Half Sigma

Long term jobs

Greg Mankiw proclaims in his blog that it's a "media myth" that long term jobs are disappearing. Based on a report by Ann Huff Stevens:

Stevens uses data from surveys of men aged 58-62 who were quizzed at the end of their working careers. She finds that in 1969 the average tenure for men in the job they held for the longest period during their careers was 21.9 years. In 2002, the comparable figure was 21.4 years, not much different. Just more than half of men ending their careers in 1969 had been with a single employer for at least 20 years; the same was true in 2002.

The obvious problem with this survey is that it tells us what the labor market was like for men who were born in the years 1940 to 1944.

What's the labor market like for men born in the 1960s? The 1970s? The 1980s?

The company I do work for pays me only as a temp because they don't believe in having permanent computer programmers on staff. They intend to get rid of me as soon as they replace the software I work on with something they think will be better.

Morons are running NYC

This article about the sale of Stuyvesant Town and Peter Cooper Village being sold really gets me mad.

No, I'm not mad that it's being sold.

I'm mad about all the incessant whining in the article about the demise of affordable housing. No more affordable housing. Working class being kicked out. Where will they live? Whine whine whine.

Stupid morons, if you want housing in Manhattan to be affordable, MORE HOUSING UNITS HAVE TO BE CONSTRUCTED. But then the morons whine, builders only build luxury housing, builders only build luxury housing, whine whine whine. Well this is what happens when you don't let the builders build new luxury housing. Old non-luxury housing gets converted to luxury housing.

Pessimism essay in NY Times

Some guy named Adam Cohen had an essay in Monday's NY Times about pessimism. This is unfortunate because it was a topic I was meaning to write about, and now when I do people will think I stole the idea.

The emphasis of my blog post was going to be more on optimism rather than pessimism. Yes, Adam Cohen is right that it's considered unacceptable behavior in America to not be an optimist. Merely being a realist is looked down upon as being pessimistic. Everyone has to delude themselves into thinking they are better than they really are.

I do take exception to the following comment from Cohen:

Pessimism is not, as is commonly thought, about being depressed or misanthropic, and it does not hold that humanity is headed for disaster. It simply doubts the most basic liberal principle: that applying human reasoning to the world’s problems will have a positive effect.

I most certainly believe that reason can solve the world's problems, but unfortunately I don't see much reasoning actually happening. One, of course, needs to approach such problem solving with a realistic view of human nature.

Misunderstanding of movie profits

There is a NY Times article about how movies with big stars are often not "profitable" because of the star's high salary.

This is incorrect, the movie is often quite profitable, but because the star has more bargaining power than the studio, the star gets more of the profits.

It is probably true that the movie studio might have higher profits by filming movies with lesser known actors. The movie as a whole would be less profitable, but the studio might have higher profits because a smaller percentage of the total profits would have to be shared with the actors.

Will Sam Brownback be the next President?

Who is Sam Brownback? He’s a Senator from Kansas who just might be the next President of the United States.

I’ve written many previous blog posts about how the Christian wing of the Republican Party has grown stronger. It is now impossible for someone to win the Republican nomination without the support of the Christians. This rules out east coast liberal Republicans like Rudy Giuliani or George Pataki. John McCain, the man who many consider the frontrunner, also isn’t well liked by the Christian right. He lost in his 2000 bid for the Republican nomination, and I don’t see how anything has changed that’s going to enable him to win in 2008.

So if you want to figure out who’s going to win the Republican nomination, you need to look at who’s going to be able to pick up the Christian vote. And that person is Sam Brownback. All the evangelical Christians are behind him, and he has the support of Pat Robertson. He’s a shoe-in to win the Iowa caucuses, a state which is very friendly to Christian candidates and which borders his home state of Kansas. Pat Robertson came in first place in Iowa in 1988.

One thing unusual about Brownback’s evangelical support is that he’s Catholic. This makes him a stronger candidate because he doesn’t alienate the Catholic vote. He is guaranteed to have strong support among Hispanic voters, not only because of his Catholicism and conservative religious views, but also because he’s soft on immigration. He favored the immigration reform bill that would grant amnesty to illegal aliens. He also has two adopted kids who aren’t white.

FURTHER READING

USA Today article on Sam Brownback
Rolling Stone hatchet job article on Sam Brownback
Sam Brownback fan blog

To be President you must first be Governor or Senator

Greg Mankiw and Alex Tabarrok have been plugging some college professor named Jeffrey Sachs for President. (That's President of the United States and not president of Columbia University.)

As much as I'd like to see a regular person suddenly become President, it ain't gonna to happen. For all practical purposes, the record shows that you must be a Senator or a Governor before being elected as President.

I looked at the biographies of all presidents since Benjamin Harrison, and there are only five exceptions to the Governor or Senator rule:

(1) George H.W. Bush - Director of CIA, Ambassador to U.N.
(2) Gerald Ford - Minority Leader of the House
(3) Dwight D. Eisenhower - general/war hero
(4) Herbert Hoover - Commerce Secretary
(5) William Howard Taft - Secretary of War

The last three were all well known high level public servants before running for President. Ford never actually got elected to the job. Bush ran for the Senate twice and lost. He was lucky to be appointed Vice President, otherwise he never would have won the party primary.

If Jeffrey Sachs were serious about running for President he wouldn't be running for President at all; he'd be running for Governor or Senator.

