Sunday, August 28, 2011

Prisons and Punishment: Part 1

The criminal justice system in America is badly broken.  There are a multitude of problems with it, and fixing any of them starts with understanding the fundamental purpose of prisons.  There are four reasons to incarcerate someone:

1.  To isolate criminals to prevent them from committing more crimes
2.  To punish criminals for committing crimes
3.  To deter others from committing crimes
4.  To rehabilitate criminals

Let’s use these four reasons as a basis to examine one of the problems of the modern American criminal justice system, namely the imprisonment of nonviolent drug offenders.  Now, the United States of America has the largest prison population in the world (a fact that’s at least mildly ironic for those of us who live in the Land of the Free).  This population has quadrupled since the 1980s but it’s not due to increases in violent crime, it's because of the War on Drugs.  Mandatory minimum sentencing and three strikes laws are the primary culprits.

The result?  The US prison population is composed of a shockingly high percentage of nonviolent drug offenders.

Do we need to isolate these people (#1)?  I would argue that’s unnecessary because they aren’t really hurting anyone with their crimes.  What about punishing them (#2)?  These people are being punished for breaking the law, but it’s a law that is becoming increasingly unpopular.  Hell, California almost legalized marijuana in 2010 with Prop 19.  And it’s not deterring others (#3).  The National Survey on Drug Use and Health reports that at least 16.7 million Americans used marijuana in 2009, the highest number ever reported.

But the biggest issue lies in rehabilitation of criminals (#4).  Locking up these nonviolent offenders in prison does not rehabilitate them so that they can safely be reintroduced into society as functioning members.  In fact it does the opposite.  Prison hardens these people making it more likely they commit serious crimes in the future. 

Our biggest problem with incarceration in this country is that we’ve gone overboard on punishment (#2) to the detriment of what should be the real reason for our prisons, rehabilitation (#4).  Next week we’ll look at some ways we can lighten up on punishment and focus more on the actual rehabilitation of our prisoners.

Sunday, August 21, 2011

Film the Police

One of the greatest victories for civil liberties is the widespread availability of personal recording devices.  Advances in technology have dramatically decreased the size of video cameras which means that the public is no longer limited to bulky and unwieldy equipment for personal recordings. Because practically every smart phone has decent video recording capabilities, crimes committed in the public arena that would have gone unreported or unprosecuted due to lack of video evidence are now being punished.  Refreshing.

Look at the riots in Britain.  In this video recorded by a civilian, hooligans pretend to help a badly injured man to his feet only to steal items from his backpack.  The YouTube video was viewed by millions, leading to the identification of the thief, Reece Donovan.  He will most likely spend a long time behind bars.  In the past, this piece of human garbage would have likely gotten away scot free.  The ubiquity of personal recording has prevented that injustice, and many others.

But people don’t use their smart phones just to record ordinary civilians committing crimes, they also record crimes committed by those in power, including police.  Most police are moral, but power corrupts, and police have a lot of power.

When I have an idea for a blog post I write it down and over the course of the next month or two, I bookmark news articles related to the central idea.  So for this post, I bookmarked news articles that had police either being caught on camera committing crimes, police trying to take away cameras after being recorded, or police trying to prosecute civilians who lawfully recorded the actions of the police.  Unfortunately, there are a lot of examples.

However, police shouldn’t be afraid of being recorded in public if they are following the law.  Note: this is MUCH different than the statement, “If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place,” famously spoken by former Google CEO Eric Schmidt.  This has been widely condemned and rightfully so.

What’s the difference?  The key is the right to privacy.  It is illegal to disclose the private information of others.  However, in public there is neither the right nor the expectation of privacy.  If I walk down the street wearing a clown costume and riding a unicycle, that act is now public information and there’s not a damn thing I can do about it.

So cops should expect everything they do in public to be public information, and should not be scared of being recorded by civilians.  I’ve heard the argument that being recorded makes a cop’s job hard.  Let me clear, cops have a tough job to begin with.  But (and I’m repeating myself here), there is no right to privacy in public.  Cops should assume they are being recorded at all times in the public, because in the near future, they will be.

Not that the police are quietly accepting being recorded.  On the contrary, there are now three states where it is illegal to record any on-duty police officer for any reason under any circumstances.  That’s patently absurd. 

