Many young adults have felt the impact of the recession and sluggish recovery in tangible ways. Fully half (49%) of those ages 18 to 34 say that because of economic conditions over the past few years, they have taken a job they didn’t really want just to pay the bills. More than a third (35%) say they have gone back to school because of the bad economy. And one-in-four (24%) say they have taken an unpaid job to gain work experience.
First, this study is great evidence of my "what is normal" fail. There is no baseline. OK, 24% moved back in with their parents. How many did this in good times? How much worse is this?
But the real eye-catcher to me is that somehow I am supposed to be shocked that people have to find a job to pay the bills. Even a job that, gasp, they really didn't want. I have a clue for you. A lot of jobs 22-year-olds have to take are not that compelling. Mine were not. Despite what colleges seem to be telling them, the world does not offer up a lot of really cool jobs to inexperienced young adults. Long before you are closing deals with CEO's, you are probably writing sales literature in some cubicle.
And by the way, I am struck by how wealthy our society is when I look at this chart. Look at answers two and three. In both cases, people are saying that in tough times, they chose to forego income and build their skills, even perhaps paying for the privilege. What other time in history would people have this luxury? How many countries today would have so many people with this luxury in hard times? Even in the Great Depression in this country I don't think we saw the same phenomenon. Obviously the economy sucks and it would be great for everyone for it to improve, but in most other times and even in many other countries in the world today, a significant bar in bad times would have been "I starved to death."
I have said for quite a while that despite all the hand-waving about efficiency and electronic records and other BS (efficiency from owner of the Post Office?) the only two cost reduction tools that state-run health care have are 1) Price Controls and 2) Rationing. This has become clear yet again in California. Allocation of scarce resource by bureaucratic fiat has NEVER worked, not only leading to mis-allocations but generally reducing the size of the pie to be allocated in the process. The only solution is returning health care to a world (that most every other product and service is in) where consumers have the incentive to shop and make price-value tradeoffs for themselves using prices set by the free operations of supply and demand.
Virginia Postrel had the same reaction to Charles Murray's recent book that I had -- it's a myth to think that there was some sort of greater cultural integration in the 1950's than there is today. Because, you know, Wally and the Beav had so many black kids at their school.
In what has to be the most hilariously unconstitutional piece of legislation that I've seen in quite some time, senators in the Arizona state legislature have introduced a bill that would require all educational institutions in the state -- including state universities -- to suspend or fire professors who say or do things that aren't allowed on network TV. Yes, you read that right: at the same time the Supreme Court is poised to decide if FCC-imposed limits on "indecent" content in broadcast media are an anachronism from a bygone era, Arizona state legislators want to limit what college professors say and do to only what is fit for a Disney movie (excluding, of course, the Pirates of the Caribbeanfranchise. After all, those films are PG-13!).
Amazing. I had thought the nominal reason for the FCC standards was because non-adults might watch TV and hear a bad word that they likely hear 20 times a day at school. But college kids are generally adults. This is just bizarre.
The Huffpo article did not mention the bill's sponsor, but how much do you want to be its a Conservative who has in the past lamented political correctness on campus? [update: sponsors here]
My new column at Forbes is a post I have been thinking about and working on for quite a while, trying to refine over time a simple explanation of what is and is not understood in climate science. This is how it begins, but I hope you will read it all
Likely you have heard the sound bite that “97% of climate scientists” accept the global warming “consensus”. Which is what gives global warming advocates the confidence to call climate skeptics “deniers,” hoping to evoke a parallel with “Holocaust Deniers,” a case where most of us would agree that a small group are denying a well-accepted reality. So why do these “deniers” stand athwart of the 97%? Is it just politics? Oil money? Perversity? Ignorance?
We are going to cover a lot of ground, but let me start with a hint.
In the early 1980′s I saw Ayn Rand speak at Northeastern University. In the Q&A period afterwards, a woman asked Ms. Rand, “Why don’t you believe in housewives?” And Ms. Rand responded, “I did not know housewives were a matter of belief.” In this snarky way, Ms. Rand was telling the questioner that she had not been given a valid proposition to which she could agree or disagree. What the questioner likely should have asked was, “Do you believe that being a housewife is a morally valid pursuit for a woman.” That would have been an interesting question (and one that Rand wrote about a number of times).
In a similar way, we need to ask ourselves what actual proposition do the 97% of climate scientists agree with. And, we need to understand what it is, exactly, that the deniers are denying. (I personally have fun echoing Ms. Rand’s answer every time someone calls me a climate denier — is the climate really a matter of belief?)
