Archive for January 2016


Let’s not have a conversation about race

My daughter told me that her high school English teacher asked the class for their views on race.  Of course not a single student dared to speak up. High school students have many flaws, but they aren’t stupid. Just to be clear, she goes to a very liberal high school. Those who haven’t been paying attention to social trends over the past 50 years might wonder why extremely liberal students would be afraid to talk about race. Let me put it this way, would it have made sense for Chinese students to speak up in 1967, if the teacher asked for an airing of views on the good and bad points of Mao’s ideas?

I was reminded of this recently when reading a post by Noah Smith, who lacks the good sense of the students in my daughter’s class.  That’s right, he waded right in:

These days American public discourse tends to feel like a giant continuous race war. Well, I guess we had that “national conversation about race” that Bill Clinton always said we needed. Oops. But anyway, I guess I might as well wade in.

The right’s way of talking – and thinking – about race is just totally poisonous.  .  .  . So it is basically now impossible to talk to people on the right about race in a rational way.

Well if a “rational way” is how they talk about race at, then I have to agree with Noah.  So since I’m on the right, I won’t attempt to talk about race. Instead I’ll talk about talking about race.

Let me start by conceding that there is a tiny grain of truth in Noah’s claim.  Of course not everyone on the right is racist, but there are probably many more racists (or at least white racists—which are the only kind that matter if you are on the left) on the right than on the left.  And yes, I do see lots of right-wingers who “don’t get it.” But in fact it’s not just people on the right who have trouble talking about race, it’s all Americans.  The Chinese Cultural Revolution reference was not intended to be hyperbole, I honestly think it fits America circa 2016.  When it comes to talking about race, the entire country is deranged. (Probably including me.) Heck, I’d add sex and gender to the list. A conversation about race? I’d rather recommend Americans have a conversation with their spouses about their deepest hidden resentments, that would be more productive.

Sometimes I read thoughtful progressives who are obviously very bright, and then when they switch over to talking about race their IQ seems to immediately plunge by 30 points.  I think to myself, “surely they can’t be this stupid, perhaps they are just trying to feel more righteous.”  Noah confirms this suspicion:

Declaiming against “structural racism” feels good. Racism is generally recognized as being a bad thing, and declaiming against bad things makes one feel righteous (certainly feel that way). It also allows one to link up with like-minded people, making you feel like you have an army on your side and are not just shouting into a wilderness.

Well thanks for clearing that up! I mean, who would have guessed that motive after seeing Smith insinuate that Garett Jones was being racist when he entitled an academic paper “The Hive Mind”?  That’s right, the title of one of the most well received social science books of 2015 is actually a dog whistle to anti-Asian racists, so subtle that the Asian editors of the journal he first published it in didn’t notice.

OK, enough fun and games.  The rest of his post is sort of intelligent and thoughtful, at least mostly.  Noah tries to warn leftists that if they constantly attack moderate white people for being a part of structural racism, then the whites will be turned off, and become more right wing—the only group that isn’t telling them they are racist.  That’s actually a good point, although I’m not sure one needs a PhD to figure it out.  Indeed I think it’s good for both the left and the right if there are fewer white racists in America.  That’s right, the Trump phenomenon is not good for the right.  Unfortunately Noah won’t be able to escape the “structural lunacy” of the left, on the issue of race. He’s unwilling to call out the radical left, and insists on treating them as well-meaning folk who have just gone a bit too far.  Their own worst enemies.  But Noah doesn’t realize that they are not his friends, in their view he’s also part of the problem.  You and I may view Noah Smith as a liberal, but to the modern left he’s a white male with reactionary views on economics. Yes, he’s liberal on race, but so am I.  Do you think they view me as one of them?

Noah Smith has lots of good qualities.  He’s highly intelligent, and willing to say what he thinks.  But that quality will eventually get him into the same hot water as a Scott Aaronson or a Larry Summers or any number of other well-meaning people.  You might think that you’re safe, because you are one of the “good guys.” Your motives are pure.  But views that seem reasonable today will at some point be hopelessly reactionary. It’s only a matter of time before Noah gets into trouble. (Nothing new here, this phenomenon goes back to at least the French Revolution.)

