The Only Question

The NY Times has a piece today in its "Fixes" series highlighting The Family Independence Iniative, "an organization that is challenging some of the core assumptions that have prevailed in social service work for decades — particularly the assumption that poor families need a great deal of assistance, advice and motivation from professional social workers to improve their lives."  It's premise is that families don't need programs, but rather tools to help them make better decisions, as well as some financial resources to be able to better leverage themselves.

Sounds nice.  I'm all for it.  It's better than nothing.  But here's the problem:

How will we ever eradicate poverty as long as our economy depends on the poverty wages of low-skilled labor?  Who will wash the dishes?  Who will clean the hotel rooms?

This is a crucial element of the "poverty cycle", in which social misfortune drives people into accepting careers of poverty.  This creates property markets that segregate entire neighborhoods of people who make low wages, as well as struggle with social issues.  Their children then go to school together, where their high stress levels and lack of preparedness compound the struggle to get educated.

Some will always make it out.  But they are the outliers, and give lie to the idea that the system is fair or functioning.  Worse, they allow us to ignore the fact that we all depend on poverty wages.  Efforts to enforce minimum wages that would eradicate poverty are met with an argument that jobs will need to be cut.  Even if true, this is an indictment of the economic system.

Truly eradicating poverty and the social ills that it perpetuates requires eradicating our systemic reliance on a low wage underclass.  Do that, and you no longer need the plethora of band-aid interventions we've been trying for over a century - charity, jobs programs, education reform, social work, criminal justice reform, drug prevention, etc.  You can't create a system in which social ills get condensed, enhanced, ingrained and perpetuated, and then expect to be able to come up with solutions to help people "rise out of poverty".

The obvious difficulty is how to do this.  How do we change such a large system?  Raising the minimum wage will indeed limit job growth - at least, as far as I know, and it makes sense.  What would it look like if businesses were all required to raise their wages to $20 an hour, effectively doubling or tripling the labor costs in industries that rely on low wages.  Hotels, fast food, groceries, retail, restaurants - all of these would be severely hit.  They would have to raise prices.  But now the $20 an hour worker has to pay a lot more for everything.  The raised income, in effect, becomes regressive.

Or so goes the argument, and I'm no economist.  But suffice it to say this stuff is really tricky.  But "tricky" is not an excuse for maintaining the status quo, and continuing to relegate millions to lives of poverty, and exploiting a system in which social ills create an underclass of low wage workers.

We need to find a way to make every job a non-poverty job.  Dishwashing.  Picking vegetables.  Cleaning toilets.  Manning cash registers.  Mowing lawns.  Stocking shelves.  Do that, and the problem goes away.  School test scores skyrocket.  Families bounce back from hardship.  Stress levels in families plummet.  Social ills like crime and drug abuse drop.  People can afford to live in nice neighborhoods (actually, most neighborhoods become nice).  Racial resentment ends.

Sounds nice.  But how do you do it?  This is the question that needs to be answered.  It is a hard question.  But it is the only question.

Whose Property?

Samir Chopra, professor of philosophy at the Brooklyn College of the City University of New York, reminds us that property is a social and legal construct.

Property is not discovered; it is made, not by the act of mixing labor with supposedly ‘fallow land,’ as Locke would have had it, but by the scaffolding provided by the surrounding legal system.

So an agreement, designed according to what makes sense.  Of course, this "sense" gets rather complicated.

The simple story is that property should be fair, distributed according to one's desert.  However, how to establish desert?  If I inherit a million dollars, I certainly did nothing to deserve it, in that I played no part in its creation.  But maybe it is fair to respect the wishes of the deceased.  But what if they inherited it, and so on?

Let me toss another piece of wood into the fire: as a behaviorist, I can make a rather solid case that all of our actions in life are in a sense "inherited", in that they are entirely a function of our genes and our environment.  As such, any action we take to create wealth is inherited.

