Archive for the ‘Economics’ Category.

Safety, Risk and Innovation



The Complacent Class (Episode 1/5)

Compare today to the 1950s. At that time, a typical apartment in New York City rented for about $60 per month, or, adjusting for inflation, about $530 a month. … Or to put that 1950s rent in perspective, the U.S. median wage at that time was about $5,000 a year, so a typical New Yorker spent as little as 10 percent of salary on rent, or perhaps even less to the extent that New Yorkers were earning more than other typical Americans.

The Complacent Class,” by Tyler Cowen (page 43)


The New Era of Segregation (Episode 2/5)

American Culture and Innovation, Produced by Marginal Revolution University

Also see:
How did we become such bumps on a log?
Complacent or Crazy?
A top economist says Americans are not nearly as ambitious or innovative as they think
The future will be good for matchers and bad for strivers
Complacent or Pathological?
NPR Interview
Have Americans Given Up?
The Art of Manliness podcast
How America Gave Up on Change

Ozymandias and Statolatry

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Credentialism and “Meritocracy” and Philosopher Kings


Does America Really Need More College Grads? – George Leef

The Chinese imperial bureaucracy was immensely powerful. Entrance was theoretically open to anyone, from any walk of society—as long as they could pass a very tough examination. The number of passes was tightly restricted to keep the bureaucracy at optimal size.

Passing the tests and becoming a “scholar official” was a ticket to a very good, very secure life. And there is something to like about a system like this … especially if you happen to be good at exams. Of course, once you gave the imperial bureaucracy a lot of power, and made entrance into said bureaucracy conditional on passing a tough exam, what you have is … a country run by people who think that being good at exams is the most important thing on earth. Sound familiar?

The people who pass these sorts of admissions tests are very clever. But they’re also, as time goes on, increasingly narrow. The way to pass a series of highly competitive exams is to focus every fiber of your being on learning what the authorities want, and giving it to them. To the extent that the “Tiger Mom” phenomenon is actually real, it’s arguably the cultural legacy of the Mandarin system.

That system produced many benefits, but some of those benefits were also costs. A single elite taking a single exam means a single way of thinking:

The examination system also served to maintain cultural unity and consensus on basic values. The uniformity of the content of the examinations meant that the local elite and ambitious would-be elite all across China were being indoctrinated with the same values.

All elites are good at rationalizing their eliteness, whether it’s meritocracy or “the divine right of kings.” The problem is the mandarin elite has some good arguments. They really are very bright and hardworking. It’s just that they’re also prone to be conformist, risk averse, obedient, and good at echoing the opinions of authority, because that is what this sort of examination system selects for.

. . .

[T]his ostensibly meritocratic system increasingly selects from those with enough wealth and connections to first, understand the system, and second, prepare the right credentials to enter it—as I believe it also did in Imperial China.

And like all elites, they believe that they not only rule because they can, but because they should. Even many quite left-wing folks do not fundamentally question the idea that the world should be run by highly verbal people who test well and turn their work in on time. They may think that machine operators should have more power and money in the workplace, and salesmen and accountants should have less. But if they think there’s anything wrong with the balance of power in the system we all live under, it is that clever mandarins do not have enough power to bend that system to their will. For the good of everyone else, of course. Not that they spend much time with everyone else, but they have excellent imaginations.

America’s New Mandarins – The paths to power and success are narrowing. So is the worldview of the powerful.

Statolatry

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The Party of “Civil Servants”?

The economic interests attached to the Democratic party are fairly easy to identify: people who work for government at all levels. You may come across the occasional Ron Swanson in the wild, but when it comes to the teachers’ unions — which are the biggest spender in U.S. politics — or the AFSCME gang or the vast majority of people receiving a taxpayer-funded paycheck, the politics of the public sector is almost exclusively Democratic. And what they care about isn’t social justice or inequality or diversity or peace or whether little Johnny can use the ladies’ room if his heart tells him to — they care about getting paid.

