El tráfico de drogas es peor que el homicidio

Al menos así parece que sea en algunos lugares de América Latina como Ecuador, Bolivia o México, donde las penas en prisión por tráfico de drogas son más duraderas que las de asesinato, según un estudio publicado en Dejusticia.

Así lo explican en Pacific Standard (mi énfasis):

“In three of the seven countries surveyed, drug trafficking garnered longer maximum and minimum penalties than murder.” In all countries studied, “the maximum penalty for drug trafficking is nearly equal to or, in most cases, greater than the maximum for rape.”

Latin American countries, he says, have a tradition of shorter, lighter sentences. But as punishments for drug crime in the United States became harsher, so too, did those in Latin America. “It’s politically very useful for politicians,” says Uprimny. “You can win votes saying that you’re going to get tough on drugs. You are seen by the population as a person that is really interested in protecting kids and teenagers, even if the concrete effect might be the opposite one.” 

What does he mean?

Analia Silva is the Ecuadorian woman imprisoned in 2003 after authorities caught her with an unidentified drug she had planned to sell. She is a single mother. “Eight years of being without your children,” she says, speaking in a video produced by theTransnational Institute and the Washington Office on Latin America, “and eight years for them without me. Because when they sentenced me—and it’s the same for every woman they sentence—they do not only sentence the person who committed the crime, they also sentence their family, they also sentence their children.”

“They want to get rid of crime,” Silva continues, “but they are the ones promoting it. If my children are left alone, what can they do? Go and steal. My daughter becomes a prostitute, my son a drug addict, a drug dealer.” 

Can or can't money buy happiness? Evidence from both sides

According to new research by economists Betsey Stevenson and Justin Wolfers (University of Michigan) happiness increases constantly as income rises. The following graph, which has been taken from The Economist, illustrates this point:

This idea supports the evidence from previous studies which seemed to indicate that happiness increases as income rises in an almost linear way:

Figure 1 shows that life satisfaction is higher in countries with higher GDP per head. The slope is steepest among the poorest countries, where income gains are associated with the largest increases in life satisfaction, but it remains positive and substantial even among the rich countries; it is not true that there is some critical level of GDP per capita above which income has no further effect on life satisfaction. Indeed, if we plot average life satisfaction against the logarithm of per capita income, as in Figure 2, the relationship between per capita income and life satisfaction is close to linear. 

Daniel Kahneman said something completely different in a TED talk two years ago. Based on a sample study of 600,000 Americans, he claimed that happiness increases as income rises, but only up to a point. When their salary reached $60,000 per year, the effect disappeared. It doesn't matter if you earn twice or ten times that quantity, happiness just stops increasing from that level. In his own words: "money does not buy you experiential happiness, but lack of money certainly buys you misery". He says that if you earn more money, it will not make you happier, it doesn't work like this for emotions.

There is something which makes me a bit skeptical about the first two papers, though. And the thing is that they function pretty well in the area that we can see. But what about the "missing graph"? There is no data for higher incomes than $128,000 for the first one and $40,000 for the latter. What happens in the case where someone is making $500,000 a year? Is he happier than someone who is earning $250,000 or $1 million? And if so, how much unhappier or happier?

Who is right in this debate is yet to be seen. However and in the meantime, there are some ways in which you can indeed buy happiness. Below you can see a TED talk by Michael Norton, where he explains how you can spend your money in a way that will probably make you happier.

Similarly, you can read this blog post which summarizes 6 ways in which money can buy happiness, according to the book The Myths Of Happiness: What Should Make You Happy, but Doesn't, What Shouldn't Make You Happy, but does. Because I don't want to copy the whole thing here, I will just write the 6 ways and if you want to know more about it, read the article.