This may seem a fanciful stretch, even if you accept the premise that our actions are not our own.  Surely we must act as if they are.  As a practical matter, maybe this is true.  However, we certainly don't act this way at a societal level.  In criminal justice, people are judged to be responsible for their actions, and thus deserving of a range of punitive measures.  In our economic system, people are assumed to have "earned" their fortunes - or lack thereof.  As such, property is hardly given a second thought as the direct result of personal action.

If our actions are inherited, then all forms of property inequality (not to mention other forms of capital) are injust.  As a practical matter, remedying this injustice in a complex society is obviously no easy task.  History is riddled with horrific results of experimentations in equality.  However, it is also filled with examples of successes (public schools, libraries, parks, social security, medicaid, etc.).

Many of our political arguments are over the practical effects of social responses to equality - whether or not they would work, whether we can afford them, whether they have secondary negative effects and so on.  Yet, first we must establish whether or not there is a moral imperative, a problem to address.  And at this point, a good-as majority of the country simply disagrees with the premise that we inherit our actions, much less that social interventions might be effective.

(A strange irony is that many of these very same people view social interventions as having negative effects on motivation, which is a completely behavioral analysis, and would as such seem to agree with the premise they deny in the first place!)

It's the Economy Stupid

Scarsellino - Driving of the Merchants From the Temple

I really hate money.  Or, economics to be more precise.  I hate it on two levels.  First, it's just super complex.  And economists don't seem to agree.  The fact that there are liberal economists and conservative economists really bothers me.  Understanding the most basic economic principles seems fraught with politics.

But then there's the second way in which economics frustrates me: it is relevant to everything I care about.  Aside from being impenetrably complex, it is essential to understanding our social system.  So how can I blog about poverty, race, class, education, human behavior, etc. without really understanding economics?

(Also, on a really deep level - to my shame - I just find the numbers boring.  When I hear words like devaluing, capitalization, marginal rate, gains, futures, leveraged or inflation, a little pit in my stomach squilches.)

So, I was happy to have tuned in to a recent Planet Money podcast in which "The Fed", which generally makes me think of the most boring haunted house you could imagine, was explained in a refreshingly easy-to-understand segment.

OK, so this is super... superficial.  But they were talking about a listener's question as to what was so special about the idea of keeping inflation at 2%?  You got me.  I know lower = better for me, personally.  But as to fiscal (or monetary?  What the hell is the difference!) policy, I have zero idea.

Apparently Bernanke came out in 2012 and announced that a committee at the Fed (I assume made up of super smart people, who know what things like amortization mean), all got together and agreed that 2% was a good basic rate to generally target.  It made sense, after this explanation from Jacob Goldstein...

So low interest rates = cheaper loans for businesses.  Businesses can borrow more, which means they can hire more.  Hiring more is good for employment.

But, once employment peaks, or when most people who want a job can get a job, unemployment is low, and it is a tight labor market.  These means workers gain a wage advantage as businesses must compete for workers, driving up wages.

Good for workers, but now businesses must charge more to pay for higher labor costs.  They then pass this cost along to - where else? - consumers.  Which means now prices are higher.  And when everything is more expensive, your dollar doesn't go as far, is basically worth less.  In other words increased inflation.

So you can see, there is a point at which lowering interest rates becomes a bad thing.  On the other hand, having high interest rates isn't good either, for obvious reasons.  The reverse happens, which ultimately leads to slow business growth and fewer jobs, lower wages, etc.  The trick is finding a balance.

Now, the answer to the original question: why 2%?  is something 20 brilliant PhDs with over a million combined total hours of studying this stuff* will have to answer.

But I enjoyed the simple explanation.  Of course, here's the thing.  This is no doubt a "political" question, as in, there are probably critiques of this formula that the assumptions are incorrect, and different market schemes would lead to different outcomes.  We can add in the sort or moral dimensions of what the hell banking even is, and invoke the sort of reverse-Godwin's Law by bringing in Jesus and the moneylenders and social hierarchy.  End the Fed!  Blah blah blah.

