Revisiting Cash for Clunkers: The Law of Unintended Consequences

A short while ago, I wrote about the Cash for Clunkers program and why I wouldn't be participating. Now that the program has blown through $3 billion, it is time to start looking at the unintended consequences. Actually, the unintended consequences should have been looked at before, but I don't really expect Congress to do that.

The program's goal is to get gas guzzling vehicles off of the road and replace them with high MPG vehicles. Sadly, the car market (like any other market) is a complex system. Complex systems are highly dependent on their initial conditions, and slight variations in those conditions can cause vastly divergent results. So let's look at some of the initial conditions that affect the car market:

Bailout, layoffs, and bankruptcy of two of the largest automobile manufacturers

New government mandates of MPG that manufacturers need to meet over the next 20 years

Increasing unemployment in the country

Government spending that has increased the deficit 400%

Forecasts of peak oil imminent with no widespread replacement technology

People spending less and saving more

Dealerships closed down by pseudo-government

Control of hiring/firing and pay by czars

Recent gas prices at all time highs

Recovering stock market

Population that is growing at a slower rate than in the 60-90s

Population that is living longer than ever before

This list is not meant to be exhaustive. There are thousands of initial conditions that affect the car market. Only one or two of these were considered when this program was conceived without regard to how they would affect the rest of the market. Let me go through some numbers.

The program (with the extra $2 billion) is going to help put 750,000 new cars on the road. The major negative with this program is that all 750,000 of those vehicles are going to be destroyed. That means the used car market (about 41 million vehicles a year) will have 750,000 less used cars, or about 2%. Unfortunately, this is going to be magnified because the 2% of $2000 cars are not going to be traded in for $4000 cars, and 2% of $1000 cars are not going to be traded in for $2000 cars, and 2% of people that were going to buy the $1000 cars are not going to be able to because of availability.

Except that the scenario above would only happen if cars of all values are traded in. So let's do a little mental exercise. First, we know that the used car market is roughly 41 million. Second, we can probably safely assume that 95% of the cars turned in were worth less than $4500. Any car that was worth more, we can just chalk up to the Stupid Tax. So that is 712,500 cars worth less than $4500 are now off of the market.

Next, I needed to figure out how much of the 41 million cars are part of the under $4500 market. So I went to my friendly neighborhood car dealer and checked out his used car inventory. It would only allow a lower limit of $7000 so I used this. Two. A total of 2 used cars under $7000. How many in his inventory overall? 63. 3% of his inventory is under $7000.

Now in all fairness, this was a dealer attached to several big name companies. There are plenty of mom and pop shops and lots of people sell their cars themselves whenever a dealer isn't going to buy it. I looked in my local newspaper. The ratio here was much better, 6 out of 10 were under $4500. And there were 118 listed. So if I assume that there 75% of the used cars are sold by dealers (there are at least 5 big dealers in my area with 60+ used cars a piece, at 3% under $4500 rate) and 25% are sold through newpaper, mom & pops, etc (with a 60% under $4500 rate), then roughly 17% of used cars sold are under $4500. Or 7 million.

The dilemma then becomes that we are taking 712,500 of the 7 million away in one year. A 10% drop. So what was on the surface 2% of the entire market (all used cars), is actually 10% of the focused market (sub $4500). To take away 10% of the supply (in basically a month's time) is definitely going to put price pressure on the market. Used cars that sell for less than $4500 will now be more expensive. Unfortunately, the laws of supply and demand are not linear. Some economists have proposed that the ratio is as high as 10:1 (for each 1% decrease in supply, there is a 10% increase in price).

While this may be a bit of a stretch, I feel confident that we will see used car prices increase for the near future. All car prices. Because if sub $4500 increase say 50%, then cars above $4500 will also increase due to relational value (if the $4500 car is now worth $6000, then the $6000 car must be worth $7500, et al). This is going to squeeze the people at the bottom (the poor) the most, by pricing them out of a better car (or any car for some).

The program is a huge waste of resources. All of the new cars will will lose value to depreciation in the first month which will more than offset the $4500. All of the cars turned in will be scrapped making them worth only a fraction of their value. Since 10% of the sub $4500 fleet is removed, there will be a decrease in the used/rebuilt parts for these cars since they aren't being recovered.

