Monthly Archives: September 2013

You Are Worth More

SowellHere is our favorite economist, Thomas Sowell, with his umpteenth column debunking the minimum wage.  Protesters are pictured, with the slogan “we are worth more.”

Yes, you personally are probably worth more than $7.25 an hour.  More and more workers in these wretched jobs are adults, often educated, and maybe trying to support a family.  No one can support a family on $7.25 an hour.

On the other hand, the job isn’t worth $15 an hour.  The job isn’t even worth $5 an hour.  A monkey could do this job.  You know that.  You may be worth $15 an hour, but the job isn’t.  These are two different things.  The problem is that you are in the wrong job.

So, which policy would you like the government to pursue?  Would you like a shot at a real job that’s really worth $15 an hour?  Or, would you like them to pump up your shit job so you can stay there for life?

Fast food was never intended to be a real job.  It’s a starter job for kids.  McDonald’s would go broke if they had to pay a living wage – or charge $10 for a Big Mac.  After high school, you are supposed to move on and get a real job.

If you are an educated adult working for $7.25 an hour, you have a right to be angry.  You should be furious, in fact – not because McDonald’s is exploiting you, but because your wonderful government has annihilated the good jobs.

See also:  Want Fries With That?

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For Your Own Protection

Here is a fun article by Jesse Walker about conspiracy theories.  The upshot of the article is that the elites overestimate the power of conspiracy theories to move the masses, and thus engage in a delusion of their own.  What caught Jeremiah’s attention was the reference to FEMA detention camps.  Walker, an expert, says that this theory has been popular since the 1980s.

For the last few decades, elements of whatever party is out of power have worried that the party in power would turn fascist.

To a centrist, the party concept is irrelevant.  What we see is a steady increase in the power of the White House, and a steady decrease in civil liberties.  So, on the day when the Rubicon is crossed and your personal definition of “fascism” is manifest – some party will be in control, and it won’t make a damned bit of difference what party that is.

We have reported this “it’s not fascism when it’s my party” nonsense before, here.  By the way, what is your personal definition of fascism?  Detention without trial?  Search and seizure?  Secret courts?  Torture?  Surveillance?  Extrajudicial killing?

Are you reading the newspapers?

See also:  NSA surveillance goes beyond Orwell

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Debauching the Dollar

We have been reading a wonderful paper on the use of this expression, “debauch the currency.”  The feature topic is simply who said it first, Keynes or Lenin, but the investigation takes us into the world of interwar inflation and communist revolution.

The best way to destroy capitalism is to debauch the currency.

It’s timely because many pundits trace today’s loose monetary policy back to Keynes – pundits on the right, mainly, as in “those damned Keynesians at the Fed.”  In fact, Keynes warned against inflation.  He cites Lenin to make the point that loose money is the enemy of capitalism.

As a disclaimer, Jeremiah was for monetary stimulus before he was against it.  Quantitative easing is long past being helpful, and everyone expected Chairman Bernanke to announce a reduction – at least $10 billion per month – at last week’s meeting.

Keynes writes that, “by a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”  He goes on to say that not one man in a million will be able to detect it.

People are smarter today.  We have all noticed the confiscation.  Pension funds are going underfunded, and savings accounts are being robbed.  Inflation hasn’t cut loose at the supermarket yet, but it will.  Meanwhile asset-price inflation is piling up in the stock market – and whom does that enrich?

By directing hatred against this class the European Governments are carrying a step further the fatal process which the subtle mind of Lenin had consciously conceived .

Keynes observed that in times of rapidly rising prices – share prices, today – the entrepreneur class “cannot help but get rich quick whether they wish it or not.”  We added the italics because billionaire hedge fund managers are now starting to complain on CNBC – you have to see it to believe it – that it’s just not sporting anymore.  Yes, this must be the apocalypse.

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America Ranks 30th in Math

book-photo-smartestLet’s hope Arne Duncan is reading The Smartest Kids in the World.  Using a combination of PISA research and personal interviews, Amanda Ripley deftly  illustrates the failure of our American educational system.  You have read the facts here.  We educate our children badly relative to the rest of the world, and we spend too much money doing it.

Ms. Ripley enlivens the facts using vignettes of three adorable schoolkids studying abroad in the world’s top systems – Finland, Korea, and Poland.  She debunks the canned social explanations, not out of ideology, but simply because she doesn’t accept excuses.  The PISA results help her in this, because they control for social variables.  Here are some of her conclusions:

  • Shielding kids from accountability sets them up for bigger failures later in life.
  • We need standards for graduation, including an exam.
  • We have a culture that doesn’t understand academic rigor.
  • This culture says that good intentions, rather than skills, make good teachers.
  • Teachers should have better pay and more respect, but they should also be better qualified.
  • We spend too much money on gimmicks, and we place too much emphasis on sports.