Go read Das Capital.  I fucking dare you.  You won't understand it.  Maybe as an economist you might.  But then you'd be missing the social science elements, which you never quite studied because you weren't taking any of it at a graduate level.

Admit it.  You're barely better than me.  You hear the news reports on the latest dow industrial averages going up and down and don't bat an eye.  Sure, it seems reasonable.  5% up.  2.5% down.  Nasdaq.  NYSE.  S & P.  Aflac.  Bisquick. Of course it is utterly meaningless.  They might as well be reporting on how many feathers washed up at the local duck pond for how relevant it is to 99.9% of the public's economic understanding.

But I digress.  You probably detect a note of bitterness in my tone.  I told you I hate money.  But today I learned something about the Fed.  It was interesting.  Hopefully it was to you too!

*in the spirit of this post I did some rough numbers.  Assuming 30 years of experience, putting in 40 hours a week over 11 months of the year.  Of course, not all 40 hours were spent in books.  But many likely were, and many papers were likely written by putting in more than 40 hours a week.  And I didn't include all the hours actually spent getting the original degrees to begin with.  Bottom line, that's a lot of damn experience.

The Final Question

Susan Ohanian argues against the Common Core Standards, getting at so much of what is lost when we treat children as widgets, instead of the amazing, blooming little people they really are.

I’ve never taught kindergarten, but I have spent lots of time in pre-Common Core kindergarten classrooms in 26 states—from poor rural to poor urban to affluent suburban.  I’ve witnessed children’s delight and inventiveness in the play house, the sand table, the building block area.  I’ve read the books they’ve written, watched their impressive mathematical reasoning. Those kindergartens were wonderful places to be. My first objection to this model lesson on teaching complex text is the rigidity of the scripted lesson, the lack of spontaneity, the lack of joy. Everything is teacher-directed and the two teachers have miles to go and CCSS promise to keep.

However, I do think there is a deeper problem that NCLB was at least hoping to address (yet failing miserably and dragging down public education in the process). This is the very real issue of socio-economic inequality and differences in human, financial and social capital in society - what I call *societal capital*. This means families in which parents have less education, less cognitive development and knowledge to pass on to their children, less time to give their children because of working long hours (for low pay), high levels of stress because of mental or physical illness, or life crises.

Socioeconomic inequality can almost be defined as an inability to leverage societal capital into developing one's young. Larger, structural forces in society conspire to perpetuate low levels of capital among the poor, primarily by shunting them into segregated communities with lower overall infrastructure and opportunity.

NCLB and "reform" has attempted to close the achievement gap that SES inequality creates, yet without addressing any of the actual causes. Schools "fail" because of SES, yet we pretend they are the answer to SES. It is completely backwards. Take all the teachers from a "good" school and switch them with all the teachers from a "bad" school and the schools will stay the same.  This is because the underlying problem is the same, and unless addressed, it will remain so.

 The billion dollar question, however, is how best to do this, and whether it is even possible.  We can radically transform public education with real reforms that target poor schools with interventions such as dramatic cuts in class size - maybe down to 10-15, multiple full-time counselors, parent liasons that follow up with families in distress, whether because of violence, illness, homelessness, etc.  A teacher with a child who is performing below grade-level and seems to have real academic, emotional, behavioral, etc. problems ought to be able to call upon a wealth of resources to find out what is really going on. 

As a high school teacher, the students I teach who are most at-risk are those with the most dysfunctional home-lives.  I routinely make phone calls home yet phones are often out of service, or the parents is at a loss as to what to do.  Try as I might in the classroom, there are limits to what I can do, especially when the student's developmental disadvantage is disrupting learning for the rest of the students.  When I taught at the elementary level, the problem wasn't much better.  Parents of struggling students tended to have difficulty knowing how to best offer their children the kind of development at home that would help facilitate academic success.  This could have been the result of any number of disadvantages associated with SES.  One parent of a chronically disobedient child worked long hours and appeared to be a recovering addict, who frequently lost her temper with her son.  Many others spoke little English.  Many struggled at low-paying jobs.  None had college educations.  Contrast this with higher SES neighborhood schools and the story is generally the opposite - students come from homes with more societal capital, and their academic performance reflects it.

