Archive for July 2014
The blog is on vacation until August 1.
Given that this came up again in the comments, please re-read my previous post about self-actualization.
And remember, in that post I am merely explaining what the elites believe, and not saying whether or not I agree with them.
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Does Mike “The Situation” Sorrentino achieve self-actualization by building up his muscles and having sex with many prole women? And if the answer to that question is yes, then do the elites see it that way, or do they think that he is wasting his life away because he didn’t go to college and doesn’t have a respectable white-collar career?
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Also, when David Brooks wrote:
Thanks to the labor of low-skill immigrants, the cost of food, homes and child care comes down, living standards rise and more women can afford to work outside the home.
I think that’s one of the most beautiful things he ever wrote because he wrote it completely unironically. He has so completely internalized the idea that the goal of life is self-actualization through career that he doesn’t even see the irony of assuming that when the cost of food and homes come down and living standards rise, that means women become more likely to “work outside the home” instead of less likely.
(And I might also point the dubiousness of his assertion that more immigration causes less expensive homes. The opposite seems to have happened. And if you add the two assumptions together, you get the weirdest ever argument in favor of immigration. “I support more immigration because it causes the price of homes to go down, and lower housing prices means that women can afford to go to work.”)
Video footage of the security breach shows the unidentified people walking on the bridge’s footpath at about 3:10 a.m., and 20 minutes later the light on the bridge’s Brooklyn tower flickers and goes dark, Miller said. The same thing happens about 12 minutes later on the Manhattan tower, he said.
Locked gates midway up the main cables leading to the tops of the towers didn’t appear to have been tampered with, suggesting the climbers scaled them to reach the top, Miller said.
So now we know that multiple people pulled this prank.
What crimes were actually committed? Since they had to scale a locked gate, I guess that’s trespass (a class B misdemeanor in NY State). And they stole the flags. Although if they merely believed they were borrowing the flags with no intent to keep them, then it’s technically not theft. And if they didn’t damage any property, then it’s not vandalism (called criminal mischief in the NY penal code).
My legal advice to the pranksters is to immediately return the stolen flags to the City (anonymously, of course) to demonstrate that there was no intent to keep the flags. And also to demonstrate that the flags were not damaged. That way, they only crime they committed was the trespass misdemeanor.
I suppose that a huge amount of police resources are going to be wasted on tracking down the perpetrators of a very minor crime.
Big police investigation to figure out who allegedly replaced the flags on the Brooklyn Bridge with faded flags.
Police removed the white flags just before noon from poles on the stone supports that hold cables above the bridge. One of the flags, viewed via video, appeared to have faint traces of stars and stripes on it.
Hey, here’s an idea. No one switched the flags. The last time DOT workers replaced the flags, they replaced them with crappy made-in-China flags made with fugitive dyes that faded in the sunlight.
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Alternatively, it could have been a false flag operation.
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OK, so the problem with my fugitive dye theory is that I searched through Instagram for pictures of the Brooklyln Bridge taken yesterday, and all show the flags looking normal. The dye wouldn’t have faded in the middle of the night.
I think this has to have been an inside job, done by a person who had previous experience legitimately replacing the flags as a City DOT employee. The employee took two of the old flags home with him instead of throwing them in the garbage, and then he bleached them. Bleaching an old flag would be easier and less expensive than buying a new white flag. (Where would one even buy such a thing? It would have to be a special order.) And of course this City DOT employee would know exactly how to climb to the top of the bridge undetected and replace the flags.
Greg Mankiw, who is a libertarian-economist type, wrote a New York Times column about inherited wealth last month.
He starts out by calling it “intergenerational altruism.” Because everyone knows that altruism is good, this artful use of language is designed to make people have good feelings about bequests of wealth. But this could also be explained in terms of evolutionary biology. People have a natural biological urge to ensure that their children are successful, because in the past this has led to having more great-grandchildren which is for the most part the ultimate goal of all animals.
The desire to bequest money to one’s children could just easily be described in terms of greed, as in greed to have a sort of immortality through one’s children and perpetual fame for having fathered a great dynasty.
The bottom line here is that rich people are not saints because they leave money to their children, they are just doing what is normal behavior for rich people. And remember that the behavior of rich people is intended to benefit themselves and not society at large.
Mankiw then spends a large part of the column writing about regression towards the mean. This is yet another emotional argument instead of a utilitarian one. This is supposed to make us feel bad for rich children that they will probably not be as successful as their parents, thus we should not begrudge them their inheritance which they presumably need in order to alleviate the low self-esteem they have from living in the footsteps of their more successful parents. Boo hoo, poor rich children.