It turns out that the propositions that are “settled” and the propositions to which some like me are skeptical are NOT the same propositions. Understanding that mismatch will help explain a lot of the climate debate.
A lot of folks have asked me if I am going to comment on this
One of the fathers of Germany’s modern green movement, Professor Dr. Fritz Vahrenholt, a social democrat and green activist, decided to author a climate science skeptical book together with geologist/paleontologist Dr. Sebastian Lüning. Vahrenholt’s skepticism started when he was asked to review an IPCC report on renewable energy. He found hundreds of errors. When he pointed them out, IPCC officials simply brushed them aside. Stunned, he asked himself, “Is this the way they approached the climate assessment reports?”
I have not seen the book nor the Der Spiegel feature, but I can say that, contrary to the various memes running around, many science-based skeptics became such by exactly this process -- looking at the so-called settled science and realizing a lot of it was really garbage. Not because we were paid off in oil money or mesmerized by Rush Limbaugh, but because the actual detail behind many of the IPCC conclusions is really a joke.
For tomorrow, I am working on an article I have been trying to write literally for years. One of the confusing parts of the climate debate is that there are really portions of the science that are pretty solid. When skeptics point to other parts of the science that is not well-done, defenders tend to run back to the solid parts and point to those. That is why Michael Mann frequently answers his critics by saying that skeptics are dumb because they don't accept greenhouse gas theory, but most skeptics do indeed accept greenhouse gas theory, what they don't accept is the separate theory that the climate is dominated by positive feedbacks that amplify small warming from CO2 into a catastrophe.
This is an enormous source of confusion in the debate, facilitated by a scientifically illiterate press and alarmists who explicitly attempt to make this bate and switch so they can avoid arguing the tough points. Even the author linked above is confused on this
Skeptic readers should not think that the book will fortify their existing skepticism of CO2 causing warming. The authors agree it does. but have major qualms about the assumed positive CO2-related feed-backs and believe the sun plays a far greater role in the whole scheme of things.
This is in fact exactly the same position that most skeptics, at least the science-based non-talkshow-host ones have. Look for my Forbes piece tomorrow.
On the way to work today, which is normally only a 5-minute drive for me, there was a small fender-bender among a couple of cars. The cars did exactly what you are supposed to do: they pulled off the road into a nearby parking lot so they would not block traffic. The police could not be bothered, and just parked in the right lane, jamming traffic up for a mile or so. I looked - there was no debris or anything in the road that they were trying to block (you can confirm that from the picture below), the police simply did not have the common courtesy that the other drivers had.
Yes, the police car below is actually parked and unoccupied in the right lane at morning rush hour. The citizens involved can be seen pulled into the parking lot at the left. Though it is hard to see from the picture, the traffic backup extends well into the distance.
Kevin Drum apparently believes the reason Republicans are not passing further stimulus spending is because such a stimulus would be too likely to have immediate results improving the economy and thus will help Democrats in the next election.
This is the kind of politcal bullshit that drives me right out of the system. I am perfectly capable of believing Drum honestly thinks that further deficit spending will improve the economy this year. I think he's nuts, and working against all historic evidence, but never-the-less I believe he is sincere, and not merely pushing the idea as part of some dark donkey-team conspiracy. Why is it that he and his ilk, from both sides of the aisle, find it impossible to believe that their opponents have similarly honest intentions?
I mean, is it really so hard to believe -- after spending a trillion dollars to no visible effect, after seeing Europe bankrupt itself, and after seeing the American economy begin to recover only after crazy stimulus programs have mostly stopped -- that some folks have an honest desire to see economic improvement and think further stimulus programs are a bad idea?
It’s true that our Framers, unlike many others, especially more recently, did not focus their attention on rights. Instead, they focused on powers— and for good reason. Because we have an infinite number of rights, depending on how they’re defined, the Framers knew that they couldn’t possibly enumerate all of them. But they could enumerate the government’s powers, which they did. Thus, given that they wanted to create a limitedgovernment, leaving most of life to be lived freely in the private sector rather than through public programs of the kind we have today, the theory of the Constitution was simple and straightforward: where there is no power there is a right, belonging either to the states or to the people. The Tenth Amendment makes that crystal clear. Rights were thus implicit in the very idea of a government of limited powers. That’s the idea that’s altogether absent from the modern approach to constitutionalism—with its push for far reaching “active” government—about which more in a moment.