Seeing as we have yet to fully implement the type of radical reform of poor schools I mentioned, it is hard to say how effective this sort of technocratic policy solution - remedying the effects of poverty through services - might be.  You also then have the problem of mixed neighborhoods, in which only a portion of the school population is lower-SES.  These students still struggle, despite the effects of going to a "good" school.  This would be expected, considering the degree to which one's societal capital is made up of capital from one's family and home-life; even in an environment of opportunity, there is still less to leverage.  These students would need the same kind of setting and services a poor school might be designed to provide. 

Yet what if these services aren't enough?  What if it just isn't practical to try and make up for the diminished societal capital of millions of families, having become so depleted over lifetimes and generations of disadvantage?  What if the only solution is to radically rethink the structure of our economy itself?  As it stands, our economy depends on a massive underclass of tens of millions making poverty wages.  Our system of property and real estate establishes neighborhoods and communities defined by very different levels of societal capital.  Low income is often the result of lower societal capital - things like one's human capital development, one's family situation (i.e. having to care for children as a single parent with no time or money for career advancement), possible mental illness such as depression or anxiety disorders, or other health issues.  The fact that one is poor because he or she is paid a low wage because of life circumstances that make it difficult or impossible to advance their career means that their disadvantage is being taken advantage of. 

To the extent that our economy depends on their labor, we are taking advantage of their disadvantage.  Thus as a society who benefits from their position, we ought to be held responsible for improving it - if indeed we believe in equality and fairness.  As a metaphor, imagine having desire to see something interesting going on on the other side of a fence.  Unfortunately, the fence is six inches too tall, yet just your luck, a man has fallen down drunk before you, and standing upon his back, you just might be able to catch a glimpse of the excitement.  Of course you wouldn't take such an opportunity.  Yet what if instead the opportunity was to avail yourself of any of the the innumerable services proffered by individuals with too little capital to find more respectable, and better paying employment.  

Well, we tell ourselves there but the grace of God go we, and complete the transaction.  The modern economic system conspires to make their plight as friendly as possible.   Just as prostitutes no doubt must pretend to enjoy servicing their customers, so too must desperate low-wage laborers "do it with a smile". 

This is the deeper moral flaw in public education - that the achievement gap belies the gap in societal capital, enforced on a daily basis by a complex society that finds the question of its own culpability too uncomfortable too spend much time on.  After all, what else might we do?  What alternative is there?  This is the question.

The American Hallucination

The American Dream, New Jersey 1991, Marcel Dekker

There may be no more defining characteristic of the American identity than the so-called "American Dream", the idea of America as the land of opportunity where everyone can succeed.  This mythology, by now hundreds of years old, is as persistent as ever.  In many ways, it is an empirical question, and it is true that, as a relatively free, first-world liberal democracy, opportunity is immense.

However, there are two features required of the term opportunity.  First, it must exist as a possible avenue of action.  The opportunity to sit on the grass in a park requires there to be a park in the first place.  But second, and this is just as important, there requires the capacity in one both to desire to, as well as know how to, find the park and sit in it.  For opportunity to exist, it must be realizable objectively, as an external option, as well as subjectively, as a personal option.

In the real world, take the example of the opportunity to start a small business, the hallmark of the American Dream mythology.  Loans might be available.  Markets might be available.  But in order for the opportunity to be real, one must both have the desire and the know-how, as well as the time and energy to start it.  For many Americans, this is has been a very real, attainable opportunity.  But for many more, it has been impossible.  It isn't hard to imagine situations in which personal circumstance might prevent one, through very real obstacles, from following this path.  A single mother with childcare expenses.  Someone with a pre-existing condition for whom self-employment means losing health care coverage.

