Third Freakonomics Response

            Steven Malanga offers harsh criticism to Levitt’s book, Freakonomics. He contends that Levitt makes too many hasty generalizations in arguments. He is especially critical in chapter four, when Levitt makes the argument that the drop in the crime rates in the 1990s are because of legalized abortion in years prior. Malanga is very critical of this point, saying it’s not abortion, but more police, and better policing tactics. Malanga is correct in his contentions. He brings up the fact that Levitt makes too many hasty generalizations, and that he ignores evidence brought up against him. The real reason for the drop in abortion rate is the increase of police, and innovation in policing strategies.  

            Levitt’s big argument throughout chapter four is that the legalization of abortion is what caused the drop in crime in the 1990s. His rationale behind this is quite simple. Poor people are typically the one’s who would raise criminals, and they are also the people who could not afford illegal abortions prior to the legalization. Thus it must be that because poor people can get abortions, fewer criminals will be born, and the crime rate will surely drop. To prove this further he discusses all the other ideas about what may have caused the drop in the crime rate. He investigated everything from increased reliance of prisons, to a stronger economy. He was able to refute all but two reasons- increased number of police, and more innovative policing strategies. Levitt will even concede to these points being drops in the crime rate. On page 124, Levitt writes, “The policing trend was put in reverse, whit wide scale hiring in cities across the country…the hiring of additional police accounted for roughly 10 percent of the crime drop.” Then he writes about new innovative policing strategies employed by the NYPD, saying they would account for roughly 18 percent of the crime drop. Then he contends that the remaining 72 percent of the crime drop was caused by the legalization of abortion. It would seem to make sense, but if one looks closer the holes in Levitt’s logic become clear.

            Malanga does not agree with Levitt’s theories on the drop in the crime rate. According to Malanga the drop in the crime rate can not be caused by the legalization of abortion, and to prove his point he brings in some counter studies. First Ted Joyce argues that the there was a more rapid drop in homicides by a group of people too old to be affected by the legalization of abortion, meanwhile, those who were affected by the legalization of abortion committed more homicides. By Joyce’s findings the legalization of abortion wouldn’t have done anything, the people in that age group who were supposed to have fewer criminals in it were committing more homicides. This is the first flaw of Levitt’s logic; he disregards new studies that would contradict his own. The next attack on Levit’s logic comes from John Lott and John Whitley. They have a new study that suggests that the legalization of abortion actually leads to more illegitimate births, and it would actually lead to more crime. Again we can see major flaws in Levitt’s logic. The reason we look to these new studies instead of Levit’s is because they are newer and more relevant. They had access to more information than Levitt did when he wrote Freakonomics. Even if you don’t buy into these new studies, Levitt would still fail to bring in any real evidence showing the direct link between abortion and crime rates. His only logic is that poor people raise criminals, and abortion would reduce that, thus lowering the crime rate, but the problem there is he is putting down an unjustifiable blanket statement. He doesn’t have any empirical evidence to back himself up. He does show the connection between poor people and how it is an environment that raises criminals, but he fails to show how exactly more legalizing abortion means that only poor people will be the ones to get these abortions, and not how it could be in other social classes. In general there are just too many flaws in Levitt’s logic, and the new counter evidence, backed by empirical evidence, is too strong of a rebuttal.

            Levitt also discounts the evidence on policing, he says they only make up about 27 percent of the crime drop, but he may be a little mixed up with his numbers here. According to Malanga, if you compare New York, who had a huge increase in the number of officers, and the employed innovative police strategies, to other cities in the 1990s who did not, like Chicago, you can see that crime rate went down in New York, but it actually went up in Chicago, and it also went up in other major cities. This would lead to one to wonder, if abortion is legal everywhere in the country, why is there only a crime drop in New York? The answer is quite simple; it had nothing to do with abortion. It must have been the police force. We can only accept Levitt’s argument that abortion was able to reduce the national crime rate if we can see the trend in all major cities under similar conditions. The problem is we can’t see the trend in other cities. The crime rate went up; Levitt only looked at New York which had the unaccounted variable of police force. We can’t buy into Levitt’s abortion article because it only takes a look at one city and disregards everything else. You can, however, buy into the fact that it was police force innovation, because in New York, unlike other cities, the police force was increased, and in New York, unlike other cities, the crime rate went down.