During the ratification debates in the states, however, opponents of the new Constitution, fearing that it gave the national government too much power, insisted that, as a condition of ratification, a bill of rights be added—for extra caution. But that raised a problem: by ordinary principles of legal reasoning, the failure to enumerate all of our rights, which again was impossible to do, would be construed as meaning that only those that were enumerated were meant to be protected. To address that problem, therefore, the Ninth Amendment was written, which reads: “The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.” Over the years, unfortunately, that amendment has been misunderstood and largely ignored; but it was meant to make clear that the people “retained” a vast number of rights beyond those expressly enumerated in the document....
The idea, then, that our Constitution is terse and old and guarantees relatively few rights—a point Liptak draws from the authors of the article and the people he interviews—does not explain the decline in the document’s heuristic power abroad. Nor does “the commitment of some members of the Supreme Court to interpreting the Constitution according to its original meaning in the 18th century” explain its fall from favor. Rather, it’s the kindof rights our Constitution protects, and its strategy for protecting them, that distinguishes it from the constitutional trends of recent years. First, as Liptak notes, “we are an outlier in prohibiting government establishment of religion,” and we recognize the right to a speedy and public trial and the right to keep and bear arms. But second, and far more fundamentally, our Constitution is out of step in its failure to protect “entitlements” to governmentally “guaranteed” goods and services like education, housing, health care, and “periodic holidays with pay” (Article 24 of the UN Universal Declaration of Human Rights). And right there, of course, is the great divide, and the heart of the matter.
For years I have argued that most high-speed rail makes no sense economically -- that in fact it is an example of the political impulse towards triumphalism. Government leaders through the ages have wanted to use other people's money and sweat to build vast monuments to themselves that would last through the ages.
I meant that as ridicule, and assumed most readers would recognize it as such, but apparently not the LA Times, which editorialized in favor of California high speed rail in part because its just like the pyramids
Worthwhile things seldom come without cost or sacrifice. That was as true in ancient times as it is now; pharaoh Sneferu, builder of Egypt's first pyramids, had to try three times before he got it right, with the first two either collapsing under their own weight or leaning precipitously. But who remembers that now? Not many people have heard of Sneferu, but his pyramids and those of his successors are wonders of the world.
As a reminder, this is what I wrote at the article linked above in Forbes
What is it about intellectuals that seem to, generation after generation, fall in love with totalitarian regimes because of their grand and triumphal projects? Whether it was the trains running on time in Italy, or the Moscow subways, or now high-speed rail lines in China, western dupes constantly fall for the lure of the great pyramid without seeing the diversion of resources and loss of liberty that went into building it.
One of the classic mistakes in graphics is the height / volume fail. This is how it works: the length of an object is used to portray some sort of relative metric. But in the quest to make the graphic prettier, the object is turned into a 2D, or worse, 3D object. This means that for a linear dimension where one object is 2x as long as another, its area is actually 4x the other and its volume is 8x. The eye tends to notice the area or volume, so that the difference is exaggerated.
The Tebow character is, by the data, supposed to be about 1.7x the Brady character. And this may be true of the heights, but visually it looks something like 4x larger because the eye is processing something in between area and volume, distorting one's impression of the data. The problem is made worse by the fact that the characters are arrayed over a 3D plane. Is there perspective at work? Is Rodgers smaller than Peyton Manning because his figure is at the back, or because of the data? The Vick figure, by the data, should be smaller than the Rodgers figure but due to tricks of perspective, it looks larger to me.
This and much more is explained in this Edward Tufte book, the Visual Display of Quantitative Information. You will find this book on a surprising number of geek shelves (next to a tattered copy of Goedel-Escher-Bach) but it is virtually unknown in the general populace. Every USA Today graphics maker should be forced to read it.
Apparently, the gap between the productive and hard-working and those with less productive habits is growing larger. David Brooks suggests that the productive be forced into a couple of years of government servitude. The idea, as I understand it, is for the productive to teach the less fortunate how to be more diligent and productive in the context of a shared experience in an unproductive government make-work program. Sort of like teaching your teenager good work habits by putting him in DMV internship.
Seriously, I suppose I understand how class-mixing at the point of a gun might expose the wealthy to classes and cultures they have never encountered. But how is working together in some service brigade with a post office-trained manager on a government paycheck going to teach the welfare-and-food-stamp set anything new about productive work and self-reliance?
This could have also been labelled as from the files of "anti-trust is not about consumers." Apparently, a mapmaker in France has successfully sued and won damages from Google for unfair competition, ie from providing Google Maps for free.