PS.  Here’s a thought.  Instead of having a conversation about race, which will solve nothing, let’s have a conversation about the various societal problems that indirectly exacerbate racial tensions.  Toward the end of his life, Martin Luther King turned his attention toward issues such as the Vietnam War, and poverty reduction.

PPS.  Ask my wife (who was a victim of some “macroaggressions” during the Cultural Revolution) what American PCism reminds her of.

PPPS.  Smith says we should be polite to those with whom we disagree:

In case you hadn’t guessed, I’m not a big fan of this aspect of the culture of economics. And the reason is not just that it results in more offensiveness than necessary (thus tarnishing our reputation among non-economists). It’s also that the fetishization of offensiveness reduces the quality of our economics. All too often we use offensiveness as a signal of the intellectual quality of an argument, but it’s a false signal.

So I hope my right-wing readers were not offended by Noah Smith calling you all racist, it was just a false signal of his intellectual quality.

NOW do you see what I was talking about

Suppose you woke up and read this while drinking your morning coffee:

LONDON (Reuters) – At attempted rebound in European stocks quickly fizzled out on Monday after markets around the world and oil prices slumped to multi-year lows amid persistent worries over an inflationary global boom.

Unless you were a central banker, you probably would have spit out your coffee. Surely that must be a typo! Calm down, I changed the last three words from today’s news.

For years I’ve been arguing that slow NGDP growth reflected excessively tight money.  People were skeptical.  “The Fed’s out of ammo, there’s nothing they can do.”  The funny thing is that this myth has become so deeply engrained that the media continues with it, even after we are no longer at the zero bound.  The title of the actual article is:

Europe struggles to lift global gloom

Struggles?  Um, didn’t the ECB disappoint markets at their last meeting by not cutting the policy rate (as markets had expected)?  How is it a “struggle”, if you aren’t even trying?

Meanwhile in the US, the Fed “struggles” to boost our economy by raising the target rate.  Seriously, the Fed actually believes the almighty dollar, the ultra strong dollar that is contributing to a global commodity price crash, is still too weak, too feeble, and needs to be even stronger.  That’s because of a Phillips Curve theory that was completely discredited by Friedman and Phelps in the 1960s, but the Fed still holds on to, convinced that low unemployment causes higher inflation.  Take a look at the graph below:

Screen Shot 2015-10-14 at 10.13.18 PM

This is the textbook AS/AD model, showing the recovery from a demand-side recession.  It probably makes more sense to view the vertical axis as the inflation rate, rather than the price level.  Do you notice that inflation falls during both the recession and the recovery?  That’s standard AS/AD.  The Phillips curve, in contrast, is just an AD model, and hence only 1/2 as good as the AS/AD model. The Phillips curve model says falling unemployment is inflationary, whereas the AS/AD model says when unemployment falls during a recovery (due to wage moderation) it is disinflationary.  Which one better fits the facts?

Now the Phillips Curve proponent might counter, “Yes, but once unemployment falls below the natural rate, inflation will rise.”  Only if it is pushed below by an increase in AD, i.e. faster NGDP growth.  But the bond market is telling is that NGDP growth will not increase.  The Fed predicted its December tightening would raise bond yields this year, whereas it’s actually reducing them.

In the standard AS/AD model, once you return to the natural rate, inflation will stay at the new lower level.  In the 1980s inflation stayed lower, it did not rise back to the level of the 1970s.  In the 1990s inflation stayed lower, it did not rise to even the quite modest levels of the 1980s.  There’s utterly nothing in the AS/AD model that tells us inflation will rise when unemployment gets back to the natural rate.  But the Fed is assuming there is.