The lost energy cost is most troubling. In all 750,000 cases the cars were already manufactured, and while their mpg might not live up to some government ideal, the energy cost of replacing them with a new more fuel efficient vehicle (i.e. the amount of CO2 pumped into the atmosphere by the manufacturing process) far outweighs what little CO2 is pumped out from burning the extra gasoline. In other words, we just pumped more CO2 into the atmosphere than we saved. And destroyed $1-2 billion dollars of wealth to boot.

Whenever the government tries to mess with the free market they always screw it up. Doesn't matter if it is Republicans or Democrats, both think they are good at playing God. They aren't. And they hurt the poor more than anyone. Cash for Clunkers is a perfect example (or imperfect example to be precise).

The Stupid Tax vs. A Tax on the Stupid

There are a couple of taxes that are labeled as stupid, that I would like to elaborate on. They are often confused.

First, is the Stupid Tax. It doesn't matter how much you make or how smart you are, everyone pays the stupid tax. The good think about this tax though, is it does stimulate the economy. Also, it is rarely, if ever, paid to any government entity. Simply put, the Stupid Tax is levied when we spend our money on something that has no value. For example:

1. Buying a new car. Not all of the money you spend on a new car is a Stupid Tax, only about 30-40% of it is.
2. Extended Service Warranties. Probably 95% of extended service warranties are pure Stupid Tax.
3. Premium Gasoline. The extra 10 to 20 cents per gallon is Stupid Tax.
4. Modern Art. 100% Stupid Tax.
5. Starbucks. Probably 50% Stupid Tax, depending on what the prices at Dunkin Donuts are.
6. Those pictures that they take for you at amusement parks. 100% Stupid Tax.
7. Wedding Photographers. Probably closer to 200% Stupid Tax.
8. Checks. 100% Stupid Tax (I'm not even sure why they offer these any more).
9. ATM Fees. 100% Stupid Tax.
10. Bottled water. Depending on where it is bottled 90% (mountain spring) to 99.9% (municipal water supply) Stupid Tax.

On the other hand, taxes on the stupid are those taxes levied by the government on stupid behavior. For instance:
1. Sin taxes. Either quit, or roll and brew your own.
2. Cashing out retirement accounts early.

By far my favorite though is the one that combines both the Stupid Tax and a tax on the stupid. Lotteries! Here we have a system where you chance of winning is about equivalent to being struck by lightning and it is to help the children too! What better way to waste your money.

What caused the 90s reduction in gun deaths? - Part 4

Part 1, 2, and 3 went over some of the statistics related to gun deaths and deaths in general. Basically showing in multiple ways that to pin the decrease in gun deaths on the Brady Bill or the Assault Weapons Ban would require one to believe that the Tooth Fairy is going to help the US get our of debt. Now I would like to take a slightly more serious approach and try to make some inroads into the problem.

First, to try to say that crime has a single cause or even that it has a major cause that if we eliminated, then crime would be dramatically reduced or eliminated is nonsensical. As with most social issues, there are a host of factors that influence it to varying degrees and at varying times. If you are hoping that I will prove conclusively what is causing crime in this post, you are going to be disappointed.

With the hard sciences (math, physics, chemistry, biology) one can form a hypothesis and then test the hypothesis through experimentation. Once correlations are determined, further testing can be done where other factors are controlled such that causes can be found. Unfortunately, in most cases it wouldn't be ethical to do such experiments in the soft sciences (psychology, sociology, economics), because there isn't a laboratory that you can control all of the factors in. So the soft sciences are left with computer modeling and tracking surveys. Invariably, they have their work cut out for them. Criminologists fall into this category.

To begin this journey, let's forget that we started talking about gun deaths and look at crime in general. Why do this? Because, besides accidents (which are already steadily declining), crime is the easier to understand and take action on. Using the FBI uniform crime statistics, I graphed violent crime and property crime figures for the period that I have the other graphs from 1981-2006 (dashed lines use right scale, solids use left scale):
I would try to not include any sarcasm here, but I must. THE LINES ARE THE SAME FREAKING ONES AS GUN DEATHS. Don't believe me, check here. Now back to being serious. Violent crime and property crime on their surface would tend to be different. This information would show they are not as different as you think. The decline in property crime started in 1991, violent crime in 1992, and gun deaths in 1993 (although it was basically flat between 1991 and 1993 for overall gun deaths and homicides). Going back to the original question, the Brady Bill and the AWB were passed in 1994. The Brady Bill had nothing to do with crime in general, the AWB was bundled with a larger crime bill, but the decline in crime had already begun 2 to 4 years before it came into effect. So my question is, what other things in our society might drive people to crime? Since we know that gun availability has been steadily rising and crime in general fell in the 1990s and leveled off in the end, then gun availability cannot be correlated to gun crime.