Just as in the Microsoft anti-trust case and just about every anti-trust case in history, companies who brought the suit are really trying to stop an up-start competitor from trashing their business model, but they have to couch this true concern in mumbled words about the consumer. Specifically, they raise that ever-popular boogeyman of jacking up prices once the monopoly is secured. The next time this happens, of course, will be the first time. Its a myth. For example, in Google's case, left unsaid is how they would jack up their prices when at least two other companies (Bing, Mapquest) also provide mapping services online for free.
The old saying goes, "where there is smoke, there's fire." I think we all are at least subconciously suceptible to thinking this way vis a vis the cancer risks in the media. We hear so much about these risks that, even if the claims seem absurd, we worry if there isn't something there. After all, if the media is concerned, surely the balance of evidence must be at least close - there is probably a small risk or increase in mortality.
Cell phones do not cause cancer. They do not even theoretically cause cancer. Why? Because they simply do not produce the type of electromagnetic radiation that is capable of causing cancer. Michael Shermer explains, using basic physics:
...known carcinogens such as x-rays, gamma rays and UV rays have energies greater than 480 kilojoules per mole (kJ/mole), which is enough to break chemical bonds... A cell phone generates radiation of less than 0.001 kJ/mole. That is 480,000 times weaker than UV rays...
If the radiation from cell phones cannot break chemical bonds, then it is not possible for cell phones to cause cancer, no matter what the World Health Organization thinks. And just to put the "possible carcinogen" terminology into perspective, the WHO also considers coffee to be a possible carcinogen. Additionally, it appears that politics and ideology may have trumped science in the WHO's controversial decision.
Increases the minimum wage, and therefore the minimum skill / productivity needed for a job
Adds substantially to the costs of labor through required taxes, insurance premiums, pensions, etc
Makes employees virtually un-fireable, thus forcing companies to think twice about hiring young, unproven employees they may be saddled with, good or bad, for decades
Puts labor policy in the hands of people who already have jobs (ie unions)
Shift wealth via social security and medical programs from the young to the old
The bitterly ironic part is that when these folks hit the streets in mass protests, it will likely be for more of the same that put them there in the first place.
Pietro Ichino, a professor of labor law at the University of Milan and a senator in the Italian legislature, is known as the author of several “neoliberal” books and studies recommending that the Italian government relax its extraordinarily stringent regulation of employers’ hiring and firing decisions. As Bloomberg Business Week reports, that means that Prof. Ichino must fear for his life: “For the past 10 years, the academic and parliamentarian has lived under armed escort, traveling exclusively by armored car, and almost never without the company of two plainclothes policemen. The protection is provided by the Italian government, which has reason to believe that people want to murder Ichino for his views.”
An apparent paradox that frequently puzzles journalists is that Europeans work fewer hours than workers in the United States, while in some countries, hourly productivity appears to be the same, or even higher, than that of American workers.
This is not actually a paradox at all. Much of the decline in European hours worked per-capita came in the form of unemployment. Rigid labor laws which make it hard to fire (and thus, risky to hire) shut less productive workers out of the market, particularly the young, and those who had been displaced due to disruptive industry change. So does anything that raises the cost of labor, like, er, loads of mandatory vacation and leave. When you exclude your least productive workers from the labor force, your measured hourly productivity will be higher, particularly if you use metrics like GDP per hours worked.
. Good stuff, though hugely frustrating of course. Watch the media for other stories on this topic -- I challenge you to find one story in the regular media that discusses pain medication that has even one interview of a pain sufferer. This issues is treated 180 degrees differently from any other story one could imagine about victims of medical conditions being denied medication. The part that always amazes me is how "addiction" is treated as a bad thing under all circumstances -- what does addiction even mean if the alternative is unbearable pain? Are AIDS patients addicted to the medication that keeps them alive?
Food activists on the Left often point to the use of High Fructose Corn Syrup (HFCS) as one of those failures of capitalism, where rapacious capitalists make money serving an inferior product. But HFCS resulted from a scramble by food and beverage companies to find some reasonable alternative to sugar as the government has driven up sugar prices through a crazy tariff system that benefits just a tiny handful of Americans, and costs everyone else money
For the last 10 years or so, HFCS-42 has actually traded at a price higher than the world market price for sugur, but lower than the US price for sugar. There is a lot complexity to prices, but this seems to imply that HFCS would not be nearly as attractive a substitute for sugar if US sugar tariffs did not exist (not to mention subsidies of corn which support HFCS). This can also be seen in the fact that HFCS has not been used nearly so often as a sugar substitute in markets outside of the US, even by the same manufacturers (like Coke) that pioneered its use in the US.