Then finally we get to an actual economic argument rather than an emotional one. We need to allow rich children to keep their inheritance so that they will invest it in ways that increase productivity and therefore make everyone richer!
For starters, this in contradiction to the regression-towards-them mean argument he made previously. Which is it? Are children of the rich unsuccessful losers who will just spend the money on big parties thrown at their big mansions, or are they hyper-smart investors who will direct their inheritance towards the investments that will produce the optimal return, thus becoming even richer by doing so and not regressing towards the mean as Mankiw earlier said they would?
If people need to be rich in order for the economy to have an adequate level of investment (which is a rather dubious assumption because the whole point of things like corporations and investment funds is that many people of average wealth can group their money together to invest in big projects), then it would surely make more sense to take away the money from the stupid rich children via a high inheritance tax and then transfer it to smart poor people, perhaps those who score the highest on the GMAT, who would then use the money a lot more intelligently to grow the economy.
I should point out that with the last argument, Mankiw is merely using one of the standard libertarian arguments for low taxes on passive income, which is that a small number of people need to be able to become rich and stay rich in order for investment to take place, and as I pointed out above, it’s a dubious assumption.
Steve Sailer has a post about Richard Feynman’s womanizing behavior.
Why are people so outraged by Feynman’s behavior when much more egregious womanizing by rock stars, actors and professional athletes is glossed over? For example, Wilt Chamberlain claimed to have had sex with 20,000 women. Why isn’t there more anger over that? Jack Nicholson hasn’t been banned from Hollywood despite allegedly having had sex with 2,000 women (but only one-tenth of Wilt Chamberlain’s alleged accomplishment).
This seems like a business — using data to predict gentrification — that has been underinvested in. My wife and I went with a Graham-Buffett “Value Investing” approach to forecasting gentrification in Chicago in 1988, buying a well-made 1923 condo near the beaches, on the grounds that the main very long run feature distinguishing one neighborhood from another in Chicago is proximity to Lake Michigan (and all the amenities that come with it).
But, that wasn’t a fashionable view in Chicago up through 1997, so if we had wanted to sell during our first eight years, we would have barely gotten what we paid for the place. The people who did better in 1988-1997 were the Momentum Investors, the proto-hipsters who flocked together to the the dumpy inland neighborhood of Bucktown (Liz Phair’s “Guyville”). Because my wife and I are pretty contrarian by personality, we missed out on that. As Keynes remarked, markets can sometimes stay irrational longer than you can stay solvent.
But then our neighborhood suddenly became fashionable in 1998 (hey, it’s the lakefront ), just like back in 1988 we had assumed it eventually would, and we wound up doing fine.
Anyway, it seems like some sabermetrician-types should stop playing around with baseball statistics and start churning massive amounts of data to figure out underlying patterns, if any, in gentrification.
While this theoretically sounds like a profitable use of HBD knowledge, I am pessimistic about this. For starters, the real estate market is a lot more “efficient” than people realize. As you should know, “efficient” is a term of art in finance and economics that refers to the fact that free markets already take into account all publicly known information in order to arrive at the market price for investments. Because all of the data that you have access to is also accessible to everyone else. Although you may think you have some special cynical or HBD-related insight, I suspect that experienced real estate investors and developers are already secret believers in HBD, or at least they know enough to know what kind of people moving into a neighborhood cause prices to go up, and what kind of people cause prices to go down.
Even if you predict that Bedford-Stuyvesant is a future up-and-coming neighborhood, do you really want to be robbed and beat up by the local residents (as happened to these hipsters) while waiting for the neighborhood to improve?
The way to actually make money in real estate in a heavily regulated environment like New York City is to have inside knowledge about the real-state approval and development process which only comes from experience working in the industry.
Libertarian-economist types believe that income is perfectly correlated with merit, and that merit is perfectly correlated with value creation. Because the unregulated laissez-faire market is so awesome. Everyone will earn exactly according to the value they create, which will incentivize maximum value creation and lead to economic Nirvana.
In the real world, income is determined by career tracks. It is easily observed that the primary skills valued by employers are skills that can only be learned on the job. The employability of a college graduate without the right work experience is extremely low. It’s hard for college graduates to find jobs, and when they do find a job it pays only a fraction of what experienced employees in the best career tracks get paid. (Whether or not people truly learn valuable skills on the job and don’t learn any valuable skills otherwise is open to debate. I am only explaining readily observable employer behavior.)
Thus the key to earning a good income is to get into a good career track so that one can acquire the career track record required to earn a high income. People who don’t get into good career tracks are screwed over by the American economy.
