its long-term business value, according to Wharton management professor Witold Henisz.

…

Engine No. 1 has only a 0.02% stake in ExxonMobil, but the climate risk issues it pushed for were sufficient to get the three big investment firms on its side. In explaining its stance, BlackRock stated that the energy major needs “to further assess the company’s strategy and board expertise against the possibility that demand for fossil fuels may decline rapidly in the coming decades.” BlackRock CEO Larry Fink had reiterated his company’s commitment to combating climate change in his 2021 annual letter to CEOs; in his 2020 letter to CEOs, he had said that “climate risk is investment risk.”

Author(s): Witold Henisz

Publication Date: 15 June 2021

Publication Site: Knowledge @ Whatron

The Opportunities and Dangers of Decentralizing Finance

Mary Pat Campbell
The Opportunities and Dangers of Decentralizing Finance

Excerpt:

Decentralized Finance — or DeFi — has experienced explosive growth in the past year. But in order for DeFi to fulfill its promise as a disintermediated ecosystem that helps rather than harms, “now is the time to evaluate its benefits and dangers,” write Wharton legal studies and business ethics professor Kevin Werbach and David Gogel, a recent Wharton MBA graduate, in the article that follows. Werbach is author of the book The Blockchain and the New Architecture of Trust and leads Wharton’s Blockchain and Digital Asset Project. Werbach and Gogel recently collaborated with the World Economic Forum to create the Decentralized Finance (DeFi) Policy-Maker Toolkit,  providing guidance to regulators and blockchain watchers everywhere.

….

The market experienced explosive growth beginning in 2020. According to tracking service DeFi Pulse, the value of digital assets locked into DeFi services grew from less than $1 billion in 2019 to over $15 billion at the end of 2020, and over $80 billion in May 2021. Novel business models such as yield farming — in which holders of cryptocurrencies earn rewards for providing capital to various services — and aggregation to optimize trading across exchanges in real-time are springing up rapidly. Innovations such as flash loans, which are either repaid or automatically unwound during the course of a transaction, open up both new forms of liquidity and unfamiliar risks.

Author(s): Kevin Werbach

Publication Date: 16 June 2021

Publication Site: Knowledge @ Wharton

More evidence suggests COVID-19 was in US by Christmas 2019

Mary Pat Campbell

Link: https://tucson.com/news/national/more-evidence-suggests-covid-19-was-in-us-by-christmas-2019/article_2235808e-a75b-55dd-aaeb-6a17877d03d8.html?utm_campaign=snd-autopilot&utm_medium=social&utm_source=twitter_

Excerpt:

NEW YORK (AP) — A new analysis of blood samples from 24,000 Americans taken early last year is the latest and largest study to suggest that the new coronavirus popped up in the U.S. in December 2019 — weeks before cases were first recognized by health officials.

The analysis is not definitive, and some experts remain skeptical, but federal health officials are increasingly accepting a timeline in which small numbers of COVID-19 infections may have occurred in the U.S. before the world ever became aware of a dangerous new virus erupting in China.

…..

The pandemic coronavirus emerged in Wuhan, China in late 2019. Officially, the first U.S. infection to be identified was a traveler — a Washington state man who returned from Wuhan on Jan. 15 and sought help at a clinic on Jan. 19.

CDC officials initially said the spark that started the U.S. outbreak arrived during a three-week window from mid-January to early February. But research since then — including some done by the CDC — has suggested a small number of infections occurred earlier. 

Author(s): Mike Stobbe

Publication Date: 15 June 2021

Publication Site: Tuscon.com, from AP

The Delta variant doubles the risk of hospitalization—but the vaccines still work

Mary Pat Campbell

Link: https://www.technologyreview.com/2021/06/15/1026365/the-delta-variant-doubles-the-risk-of-hospitalization-but-the-vaccines-still-work/

Excerpt:

The good news? Vaccines still sharply reduce the risk of being admitted to hospital with the Delta variant. The Scottish study found that the Pfizer/BioNTech vaccine provided 79% protection, two weeks on from the second dose, while the Oxford/AstraZeneca vaccine offered 60% protection. That lower rate may be due to the fact that it takes longer for immunity to develop with the Oxford/AstraZeneca vaccine, researchers said. 

However, research released shortly after by Public Health England was even more promising. It found that the Pfizer/BioNTech vaccine provides 96% protection from hospitalization after two doses, while the Oxford/AstraZeneca is 92% effective at preventing hospitalization after both shots. The conclusion? It’s yet more evidence of the importance of making sure as many people as possible get vaccinated, and that they get both shots.

Author(s): Charlotte Jee

Publication Date: 15 June 2021

Publication Site: MIT Tech Review