The Bell Curve Through The Veil

I stopped reading Andrew Sullivan a long time ago, because his conservatism leaks through his pores and smells like William F. Buckley's socks. Luckily, people like Ta-Nehisi Coates know what to do with this Bell Curve crap.--SS

The Bell Curve Through The Veil:

Andrew responds:

No one is arguing that "that black people are dumber than white," just that the distribution of IQ is slightly different among different racial populations, and these differences also hold true for all broad racial groups:

Perhaps there really is a genetic relationship between the darkness of skin and the potency of neurons. (Only for "Africans," mind you.) Maybe the sterilizers and the slave-traders were wise beyond their years.

No, not "only for Africans". The differential between Caucasians and Asians - or between Ashkenazi and Sephardim Jews - is also striking in the data. And notice that my sole interest in this is either to counter what would be an injustice (affirmative action) or pure curiosity. I don't think any serious critic of my work could conjure up a defense of compulsory sterilization or slavery within it. And the notion that I have an "obsession" with this is bizarre.

I encourage you to read the rest. For the record, I certainly am not claiming that Andrew defends slavery or sterilization. I am arguing that the notion that black people are, genetically, intellectually inferior to white people is not a new and revolutionary strain of research subject to academic repression, but a specimen of thought as old as this country, invented mainly to justify white supremacy. To this very day one need only look around to find a familiar cast of characters lurking in the shadows.

It was not simply science that James Watson appealed to, but to presumably frustrated white employers "who have to deal with black employees." William Saletan did not merely cite some objective numbers. He wrote a five part series for a major publication almost based on the work of a researcher whose organization funds in such data-driven conclusions as "Everyone knows that blacks are dangerous" and "Unless whites shake off the teachings of racial orthodoxy they will cease to be a distinct people."

On the broad question--Should researchers be free to explore the nexus of race, IQ and intelligence?---Andrew and I are in harmony. Onward, indeed. Where we differ is the following: Andrew, like most conservatives who write about race, is more concerned with a vague p.c. egalitarianism than the forces that birthed such things. (Unlike "political correctness" those forces can actually be quantified, and their impact demonstrated.)

That his contention has long been linked to one of the ugliest strains of American thought, that it continues to be linked to actual white supremacists, is not particularly troublesome to Andrew. But that others might find it troublesome is deeply distressing. I don't charge Andrew with defending slavery or sterilization. I charge him with bumbling through the ICU, tinkering with machinery, and wondering why everyone is so uptight and stuff.

I am not without my own baggage. I remember when the Andrew published The Bell Curve excerpt in The New Republic. I was an undergraduate at Howard University--same city, but a different world. All of the young intellectuals who'd gather under the flag-pole on the yard were hot and angry. But a professor on campus (and I wish I could remember who) handed out xeroxed copies of the excerpt and its responses and simply told us, "Arm yourselves." Don't get angry he told us. Get informed. That the in flight magazine of Air Force One would argue that all the world I'd known was brain addled set me afire. Some years later I had seen more of the world. But I was still burning.

I didn't remember the name of the editor of that particular issue. Yet there I was regularly reading this Sullivan dude, when I was supposed to be working. Even before his split with the right Andrew wrote with an energy and tenacity that amazed me then, as sure as proud pushing of The Bell Curve amazed me later when I put the two together. There are only a handful of living writers who've had more impact on me. And yet here I am having to balance all the wisdom I've gotten from him, with moments like these.

I am not appealing to emotion to win a debate. You judge the merits as you see them. But I believe true empathy--not squishy self-serving conflict avoidance--is the hand-maiden, not the enemy, of reason and intellectual inquiry. Moreover I think, if only for a moment, it's worth considering what it's like to take your bread, with some regularity and some joy, from people who don't really see you.

I mean not to be presumptuous, but I think Andrew knows a little about this. Perhaps that explains everything.

Bill Keller Missed the Housing Bubble

Bill Keller Missed the Housing Bubble:

NYT columnist Bill Keller decries a political process in which the consensus of mainstream economists is not according the respect it deserves. He failed to note one obvious reason why these experts' views might be according much respect: almost none of the experts noticed the huge housing bubbles whose collapse led to severe recessions in the United States and Europe.

In this case, the process of credentialing ensured that evidence would be ignored rather than examined. Those who raised concerns about the bubbles were dismissed as cranks. Even after the collapse, the economists who managed to overlook the largest asset bubbles in the history of the world have suffered almost no consequences in terms of their employment or professional standing. Clearly the economics profession does not have a structure where performance is rewarded and failure is punished. Given this fact, it is certainly understandable that the pubic would be suspicious of pronouncements by economists.