Libertarian-economist types will no doubt stress the merit-based aspects of getting hired into career tracks, but there are many more factors that are unrelated to value creation ability.
- Coming from a socioeconomic environment where one would learn about the importance of attending prestigious colleges.
- Coming from a socioeconomic environment where one would be directed towards scholastic and extracurricular endeavors that will look good on a college application.
- Coming from a socioeconomic environment where one learns about the importance of internships, and has the financial ability to work for free.
- Coming from a socioeconomic environment where one has social connections (often through parents) that give one preferential treatment in getting hired.
- Being physically attractive, which helps a lot on job interviews.
- Having a “good” personality, which helps a lot on job interviews. (“Good” means good for doing well on job interviews which may or may not also be good for contributing to an employer’s profits.)
- The randomness of people who are not even considered old enough to drink beer making decisions about college majors that determine the course of their whole lives by limiting the career tracks they can get hired into.
The only objective merit-based determinant of career track is college grades. But this is only one factor among many that determine career tracks.
On the other hand, it should be noted that intelligence (as measured by IQ tests) is NOT normally a merit-based determinant of career track because employers don’t give IQ tests, and the College Board won’t even help you out here by sending your test scores to employers. Unless people use their intelligence to get into a prestigious college, select a lucrative major, and get good grades, their intelligence won’t help them make money in a white-collar career. And nothing I wrote in the previous sentence is contradicted by anything that Herrnstein and Murray wrote in The Bell Curve.
In the most recent episode of Under the Dome, a new character is introduced who was a friend of Junior’s mother, and he kidnaps the multiracial female science teacher (yes, not all science teachers are white men!) because of some crazy Christian-based beliefs. Remember that last season the only religious character on the show was the crazy reverend who was also a drug dealer. This continues with the bias of Hollywood that religious people are a combination of stupid, crazy, or evil.
The most recent episode of the Leftovers is about an Episcopal priest, who while not stark-raving-mad, is nevertheless a slight bit off his rocker. (HBO shows are for the more sophisticated, so the priest has to be crazy in a more subtle and nuanced way.) He is obsessed with finding the bad things that departees have done, and then publishing them. The episode begins with him preaching to nearly empty pews, and then someone comes into the church and beats him up because he is pissed off about one of his flyers. At the end of the episode, the weird cult of silent chain smokers winds up buying his church.
While I am not necessarily in favor of TV shows pushing religion on us, I think both shows are very unrealistic. I think the natural response that people would have to an unexplained supernatural event like a dome encasing a town or 2% of the people disappearing would be a return to their religious beliefs rather than turning away from them.
And I can’t take any more of either show. They both suck (but in different ways: Under the Dome is stupid and prole, and The Leftovers is pointless). I’m not watching any more episodes.
A few days ago, a commenter named Mark wrote:
I know you’re talking about the future prescient lion but my reality is so different. I work a blue collar job for a half a billion dollar company. Many of my coworkers have part time jobs and some have 2 full time jobs. We don’t need all these people working is so far from my reality. I know 2 guys (one in his sixties, the other guy, at least, in his fifties) who work 2 full time jobs. I asked another guy in his sixties if he had another job and he told me he couldn’t get by on just the one salary (25k?) and has 2 part time jobs. The company can’t keep workers for several reasons and my department is understaffed and probably will always be understaffed on Friday nights. Yes, I can see robots in theory doing some work but ironically, the most physically demanding jobs are also going to be the toughest to automate. I know you’re typing about the future but the present is quite different.
I haven’t necessarily predicted that the future wouldn’t be dystopian. In fact, as your anecdote shows, we are slipping in the direction of the dystopian future in which, ironically, a much greater supply of material goods produced with automation and robotic labor coincides with greater poverty. This is because our economy is set up so that workers don’t get any of the benefits of the robotic bounty unless they can do something that the owners of capital are willing to pay for. And furthermore, there is the Iron Law of Wages which states that competition among workers will drive down salaries to the minimum level needed to sustain the life of the workers and their families.
Mainstream economists, today, don’t believe in the Iron Law of Wages, but that’s because their framework for what’s “normal” is the post-World War II era, but they probably have that backwards. The post-World War II era is an anomaly and we are returning now to the normal human condition in which the average worker is only able to earn a subsistence income.
So unless government does something to interfere with the economy and/or redistribute wealth, the future will be one of poor masses and a super-rich elite.
And as usual, my advice for younger readers, as well as older readers who want advice for their children, is that one should not be content to settle for an average salary or an average career, because in the future average will be poor. One must strive to be in the top 10% and preferably the top 1% in order to be able to benefit from the future robotic economy and to have as good a life as your parents had.