There are many for whom these kind of practical realities make the American Dream impossible.  But there is another kind of practical reality that arises from something much more complex and less talked about: personal agency.  To those without sufficient personal agency, opportunity is just as unattainable.  As an objective reality, it may exist.  But as a subjective reality, no less important, it does not.

When talking about the American Dream, and the question of opportunity, personal agency is rarely talked about explicitly.  For many, it is something that is assumed to exist in relatively equal measure among all adults.  Objective opportunity is pointed to, and its existence is assumed to be evidence that it is within the grasp of all.  The expectation is that everyone should be able to take advantage of it, and and failure to do so is simply a matter of lack of freely chosen will.

Yet there is no evidence that any such thing exists.  Wherever one looks, human behavior is driven not by free agency, but rather by complex forces of genes and environment.  Depending upon these variables, one either will or will not have the subjective capacity to take advantage of any objective opportunity that exists.

This should be obvious to every parent.  We strive to create the best possible environment within which our children might grow and develop the very best of their potential.  We know that positive environments are almost entirely determinative of future behavioral outcomes.  "Bad parenting" is defined in obvious relation to what is either "good" or "bad" for the child, profoundly effecting development - specifically their capacity for agency.

Somewhat ironically, this can be taken a step beyond.  A cascading effect occurs: "bad" parenting increases the likelihood that the child will reach maturation with a poorly developed skill-set, thus increasing the likelihood that he or she will in turn practice "bad" parenting, in turn increasingly the likelihood that their child will mature poorly, etc.  This process of cyclical, generational dysfunction is well-documented.

In Hart and Risley's classic study, Meaningful Differences, profound differences in language and cognitive development are tracked in granular detail through analyzing interaction in families of varying levels of socio-economic background.  Parent education levels correlated strongly with development of language and cognitive skills in children, which in turn varied greatly across, yet not within, socio-economic background.

In a fascinating follow-up study to Walter Mischel's study in the 1960's on child impulse control, in which children's ability to abstain from eating marshmallows found great variance in self-control as a seemingly tempermental skill, researchers recently found evidence that this skill was not nearly as innate as was once thought.  Environment was actually found to be a strong variable in a child's capacity for self-control.

This comes as no surprise given what we know about child development, and goes a long way to explaining differences in child development across socio-economic backgrounds, specifically with regard to patterns of school success across the nation.  A story emerges in which, from birth to maturation, people are heavily influenced by the environments in which they are raised.  In fact, there is little evidence that one has any capacity to transcend one's environmental or innate abilities.  The outlying cases, upon further scrutiny, always seem to turn up strong evidence of environmental factors.

And yet we seem to cling to the notion that humans can transcend the shackles of genes and environment.  The American Dream is alive and well, despite no evidence that it exists, and a great deal of evidence that it can't possibly.  All around us, we see the link between socio-economics and agency.  But, much like the faith in a God that makes no rational sense, we can't seem to let it go, even when surrounded by evidence to the contrary.

A recent episode of the news program 60 Minutes illustrated the American captivation to this mythology.  A Pakistani immigrant to America was profiled who, seemingly against the odds, through seemingly nothing but pluck and determination, built himself a hugely successful business and is now a multi-billionaire.  The schizophrenia of the American Dream mythology, clinging to its seductive charm, was on high display.  Shahid Khan was at first introduced as coming to America as a teenager from "the dusty streets of Lahore", with nothing but $500 to his name.  From this, he grew a small auto parts company into a profoundly successful enterprise.  A charismatic, jovial man, his optimistic attitude allowed him to become wealthy, proof positive of the American Dream, described as much by a Forbes cover story.

However, as the story quietly mentions, Khan wasn't quite the rags-to-riches story he is made out to be.  The son of a mathematics professor and businessman, he came to America after being accepted as an engineering major at the University of Illinoise.  As a college student in the US, he was clearly of higher socioeconomic status, despite his plaintive descriptions of washing dishes for minimum wage.  In Pakistan, far from the dusty streets, as we are shown, he rather grew up in a walled, two-story compound.  In a 3rd world country like Pakistan with nothing like a middle class, we're hardly taking about a poor kid.  Middle class - if such a thing can really be considered in Pakistan - is unlikely.  My guess is closer to the 1%.