For years I’ve been saying the central banks could do more, but simply refuse to.  NOW do you see what I was talking about? Everyone can now see that central banks don’t see anything “funny” about the joke at the top of this post.  Only the markets get the joke. The central banks simply aren’t trying.  Demand shortfall?  What demand shortfall?

Here’s a more interesting joke.  In December, some pundits said there was an argument that higher rates would reduce the risk of bubbles. OK, mortgage rates are now falling.  Does that mean we need still higher rates?  When will these higher fed funds rates bring us the higher mortgage rates that will prevent the bubbles?

(I should say, “supposedly will prevent bubbles”, as actual so-called bubbles tend to occur when rates are high, such as 1929, 2000, and 2006, not when rates are low (1932, 2002, 2009).

From The Economist

Here are some recent excerpts from The Economist, which caught my attention:

More Muslims please:

Three things account for America’s relative security. The first is its distance from the Middle East; the second is decent law enforcement, especially by the FBI, which since 2001 has partly turned itself into the internal spy agency America lacked. Its counter-terrorism staff, whose number has grown by 2,000, are investigating links to IS in 50 states. By far the most important reason, however, is that American Muslims are less interested in being radicalised than their European counterparts.

They are richer, better educated and altogether better integrated into the mainstream. Though less than 1% of America’s population, they account for 10% of its doctors; in 2011, less than half said that most of their closest friends were Muslims.

What Europe gets wrong:

A series of problems, however, hinder the smooth movement of refugees into European workplaces. The first, and broadest, of these is legal. America generally lets in people it has already screened and recognised as refugees, and allows them to start work almost immediately. There are plenty of low-paid jobs waiting for them, and they typically integrate, and learn English, quickly. Europe mostly gets asylum-seekers, and keeps them waiting, sometimes for years, for refugee status. In this legal limbo they typically get welfare and shelter but are usually barred from work, and even from state-funded language lessons.

Europeans have been too slow to grasp that getting newcomers quickly into the labour market is “the only way” to integrate them, says Demetrios Papademetriou of the Migration Policy Institute in Washington, DC.

A surprising data point from Germany:

Even before this year’s surge, western Europe had lots of immigrant students. According to the Organisation for Economic Cooperation and Development (OECD), the proportion of 15-year-old schoolchildren in Spain who are foreign-born rose from 3% to 8% from 2003 to 2012 (though in Germany it fell by about the same amount).

And these students may help boost education standards in Sweden:

Most important, European governments need to treat refugee children as an opportunity rather than a problem. Driven by a desperate desire for a better life, they and their parents tend to be hard-working and ambitious. Europeans worried about migrants studying beside their children should take comfort: the most important predictor of pupils’ school results is their parents’ level of education, and about half of the refugees reaching Europe from Syria have university degrees, according to UNHCR, the UN refugee agency (though other surveys put this number far lower). “Sometimes I joke that Syrian children may help reverse [our decline in] PISA results in maths,” quips Ms Hadzialic. If they are integrated properly, she may be right.

The 50% figure is wrong, although of course if you get your news from the sludge media you’d assume they are all rapists.

Last year I pointed out that almost all the population growth over the next century would be in Africa.  That’s even more true today:

Alarmingly, population growth in Africa is not slowing as quickly as demographers had expected. In 2004 the UN predicted that the continent’s population would grow from a little over 900m at the time, to about 2.3 billion in 2100. At the same time it put the world’s total population in 2100 at 9.1 billion, up from 7.3 billion today. But the UN’s latest estimates, published earlier this year, have global population in 2100 at 11.2 billion—and Africa is where almost all the newly added people will be. The UN now thinks that by 2100 the continent will be home to 4.4 billion people, an increase of more than 2 billion compared with its previous estimate.

“Alarmingly”?  I’m not sure the Ethiopians are alarmed to be alive:

(Ethiopia is Africa’s second-most-populous country after Nigeria; by some estimates it has nearly 100m people.) Most women still have four or five children. The standard family plot has shrunk to less than a hectare.