[*** This post has been edited because for some reason I thought George H.W. Bush was a Senator and I left him off the list of exceptions. Sorry. ***]

Wages at an all time low

The NY Times reports that wages as a percent of GDP are at an all time low (since the government began recording data in 1947):

Together, these forces have caused a growing share of the economy to go to companies instead of workers’ paychecks. In the first quarter of 2006, wages and salaries represented 45 percent of gross domestic product, down from almost 50 percent in the first quarter of 2001 and a record 53.6 percent in the first quarter of 1970, according to the Commerce Department. Each percentage point now equals about $132 billion.

Total employee compensation — wages plus benefits — has fared a little better. Its share was briefly lower than its current level of 56.1 percent in the mid-1990’s and otherwise has not been so low since 1966.

This explains why the average American doesn’t seem to be any better off than he was in 1970 (even though he can buy all sorts of wondrous consumer electronics that didn’t exist in 1970).

Whites, soon to be the new minority

According to the NY Times, in 2004 only 57% of public school students were white. Within a decade, less than half will be white.

Because children are the future, it looks inevitable that the United States will not be a majority white nation in a few decades.

Will we still need to have affirmative action when whites are no longer the majority?

Hispanics and Republicans

In response to my post revealing that Bush voters had more children than Gore voters, Steve Sailer asked how that breaks down for only white non-Hispanic voters. (All statistics are from the General Social Survey.)

Looking at all voters, Bush voters had 2.03 children compared to 1.92 for Gore voters.

Looking only at non-Hispanic white voters, Bush voters had 2.01 children compared to 1.83 for Gore voters.

The average non-Hispanic black voter had 2.16 children compared to 1.92 children for the average non-Hispanic white voter. Because 87.7% of black respondents voted for Gore, removing black voters from the analysis lowers the birthrate of the average Gore voter.

The average Hispanic voter had 2.03 children, only slightly more than the average white voter. Interestingly, the higher Hispanic birthrate favors the Republican Party. Hispanics who voted for Bush had 2.31 children compared to 1.82 for Gore. (The story is the opposite for blacks. The few blacks who voted for Bush had fewer children than those who voted for Gore. Probably, only the higher social class blacks vote Republican.)

A much higher percentage of Hispanics voted for Bush than did blacks. Hispanics are more religious than non-Hispanic whites. 39.2% of Hispanics believe that the Bible is the actual word of God compared to only 28.4% of whites. I am certain that it’s the Republican Party’s Christian message which appeals to Hispanics.

Non-Hispanic blacks are the most fundamentalist of all, with 57.2% believing that the Bible is the actual word of God. But blacks have such a strong tradition of voting Democratic that the Republican Christian message doesn’t pull them in.

I predict that as long as the Republicans field Christian candidates, more Hispanics will vote Republican until the Republicans command a majority of the Hispanic vote. But people who favor libertarian economic policies shouldn’t be so happy about this. Hispanics are more in favor of socialist policies than whites. 52.3% of Hispanics believe that the government should reduce income differences between the rich and the poor, compared to 42.7% for whites and 54.3% for blacks.

The Republican Party is a coalition between Christians and people with libertarian economic views. Political pundits are so used to this that they think it’s natural for these two philosophies to go together. In fact the opposite is true; more libertarian people are less religious. As more Christian voters with socialist economic views join the Republican party, candidates who support libertarian economic policies will no longer win primaries, and suddenly the platforms of the two parties will undergo a radical shift. The Republican Party will become the party of religious socialists, and the Democratic Party will be the party of secular libertarians. The good news is that this will result in the leftist wing being kicked out of the Democratic Party. The bad news is that the Republican Party will probably command more votes than the Democratic Party and we will see the country become more socialist, and at the same time abortion will be outlawed, prayer re-introduced to the public schools, etc.

This is the future and it is inevitable.

The tracks theory of labor market outcomes

THE TRACKS THEORY EXPLAINED

How do people wind up in the jobs that they do? The tracks theory explains it. Once people wind up on a career track, they tend to stay on that career track for the rest of their lives. Switching costs are usually very high if it’s even possible to switch at all.

Middle class and upper middle class workers face two important junctions in their career tracks. The first junction occurs at the age of 17 to 19 when they decide what college to attend and what to major in. The second junction occurs when they obtain their first job out of college. Once a person gets a first job, he obtains experience at that job, so forever after he is valued based on the track he has landed in.

I previously blogged about the importance of the first job. Workers who graduate during a recession have permanently lower earnings because they are less likely to start out on a good career track.

Graduate school offers the possibility of two additional junctions: selecting a graduate program and the first job obtained after completing the program.

IQ AND CAREER TRACKS

I previously blogged about how IQ has little or even sometimes a negative correlation with income after highest level of education is accounted for. The tracks theory explains why IQ is of so little importance. Once a person gets onboard a track, he just follows the track regardless of his IQ.

Take for example my high school English teacher, Frank McCourt. Even though he scored in the 99th percentile on the verbal section of the GRE, he probably got paid exactly the same as every other New York City public high school teacher with the same number of years of service.

Higher IQ opens up the possibility of more career tracks because the person with a higher IQ qualifies for better educational opportunities. But, perhaps more often than not, the 18-year-old chooses a career track that’s not optimal for making money. For example, the 18-year-old who is smart enough to get onboard the BIGLAW track may instead opt into the teaching track and wind up being a modestly paid schoolteacher for the rest of his life. (But I should add here that the average schoolteacher certainly has higher total compensation per hour than the average non-college graduate—it’s not a horrible career choice at all for the student who isn’t capable of handling a more intellectually demanding college major.)

I previously theorized that higher IQ students are at higher risk for selecting interesting sounding but economically unrewarding majors. Lower IQ students tend to seek more practical majors that lead to jobs because they aren’t interested in the learning part of the college experience anyway.