It is also worth noting that Keller's takeaway about the profession's consensus of what needs to be done is in fact wrong, or at least seriously misleading. He says that there is a need to reduce "entitlements." In fact, there is no obvious need to reduce Social Security. Its cost is projected to increase only modestly in coming decades as a share of GDP and is fully paid by its designated tax through the year 2038. Even after that date, the tax is projected to cover more than 80 percent of scheduled benefits through the rest of the century.

The real story is Medicare and Medicaid, the cost of which is in turn driven by the broken U.S. health care system. If the United States paid the same amount per person for health care as people in other wealthy countries we would be looking at long-term budget surpluses, not deficits. It is misleading to describe the problem of a broken health care system as a problem of "entitlements."

This is especially important because it conceals the main choice in containing Medicare and Medicaid costs. On the one hand, we can look to reduce the quality of care provided by these programs, as advocated by politicians of both parties. Alternatively, we can look to reduce the waste and excessive fees charged by providers.

There are enormous distribution implications to how this issue is resolved. However most people will not even be aware of these issues if the media hides them under the problem of "entitlements."

Senator Kyl Claims that Businesses Don't Hire When Demand Increases

When you're paid to report facts, you should find out what the facts are.--SS

Senator Kyl Claims that Businesses Don't Hire When Demand Increases:

Economists and people who believe in gravity think that firms hire when they see an increase in demand. The alternative is to turn away customers because a business does not have the necessary staff. Companies trying to make profits generally do not like to turn away customers.

Nonetheless, Republican Senator Jon Kyl said that the payroll tax cut did not lead businesses to hire workers. It is clear that workers did spend much of this tax cut. The savings rate in the last quarter was under 4.0 percent. If workers did not spend much of the tax cut, the implication is that the saving rate would have been under 3.0 percent in the absence of the tax cut. While this is higher than the near zero rate when the housing equity created by the bubble was driving consumption, it is far below the 8.0 percent pre-bubble average.

The NYT should have pointed out that Kyl was wrong; that he either doesn't understand basic economics or was deliberately making assertions that he knew not to be true. Instead it just presented Kyl's statements and responses by Democrats in he said/she said context. NYT reporters have the time to find the truth of such statements, most NYT readers do not.

For Companies, the Good Old Days Are Now - NYTimes.com

Gee. I wonder what happened in 1929, the last time corporate profits and workers wages were this far apart?--SS

For Companies, the Good Old Days Are Now - NYTimes.com:

"Corporate profits after taxes were estimated to be $1.56 trillion, at an annual rate, during the quarter, or 10.3 percent of the size of the economy, up from 10.1 percent in the second quarter. Until 2010, the government had never reported even a single quarter in which the corporate share was as high as 9 percent, as can be seen in the accompanying charts.

The government began calculating the quarterly figures on corporate profits in 1947, but it has annual figures back to 1929. Until last year, the record annual share was 8.98 percent, set in 1929. For all of 2010, the figure was 9.56 percent.

Wage and salary income was only 43.7 percent of G.D.P., the lowest number for any period going back to 1929. That figure first fell below 45 percent in 2009."

The Occupy Wall Street election

Hey, Republicans, keep talking about raising taxes on the poor and cutting taxes for the rich. Please.--SS

The Occupy Wall Street election:

Click for pdf.

From a Hart Research Associates strategy memo posted by Politico.

The competing visions of how to win in 2012 grew sharper over the Thanksgiving holiday. For an example of the first, outgoing Mississippi Governor Haley Barbour dropped this wisdom last night on the Republican Party of Sarasota County, Florida:

"This election is about policy, it's about jobs and the economy and how they are affected by taxes, and spending, deficits, debt. Are you for or against Obama's health care bill? Do you think his energy policy of driving up the cost of energy is good policy? If the election is decided on those grounds, we'll have a Republican president."

In other words, that's statement A from the NBC/Wall Street Journal poll (pdf) extracted above in a Democratic strategy memo posted by Politico (pdf). Governor Barbour is arguing that Republican can win in 2012 by continuing to argue that government is too big, spends too much, etc. FWIW, he also cautioned the party against turning the nomination into a contest over who's more conservative.

The second vision, the Democratic one, centers on income inequality and how voters understand what's going on around them. From a New York Times interview with Senator Charles Schumer (D-New York):

"Jobs and income inequality are going to be the No. 1 issue" in 2012, he said. "Simply cutting government isn't going to work."