When I saw these charts, I knew that I had seen the shape before so let me go through my thought process. First, crime has been linked to economic prosperity before so I ran some numbers to see. Here is the average yearly unemployment rate from the Bureau of Labor Statistics during the time in question:
OK, it is not quite like the crime graph, although there much better correlative properties than gun availability. We see a peak in 1991 and then a steady decline until 2000, which is nearly what crime in general did. However, there is the other peak in 1982 that we don't have a corresponding peak for crime.

Next I decided to look at another economic indicator. The S&P 500. In order to compare it to rates, first I determined the yearly average based on the daily closing averager. Then, I needed to take the value and divide it by some population coefficient to account for the increasing population (more workers should equal more value in the S&P 500). Next, the S&P 500 is a positive indicator of the economic health (directly correlated) as opposed to unemployment rate which is a negative indicator of economic health (inversely correlated). Therefore, I could just take the inverse of the manipulated S&P value, but inverses tend to add distortion, so I also wanted to see what the curve would look like undisturbed. So I also graphed a manipulated value with a negative. The scales are not so important (because you would need my coefficients to be able to back track to the S&P value). The result is this graph:
The negative curve is showing the steep decline starting about 1995, while the inverse curve is showing a leveling off after about 2000. Not perfect, but the indicators of correlation are there. I would say that because of the way that the S&P 500 is calculated (a weighted average), one would be hard pressed to correlate it to anything straight across. Some normalizing has to be done. However, I believe it is valid to look at trends over short periods of time.

To end, I can't make a firm conclusion of causation about the economy and crime. However the factors I looked at are better correlated than gun availability was (which showed no correlation at all). So from that I would conclude that if one was really serious about decreasing both crime in general, as well as gun deaths, then perhaps you should focus more on policies that would improve the economic situation of people rather than trying to control who has the guns. If you want to believe the article of faith that in order to control crime you have to control who has the guns, then keep on believing. The evidence isn't there to support you.

Too many people don't want to hear that crime follows the economic cycles. To some that is admitting defeat in that as long as we have a free market, we will continue to have these economic cycles and crime will ebb and flow. The easy way is to say that guns (or drugs, or the boogeyman) is the primary driver, and if we just control or eliminate that item, then all will be well. Tinman, pay no attention to the man behind the curtain...

As with any of my analysis, I am more than happy to take large sums of money to do this full time from my couch while I watch reruns of MacGyver. If you're interested, please contact me. If you have complaints about how I did the analysis, email me and I'll send you the spreadsheet and you can do your own. If the facts I have presented are wrong, correct me and I will update these posts.

What caused the 90s reduction in gun deaths? - Part 3

For Part 1 and Part 2, I focused on gun deaths and whether the Brady Bill and AWB caused a reduction. As with other researchers, I found no evidence to support it. Now, let me look at injuries some. Unfortunately, WISQARS only has data back to 2000 for injuries so the major portion I want to look at (1990-2000) is not available. But I'll see what I can find from the data anyway.

Remember, the stock of available firearms in the US has steadily increased every year. First assault related injuries:
Over this short time period, injuries from firearms have increased by about 10%. That brings up the first question. Does this show that firearms are being used more? Not necessarily. If we saw increasing injuries and decreasing fatalities, that would be an possible indication of better medical care. In this case, we are seeing an slight increase in both injuries and fatalities. So we could chalk this up as evidence of more guns=more gun homicides and gun assault injuries. The other three methods I looked at show a declining trend. Cut/pierce injuries have decreased by more than 30 percent. When looking back at the fatalities from cut/pierce, they haven't declined. So this would indicate we have less instances of people attacking others with a knife and more of those attacks result in death rather than injury.

Let's move on to attempted suicides:
Besides the last year of data, firearm attempted suicides have remained steady. The CDC denotes that the last year of data is "unstable." This means the sample size was much smaller than the others and could be an indication that the number is incorrect. Another interesting thing is that struck by/against has more than tripled in 6 years as the method of attempts. Personally, I think this probably has more to do with how something was classified. Finally attempts by cut/pierce had an initial increase and then a slight decrease the last couple of years. Important point here is the magnitude. About 20 times the number of self-harm cuts as their are firearm wounds.