IQ is more helpful for getting a degree than it is for getting the crucial first job after graduating. Colleges look at an IQ test (the SAT) as one of the criteria for admission. (But leadership is just as important, and lack of leadership can prevent high IQ young people from getting into degree programs they are otherwise perfectly intellectually qualified for.)

Employers don’t look at IQ tests when making hiring decisions. Sometimes they look at grade point averages which are weakly correlated with IQ. I once recall reading about a study which found that tall male college seniors received, on average, more job offers than male seniors with high GPAs. This is consistent with my own findings that men who are unathletic or short earn less money.

Once a person is admitted to a career track, it’s not clear that high IQ provides much additional benefit. In most career tracks compensation is more related to years of experience and not actual competency on the job. IQ may have little to do with promotions. The guy who gets along better with the person making the promotion decision is the one who will most likely be promoted. Higher IQ people may be less likely to get along well with their bosses because they are unable to hide how stupid they think their bosses are.

Being a mid-level manager doesn’t seem any more intellectually demanding than being a bottom level worker. I’m sure a person whose IQ is just average for his profession can get several promotions before his merely average IQ becomes a handicap, if it ever does. (I believe that eventually a person with a good personality but only average IQ will be promoted to a position where his merely average IQ causes him to make bad decisions which harm the company. This is the Peter Principle in action.)

CAREER TRACKS AND LABOR MARKET INEFFICIENCY

It should be obvious how inefficient it is for an 18-year-old to be forced to decide his career track for the rest of his life. What does an 18-year-old really know about anything? How does he know what he wants to be doing when he’s 36, twice his current age? To top that off, he’s given incomplete and sometimes even wrong information about how the job market works.

How many 40-year-olds look down another 25 years of their career track and wish that their 18-year-old self made better decisions? Society has determined that the 18-year-old lacks the maturity to drink beer, yet the same 18-year-old is given the choice to decide his future career track for the next 47 years.

I am sure that our national productivity is much lower because people are matched to career tracks based on the whimsical decisions of 18-year-olds and discrimination based on factors like lack of height or athletic ability. It’s completely random whether or not a person with a high level of ability will get mated with a career track where his ability can be best used and where his ability will be economically rewarded.

The case for natural gas

I'm posting to my Contrarian Investing Blog again. Today's post is The case for natural gas.

Bush voters have more children than Gore voters

My previous post doesn't explain the whole story. Bush voters in the 2000 election have somewhat more children than Gore voters. During the 2000 election, poor religious people crossed party lines to vote for Bush because the politics of religion was more important to them than the politics of redistribution of wealth.

Frequency Distribution
Cells contain: -Column percent -N of cases		PRES00
		1 GORE	2 BUSH	3 NADER	ROW TOTAL
CHILDS	0: NONE	24.6 369	20.6 372	50.6 43	23.1 783
	1: ONE	15.2 227	15.2 274	11.2 9	15.1 511
	2: TWO	27.8 417	30.5 550	20.8 17	29.1 985
	3: THREE	18.6 278	19.5 352	5.5 5	18.7 635
	4: FOUR	8.3 125	8.5 153	7.2 6	8.4 284
	5: FIVE	2.7 41	3.0 54	1.2 1	2.8 96
	6: SIX	1.6 25	1.2 22	2.4 2	1.4 49
	7: SEVEN	.4 6	.9 16	.0 0	.7 22
	8: EIGHT OR MORE	.7 11	.7 12	1.2 1	.7 24
	COL TOTAL	100.0 1,499	100.0 1,805	100.0 84	100.0 3,388
Means		1.92	2.03	1.28	1.96
Std Devs		1.59	1.56	1.70	1.58
Unweighted N		1,517	1,805	85	3,407

Back in the 1980 election, Carter voters had more children than Reagan voters. Times they are a changing.

Frequency Distribution
Cells contain: -Column percent -N of cases		PRES80
		1 CARTER	2 REAGAN	3 ANDERSON	ROW TOTAL
CHILDS	0: NONE	22.7 556	22.0 526	39.2 129	23.4 1,211
	1: ONE	15.6 383	14.1 337	14.3 47	14.8 767
	2: TWO	22.9 562	28.0 671	24.4 80	25.4 1,313
	3: THREE	17.0 418	18.2 436	13.1 43	17.3 897
	4: FOUR	10.4 256	9.1 219	5.3 17	9.5 492
	5: FIVE	4.6 113	4.2 101	3.1 10	4.3 224
	6: SIX	2.5 61	2.0 47	.0 0	2.1 108
	7: SEVEN	1.6 40	1.0 23	.6 2	1.3 65
	8: EIGHT OR MORE	2.7 66	1.4 35	.0 0	1.9 101
	COL TOTAL	100.0 2,455	100.0 2,395	100.0 329	100.0 5,179
Means		2.25	2.12	1.43	2.14
Std Devs		1.94	1.73	1.47	1.83
Unweighted N		2,629	2,209	308	5,146

According to the GSS, Carter should have won the election! In reality, Reagan had a huge popular vote lead over Carter (51% to 41%). The GSS is clearly strongly biased in favor of Carter voters. I think that the GSS is biased in favor of a disproportionate number of lower socio-economic status respondents.

(People familiar with the GSS might conclude that I failed to correct for the "black oversamples", but I did. Without the "black oversample" correction, there would be a huge lead in favor of Carter.)