Yet, despite these self-imposed brakes, Ethiopia’s economic progress has been spectacular. Its growth rate, if the latest official figure of 11% is true, is the fastest in Africa; and even the lower figure of around 8%, which the IMF and many Western analysts prefer, is still very perky. Social and economic indices are reckoned to have improved faster than anywhere else in Africa, albeit from a low base. Extreme poverty, defined as a daily income of under $1.25, afflicted 56% of the population in 2000, according to the World Bank, but had fallen to 31% by 2011 and is thought to be dipping still. The average Ethiopian lifespan has risen in the same period by a year each year, and now stands at 64. Child and infant mortality have dived. Protection for the rural poor in time of drought, which presently afflicts swathes of the north and east, is more effective than before. The government has “the most impressive record in the world” in reducing poverty, says a British aid official.

This excellent article in The Economist points out that, throughout the developed world, minorities are rapidly integrating into the native population. Residential segregation is falling fast.  I’ve never believed that whites would become a minority in America (although I hope I’m wrong.)  One reason is that intermarriage rates are very high:

In London whites and black Caribbeans marry or cohabit in such numbers that there are now more children under five who are a mixture of those two groups than there are black Caribbean children. Marriages between whites and Asians are growing, too. America is mixing just as quickly. In 2014, Mr Frey calculates, 19% of new American marriages involving whites and 31% involving blacks were mixed-race. The share for both Hispanics and Asians was 46%. The children of such unions can be hard to deal with statistically. So in the future the numbers will probably underestimate the speed of desegregation.

My daughter is has a white dad and an Asian mom, and is generally regarded as “white.”  In the future, there’ll be millions more like her.  In the 22nd century, America will be beige, unless by then genetic engineering allows each person to pick their skin color.

Unfortunately, Puerto Rico just died of SIIDS (sudden infant industry death syndrome):

Federal investment and tax breaks helped Puerto Rico develop from a sugar-based economy to a pharmaceutical-manufacturing hub. But once producers like Ireland and Singapore began to compete and the tax preferences expired, the island did not develop a new comparative advantage. As part of the United States, Puerto Rico could not devalue its currency, and the national minimum wage inflated its labour costs. But being American offered benefits as well. Residents could move to the States to find work, and were eligible for federal welfare payments if they stayed. Meanwhile, the government could issue tax-exempt municipal bonds, prized by mainland investors.

As a result, the economy slowly hollowed out. The population has fallen from 3.9m to 3.5m during the past decade, with young workers accounting for much of the exodus. Those who stayed tended either to depend on the state—as students, public employees, pensioners or recipients of federal largesse—or to fall into the sprawling underground economy and bustling drug trade. Candidates from across the political spectrum have won office by keeping the gravy train running: more than a third of Puerto Rican schoolchildren are classified as having special needs, inflating the teacher-to-pupil ratio, and the island’s health plan for the poor would be the envy of any American state. A paltry 40% of working-age boricuas are in the labour force, and just 57% of personal income in Puerto Rico comes from formal private jobs, compared with 76% for the 50 states, according to José Villamil, an economist. Investment has collapsed, from 27% of GNP in 2001 to 13% today. Yet retail sales have held steady since 2008. The only way to maintain consumption was via massive borrowing: during the past 15 years, the government’s nominal debt load has tripled.

Just wait until the US mainland gets that $15 hour minimum wage.  Perhaps our unemployed poor can then move north to Canada.

On a lighter note, the annual Holiday double issue was as delightful as always, with the three standout articles discussing Tibetans, Gujaratis, and master/slave dynamics on a desert island.  Here’s an excerpt from the Tibetan articlewhich erases any doubts about the evil nature of China’s government.  (It discusses the boom in a medicinal caterpillar.  But read the entire issue.):

Caterpillar fungus has also been a direct cause of violence among Tibetans, and between Tibetans and caterpillar-poaching Hans. In parts of the plateau, the annual rush for fungus is Klondike-like. In a report by the Communist Party committee of Nangqian county in Yushu, a village official says: “Caterpillar fungus has turned people bad. It has made them think only of money and caused them to lose their sense of family, friendship and humanity.” Complaints abound about Tibetans frittering away their caterpillar money on gambling and booze (there are few opportunities for Tibetans to find decent work in cities, where jobs usually go to Hans or Huis).