If I had all the money in the world, I would fight those laws tooth and nail.  Furthermore, I would start a YouTube channel of just police recordings.  The channel wouldn’t only be videos of police committing crimes, but it would certainly have those.  If someone was being prosecuted for lawfully recording the police, I would pay for their defense.  This would be a great defense of civil liberties.  In fact, I can’t think of anything more patriotic, so this would be our logo.

I didn't create this but I can't seem to find the person who did to properly credit them.

Finally, I want to end on a positive note.  Here is a video of someone recording a police officer that goes pretty smoothly.  Just as this police officer says in the video, it’s the inalienable right of the civilian to record the police in public. 

Sunday, August 14, 2011

July Lending Club Update

Lending Club update time!  After discussing strategy with Peter from Social Lending, I am revising my Lending Club investment strategy.  Peter pointed out that #9 in my list of Lending Club filters (remove loans of borrowers with more than 5 credit inquiries in the last 6 months) was not a great filter.  First, it wasn’t really removing any borrowers from my investment pool.  Second, after reviewing past loans and their performance on Lend Stats, it became pretty clear that by actually limiting number of inquiries less than or equal to 1, you could pretty dramatically improve results. 

So, that’s what I’ve done.  I’ve changed this filter to remove borrowers with more than 1 inquiry in the past 6 months.  On a related note, Peter explains why credit inquiries is his favorite P2P filter here.

As I did last month, I’ll show you my investing returns two ways.  First, what Lending Club calculates for me:

Pretty consistent with last month.  Interesting to note that I had one note already paid in full, which will happen.  For an investor like me, this is not what you'd like to happen but it's certainly better than a default.  Now how do I stack up against other Lending Club lenders?

Also pretty similar with last month.  Now let’s calculate my returns using the Lending Club monthly statements.

As of 7/31/2011, I have $6665.0 in my Lending Club account.  Using the XIRR function in Excel, I get a calculated NAR of

Hmm… my calculated 12.86% is pretty different from the 15.42% calculated by the Lending Club website.  Why is this the case?  Well, as I mentioned before and as Social Lending reiterated this week, the Lending Club formula doesn’t properly account for money sitting as idle cash.  I believe the NAR discrepancy is from when I deposited $1,500 on 7/18/2011 and didn’t immediately invest all the cash into loans.  If you look at my NAR using the account total for today, you find

This 14.92% is much closer to 15.42% generated by the Lending Club website.

Finally, I’d like to mention how I’m depositing money into Lending Club.  After some thought, I’ve decided to schedule a recurring monthly transfer of $1,500.  With my investing strategy of $50/loan, this gives me 30 loans to pick during the month, or about 1 per day.  Picking one loan per day on average is something that I can keep up with.  In fact, I prefer it that way over just dumping in a lump sum of money that I won’t immediately invest.

Furthermore, Lending Club offers a recurring transfer bonus program bonus of up to 1.5%.  If you set up a recurring transfer of greater than $500, you get 1.5% back about three months after investing the funds (for transfers between $200 and $500, the bonus is 1%).  That almost immediate return beats almost all saving account returns out there.

Sound too good to be true?  It just might be.  While this recurring transfer cash bonus definitely existed at one point, it may not any longer as I can’t find it on the Lending Club website.  I have emailed the Lending Club support to find out if the program is still in effect.

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Sunday, August 7, 2011

July Lending Club Update Delayed Until Next Week

This morning I wrote that I would have my July Lending Club update up later in the day.  Unfortunately I don't have my July monthly statement from Lending Club (the site says monthly statements are generated one week after the end of each calendar month, so I thought the statement would be available today.  I was wrong).  I use this statement to calculate my net annualized return (NAR) to compare to the NAR generated by the Lending Club website.  Without it, I will have to delay the update to next week.

July Blog Income Update

July update time!  In the month of July, my earnings were

My past earnings in graphical form:

I had a slight bump in earnings.  This is mostly from Peter Renton mentioning my Lending Club series on his site, Social Lending.  I’ll have more on that later today in my monthly Lending Club update.  I plan to revise my investing strategy as I have taken a more in-depth look at Peter’s P2P strategies and I like what I see.