Democrats have more children than Republicans. WSJ is wrong

In a WSJ opinion article entitled The Fertility Gap, Arthur C. Brooks writes:

Simply put, liberals have a big baby problem: They're not having enough of them, they haven't for a long time, and their pool of potential new voters is suffering as a result. According to the 2004 General Social Survey, if you picked 100 unrelated politically liberal adults at random, you would find that they had, between them, 147 children. If you picked 100 conservatives, you would find 208 kids. That's a "fertility gap" of 41%. Given that about 80% of people with an identifiable party preference grow up to vote the same way as their parents, this gap translates into lots more little Republicans than little Democrats to vote in future elections.

With his claim that there are “more little Republicans than little Democrats,” Mr. Brooks demonstrates that he is either (1) too stupid to be allowed to use the GSS and write about it in the Wall Street Journal; or (2) intentionally misleading people.

Let’s look at the actual GSS data comparing Democrats to Republicans (using only 1996-2004 data to reflect the current parties and not how they were in the 1970s):

Frequency Distribution
Cells contain: -Column percent -N of cases		PARTYID
		1 Democrat	2 Ind	3 Republican	ROW TOTAL
CHILDS	0: NONE	26.6 1,258	31.3 1,646	26.0 986	28.2 3,890
	1: ONE	16.7 792	17.1 901	15.6 590	16.6 2,283
	2: TWO	24.6 1,167	25.4 1,336	27.9 1,057	25.8 3,560
	3: THREE	15.9 753	14.6 767	17.6 665	15.8 2,185
	4: FOUR	8.5 403	6.1 320	7.5 283	7.3 1,006
	5: FIVE	3.4 162	2.8 149	2.7 104	3.0 415
	6: SIX	2.0 96	1.2 61	1.1 43	1.5 200
	7: SEVEN	.9 42	.6 33	.9 33	.8 108
	8: EIGHT OR MORE	1.4 65	.9 49	.7 26	1.0 140
	COL TOTAL	100.0 4,738	100.0 5,262	100.0 3,787	100.0 13,787
Means		1.94	1.69	1.86	1.82
Std Devs		1.75	1.63	1.60	1.67
Unweighted N		4,738	5,262	3,787	13,787

As we see, the average Democrat has 1.94 children and the average Republican has only 1.86 children. The opposite of what Brooks tells us.

This is because poor people have more children than rich people, and everyone knows that the Republicans are the party of the rich and the Democrats are the party of the poor. And the Democrats are also the party of blacks and Hispanics who have much higher birthrates than whites.

But everyone knows that conservatives vote Republican. How is it possible that conservatives have more children but Republicans have fewer children? Well the answer is that there is not a perfect correlation between political party and whether a voter identifies himself as “liberal” or “conservative.” Furthermore, a plurality of respondents identified themselves as “independent.”

A big component of “liberal” and “conservative” is how religious a person is. Religious people are more likely to identify themselves as “conservative.” When we examine birthrates based on a measure of religiosity, we see a huge birthrate difference between the religious and the secular (once again looking only at 1996-2004 data):

Frequency Distribution
Cells contain: -Column percent -N of cases		BIBLE
		1 WORD OF GOD	2 INSPIRED WORD	3 BOOK OF FABLES	4 OTHER	ROW TOTAL
CHILDS	0: NONE	20.2 591	29.5 1,342	41.5 616	37.0 44	28.5 2,593
	1: ONE	16.5 484	16.8 767	15.1 224	17.6 21	16.5 1,496
	2: TWO	26.8 786	26.1 1,190	21.6 320	26.1 31	25.6 2,327
	3: THREE	18.0 529	15.3 696	12.7 189	10.9 13	15.7 1,427
	4: FOUR	9.7 285	6.7 304	4.7 70	4.2 5	7.3 664
	5: FIVE	4.1 120	2.6 117	2.3 34	2.5 3	3.0 274
	6: SIX	1.9 56	1.4 65	1.3 19	.8 1	1.6 141
	7: SEVEN	1.1 33	.9 42	.2 3	.8 1	.9 79
	8: EIGHT OR MORE	1.6 48	.7 33	.5 8	.0 0	1.0 89
	COL TOTAL	100.0 2,932	100.0 4,556	100.0 1,483	100.0 119	100.0 9,090
Means		2.16	1.75	1.40	1.43	1.82
Std Devs		1.75	1.63	1.56	1.48	1.68
Unweighted N		2,932	4,556	1,483	119	9,090

I previously wrote about how more intelligent people have less children.

The trend in the United States is that poor, religious, and stupid people are having more children, while rich, secular, and smart people are having fewer children.

I don’t see the birthrate pattern as a good thing for the future of the United States.

UPDATE

Read my important followup post: Bush voters have more children than Gore voters.

Should government help anyone obtain higher education?

Based on my previous post about why Democrats suck, some commenters have the mistaken impression that I think the government shouldn't help anyone at all to obtain higher education.

It's a huge waste of talent when someone capable of being an engineer or a doctor winds up working in a bookstore for $7/hour because he had the misfortune of being born to a poor family which couldn't afford to send him to college.

Students in the top 5% of intelligence should definitely be given the guidance and financial support they need to enter a career track where their gifts can contribute to society. What's the purpose of paying over $100,000 to get a person educated through high school only to hold back and deny him the final four years he needs in order to enter a productive career track?

The problem I have with Democrats is that they don't care about the top 5%, or even the top 20% of students. They want to fund the average student's college education, and the average student just isn't smart enough to get much out of college. So this becomes just a big waste of money. The knowledge capital generated is worth less than the cost of the education.

Even at the primary and secondary school level the Democrats don't care much about the top 5% or top 20% of students. They would just throw them into a public school full of kids in the bottom 20% if they have the misfortune of having parents who live in a neighborhood zoned for such a school.