Finally, accidents:
Besides falls, all are showing a decreasing trend, even falls are remaining level. Firearms have actually shown the largest decrease (even with the uptick in the last year). So firearms per person are increasing in the US, and firearm accidental injuries have decreased. Major point of this graph though is the scale. Firearms uses the right scale, the others use the left. Injuries from cuts are 100 times more likely than firearms. Injuries from being struck by something are 300 times more likely, and injuries from falling are 500 times more likely. Five Hundred Times!!!

So which is more dangerous? I use a knife (including butter knifes) or other sharp object on average 20 times a day (that is counting every slice of bread as one instance). That is roughly 7000 times a year. I easily shoot 7000 rounds of ammunition a year. So I think they are comparable on a per use basis. In this case, I would have to limit my knife, pointy object use to 1 time every 5 days (70 times a year) to decrease the chance of injuring myself to the same as I have while shooting 7000 rounds of ammunition. My wife wouldn't be happy about that. She doesn't like to slice bread.

I wore a pedometer once and found out that I take about 4000 steps a day. Let me count each and every step as a potential falling injury. Compare this to an average of 20 rounds of ammunition used each day. Since falling injuries are 500 times more likely than firearm injuries, I would have to cut back my walking by 60% to have it equal the chance of being injured by a firearm. In other words, my shooting hobby (which is completely optional) is 2.5 times safer than my walking (which is necessary). Maybe I should quick walking entirely and just sit and shoot all day? That has some possibilities (again, don't think my wife would go for this, because she would get tired of carrying me everywhere).

In summary, the only firearm law that changed during this time was the expiration of the Assault Weapon Ban. As I said before, the AWB did not ban a single firearm already in the US. Not only that, it didn't affect the production of the number firearms. So what is the mechanism that the re-newed ability to add a bayonet lug or WWII era grenade launcher (which you can't even get the grenades for - because they are no longer manufactured!) may have caused the slight increases we have seen in some (not all) categories of firearm deaths and injuries? I don't know, and that would be kind of hard to explain.

And the finale in Part IV.

What caused the 90s reduction in gun deaths? - Part 2

In Part 1, I started my explanation of Linoge's graphic. At the end of Part 1, I basically left off showing that the trends of death by cut/pierce and bludgeoning was similar to those by firearm, thereby discounting that the Brady Bill or AWB had anything to do with the decrease in firearm deaths. In this post, I want to tackle an issue that Joe Huffman brings up in Linoge's comments.

Joe says:
"Does "Firearms related deaths" include justified homicide? If so then you are being a little too generous to the anti-rights people."

Basically, if we break down the firearm deaths we find that two categories account for 95% of them, homicides (not legal intervention) and suicides. So let's look at those in comparison to other forms of death. First homicides:
Dashed lines use the righthand scale, and solid lines use the left hand scale. All data is in rate per 100,000. If you notice, the top three methods of homicide - firearms, knifes, suffocation - have almost identically shaped curves. That means whatever is affecting one is affecting all. Anyone care to explain how the Brady Bill or the Assault Weapons Ban prevented people from strangling others? I just can't do that kind of mental gymnastics. The struck by/against curve is somewhat similar, with the overall basic trend (high near 1990, then decreasing until a leveling off in the last few years).

Now lets look at how closely it is correlated. I graphed the year over year percent change in the rate for the top three causes of homicide:
If you don't quite understand this, I apologize. Let me try to explain. The lines are showing the magnitude of change from the year before. The fact that all three curves are tracking so well (and in some cases have nearly identical year over year changes) means that these three methods of homicide are highly correlated. Since homicides account for about 45% of the firearm deaths each year, for the Brady Bill or AWB to have had any effect, there must have been some sort of Knife/pointy Stick Bill or Assault Pillow Ban at the same time to get such good correlation.