Here’s an interesting point of comparison. When Barack Obama was running for president in 2008, he opposed gay marriage. So did Hillary Rodham Clinton, but Obama’s opposition was especially interesting in that he cited religious doctrine in support of his position: “My faith teaches me . . . that marriage is a union between a man and a woman. For me, as a Christian, it is also a sacred union — God’s in the mix.” George W. Bush, who was derided as a fundamentalist bigot by lifestyle liberals, never said anything like that. (Dick Cheney was well to the left of the Democrats on the question.) But there was barely a murmur of opposition to Obama’s staking out this ground “on the wrong side of history.” Social issues are for the naïfs.

. . .

What is the Democratic party? Is it a genuine political party, or is it simply an instrument of relatively well-off government workers who care about very little other than securing for themselves regular raises and comfortable pensions?

If I were a progressive, I’d be curious about that.

What Is the Democratic Party?

Clerisy, Ozymandias, Statolatry

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Silicon Robber Barons

Silicon Valley’s power brokers want you to think they’re different. But they’re just average robber barons.

. . .

The press [i.e., clerisy] enjoys excitedly praising tech titans by comparing them to fantastical and mythical figures. Zuckerberg is Caesar. Elon Musk, a wizard. Peter Thiel, who believes that he lives in the moral universe of Lord of the Rings, is a vampire. I do not know if these men believe that they have the supernatural powers the media claims. Maybe they do. I do know that they do not mind the perception, or at least have done nothing to combat it, even among those critics who believe that they’re cartoon villains.

. . .

This might not be so bad if the phenomenon were limited to daft profiles by fawning magazine writers. But this Hegelian fan fiction is nowhere more potent than from the mouths of the Disruptors themselves. Mark Zuckerberg speaks in the voice of God. Shane Smith, by his own account, is the Stalin of Vice. Silicon Valley investor Carl Icahn was called “evil Captain Kirk” by fellow billionaire Marc Andreessen, before he was himself dubbed Dr. Evil by Rod Dreher, who has evidently not absorbed a cultural reference since 1999. When Elon Musk worries that Larry Page is hurtling toward AI without a sufficient appreciation of the risks, he calls it “summoning the demon.” Seamless CEO Jonathan Zabusky, a typical case, says his food delivery application for depressed millennials is “disrupting the paradigm” by showing people that “the era of the paper menu” is over. AirBnB’s mission statement laments “the mechanization and Industrial Revolution of the last century,” which “displaced” “feelings of trust and belonging”; their mission is to turn the world back into the “village” of simpler eras by encouraging longstanding residents of gentrifying areas to rent out their homes to monied travelers. Some firms are more modest: HubSpot, a marketing and sales platform, is merely on a mission to make the whole world “more inbound,” which is to say, more reliant on their blogging tips for small businesses.

. . .

Let us state the obvious: None of these men are Roman Emperors, and they haven’t got the wherewithal to “blow up” anything but a stock market bubble. They are not Lex Luthors or Gandalfs or Stalins. Their products do not bring about revolutions. They are simply robber barons, JP Morgans and Andrew Mellons in mediocre T-shirts. I have no doubt that many are preternaturally intelligent, hardworking people, and it is a shame that they have dedicated these talents to the mundane accumulation of capital. But there is nothing remarkable about these men. The Pirates of Silicon Valley do not have imperial ambitions. They have financial ones.

The vast majority of Silicon Valley startups, the sort that project lofty missions and managed improbably lucrative IPOs despite never having graced the cover of The Economist or the frontal cortex of the president, work precisely like any other kind of mundane sales operation in search of a product: Underpaid cold-callers receive low wages and less job security in exchange for a foosball table and the burden of growing a company as quickly as possible so that it can reach a liquidation event. Owners and investors get rich. Managers stay comfortable. The employees get hosed. None of this is particularly original. At least the real robber barons built the railroads.