Mr Mayong, the guide, insists that in his experience, fellow villagers are courteous to each other in their collective scramble. That is not how it works between rival villages, however, or when caterpillar poachers invade a village’s territory. In 2013 two people were killed in another part of Qinghai when villagers shot at rivals. The Dalai Lama, Tibet’s exiled spiritual leader, said fungus-fuelled fighting had caused “disgrace to the Tibetan people” and a “crisis” on the plateau.

During this year’s harvest season, security forces in some parts of the plateau warned that the task of “stability preservation” was “grim”. In Shangri-La, a Tibetan town in Yunnan province (so named in 2002 in order to attract more tourists), police told residents to give up any hidden guns as the season approached. In one county of the TAR, villagers were told they would be banned from harvesting caterpillar fungus for a year if they used any outsiders to help—an attempt, partly, to curb the kind of violence that has sometimes broken out between Tibetans and Han fungus-gatherers.

The environmental fallout has been considerable, too. For a time before the earthquake in Yushu, the horse festival (which includes yak races—a perilous sport for the riders) offered a clue to one aspect of this. It was in the elaborate traditional costumes that rural Tibetans like to wear on special occasions. Enriched by caterpillar fungus, some took to augmenting their garb with the skins of leopards and tigers smuggled from India through Nepal.

Local officials in Tibet were of little help in stopping this. According to Emily Yeh of the University of Colorado at Boulder, they wanted to encourage festivals as way of attracting tourists from the rest of China; exotically dressed Tibetans were seen as crowd-pullers. Counties in some parts of the Tibetan plateau “competed to show off their wealth and development status through the hyperbolic display of jewellery and pelts on the bodies of their Tibetan participants [at festivals], often so much that participants had trouble walking under their weight”, she said in a paper published in 2013. Popular singers began sporting pelt trims on their music DVDs. This surprising—and tragic—side-effect of demand for a purported aphrodisiac came to an equally unexpected end. In 2006, at a prayer ceremony in India attended by thousands of Tibetan pilgrims, the Dalai Lama called on Tibetans to cease wearing animal furs. The impact was immediate. From across Tibet reports emerged of Tibetans piling up their furs and burning them: given the garments’ huge value, an extraordinary display of devotion to the Dalai Lama. Anxious Chinese officials tried to ban such bonfires and arrested the organisers. In some places they even ordered Tibetans to wear their furs at festivals.

But the Dalai Lama’s injunction held firm. Despite a stepped-up campaign by the government to vilify the exiled Tibetan leader since the unrest in 2008, Tibetans appear largely to have heeded him. India’s tiger population fell from 3,642 in 2002 to a low of 1,411 in 2006. Since then it has climbed back up to 2,226. Your correspondent did not spot any furs looking like those of rare animals at this year’s festival in Yushu. In the privacy of Tibetans’ homes, the Dalai Lama’s popularity is evident. One yak-herder, in her tent on the 4,500-metre pastures of Lanweilaha Mountain, gets out her box of recently harvested caterpillar fungi. She keeps it under a portrait of the Dalai Lama (banned in some parts of the plateau) which has a strip of yellow cloth draped over it as a symbol of respect.

Only China’s government would order people to wear tiger skins.

PS.  The Gujarati article makes me more pessimistic about India—can you guess why?

The War on Drugs

Here’s Kevin Drum:

And on another related note, the damage from the Oxy epidemic is worst among the poor and working class. It’s easy to favor drug legalization when you’re middle-class and well educated. Your social group probably doesn’t include many people who abuse drugs much in the first place. Moderate users can afford their habit. And when their use turns into addiction, they usually have a strong support network to help out. It’s a problem, but not a huge one.