1. Spend Your Money On Many Small Pleasures Instead Of A Few Big Ones
2. Spend Money On Fundamental Feelings
3. Spend Money On Others, Not Yourself
4. Spend Money To Give You Time
5. Spend Money Now But Wait To Enjoy It
6. Spend Your Money On Experiences Rather Than Possessions

Why sending food to poor countries is not a good idea

Here is an excellent article from The New York Times explaining why giving food to poor countries is not going to alleviate the problem, but probably make it worse. The emphasis is mine:

When the Indian Ocean tsunami hit in December 2004, killing more than a quarter-million people, the great global humanitarian machine sprung to life. First on the list of donations, of course, was food — bags of food began arriving by airlift and sea, especially into Aceh, the hardest-hit region.

But was it the right kind of aid? The Acehnese who lost their livelihoods needed food, but there was actually plenty of food to be bought. Indonesia’s foreign minister told the world not to send rice. The coast had been devastated, but not far inland life was normal— in fact, harvests had been excellent. What was disrupting the food market was not the tsunami, but the sacks of rice that were coming in. So many people were getting rice for free that local markets couldn’t sell it. Farmers were undercut and supply chains fell apart. 

“It seemed counterproductive to ship in commodities and undermine local producers,” said Gawain Kripke, director of policy for Oxfam America. “Shipping in food was doing more harm than good.”

And: 

Perhaps most damaging of all, sending food creates a cycle of need. One reason Haiti is perpetually hungry is that free or highly subsidized imported rice has destroyed Haiti’s rice farmers, who can’t compete. In March 2010, two months after the earthquake, Haiti’s President Rene Preval asked the United States to “stop sending food aid, so that our economy can recover and create jobs.” (The United States did not stop.) In testimony before the Senate Foreign Relations Committee, former President Clinton actually apologized for his policies that flooded Haiti with subsidized rice. (Here’s a rather startling video.) That was trade, not aid, but the effect was similar.

And: 

The most surprising pillar of food-aid-as usual is an assortment of charitable groups that work on the ground — groups that are very familiar with the system’s flaws. One reason is monetization. About a fifth of all American food aid goes not to people but to American organizations such as World Vision or Catholic Relief Services. They sell it to raise money for their programs. No one thinks that turning aid workers into commodities brokers is a good way to finance programs — it’s about 25 percent less efficient than cash, and it can have the same malignant effect on local farmers that other food shipments can have. 

Some groups have stopped accepting the aid — CARE, for example, stopped in 2009. The organization decided that not only monetization but also giving out food was ineffective, and turned to more long-term development programs. But it’s instructive that CARE lost some $45 million annually in the process.

Why is Apple borrowing money if they already have so much cash?

According to an article of The New York Times, to satisfy its investors: 

With a $145 billion cash hoard, Apple could acquire Facebook, Hewlett-Packard andYahoo. Put another way, it could buy every office building and retail space in New York, according to city estimates.

But despite its extraordinarily flush balance sheet, the technology behemoth borrowed money on Tuesday for the first time in nearly two decades. In a record-size bond deal, the company raised $17 billion, paying interest rates that hovered near the low-cost debt of the United States Treasury.

Apple’s return to the debt markets raises a riddle: Why would a company with so much cash even bother to issue debt?

The answer has a lot to do with the frenzied state of the bond markets. Companies are issuing hundreds of billions of dollars in debt to exploit historically low interest rates. They are also feeding strong investor demand for high-quality corporate bonds as an alternative to money market funds and Treasury bills, which are paying virtually nothing.

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Why people vote, illustrated

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Macro Christmas and Happy New Year!

What is the best way of cutting deficits? Tax hikes vs cut spending

The answer is simple, according to Alberto Alesina: spending cuts is better. Taken from VoxEU:

Should debt-ridden and economically struggling Western governments be doing everything possible to reduce their deficits? Should we cut spending or hike taxes to reduce our debt-to-GDP ratios? This column argues that the answer is obvious: the cheapest, most effective and confidence-inspiring route is to cut spending. Coupled with other pro-growth policies, the evidence suggests that it is only really spending cuts that will spur private investment and economic recovery in Europe.