            Levitt’s argument may sound very convincing. On the outside it appears to have sound logic. Poor families raise criminals, thus a legalization of abortion would account for the decrease in crime levels in the 1990s. However, there are faults in his logic. He discounts recent studies that show how abortion may actually raise more criminals, and how the legalization of abortion wouldn’t help the crime rate at all. Then he makes hasty generalizations that the police force only accounted for a small fraction of the crime drop, but the neglects the other cities that had raises in crime, which would be consistent with the two studies brought in by Malanga. The evidence is staked against Levitt. He made a false claim, and he didn’t have enough evidence to back it up, so we can’t accept it as fact. Malanga brings up good points, and he has stronger evidence. 

Opinion Editorial Post

1. He doesn’t agree with Santorum’s claim that going to college makes you more liberal and less religious.
2. He first introduces the problem. Then he introduces the opposing view point in the opening, and he says why the republicans think what they think. Then he brings in research and statistics to show why they are wrong. He concludes by showing the opposing view again and the reason they would make these claims.
3. In one example he says, contrary to conservative rhetoric, similarly, but contrary. These are able to show the opposite sides, and possibly why they are wrong, and similarly is able to bring in another example to support his side.
4.  He brings in a lot of research. He has many credible political scientists and sociologists in his paper. In the following quote the author is able to demonstrate ethos, “The sociologists Jeremy Uecker, Mark Regnerus and Margaret Vaaler examined data from the National Longitudinal Study of Adolescent Health and found that Americans who pursued bachelor’s degrees were more likely to retain their faith than those who did not.” He also has a lot of studies that show a lot of empirical evidence. I think he is pretty trustworthy. He has proof to back his thoughts, and he doesn’t have any post hoc fallacies.
5. An opinion editorial is where you express your thoughts and beliefs in a certain subject. The author is responding to a claim made by someone else, in this case by Rick Santorum. There also should be evidence to back up the opinion. The piece should be dogmatic, expressing strong views against the paper it is in response to. It should also try and refute the opinions made in the previous paper.

Question two:

            In the book Freakonomics, Levit explores the idea of information abuse and information asymmetry. Information abuse is the idea that some people use information that people don’t know to their advantage. And information asymmetry is the idea of others having advanced knowledge in a field and using it to their advantage. They are pretty similar. Levit will discuss the ideas in chapter two and then further relate them in chapter three. Prime examples of the abuse and asymmetry can be seen in chapter two with the KKK, and the real-estate agent, and then these ideas are brought to a new level in chapter three in the crack dealing gangs, and it can even be seen in real life.

            The idea of hoarding information and abusing information is very prevalent in the KKK. The KKK, of course, was an organization that used tactics of fear to get what they wanted. In the early days they would lynch quite a few black people. On page 56, a chart depicts the number of people lynched the KKK did per decade. From 1890-1899, the numbers are quite high. 1,111 people were killed by the KKK. However, as the gang’s influence grew throughout time the number of people lynched went down, to the point where in the 1960s only 3 people were lynched. This time period was when the KKK was in its prime, so the question is why were the numbers so low, yet the gang’s influence so large? Levit explains the phenomenon on page 57, “The most compelling explanation is that all those early lynchings worked…had through their actions and their rhetoric developed a strong incentive scheme that was terribly clear and terribly frightening. If a black person violated the accepted code of behavior…he knew he might well be punished, perhaps by death.” So what we have here is an example of information abuse. The KKK, while they were known for killing people, didn’t actually kill that many people in the later years of the Klan. However, black people didn’t know that, nobody except the Klan leaders knew just how few people they actually killed, and only the Klan leaders knew that they didn’t want to kill. The leaders flat out said that they didn’t want to kill; they didn’t even want to use that much violence. The thing is that only they knew that. Black thought that if they violated any of the Klan’s social code then they would be lynched. The abuse and asymmetry of information caused a whole race of people to voluntarily act like second class citizens just out of fear. Had they had the information the Klan had the civil rights movement may have began much earlier. Regardless, we can see how information hoarding can lead to nation wide fear and irrational action.