Furthermore, Democrats view all college degrees as being equally useful, which is not the case. I don't think the government should pay for anyone to go to art school or any other type of school which doesn't produce any pecuniary returns. Such an education is a luxury good and not an investment in human capital, and government shouldn't be funding people's consumption of luxuries.

Why Democrats suck, part II: college

One of the factors of the new economy which makes the middle class, especially the young middle class, worse off today than they were in the past is the increasing cost of higher education combined with the increasing years of higher education which people feel necessary to obtain in order to be competitive in the economy.

Athough some college programs teach real skills (such as medical school, nursing, and engineering), the majority of college students are enrolled in majors which doesn't add much in the way of knowledge capital.

Student loans are increasingly used to pay for college, and the result is that young people have to go into debt in order to obtain a job which they could have obtained a generation ago debt-free without a college degree. With the exception of programs which generate genuine knowledge capital, college is mostly a transfer of money from the uncredentialed to the credentialed. Most college graduates obtain their knowledge capital on the job and not in college.

People harmed the most are those who start college and never finish. They rack up the debt, but they never gain a credential so they obtain no pecuniary benefits from their college education.

Democrats don't get it. Their goal is to spend ever increasing amounts of public money on the useless goal of making college as universal as high school. Do Democrats think that people who graduate high school barely knowing how to read are going to get anything out of college? Do they think that Walmart workers need a college degree?

UPDATE

The commenter who calls himself "Austrian" left a link to an interesting opinion article from the Washington Post. The author complains that the government isn't spending enough money on graduate education:

Once you aspire beyond a bachelor's degree, the financial aid door is pretty much closed unless you, or your family, have the economic ability to finance whatever costs are not covered by your guaranteed federal student loans.

Today's job market is becoming more and more competitive. Bachelor's degrees don't carry the weight they used to. It's almost necessary to have a graduate, doctorate or law degree to compete with the current highly qualified pool of candidates.

The article demonstrates both the demands for increasing government spending for higher education and the futility of such spending. Because bachelor's degrees have become so common, upper middle class parents now pay for their children to get graduate degrees to make their credentials stand out. If the bad advice of the author of the article is followed, and graduate degrees become as universal as college degrees, then upper middle class parents will then send their kids to yet some higher level of education once again out-credentialing the poor people. It's an "arms race" that can't possibly be won.

Interracial marriage good for your children?

Steve Sailer blogs about the book Breeding Between the Lines: Why Interracial People are Healthier and More Attractive by Alon Ziv. The title of the book presumably explains what the book is about.

Steve writes "I'm not fully convinced by the evidence for much additional hybrid vigor from marrying intercontinentally." I, however, am completely convinced that Jews would be better off marrying non-Jews, because Jews are especially inbred and have a lot of bad recessive genes in their gene pool.

I also believe that white Americans are, on average, better looking than white Europeans, because Americans are more likely to be a mix of genes from different areas of Europe. I can't help but notice how ugly people look in some of the more inbred areas of Europe, such as the Balkan countries.

But is a white American better off marrying a black, Asian, or Latin-American in order to have genetically better children? That's a very different question.

Why Democrats suck, part I: housing affordability

Because there are so many ways that Democrats suck, it's too much for a single post. So I start out with Part I, housing affordability.

The biggest problem facing the middle class is the high cost of housing. You hear Democrats occasionally say stuff like "today it takes two incomes where one used to do," but they seem completely clueless when it comes to the reason why it takes two incomes: the unaffordability of housing.

Because Democrats never met a regulation they didn't like, they have zoned and regulated the housing market and caused a massive increase in the cost of housing. If a residential development is even allowed by zoning laws in the first place, the builder faces bureaucratic hurdles in getting it approved for construction which significantly increase the builder's costs.

Steve Sailer has empirically proven the damage done to housing affordability by Democrats by demonstrating the extremely high inverse correlation between whether the people of a state voted for Bush and how much housing costs have risen in that state (greater percentage of votes for Bush equals lower housing costs). Where Democrats run things, they create zoning laws and construction regulations which cause housing to become unaffordable. Unfortunately, Steve seems more interested in how this affects "affordable family formation" instead of using this as evidence that the Democrats are the political party which has most hurt the poor and the middle class.

How hypocritical is it for Democrats to complain about housing affordability when it's their fault?

AllanF on the declining standard of living

"AllanF" left such a great comment on my post about vacations for workers that it deserves its own post:

I'm going to try to respond to the underlying theme Half Sigma has been developing here with this post and related posts. Why does it seem the US is less rich than 30, 40, and 50 years ago? What can be done to restore the middle class to its former standard of living?

Well, on the first question I would submit that women entering the work-force and 'keeping up with the Joneses' has created a virtual arms race in the price of housing. Whether you want to spend 2x your annual salary on housing or not, if everyone else is doing it, what choice do you have? If everyone then puts their wife to work to increase their annual salary, and then bid up (inflate) housing prices to reflect their new household income, what choice do you have?

If immigration is allowed unchecked, creating a double-edged sword of increasing total demand and driving down the relative quality of the below median neighborhood, what choice do new/young families have?

If land-use laws enacted by 40-60 year old politicians and their similar-aged constituents in their secure neighborhoods prevent new houses from being affordably developed and increase the value of all those existing, secure neighborhoods what choice do young families have?

Who benefits by all this housing inflation?

Housing, I think is the biggest expense and the biggest thief of standard of living in contemporary US. There are certainly others. As long as people are kept on the housing and vehicle and schooling/credential treadmills quality of life is going to be compromised.

So yes, I'm quite certain people had it better 40 years ago and we as a nation/society have largely squandered the productivity improvements of the past 40 years.