Like all slim ranks of oligarchy, the Silicon Valley billionaires hate and fear nothing more than ordinary people. This manifests itself in mundane ways, in their open, cartoonish class spite (why, they ask, must Innovators in San Francisco be burdened by the existence of homeless riff-raff?); it is revealed in their most contemplative moments too. Peter Thiel has said that when the history of the 21st century is written, René Girard will be remembered as one of its greatest intellectuals. Girard is best known for the contention that all human desire is mimetic, that not only aesthetic taste but even hunger and lust are modeled on the desires of others. Perhaps this is why Thiel does not believe that capitalism and democracy are compatible. We know which side he’s chosen. So long as he and his fellows can continue to exploit that same mimetic tendency to persuade people that they are superhuman and essential to their flourishing, his side will continue to win.

. . .

If your enemies can convince you that they are an unprecedented species of madman, you will convince yourself that you need unprecedented weapons to fight back or that you may be better off just hiding in the forest. But you are not.

The rigged contracts and wage suppression, the racism and surveillance collusion (soon to be playing voluntary footsie with Donald Trump’s NSA, with further chicanery to follow), all these sins of Silicon Valley have come about and been overcome before in the short history of American capitalism. They require only the same weapons as before. Organization and agitation. Strikes and labor laws. The ordinary practice of radical politics. Some of these efforts have begun already, with militant organizing and unionization drives beginning to organize Silicon Valley laborers against their exploiters. But these movements require national and popular support, support that cannot begin until the pretense and terror of world-conquering wizards is abandoned and the truth is laid bare: These are only rich assholes, the same as they ever were. All that superman bullshit is just the cheap propaganda of the powerful, propaganda so thoroughly saturated in the American mind that its own inventors might believe it.

Valley of the Dolts

Moral preeners aided and abetted by the clerisy.

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Superman Politics

The Carrier bailout is awful, of course. It is a case of two politicians’ using public funds to bribe a business into doing things that benefit them personally and politically while creating no real long-term economic value. Pence, who dropped his free-market principles like the world’s hottest potato once he got within sniffing distance of presidential power, can burnish his populist credentials at the taxpayers’ expense, and Trump can get ready to flit on to the next publicity stunt.

But the emerging “Superman” politics here are truly poisonous. One of the genre conventions of superhero stories is the compression of all the world’s drama into the immediate presence of the hero — only his actions and intentions are relevant. People may be dying all over the world, but Superman saves Lois Lane. (Comic-book movies have lately subverted that convention by focusing on the collateral damage done by superheroes to the cities in which they live.) What that means in the context of our contemporary presidential politics is that no one takes any note of the fact that Carrier is not the only HVAC company in the United States or the only industrial concern in Indiana. Carrier has competitors that employ Americans, pay taxes, and produce real economic value, and they have been put at a relative disadvantage by the political favoritism extended to Carrier. What about them? They’re not on the stage, so they do not matter.

What is important to understand here is that this is not part of an economic-development agenda: It is theater. It is an adolescent fantasy of political power, and wherever Superman happens to land is where the action is. Nothing else is relevant. It does not matter that there is no broader logic at work: Small displays of efficacy can work to create an illusion of general efficacy. It is busyness as business.

. . .

Trump’s big idea so far is spending $7 million of other people’s money to delay an embarrassing headline. Some deal. Some deal-maker.

Trump’s Superman Style of Politics

Cronyism has a new moral preener and Crony Capitalist in Chief.

Ozymandias

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The President is not My King or My God – How About You?

Up to a certain age, belief in Santa Claus is charming, and entirely harmless. Blind faith in presidential benevolence is neither. If you’re teaching your kids that the president reliably tells the truth and does the right thing, then the future citizens you’re raising may turn out gullible and easily led.

Why lie to them? After all, in living memory, presidents have conducted themselves abominably in their personal relationships, lied us into war, and, in former Nixon aide John Dean’s memorable phrase, “use[d] the available federal machinery to screw [their] political enemies.” Trump, who seems positively gleeful about the prospect of turning the federal machinery against his enemies, seems unlikely to set a higher standard of presidential character.

. . .

For nearly eight years, President Obama has waged a War on Cynicism from the bully pulpit, railing against “those who question the scale of [government’s] ambitions,” and telling college students to reject the “voices” that “warn tyranny is lurking just around the corner.” Somehow, what the president decried as “cynicism” always sounded like healthy skepticism toward increased federal power. In Trump’s case, even Obama might be starting to appreciate the “cynics” point.