            Information hoarding can also happen on a very small level, it’s not always done by large organizations. It happens all the time in real-estate. Real-estate agents are experts in the field of real-estate; the person selling his or her house is not. We look to real-estate agents because we think they will get us a good deal, and make us money. However, that’s not exactly how the agents see it. They, of course, want to make money too, but they also don’t want to spend too much time on your house when they can move on to other houses, and in doing this make more money. Levit shows proof of this on page 69, “the problem is that the agent only stands to personally gain and additional $150 by selling your house for $10,000 more, which isn’t that much more of a reward for a lot of extra work. So her job is to convince you that a $300,000 offer is in fact a very good offer, even a generous one, and that only a fool would refuse it.” So the idea that Levit brings up here is an example of information asymmetry, in that you don’t know what the real-estate agent knows, so you trust her, even though she knows that you could make a lot more money if you held out a little longer. This imbalance of information causes the real-estate agent to make a lot of money by being able to move on to a different house and make another commission sooner, and for you to lose a lot of money by being fooled into selling your house preemptively. So this whole idea of information abuse and information asymmetry is very powerful. It’s good for those who have information and bad for those who don’t.

            Levit expands the idea of information abuse even further in the next chapter. In crack gangs, like the one discussed with J.T. in Chicago, there is a leader and his “foot soldiers” that do the actual work. In this case the leader is J.T., and the work is selling crack and defending against rival gangs. J.T., being the leader, has access to all of the information of the gang, including salaries. He keeps records on transactions and how much everyone in the gang earns. He makes $8,500 a month, or about $66 an hour. A foot soldier, on the other hand, makes a mere $3.30 an hour. So why is it that crack dealers, who risk their lives everyday selling crack make such miniscule amounts, compared to J.T. who makes so much more money do doing less dangerous work? Levit explains why this happens on page 103, “The problem with crack dealing is the same as in every other glamour profession: a lot of people are competing for very few prizes. Earning big money in the crack gang wasn’t much more likely than the Wisconsin farm girl becoming a movie star…but criminals, like everyone else respond to incentives, and if the prize is big enough, they will form a line a block long just hoping for a chance.” Levit brings up the idea of information abuse. He knows that people will get killed trying to get his job. He knows that after four years there is a 25% chance of getting being in the crack business, but he also knows that people will line up for the job of being a crack dealer, so he can pay them minuscule amounts, and the supply of crack dealers won’t go down. J.T. is abusing information to get people to work for him, and he exploits them to make huge profits for himself. Once again Levit shows how information asymmetry is good for the experts, but bad for the commoner.

            We can also see this idea of information hoarding in real life. We can see it in Wall Street. The commoner does not know much about investing, but he will still try his hand at the stock market anyway, but to take off some of the stress he hires someone to help him make his investments. The consultant will probably make some sort of commission off of every transaction, so he will encourage the investor to buy and sell often, even if he knows that it’s not the best deal. The consultant will be making a lot of money of commission and transaction fees, while the investor will make less money. Again we can see another example that experts will use information to make money, while the common person suffers from a lack of information.

            Levit goes very in depth with the idea of information hoarding. He talks a lot about how everyone who has information can use it to their advantage. Wheatear it be the KKK, real-estate agents, crack dealers, or financial consultants, everyone uses information to take advantage of other people. Everyone has different incentives, but the common theme is influence or power, and experts win, while those without the information lose.