In poor communities, none of this is true.

Let’s try to look at this from a different perspective:

It’s easy to favor drug prohibition when you’re middle-class and well educated. Your social group probably doesn’t include many of the 450,000 people currently imprisoned for violating drug laws. Nor does it include the thousands who die every year in developing countries, as a result of the US-led war on drugs.  Moderate users can afford their habit, without having to sell drugs. And when their use turns into addiction, they usually have a strong support network to help out. It’s a problem, but not a huge one.

In poor communities, none of this is true.

Sorry, but I’m not willing to imprison 450,000 people, let thousands die, and let millions suffer with untreated pain, just because some people abuse Oxycontin.  And isn’t this horrible outbreak happening despite our draconian drug laws?  If we legalize pot or cocaine, does the Oxy epidemic get even worse? The addiction center nashville is what one can count on when it comes to drug issues.

I hope this is not the beginning of a shift of opinion of progressive pundits in favor of the war of drugs. (“Liberal” politicians already favor the war on drugs.)  I grew up middle class, and have known lots of people who used drugs.  I don’t recall a single one of my acquaintances ever serving a minute in prison.  Nor did our last three presidents.

The 450,000 figure is misleading, as many serve only short sentences (this includes those in jail awaiting trial.)  Millions of people go through our prison system for drug law violations.  Why don’t I know any of them?  Is it perhaps because the system mostly punishes poor and minority drug users and sellers?  Isn’t this the sort of “disparate impact” that liberals (rightly) complain about? There are OrganicCBDNugs that people are into these days.

Some commenters were skeptical about my previous post, which claimed class bias in anti-rape policies.  But we see the same class bias in drug laws.  How many examples do we need to see?

Class bias

When I used to read newspapers from the 1930s, I was struck by the strong bias against the lower classes.  I suppose it was even worse a few hundred years earlier, when the aristocrats viewed peasants as little better than livestock.

Things are better today, but a recent piece of legislation reminded me that the problem has not entirely gone away.

SaVE instructs colleges and universities to provide programming for students and employees addressing the issues of domestic violence, dating violence, sexual assault and stalking. Education programs shall include:

  • Primary prevention and awareness programs for all incoming students and new employees

  • Safe and positive options for bystander intervention

  • Information on risk reduction to recognize warning signs of abusive behavior

  • Ongoing prevention and awareness programs for students and faculty

So here’s my hypothesis, and I want you to tell me if I am wrong.  Most policymakers come from the upper classes. Therefore they care about their own class more than the lower classes.  That’s not to say they don’t care about the lower classes at all, indeed many are so rich they are willing to favor programs that redistribute a modest amount of income.  But nonetheless, they care about their own class more than others.  This is not a radical claim; I suppose it might even be in some sense hardwired into our brains that we should care more about people who are similar to us.

My specific claim is that this campus anti-rape program reflects class bias, as it doesn’t apply to young people who are not in college.  Possible counterarguments:

1.  Maybe the rape problem is more severe on campus.  But I recall reading that it’s more severe among non-college students.

2.  Maybe it would be hard to require non-college students to take the classes.  But couldn’t you require the completion of the program at various “checkpoints”—renewing a driver’s license (or getting a similar ID for drinking), getting government benefits such as food stamps, unemployment compensation, etc.?  That would not catch everyone, but it would include a very large share of the population.

So which is it?  Class bias, or am I missing something?  My claim is that the ruling class doesn’t care as much about poor people being raped.

PS.  In a weird way I see this campus safety act as being subtly linked to the recent racist comments by Maine’s governor, although I wouldn’t blame others for seeing that as a stretch.

PPS.  You might argue that these programs are ineffective, but even if that were true, it would have no bearing on this post. I’m pretty confident that the proponents believe they are at least slightly effective.

PPPS.  Off topic, but I highly recommend Kevin Drum’s excellent essay on the right to die.  And I wish him well, he’s one of the best bloggers out there, and also one of the most honest.