Tell The Children The Same Thing About Donald Trump As For Any President: Beware

Statolatry and Ozymandias

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Washington may desire to dominate our lives, but that desire can and should be resisted.

Washington may desire to dominate our lives, but that desire can and should be resisted.

Trump, with his airplanes and helicopters, probably would inconvenience the general public a good deal less with whatever commute he comes up with than does Joe Biden’s risible regular-guy act on Amtrak. When Regular Guy Joe takes the train from Wilmington to Washington, they clear out half a car for his use — Biden himself sits stock still, looking frail and terrified — while teams of Secret Service agents are dispatched to each and every stop along the way to swarm the vice-presidential car and prevent any incursions from the plebs. At the end of the journey, the Amtrak riders are kept on the train — at gunpoint — until Regular Guy Joe has cleared the platform, which can take a while. Do they have places to be and schedules to keep? Of course they do, but the Cult of the Imperial Presidency extends to the Semi-Divine Vice Presidency and its odd, pseudo-democratic rituals.

Trump Snubs D.C. as Millions Cheer

Ozymandias

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Obamacare a Success!

There’s one thing for sure: no matter what happens, liberal cheerleaders of Obamacare will continue to act as if the law was an awe-inspiring success.

When Will Liberals Answer For Obamacare’s Failures?

Also see “Obamacare woes to linger long after Obama is gone

The conspiracy theory about the woefully misnamed Affordable Care Act is that the architects of Obamacare intended their program to fail, thus creating an opening for a so-called public option which would then be expanded to a full-on British-style government health-care monopoly. That’s a fun story, though it isn’t true.

The truth is worse: These idiots thought this would work.

. . .

Obamacare was intended, in theory, to enhance competition. The Democrats were never quite clear on how that was going to work, but that’s what they said. In Philadelphia, the nation’s fifth-largest city, those shopping for health insurance have a grand total of two insurers to choose from. Until recently, the state of Pennsylvania had 13 insurers; today, it has eight.

It is worth keeping in mind that the people who brought you Obamacare want to apply the same model across the commanding heights of the U.S. economy.

Obamacare and the Fundamentals

Philosopher Kings, Clerisy, Ozymandias

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Hoarding, Scrupulosity, and Detachment

To hoarders, belongings are physical anchors in a stormy world. Hoarders might otherwise lead functional lives, but according to experts who spoke at the conference, many derive security from having their keepsakes always in view.

“People who hoard tend to live their lives visually and spatially, instead of categorically like the rest of us do,” said Randy Frost, a psychologist and co-author of Stuff: Compulsive Hoarding and the Meaning of Things, in an interview with Fresh Air. They sort things by location, rather than importance. When he asked one hoarder where her electric bill was, she responded “on the left side of the pile, about a foot down.”

Far from being dirty or disgusting, hoarders might actually be too careful. A common manifestation of OCD is scrupulosity, or an extreme fear of wrongdoing. For example, a highly religious person with OCD might have a fleeting, blasphemous thought one day—”What if God is actually terrible?”—and obsess for days about what thinking it means.

Hoarding in the Time of Marie Kondo

[M]y moderately smug disdain is directed at the writers and “experts” who breathlessly report and analyze these trends—especially when, as is the case in the New York magazine piece, consumerism is highlighted as a contributing vice. “Ours is a spendy culture,” one subheading announces with vague judgmentalism while surrounded by ads for Tiffany and Burberry. “It’s expected that as you earn more, your lifestyle should swell accordingly . . . . If you can’t Instagram or Facebook or Snapchat your material progress, it might as well not exist.”

My question is: Why on earth would we expect anything different? Our culture gives us no compelling reason to resist the allure of conspicuous consumption. We have gutted society of any institutional recognition of, let alone support for, traditional virtues, and yet we vainly expect people to live virtuously. It may be impossible to improve on C.S. Lewis’s concision: “We castrate and bid the geldings be fruitful.”