Perhaps the book’s greatest value lies in illustrating what rigor looks like, and the author’s optimism that American kids would rise to the challenge if it were offered.

Since Secretary Duncan probably is reading the book, we must address its one failing as public policy.  Like many people, Ms. Ripley assumes that reform must come from the federal government as a top down mandate.  The author seems to count states’ rights as an obstacle, which is odd because elsewhere in the book she analyzes the states individually – like distinct countries.

Texas, we learn, is a shining example like Poland.  California is compared to Greece, and businesses are migrating from California to Texas.  So, why not implement reforms at the state level?  American states are large enough to manage their school systems independently, or in regional consortia of their own making.

The federal DOE should assist in implementing reforms designed by state leaders, especially – since it is a national organization – as a counterweight to the teachers’ union.  The feds should provide negotiation support, research assistance and advice, with autonomy to the states.

Some states might be slow to reform, while other states blaze the trail.  That’s the point of our federal system.  Comparisons among states would become a powerful motivation.  We could even enlist PISA to do the ranking.

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Color Blind

JusticeImagine reporting on the Zimmerman trial without reference to race.  Imagine a country like Canada, with no history of racism.  There are people and places outside America where “color blind” is more than a metaphor.  They really don’t see it.

In such a place, the Trayvon Martin story goes like this, “the chubby guy shot the teenager, and then the court ruled it was self defense,” followed by these two observations:

  • Americans sure do like their guns, and
  • Americans talk about race a lot.

Yes, we talk about race a lot.  It sells newspapers, and it supports the race baiting industry.  The color blind story is not newsworthy.  The race element gives it “punch.”

… investigation of a racially charged case that polarized and outraged many in the state and nation.

Recently, three black teenagers shot and killed a visiting Australian student.  No, wait – one of the murderers is mulatto so, as a group, they’re only 83% black.  George Zimmerman is the world’s first “white Hispanic,” a racial category invented by CNN.

Because of our history, people are receptive to these stories – but that’s no excuse for media pandering.  Remember the Duke lacrosse team?  The Harvard professor?  Tawana Brawley?  In seeking, sensationalizing, and outright inventing racist news stories, the media perpetuate a divided America.

When President Obama says, “if I had a son, he’d look like Trayvon Martin,” he is talking about race.  We should all consider that Trayvon Martin might have been our child – and George Zimmerman, too – regardless of race.  That’s why Lady Justice wears a blindfold.

See also:  Is This Sill America?

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Anecdotal Evidence

Jeremiah says it’s mayhem in America, but the official statistics say otherwise.  So, whom to believe?  Well, if you believe the official figures, then crime is down, jobs are up, and inflation is flat.  LOL.  This is not to impugn the official sources, but they do suffer from scope, scale, timing, and definition problems.  Sometimes, the best evidence is what you can see for yourself.

Nobody knew how many … every quarter astronomical numbers of boots were produced on paper, while half the population went barefoot.

For example, if you want to know about inflation, look at the tape from your grocery store.  Is your paycheck not buying what it used to?  That’s inflation.

The official figure, “core” CPI, omits food and gasoline because the prices are too volatile.  Apparently, the BLS can’t calculate a moving average, so they omit the very prices that matter to you.  They also allow for “substitution,” which says not to worry about the rising price of beef – as long as you can eat pork.

Likewise, the best measure of unemployment is the number of friends and relatives who are out of work.  The official  figure, also from the BLS, is regularly recast – yes, for political reasons.  No one takes the headline figure seriously.  You have to look at the U6 measure and the participation rate – or visit John Williams, and praise Allah that someone is still keeping decent records.

This brings us to the crime statistics.  Jeremiah is certain that crime is going up in his neighborhood, but what about those national figures?  Below is the chart from the BJS Criminal Victimization Survey.

Crime1These people do a nice job, especially given the sensitive topic.  The survey makes good use of stat sampling and confidence intervals.  This chart, though, has a scaling issue.  The epic decline from 1993 to 2003 masks changes in the more recent period – to wit, a serious uptick in the last year.

Below is the same data, looking only at the last ten years.  The units are victims of violence per thousand, so it accounts for population growth.  The uptick from 19.3 to 22.5 may not sound like much, but it’s over 16% and it more than reverses the prior year’s decline.

Crime Rate

Since this is the 2011 survey, reported October 2012, the rate could easily be above 25 right now.  In case you’re wondering what genius policy reduced crime during the Clinton administration, we still like Steven Levitt’s analysis. He does a nice job of debunking the partisan explanations, and he puts the data into a generational context.

Lest anyone be too glib about the fall in crime since 1990, Levitt goes farther back – showing that we are still above historical norms.

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