Let's move on to suicides, again dashed lines use the right scale, solid lines use the left scale:
This is actually the most interesting to me of all. Firearm suicides (being about 65%) of all suicides tracked fairly well with overall suicides until 2000 (fairly level through the 80s and then a decrease in the 90s). Since 2000, firearm suicides have continued to decrease, while overall suicides have increased. In fact, all forms of suicide tracked the overall rate until 2000. Now it appears we are seeing rising suffocations, cut/pierce, and poisonings. To me this looks like substitution. People still choosing to commit suicide, just via a different method. And during this entire time, gun availability in the US has been on a steady increase. The trend in decreasing firearm suicides started in 1990, 4 years before the Brady Bill and AWB. It starts another increase in 2000, again 4 years before the AWB expired. If either of these affected the suicide rate, you could easily argue that all it did was transfer the gun suicides to drowning, fall, and suffocation which showed jumps in 1994 and then decreased at roughly the same rate as before (but from a higher level). Except suffocations which has continued the increase. So what good is a bill that decreases gun suicides only to have other forms of suicide increase and offset the decrease? Again, even though gun availability in the US rose each and every single year!!!!

The other point that this graph shows is that you can't really lump suicides in with homicides to do analysis. For homicides, the top 3 or 4 methods were highly correlated. Suicides shows no such correlation. Ergo, eliminating one method only changes the method used not the rate.

And if you thought I was done yet, you're wrong. Guns don't just kill people, they injure people too (as do knives, cars, sticks, and drugs). So on to Part 3!

What caused the 90s reduction in gun deaths? - Part 1

There has been a lively debate going on in some blogs I read about the information presented by Linoge here. There are a few points among the commenters that I wanted to expand on. To begin, the graphic that Linoge created is a compilation of several datasets. It is an excellent display of the wealth of information that can be shown by a graphic. I am a table and formula man myself, but I'll try to constrain myself in this post to only graphics.

The first comment I would like to address is that the Assault Weapons Ban and the Brady Bill were part of reason for the gun death decline in the 90s. Even though some commenters criticize the links (note they don't criticize the evidence, just the links) as being to pro-gun cites here are links to the reports (not someone's interpretation) that show the two bills could not be correlated to the decrease in crime. Here and here. I will attempt to show it in a different way.

First, the data Linoge displays is total gun deaths, which includes homocides (45%), suicides (50%), legal intervention (less than 5%) and accidents (less than 5%). First let us understand what the Brady Bill and the Assault Weapons Ban were. The text of the bills are here and here. I'll summarize, but if you don't believe me, feel free to read the whole thing.

The Brady Bill initially made a 5 day waiting period for the purchase of a handgun to do a background check (until the NICS came into effect). This only applies to licensed dealers selling to private individuals.

The Assault Weapons Ban was part of a larger crime bill. The "ban" part only banned the manufacture or importation of "assault weapons." "Assault weapons" was defined by a firearm having a minimum number of parts. None of the parts had anything to do with the actual firing capabilities of the firearm, they were all cosmetic. In other words, the "assault weapon" sold before the AWB looked slightly different from the other one, but used the same ammunition, had the same accuracy, and the same operating mechanism (in some cases, target shooters found some of the features superfluous and were happy to be able to get a rifle without them). The "ban" did not remove a single "assault weapon" from the US. It only banned the import and manufacture.

So, let us look at the hypothesis: That the Brady Bill and the AWB were a cause of decreased gun deaths. First, let me think of how this could be. The arguments put forth at the time and still put forth by supporters is that criminals could no longer buy their guns from legal sources (even though FBI statistics show they weren't buying them from legal sources) and hence wouldn't have a gun to commit a gun crime.

The Brady Bill only dealt with guns, and handguns at that. But the vast majority of gun crimes are committed with hand guns so we won't worry about rifles and shotguns. So this one is easy. A quick way to see if the Brady Bill is responsible (fully or in part) for the decrease in firearm deaths is to compare it to other deaths (falling, stabbing, suffocation). Except that the vast majority of firearm deaths are homicides and suicides, so we would really have to compare it to other common causes for homicide and suicide (stabbing, suffocation).

The AWB is a little more tricky. Since it was part of a larger crime bill (which included putting more cops on the street), we need to isolate it. We'll start by ignoring that assault weapons are used in less than 3% of all gun related crimes (which means at most the change we see should be 3%) and rarely, if ever in suicides. Next, because of the sunset provision of the AWB, we should see an uptick in the amount of gun deaths when the "ban" expired because all of the other provisions remained. All other forms of death typical of homicide (stabbing, bludgeoning, suffocation) should remain the same since they were unaffected by the AWB.