Weddings keep the poor people poor

There's an essay in yesterday's New York Times about weddings. I learned that the cost of weddings, much like housing, education and healthcare, has been rising faster than the rate of inflation:

A survey this year found that the average wedding costs $27,852, compared with $15,208 in 1990. That is just the average, to say nothing of the mind-bogglingly lavish affairs of the well-to-do.

$27,852 is a huge chunk of money for an average couple, probably equivalent to one year's worth of their take home pay.

Weddings seem like a scam designed to keep the poor people poor. The huge cost of weddings prevents them from amassing any capital. After you add in the cost of an engagement ring, the newlywed couple starts out life significantly in debt. Or if all the money came from their parents, surely they would have been better off with a significant downpayment on a house instead of a wedding and a fancy ring.

Further thoughts on more vacation time for workers

My previous post on vacations received a lot of comments by people who don’t seem to get the point, so I’m going to respond to the comments and explain the philosophy in more detail.

One theme of the comments was that people want to work more. This is completely ridiculous. People don’t want to work, what they want is more money. If a person who claims to want to work more was given a choice of two jobs, each paying an identical salary, but one job had no vacation and sixty hour workweeks, and the other job had six weeks of vacation and 40 hour workweeks, I guarantee you that everyone would choose the job which provided more leisure time.

The second important point is that people don’t want money at all, what they really want is to keep up with the Joneses. If everyone had their workyear reduced by 5% (which is approximately what would be the case if everyone was given an extra two weeks of vacation), and there was a commensurate 5% drop in everyone’s salary, this would effect the Joneses as well, so there wouldn’t be any harm done to anyone. Everyone’s status with respect to the Joneses would remain constant, but they’d have more leisure time.

People value keeping up with the Joneses more than leisure time, but they value leisure time more than a few extra square feet in their house, a bigger TV set, and leather seats instead of cloth in their car. This is an example of how the free market produces a less efficient allocation of resources than one where the government steps in and mandates more vacation time.

People don’t fully understand their motivations for wanting more money. The desire to keep up with the Joneses is partially subconscious. It manifests as a desire not to live in a bad neighborhood, and a desire to have the stuff they see advertised on TV. But the quality of a neighborhood is determined by the class of the people living there and not the absolute size of the residents’ paychecks. And the stuff that’s advertised on TV is geared to what people can afford to buy. If everyone’s income decreased by 5%, there’d be a subtle change in the mix of items advertised on TV such that people wouldn’t really feel any poorer because they’d still be able to afford the same percentage of items they see advertised!

Until now I’ve been using the assumption that a 5% drop in the workyear would result in a 5% drop in income, but actually the drop in income would be less. This is because output is a function of labor plus capital. If labor decreases by 5% but capital remains the same, output would decrease by an amount less than 5%. Let’s call it 2.5%. A 5% decrease in the workyear would only result in a 2.5% decrease in income.

The United States already has the highest per capita income of just about any country in the world. If our per capita income dropped by 2.5% we’d still be way out in first place. What’s the point of being in first place if you don’t have free time to enjoy the fruits of victory?

A drop in income of 2.5% would result in less than a 2.5% drop in absolute spending power because there would be a drop in housing costs. The value of housing is inflated by zoning which prevents adequate housing from being built. So when people earn more money, a good chunk of the extra money goes into bidding up the price of housing.

Commenters also indicated their opinion that reducing the workyear would cause great harm to growth. Growth is mostly a function of the ratio of investment to current consumption, so as long as that ratio remains the same, our growth would still be the same. I don’t see any reason why the ratio of investment to current consumption would change if people had a little more leisure time.

Are men more logical than women?

The General Social Survey contains a vocabulary test, and women outperform men on this test except in the highest score category:

Frequency Distribution
Cells contain: -Column percent -N of cases		SEX
		1 MALE	2 FEMALE	ROW TOTAL
WORDSUM	0	.7 49	.7 67	.7 117
	1	1.4 103	1.5 150	1.4 252
	2	2.9 220	2.9 290	2.9 511
	3	6.4 481	4.9 494	5.6 975
	4	11.1 828	9.4 944	10.1 1,772
	5	15.9 1,187	16.6 1,668	16.3 2,855
	6	21.5 1,607	22.7 2,281	22.2 3,888
	7	15.5 1,158	16.7 1,685	16.2 2,843
	8	10.6 790	10.7 1,080	10.7 1,870
	9	8.0 596	8.2 826	8.1 1,422
	10	6.0 448	5.7 574	5.8 1,023
	COL TOTAL	100.0 7,468	100.0 10,060	100.0 17,528

But just because women are slightly more adept at vocabulary doesn’t mean they think as logically as men.

I believe someone who thinks logically would reject religion because, frankly, it just doesn’t make any sense. This is why we see that smarter people are less religious.

However, when we compare men and women, we see that women are more likely to believe in the religious superstitions, demonstrating that they are less logical than men:

GOD 369. Please look at this card and tell me which statement comes closest to expressing what you believe about God. 1. I don't believe in God. 2. I don't know whether there is a God and I don't believe there is any way to find out. 3. I don't believe in a personal God, but I do believe in a Higher Power of some kind. 4. I find myself believing in God some of the time, but not at others. 5. While I have doubts, I feel that I do believe in God.. 6. I know God really exists and I have no doubts about it.