President Obama used a lot of his state of the union address again teeing up what sounded to me like a new round of protectionism. Protectionism is the worst form of crony capitalism, generally benefiting a handful of producers and their employee to the detriment of 300 million US consumers and any number of companies that use the protected product as an input.
Folks on the Left prefer public institutions over private ones because they percieve them as more "fair." But the power of lawmaking and police and prisons allows public institutions to be far more abusive than private entities could ever be. We spent months and years torturing ourselves about accounting abuses at Enron, but these are trivial compared the accounting shenanigans state institutions engage in every day.
“In the event of default (i) any non-official bond holder is junior to all official creditors and (ii) the issuer reserves the right to change law as needed to negate any rights of the nonofficial bond holder.
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“We should not underestimate the damage these steps have inflicted on Europe’s €8.4 trillion sovereign bond markets. For example, the Italian government has issued bonds with a face value of over €1.6 trillion. The groups holding these bonds are banks, pension funds, insurance companies, and Italian households. These investors bought them as safe, low-return instruments that could be used to hedge liabilities and provide for future income needs. It was once hard to imagine these could ever be restructured or default.
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“Now, however, it is clear they are not safe. They have default risk, and their ultimate value is subject to the political constraint and subjective decisions by a collective of individuals in the Italian government and society, the ECB, the European Union, and the International Monetary Fund (IMF). An investor buying an Italian bond today needs to forecast an immediate, complex process that has been evolving in unpredictable ways. Investors naturally want a high return in order to bear these risks.
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“Investors must also weigh carefully the costs and benefits to them of official intervention. Each time official creditors provide loans or buy bonds, the nonofficial holders become more subordinated, because official creditors including the IMF, ECB, and now the European Union continue to claim preferential status.”
This is not to say that bondholders in private entities don't get crammed down in a refinancing or bankruptcy. But here we are talking about differential treatment of holders of the exact same class, even issue, of securities.
A reader sends me this editorial from Jerry Jordan at IBD. It discusses a topic that is one of my favorites - government mal-investment. By a thousand different mechanisms, from direct investment (Solyndra) to artificial interest rates to monkeying with price signals to economic rule-making (e.g. community banking, ethanol mandates) the government is shifting capital and resources from the allocations a well-funcitoning market would make to optimize returns and productivity to allocations based on political calculation. We rightly worry about deficits and taxes, but in the long run this redistribution of investment from the productive to the sexy or politically expedient may have the largest long-term negative implications -- just look at what the management of the Japanese economy by MITI (touted at the time as fabulous by statists everywhere) did to that country, with the lost decade becoming the the lost two decades.
It is hard to excerpt but here is how it begins
It usually surfaces with an entrepreneurial adolescent deciding it would be a good idea to sell lemonade at the curbside to passersby
Parents, wanting to encourage the idea that working and making money is a good idea, drive around to buy the lemon, sugar, designer bottled water, cups, spoons, napkins, a sign or two, and probably a paper table cloth.
Aside from time and gas, the outing adds up to something north of $10. At the opening of business the next day, the kids find business is slow to nonexistent at $1 per cup. So, they start to learn about market demand and find that business becomes so brisk at only 10 cents per cup that they are sold out by noon, having served 70 cups of lemonade and hauled in $7.
The excited lunch-time conversation is about expanding the business. A stand across the street to catch traffic going the opposite direction; maybe one around the corner for the cross-street traffic. The kids see growing revenue; the "investors" see mounting losses.
There is a strand of economics, we'll call it the K-brand, that sees all this as worthwhile. They add together the $10 spent by the parents to back the venture and the $7 spent by the customers and conclude that an additional $17 of spending is clearly a good thing. Surely, the neighborhood economy has been stimulated.
To the family it is a loss, chalked up as a form of consumption. If this were a business enterprise it would be a write-off. In classical economics it is a "mal-investment."
In his New York Times column, Paul Krugman blames the coming British recession on the government's "austerity." In the Left's parlance, "austerity" means the government is not spending and in particular deficit spending enough.
a. Of 44 major economies in the world, the British have been running the highest budget deficits of any country except two - Greece and Egypt are higher.
b. British real government spending has risen every year through the financial crisis
Presuming Krugman has access to these basic facts, is his argument that Britain should be deficit spending even more (and if so, wtf is enough?) or is this just political hackery to help Obama dispel concerns about his deficits?
If I were any good at the two minute sound byte interview, I would have summarized this about the superiority of the current US private rail system vs. the systems in Europe and Japan:
Link here (sorry, for some reason the link did not show up the first time, probably something to do with my iPad)
[update: sent to me by by the folks at finem respice]