Now, the virtue I’m thinking of here is not the old-timey Puritan concept of thrift. Thrift can certainly be virtuous, but it can also emerge just as much from a preoccupation with wealth as conspicuous consumption does—a preoccupation with economic status in the future rather than the present. It’s an idea that is easily co-opted by a secular culture where class is considered a reasonable proxy for moral worthiness.

I’m thinking instead of the relatively unknown and little understood virtue of detachment. We shouldn’t be too surprised that detachment has been largely forgotten; more than almost any other virtue, it relies for its coherence on the public recognition of the divine that secularism has systematically purged from our society. Detachment from worldly goods and concerns only makes sense if there’s another world to which we owe our loyalty.

Perhaps the most well-known description of detachment comes from Jesus himself in the sixth chapter of Matthew’s gospel: “No one can serve two masters; for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and mammon.” Secularism solves this dilemma elegantly by erasing God. Only mammon remains.

. . .

We’ve gutted all the social and spiritual foundations of a healthy relationship with worldly goods, and there’s nothing our hordes of life coaches and inspiration mongers and financial therapists can do to replace them. It’s foolish and even a little cruel to expect a society of slaves to mammon to resist their master.

Why the Rich Can’t Save Money

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2016

We are not going to solve our fiscal problems by closing some military bases, eliminating foreign aid, or cutting redundant federal jobs-training programs. Eventually, we will have to cut where the spending is.

William Weld’s Wishful Thinking: Even the Libertarians aren’t serious about fiscal reform.

“We’ve reached a moment when our political thinking and vocabulary as a nation seem exhausted,” he said. “The real effect that we as individuals have on the government and political class that claim to represent us – the big mechanical Golem we call Washington – is so slight that it breeds indifference and anger.”

Christians’ response must be more than merely wringing hands or making a search for better candidates, policies, and public relations. Renewing a society “demands that we be different people.”

Archbishop Chaput noted the “huge spike” during his priesthood of hearing penitents confess sins of promiscuity, infidelity, sexual violence, sexual confusion, and pornography use.

“Listening to people’s sexual sins in the Sacrament of Penance is hardly new news. But the scope, the novelty, the violence and the compulsiveness of the sins are,” he said.

“The truth about our sexuality is that infidelity, promiscuity, sexual confusion and mass pornography create human wreckage,” he continued. This wreckage has been compounded by tens of millions of people over five decades, and “media nonsense” about the effects of sexual immorality and divorce.

“What you get is what we have now: a dysfunctional culture of frustrated and wounded people increasingly incapable of permanent commitments, self-sacrifice and sustained intimacy, and unwilling to face the reality of their own problems,” the archbishop lamented.

“This has political consequences. People unwilling to rule their appetites will inevitably be ruled by them – and eventually, they’ll be ruled by someone else,” he said. “People too weak to sustain faithful relationships are also too weak to be free. Sooner or later they surrender themselves to a state that compensates for their narcissism and immaturity with its own forms of social control.”

People who are unwilling to have children and raise them with love, virtue, and moral character are “writing themselves out of the human story,” he added.

Government has a role to play in easing problems like unemployment, low pay, crime, poor housing, chronic illness and bad schools, but not if government works “from a crippled idea of who man is, what marriage is, and what a family is.”

He warned against a government that “deliberately shapes its policies to interfere with and control the mediating institutions in civil society that already serve the public well.”

According to the archbishop, the decline of marriage, family, and traditional religion also have consequences for the country. Fewer than 30 percent of U.S. millennials think that it’s vital to live in a democracy, while undemocratic feelings have especially risen among the wealthy.

This didn’t happen by accident.

“We behaved ourselves into this mess by living a collection of lies,” Archbishop Chaput charged.

Given that the truth makes us free, “no issue has made us more dishonest and less free as believers and as a nation than abortion.”

“Abortion poisons everything. There can never be anything ‘progressive’ in killing an unborn child, or standing aside tolerantly while others do it.”

“In every abortion, an innocent life always dies,” the archbishop said. Trying to imply other important issues have the same moral weight is “a debasement of Christian thought.”

Why Archbishop Chaput thinks the US presidential candidates are ‘very bad news’

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