Frequency Distribution
Cells contain: -Column percent -N of cases		SEX
		1 MALE	2 FEMALE	ROW TOTAL
GOD	1: DONT BELIEVE	3.4 108	1.6 66	2.3 174
	2: NO WAY TO FIND OUT	6.1 195	2.5 105	4.1 300
	3: SOME HIGHER POWER	10.8 346	6.1 258	8.2 604
	4: BELIEVE SOMETIMES	4.7 152	3.4 142	4.0 294
	5: BELIEVE BUT DOUBTS	19.1 610	15.3 645	16.9 1,255
	6: KNOW GOD EXISTS	55.9 1,790	71.1 2,988	64.5 4,778
	COL TOTAL	100.0 3,201	100.0 4,204	100.0 7,405

BIBLE 120A. Which of these statements comes closest to describing your feelings about the Bible? READ FIRST THREE STATEMENTS [(a)-(c)] ONLY. CIRCLE ONLY ONE CODE.

a. The Bible is the actual word of God and is to be taken literally, word for word

b. The Bible is the inspired word of God but not everything in it should be taken literally, word for word

c. The Bible is an ancient book of fables, legends, history, and moral precepts recorded by men

Frequency Distribution
Cells contain: -Column percent -N of cases		SEX
		1 MALE	2 FEMALE	ROW TOTAL
BIBLE	1: WORD OF GOD	28.5 2,226	38.0 3,809	33.8 6,035
	2: INSPIRED WORD	51.2 4,006	48.9 4,896	49.9 8,902
	3: BOOK OF FABLES	19.4 1,515	12.2 1,225	15.4 2,740
	4: OTHER	.9 74	.8 82	.9 157
	COL TOTAL	100.0 7,821	100.0 10,013	100.0 17,833

Astrology is something that has no scientific basis, and we see that more intelligent people reject astrology:

SCITEST3 1224. For each statement below, just check the box that comes closest to your opinion of how true it is. In your opinion, how true is this? ... C. Astrology - the study of star signs - has some scientific truth.

Frequency Distribution
Cells contain: -Column percent -N of cases		WORDSUM
		0-5	6-7	8-10	ROW TOTAL
SCITEST3	1: DEFINITELY TRUE	14.1 73	8.2 50	5.6 21	9.6 144
	2: PROBABLY TRUE	54.1 280	41.4 253	23.3 88	41.2 621
	3: PROBABLY NOT TRUE	19.5 101	28.3 173	31.8 120	26.2 394
	4: DEFINITELY NOT TRUE	12.4 64	22.1 135	39.3 148	23.0 347
	COL TOTAL	100.0 518	100.0 611	100.0 377	100.0 1,506

It’s shameful that such a large percentage of people think that astrology has scientific truth, but women have more to be ashamed about than men:

Frequency Distribution
Cells contain: -Column percent -N of cases		SEX
		1 MALE	2 FEMALE	ROW TOTAL
SCITEST3	1: DEFINITELY TRUE	8.8 92	10.3 140	9.7 232
	2: PROBABLY TRUE	34.4 359	47.9 650	42.0 1,009
	3: PROBABLY NOT TRUE	27.8 290	23.7 321	25.4 611
	4: DEFINITELY NOT TRUE	29.0 303	18.1 246	22.9 549
	COL TOTAL	100.0 1,044	100.0 1,357	100.0 2,401

The conclusion is clear. Men are, on average, more logical than women.

No vacation for the American worker

There's an article in the New York Times about how Americans are taking less vacation time than ever before.

The Conference Board, a private research group, found that at the start of the summer, 40 percent of consumers had no plans to take a vacation over the next six months — the lowest percentage recorded by the group in 28 years.

If Americans are better off today than they were in the past, how come vacation time is decreasing? In an increasingly wealthy society there ought to be more time for leisure and not less.

Probably one of the reasons why happiness has decreased since the 1970s is because Americans have to work more than ever before.

I previously proposed that Americans should have six weeks of vacation. I think that if a political party picked up on the idea, it could attract a lot of votes. Why don’t the Democrats, who claim to be for the working man and woman, get behind the idea of a shorter workyear? Probably because they are too busy trying to figure out how to shortchange the worker by opening the borders to more cheap labor immigrants.

Visit to a lower class neighborhood

Today I visited a lower class neighborhood. South Washington Heights to be more specific (the 160s and 170s). Here are my observations:

(1) Children everywhere. Hundreds of them, maybe even thousands. There are almost as many kids around as there are adults. In Hell’s Kitchen, you can look up and down Ninth Avenue and not see a single kid at all. Lower class people sure know how to reproduce.

(2) People sitting around doing nothing. The streets are busy in Hell’s Kitchen, but everyone is walking somewhere or doing something. In the lower class neighborhood, you see people sitting around on their stoops doing nothing.

(3) Signs in Spanish. Maybe there were even more signs in Spanish than there were in English?

(4) People have darker skin. There’s no place in New York City where everyone is white, but where I live whites are the majority. In Washington Heights, I was the minority.

(5) No doormen. There were some residential buildings big enough to have doormen, but the familiar doormen were not present. However I suspect that many doormen live in this neighborhood when they’re not working. How do people buy stuff from Amazon.com if there’s no doorman to receive their package?

White parents adopting black babies

Yesterday's interesting NY Times article is about transracial adoption--specifically about white parents adopting black babies.

The social workers don't like to give black babies to white parents. The big mystery is why those from the political left are opposed to this--one would expect objections to come from racist groups like the KKK.

A quote from the article:

Many blacks still worry that white families cannot equip black children to navigate the country’s complicated racial landscape.

Someone needs to explain why it's so difficult, more difficult than white families raising Asian children (which has become pretty common), or a white mother raising her own child who has a black father. If it's so difficult for a white woman to raise a dark baby, maybe they should outlaw interracial sex?