            In the book Freakonomics many underlying themes are explored in the first chapter, such as subtle cause and effect relationships, and the value of information. However, if there was to be one theme that would be more important than all others it would be the exploration on incentives. Levit writes, “Incentives are the cornerstone of modern life,” (Levit 12). He is basically saying that all actions have incentives behind them, and that incentives are what cause to people to either perform, or withhold and action. Levit breaks it down into two main types of incentives. We can see these in chapter one. There are economic incentives, causing people to abstain from homicide, and causing teachers to cheat on high risk tests, and moral incentives, causing people to pick up their kids on time from day care. There are also examples of this in real life like the economic incentives of doing this paper, or the moral incentives behind not cheating on this paper.

            First, Levit explores the political incentives for why people don’t commit homicide. On page 19 he offers a table of number of homicides per 100,000 people in various European countries over the pas 700 years. Some numbers like in Italy offer extreme drops from numbers of 56 in the 13^th and 14^th century, to a mere 1.5 in the later half of the 20^th century. The question is what causes this?  Levit writes, “The chance of going to jail- thereby losing your job, your house, and your freedom, all of which are essentially economic penalties- is certainly a strong incentive.” People know that being part of a society comes with certain obligations, mainly fallowing the law- people also know that when they break these obligations there are repercussions, you go to jail. As we can see from the graph, as law enforcement goes up, and the threat of going to jail becomes more prominent, the incentive to kill someone, or commit any crime is reduced, by the stronger possibility you go to jail. The 13^th century there was a higher incentive for people to kill and commit crimes, because there were fewer people arrested for it, and there were fewer negative impacts. Thus, the conclusion can be drawn that people act based off of incentives. The only reason the numbers would have dropped is that people fear the repercussions, and negative economic impact which is enough incentive to abstain from doing an action.

            Next, Levit brings up another example of an economic incentive of why teachers in Chicago would cheat on high risk state tests. It seems ridiculous that teachers would have their students cheat on state test. At first glance, it seems as if they have nothing to gain, but that’s where hidden incentives lie. Levit writes on page 32, “An analysis of the Chicago data reveals evidence of teacher cheating in more than 200 classrooms, roughly 5 percent of the total…What are the incentives of a cheating teacher?...It was the teachers with the lowest test scores who were most likely to cheat,” (Levit 32). Levit also mentions that in California there was a $25,000 bonus to teachers who were able to raise test scores. Levit contends that the reason teachers cheat is one, to keep their job, and two to get a bonus from high test scores. Teachers will do anything from write the answers on the board, to change the answer keys after students leave. The reason is quite clear, they want the money. There would be no other reason why they would cheat. In 1996 before the test was giving out money to school districts that did well there was far less cheating. When the new economic incentives were introduced to the schools, there was a spike of cheating. Logical progression of thought would have us believe that the school wanted money, so they offered money as an incentive to teachers to do well, who then cheated to get the money. Again, we are able to see another example of how incentives cause us to do things we wouldn’t normally do. Everything is done for a reason.  

            Next, Levit is going to bring up the idea about morality, he observes how moral incentives cause people to pick up their children on time from day care. A test was carried out on a day care center in Israel. The owners were concerned about how many kids were picked up late, so they decided to run a test to see if causing a $3 penalty would be enough of an incentive to get parents to pick up the kids on time. The results were counter intuitive. There were actually more kids who were picked up late. Levit describes the reason for this, “For just a few more dollars each day, parents could buy off their guilt,” (Levit 20). Before the $3 incentive was added most parents would pick up their kids on time because they felt bad, they inherently thought it was immoral, however, now they felt like it was ok to do this because they were paying for the extra time. It may have seemed like stealing to them before, but now it was all balanced out. This brings out the core in Levit’s incentive argument. Moral incentives are greater than economic incentives. He brings up another example on page 20. He writes that a blood donation that offered money to those who donated actually received less blood than a blood drive that didn’t. He writes to explain this concept, “When people are given a small stipend for donating blood rather than simply being praised for their altruism, they tend to donate less blood. The stipend turned a noble act of charity into a painful way to make a few dollars,” (Levit 20). Looking to the blood drive example, we can see that acting in a way we deem to be moral is worth the pain, but an economic incentive is not. Going back to the cheating teachers, that was an extreme case. The reward was so high, and risk seemed very low, that the teachers cheated because every once in a while the opportunity cost is just too high. They may have even lost their jobs for poor teaching. It was an extreme example, and cannot be looked to on the argument of which incentive is greater on balance. Levit will imply that moral incentives are greater than economic incentives, however, the point still remains that people will act based off of incentives. This can even be applied to real life.