For the dataset, I'll be using the CDC WISQARS database (same as what Linoge used) from 1981 to 2006. The great thing about WISQARS is that besides just deaths, I can look at injuries as well (since not everyone dies from a gunshot wound). Their injury reports only go back to 2001 so there is limited amount of data to analyze.

So let's get started looking at some charts. All of the charts have a rate per 100,000 population so that you can get an accurate year by year comparison. This first one includes all deaths by the cause listed (homicide, suicide, legal intervention, accidental).
You can click on it for a larger image. The bold line is number of firearms per 100 people. Notice that there is a steady increase (indicating that the number of firearms in the country is growing faster than the number of people). The dashed line for all deaths uses the right hand numbers, all other lines use the left hand numbers. I know all of the lines make it busy, and since we are looking for correlations, the actual value of the datapoints is not that important, what is important is the shape of the line.

Now the Brady Bill was passed at the beginning of 94 was the first full year of its effect. The major decline of firearm deaths began in 93, however there is a slight increase in the slope of decline so if this was our only dataset, then I can see how people may make the argument that the Brady Bill helped. That still doesn't explain the previous decline. The AWB was passed at the end of 94. Interestingly enough, there is no increase in slope from 94 and 95. To me this indicates that the AWB had no effect (which as I said before was bundled with a crime bill that did a lot of other things).

Now let's look at the backend. The NICS came into effect at the end of '98. This ended the 5 day waiting period, a background check was still required. At this point the gun deaths level off. One explanation that could be made is that without the "cooling off" period, people were committing more crimes and suicides. Except that I said the deaths leveled off, there has been a very gentle fluctuation since then but essentially the rate has remained the same. In other words, gun deaths are happening at the same rate as immediately before the NICS came into effect. For the AWB, it ended in 2004. There is a very slight increase but the flucuation is no more than the increase after 1999 or the decrease after 2002. Again during this entire time, the number of firearms per person in the country has been increasing (and presumably the number of firearms per criminals as well? maybe...).

Another interesting factoid, more people are now die of poisoning than firearms. The last thing to point out with this graph is a couple of the lines that are looking similar to the firearm: cut/pierce and struckby/against. Let's blow those up to look at them better.
Pretty cool huh! Firearms use the right scale, the others are on the left. It is easy to see the correlation between cut/pierce and firearm deaths. Almost like they are related. Struck by/pierce is not as easy to see since the rate is so low, but if we blew the scale up more, the general trend is there but the shape is note quite the same. What is important here is that the Brady Bill and the AWB had absolutely nothing to do with knifes or blunt objects. So if these are showing the same trends as firearms, then one would be hard pressed to explain the mechanism for the Brady Bill and AWB causing knife and bludgeoning deaths to decrease.

So in summary, when we only look at firearm deaths, it appears that there may be evidence to support the Brady Bill affecting the rate of firearm deaths, however once deaths by other means are looked at it is found that they have similar trends and were not affected by the Brady Bill. So more than likely, the change in firearm, knife, and bludgeoning deaths have a common cause. But let's not jump to conclusions just yet!

On to Part 2 ...

Common Sense and Logic vs. Facts

One of the blogs I read, whose writer I disagree with emphatically on the topic of firearms, has written a post in which he makes the following statement:
This is where common sense and logic come in, attributes which are sometimes lost in the pursuit of "facts" and "proof."
The interesting part of the statement above is that the writer seems to be the embodiment of the exact opposite.

He has repeatedly taken a stand of more and more gun control or regulation. In spite of the fact that posters have provided evidence (proof, statistics, etc.) that are completely contrary to his philosophy, he continues to hold to his views what little acknowledgment of the facts that have been presented is usually countered by the point that logic and common sense have to play a role.

So for today's post, let me explore what role logic and common sense have in decision making. Everyone make thousands of decisions daily. And for each of these we rely on a certain amount of logic, facts, and morals. Logic should tell us what the outcome of our decision will be, while morals tell us whether that outcome is good or bad.

Logic is a method of thinking. In the strictest sense, a mathmetical proof, uses a defined set of rules to travel from point A to point B. All of the hard sciences recognize their own set of logic rules (many of which overlap with other sciences), and many of the soft sciences have realized the need to have a set of rules to play by.

Logic can be faulty. One can commit any number of logical fallacies (appeal to authority, circular reasoning, etc.) when one is trying to prove a point. People trained to use logic are always on the lookout for these in their own and others arguments. Logical fallacies indicate one has not critically examined his position or made an error in conclusion.