That's where Occupy Wall Street wins, or part of it: Shifting the debate to income inequality. One side is saying, with factual facts, that our country is experiencing a yawning gap between rich and poor, and they're out in the streets over it. The second, as we saw with Senator Jon Kyle (R-Arizona), says Congress should cut taxes for the rich and raise them for families. Watch this week for Democrats to begin forcing their Republican colleagues to vote on that idea.

I Get By With A Little Help From My Friends

Rick Santelli can suck it.--SS

I Get By With A Little Help From My Friends:

It appears our Galtian Overlords really can’t do anything right:

“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”

The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC to force lending details into the open.

The Fed, headed by Chairman Ben S. Bernanke, argued that revealing borrower details would create a stigma—investors and counterparties would shun firms that used the central bank as lender of last resort—and that needy institutions would be reluctant to borrow in the next crisis. Clearing House Association fought Bloomberg’s lawsuit up to the U.S. Supreme Court, which declined to hear the banks’ appeal in March 2011.

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

Remember what was happening in March of 2009? On February 19th, 2009, Rick Santelli had his famous rant about a program to extend meager amounts of help to homeowners, while at the very same time the Fed was doling out trillions to his douchebag buddies. While these assholes were famously whining and screaming about socialism and government involvement in the markets (when people were discussing different compensation rules), they were behind the scenes taking trillions to help smooth over their fuck-ups.

This is what the useful idiots in the tea party are fighting for…

Can Unions Be Saved By Making Them Smaller?

K Drum, on Union Lite.--SS

Can Unions Be Saved By Making Them Smaller?:

Reihan Salam directs us to an essay about labor unions by Alan Haus, an IP and employment law attorney in San Francisco. Haus thinks that conservatives ought to be more supportive of the power of labor unions in promoting higher wages:

There is much that could be said about the economic effects of promoting higher wages. For Republicans, the disadvantages should be trumped not only by the advantages but also by a vital consideration of political philosophy: the society of limited government to which most Republicans aspire will only come about in the real world if most Americans earn enough money to save for retirements and college educations, and provide for their long-term healthcare through substantially private markets. Achieving this requires some measure of support for a high wage economy.

But Haus is a lot less enthralled with every other aspect of organized labor:

....The central problem with private sector unions is that under current labor relations regimes they stifle economic innovation....[This] starts with the litany of subjects on which collective bargaining is not only permitted, but in many cases mandatory. The only mandatory subject of bargaining in the 21st century should be employee compensation.

Radically different employee associations that don't suffocate both their companies and their members need to be created....Congress should authorize employee associations that are easier to form than current unions, but which do not have the power to interfere with managerial prerogatives (which is pretty much every subject other than employee compensation as determined by a collectively bargained contract).

The idea here, I guess, is that there would two distinct kinds of labor unions authorized and protected by law. The first kind would be the ones we have now, which are extremely difficult to create. The second kind would be restricted to bargaining over wages and benefits, but would be much easier to create. With this kind of "Union Lite" available as an option, perhaps Wal-Mart could finally be successfully organized?

I'm surprisingly sympathetic to this notion, though it's obviously pie in the sky. As Haus mentions elsewhere, existing labor unions would oppose it and therefore Democrats would oppose it too. Likewise, although perhaps corporations and rich people should be in favor of organizations that promote higher wages for the working and middle classes, they aren't. Therefore Republicans would also oppose this idea.

Beyond this, there are obvious problems with wage-only unions. I've long supported organized labor because it's the only large-scale countervailing power that promotes the economic interests of the middle class against the interests of the corporate community. At the same time, I've long recognized that telephone-book size contracts stuffed with endless picayune work rules are genuinely corrosive. But where do you draw the line? I agree that unions would be far more acceptable to management, and far more useful to their members, if they spent less time fighting for rigid job classifications and money-wasting featherbedding clauses. But what about safety regs? I'd love to think that we could just trust MSHA to enforce safe practices in coal mines, but that would be naive. It's the UMW that's been mostly responsible for progress on that front.

Still, this is an interesting suggestion. Whatever you think of them, unions in their existing form are dying, and there's little reason to think that's going to change. I acknowledged this when I wrote about unions earlier this year ("Why Screwing Unions Screws the Entire Middle Class") and argued that we needed something to replace them, "a countervailing power as big, crude, and uncompromising as organized labor used to be." Haus's proposal won't be adopted anytime soon, but at least it's a useful idea: a new union movement that trades a bit of power in one area (work rules) for more power in another (much greater density in the private sector). It's something to think about.