            Personally, I am driven by incentives. Why am I doing this paper right now? The answer is simple. I want to get a good grade in this class, I want to have a high GPA, I want to go to a good college, and I want to have a good career and make money. School is a lot of work, and typically students don’t just do assignments for the sheer enjoyment of it, we do it (that is if we actually do it) for the economic incentives promised to us. If we do well and go to college we will make money and in turn be happier, making the work worth it in the long run. By writing this paper, I am only affirming the idea further that people act based off of incentives. The opportunity cost of me being here in school right now is sleeping in a nice, warm bed. However, I come to school because I want to do well and have a good job, therefore I forgo the extra sleep to come to school, write this paper, and hold on to the whim that I will be better off for it.

            I will give out full disclosure that I have not cheated on this paper. There is a moral incentive for me not to cheat on this paper, but there is also an economic incentive for me to do well on this paper, which prompts the idea to cheat to get ahead in school. There exist two incentives to do two opposite actions. By not cheating I have chosen to follow the moral incentive, because the moral incentive on not cheating outweighs the fact that I may do a little better by cheating. This paper in of itself affirms Levit’s idea that moral incentives are greater than economic incentives. Regardless, the fact that I am doing this paper to begin with proves that people act based off of incentives.

            Levit does a very good job getting his point across. His clear underlying theme is that people act based off of incentives. He brings in many examples like the homicide rates, the high stakes test cheating, the day care example, and the blood drive. Through the example he is able to prove that on balance, moral incentives outweigh economic incentives. He also makes it relatable back to the reader, seeing as I was able to come up how I was acting off incentives even as I wrote this paper. 

Army Marketing
I think this whole army marketing thing has gotten a little out of hand. Sure, the army is good, and recruitment is also good. The problem lies in the fact that each side has gone too far. Let's start with the U.S. army. I agree with the fact that they have to make recruitment goals to sustain the defense of the country, however, the means in which they do this may have gone a little too far. Putting army recruitment games in Dave and Busters is not really necessary, the army is just presenting a glorified version of war to the public. The simulation isn't even realistic. These simulations are giving people false ideas about war. If they think its all fun and games of course they are going to join. I think we should go back to the ways of WWI, where people joined the army for the shear love of their country, fighting for what they believe in, and not just because they think it will be a fun game. In no way am I advocating against the actions of the U.S. army soldiers, but I do not agree with the way they get their recruits. They have this massive recruitment goal, but I just don't think its necessary. We, as a country, spend more on national defense than the next five countries combined. I have mad respect for the men and women who serve in the army, but I don't think we need to spend all of our money of defense.
Now moving on to the other side of the coin. The accusations made by a few individuals are a bit ridiculous. There is a claim that Sears and other clothing stores are releasing a line of clothing related to the army, and that they are trying to brainwash the youth. This claim is felicitous and outrageous. Its simply clothing, its not like the clothes and brain controlling micro chips in them, or that every single person who wears the clothes is going to join the army. First of all people who would buy the clothing in the first place are probably people with some interest in the army to begin with, so they are not being brainwashed, they are buying clothes that support what they like. To make this claim is like saying that everyone who buys and NFL jersey is going to try and join the NFL. This simply is not true. People who buy an NFL jersey are people who like the team and want to support them. Second, the military look has always been a style, and it was never criticized until now. I think people are complaining just to complain. People need to realize that the army is in charge of our national security, and they are going to use recruitment methods. I don't believe they are overstepping their bounds by selling a clothing line.People need to calm down and show some respect for the organization who is protecting their country.