Common sense is a sum of our experience and knowledge. The common sense that everyone has is different - because all of our experiences and knowledge are different. In that sense, common sense is not common at all (except to say we all have something different that we call the same thing). We may say that not running out into the middle of the street is common sense. But would a child know that? So if we further constrain ourselves and say among adults in America, it is common sense to not run across a busy highway.

Does this hold as universal? Probably, I would bet that if you took 1000 adults in America and asked them 98% would say yes. One of the defining attributes of common sense is that one need not think about it, it is a gut reaction. So the next question one should ask is, is it right?

Let's look at the statement logically. "It is not safe to run across a busy highway." Well, we would have to define some terms: safe, run, busy, and highway. Let me confine highway to roads without a permanent set of stops (i.e. interstates, state highways, etc.). Some roads are called a highway but are covered with stoplights and stop signs. Safe I'll define as not getting hit by a vehicle. Run will be a pace equivalent to being chased by a dog (not a rabid dog, just a dog). So far do you see any problems in my definitions? Some may say yes, and I would agree, but for any logical argument you need to have a rigidly defined set of rules, so by agreeing to analyze the statement based on the rules I have set, we can judge the conclusion against those.

The last term is busy. For my purposes I am going to assume that busy is traffic near downtown Los Angeles during rush hour. So, the statement now becomes "Will I get hit while being chased by a dog, if I go across Interstate 5 in Los Angeles, CA at 5:30pm on a Wednesday?" Same statement as before, I have just constrained it with the definitions. My answer when looking and thinking about this critically, "Probably not." Having driven on I-5 in LA at 5:30 pm this year, I know that the traffic has 30 sec bouts of 5 mph - 20 mph with stops of up to 3 minutes in between - hence the term "stop and go traffic." I feel very confident in my abilities to weave and dodge around cars that are stopped or maybe going as fast as I am. My only concern would be the motorcycles traveling in between lanes at 30 mph constantly.

So from this example, we have common sense that tells us one thing, but once we put some thought in to the situation, we find that our common sense could be wrong. Mao Tse Deng knew nothing about agriculture, but ordered the countries farmers to plant the rice plants only half the distance apart (thereby doubling the amount of rice). No other factors changes - no added fertilizer, not a new breed of rice, just the distance between plants. The result was an unmitigated disaster. The worst rice crop ever and 20 million people died of starvation in China as a result. Common sense decisions are the worst, when we have no background to develop the "common sense" in the first place.

Facts are simply that. Facts. They don't have a political agenda, they don't care about you, they are completely emotionless. People may interpret facts different ways, but any logical interpretation will have to take into account all of the facts. If new facts are brought forth that discount the previous interpretation, then the interpretation must be changed (otherwise you are delving into the realm of faith). For instance, if I look at data of airplane hijackings during the 70s, 80s, and 90s, and find that rarely did everyone on the flight lose their lives; I could then logically conclude that if a plane is hijacked, the best method of dealing with it is to cooperate with the hijackers and let the authorities on the ground handle the situation (this worked dozens of times). After 9/11, one would be a fool to think that this interpretation was still valid. Which may be the reason the few instances of hijacking since then have been met with passenger resistance.

This process of interpreting the world based on facts and changing that interpretation when new facts are presented is also known as the scientific method. Common sense can be used to deal effectively with small problems that have limited amounts of data input if we have the proper prior information (i.e. touching a hot stove will get you burned). If we dealt with complex problems using only common sense, we would never have such things as evolution, quantum mechanics, calculus, and organic chemistry. These concepts are not common sense. The people who developed them didn't just happen upon them one day while taking the dog for a walk.

So if common sense is not common and sometimes makes no sense, what good is common sense for decision making? Well, it should be the first step to formulating a hypothesis. (Common sense is right many times, although not always for the reason we think). This should then be backed up by factual information. If the facts are contrary to common sense, then the common sense was wrong. This doesn't mean you are stupid, only that you didn't have sufficient information and experience. Logic dictates how you frame the argument. It has nothing to do with whether the argument is correct. Faulty logic only means your proof is invalid, it does not mean that the result is incorrect.

In closing, facts are integral to any kind of proof. They validate whether a hypothesis (or common sense) is correct or not. Logic provides the framework for your argument. Appealing to common sense or logic because the facts don't support your case indicates that argument doesn't have a leg to stand on.