There's a story about a black man raised by whtie parents who is apprently traumatized because he doesn't "understand black trends in fashion or music." This makes you wonder if the people writing these articles think of blacks as humans with different color skin, or as a completely genetically different species that requires special music and clothing in order to be fulfilled in life.

Admission to "elite" NYC public high schools

There’s an article about my high school in the New York Times.

Despite the fact that blacks make up 34.7% of the school system, they are only 2.2% of the student body at Stuyvesant High School, which limits admission to students who score high on an admissions test.

Officials are “at a loss” to explain why so few blacks qualify despite the existence of a “special institute to prepare black and Hispanic students for the mind-bendingly difficult test “

The demographic makeup of Stuyvesant has changed significantly since I graduated. When I attended, the student body was mostly white, but today it’s mostly Asian and whites are a minority. This is an expected result of continued "flight" of middle class whites from New York City. The whites who are left are either blue collar whites living in the outer boroughs, or rich whites living Manhattan who can afford to send their children to private schools.

In case you are wondering about my opinion on what should be done about the “problem,” my answer is that nothing should be done, Stuyvesant should continue using an exam as the sole criterion for admission. Intelligent students whose parents can’t afford to send them to a private schools need a place to go where they can be among other intelligent students.

The Triple Nine Society NYC gathering

When I previosly blogged about joining the Triple Nine Society, one commenter asked what I hoped to gain by doing so.

Well, I got attend the New York City gathering of Triple Nine Society members held at the outdoor bar/restaurant in Union Square, one of the coolest spots in Manhattan. It was too cool for one or two members who complained about the high prices, but I guess they've never been on a date which is usually four times as expensive. (Maybe this has something to do with high IQ people having less sex?)

Two thirds of the attendees were Ashkenazi Jews, and four fifths were male, in case anyone was wondering about the demographic breakdown.

It was a very cool group and I recommend all eligible people to join this great organization.

It's relative wealth that makes people happy

From today's WSJ:

[D]espite rising standards of living, just 30% of Americans described themselves as "very happy" in the late 1990s, down from 34% in the early 1970s, according to a study by economics professors David Blanchflower and Andrew Oswald that appeared in the Journal of Public Economics in July 2004.

Faced with this sort of data, researchers have speculated that our happiness is influenced not by our absolute level of wealth and income, but rather by how our financial situation compares with friends and colleagues.

This has always been one of the basic points of this blog, people desire relative status and not absolute wealth.

However, I also believe that one's relative assessment of status is based on comparison to one's parents and how things were when they were growing up. On that basis, the 4% drop is probably a result of the majority of Americans not feeling better off in the 1990s compared to the 1970s.

Rank colleges? Or rank students?

An essay in today’s NY Times by David Leonhardt is generally dismissive of the U.S. News college rankings:

By now, 23 years after U.S. News got into this game, the responses have become pretty predictable. Disappointed college officials dismiss the ranking as being beneath the lofty aims of a university, while administrators pleased with their status order new marketing materials bragging about it — and then tell anyone who asks that, obviously, they realize the ranking is beneath the lofty aims of a university.

There are indeed some silly aspects to the U.S. News franchise and its many imitators. The largest part of a university’s U.S. News score, for instance, is based on a survey of presidents, provosts and admissions deans, most of whom have never sat in a class at the colleges they’re judging.

That’s made it easy to dismiss all the efforts to rate colleges as the product of a status-obsessed society with a need to turn everything, even learning, into a competition. As Richard R. Beeman, a historian and former dean at the University of Pennsylvania, has argued, “The very idea that universities with very different institutional cultures and program priorities can be compared, and that the resulting rankings can be useful to students, is highly problematic.”

But Mr. Leonhardt doesn’t quite get it, because the status obsession isn’t irrational. As I previously pointed out, the most prestigious college degrees lead to the best life outcomes.

For people who attend college just to party for four years, nothing is more important than the college’s prestige. Four years of partying at a community college is just a big waste, but four years of partying at Yale can lead to a job as President of the United States.

Mr. Leonhardt suggests some supposedly better ways to rank universities, and while that would be useful, it would be even more useful to rank students in addition to ranking universities. Each graduating student should take standardized tests, both general and specific to his major, and these tests should be certified and available to employers, so employers could hire the most educated students instead of the most prestigious degreed.

However, if we are going to rank universities, the way I see it the only really important criterion is how much money someone with a specific major will make when he graduates. Every college should report labor force outcomes, broken down by major, and the results should be audited by independent auditors and reported in a standardized format so colleges can be compared.

Drink coffee for your health

A NY Times article reports that coffee is good for you.

Coffee decreases the risk of Type 2 diabetes and also reduces the risk of cardiovascular disease.

Coffee lowers your chance of dying:

[A]fter controlling for age, smoking and alcohol consumption, women who drank one to five cups a day — caffeinated or decaffeinated — reduced their risk of death from all causes during the study by 15 to 19 percent compared with those who drank none.

One of the benefits of coffee is antioxidants:

[R]esearchers found that a typical serving of coffee contains more antioxidants than typical servings of grape juice, blueberries, raspberries and oranges.

As usual, whenever a study shows that something supposedly bad for you is actually good, there are doctors who refuse to acknowledge the truth:

“I wouldn’t advise people to increase their consumption of coffee in order to lower their risk of disease,” Dr. van Dam said ... .

Standardized testing for universities

A federal commission recommends standardized testing for public universities.

I support this recommendation. Massive amounts of money are spent on higher education. The public is entitled to know what benefit, if any, the college students are obtaining from their education.

I suspect that marginal students who don’t belong in college in the first place aren’t learning very much.