Opportunity in America surely exists.  But in order to take advantage of it, one must first develop the requisite skill sets.  This doesn't happen on its own.  It takes a concerted effort of numerous environmental factors.  Social inequality translates into developmental inequality, and inequality of opportunity.  An American Dream that does not account for this is nothing but a fantasy.  Instead, maybe the American Dream ought to be a vision for all of us to do better, to reduce inequality not just of opportunity but of development of capacity to take advantage of opportunity.

The Wealth Producers

H. J. Heinz factory workers, 1909

In a recent post I described how many American workers have enormously strenuous jobs, and yet are compensated poorly because of the low skill level and low status of their labor.

According to Wikipedia,

Productivity is a measure of the efficiency of production. Productivity is a ratio of production output to what is required to produce it (inputs). The measure of productivity is defined as a total output per one unit of a total input.

An assumption commonly made by those not progressively inclined is that labor compensation ought to follow productivity.  In other words, pay ought to reflect one's productive contribution.  This is a reasonable enough proposition.  But what is often overlooked are the unseen factors involved in production.  There is a tendency to view those who's productivity is associated with larger quantities of production as being more productive than they actually are.  Thus, a manager of 100 employees is seen to be much more productive than a single employee, as he is responsible for the net production of one hundred people, rather than one person.  His contribution is less the creation of goods, but rather the management of structures involved.  To the extent that he creates efficiency, he is adding value.  But it is a mistake to measure his value by the end product, as his role is much more limited.

Because productivity is a combination of what the worker brings to the table, as well as the structures at their disposal, man digging a ditch with a shovel is less productive than a man using a backhoe, even though his work is much harder.  The man with the backhoe has the advantage of the structure which designed, developed, purchased, etc. the backhoe.  What he brings to the table might be his skill with operating it, yet that depends on the structures that trained him.  His increased productivity is thus a result of larger social systems.

This is the thinking underlying progressivism, that there are systems in place that facilitate and allocate different levels of production and capital (human/societal/financial).  These systems tend to solidify inequality in very real ways, ways that create an unfair distribution of capital, which results in rewards not being just.  All manner of factors conspire to limit freedom of individuals to access agency-increasing capital.

There is a moral case here for progressive redistribution.  But there is also an economic argument, in that a degree of redistribution of capital lubricates individual agency and promotes innovation.  For instance, libraries, public schools, health care, minimum wages, etc. all redistribute capital in ways which promote human agency by more evenly spreading it around society and allowing more creative enterprise to develop. 

The last thing you want is capital stuck in the hands of the few, with fewer opportunities for it to be leveraged into growth.  The meritocratic argument assumes that the high levels of inequality and wealth concentration we currently see are a function of those best able to allocate, manage and create growth.  Yet this is a post-hoc justification of power structures that are often not a function of merit at all, but rather systemic privilege.

The Right Wing Crap Rocket

Jaime works hard.  Everyday he wakes at the crack of dawn, pulls on his work boots and sets out for a long day of mowing lawns and digging ditches in the hot sun.  His wife, Maria, wakes, gets the kids off to school, then dons her uniform, packs up her cleaning supplies and takes the bus to the wealthy houses on the hill where she will spend the day scouring toilets and polishing crystal.  Together, they make less than $30K a year, yet do not have health insurance and employment can be fragile.  They live in a modest home in a poor neighborhood, always seemingly on the edge of getting by. 

By all measures, Jaime and Maria represent the lower end of inequality; their reward for their hard work is in no way equal to the rewards earned by the affluent.  Yet, there a creepy argument on the right that this sort of inequality is actually good for society. It provides an incentive for people to strive and be more productive.  The low pay and devaluing of certain jobs actually function as an inspiration to social mobility.  No one wants to earn low pay for low-status work - especially work that is back breaking and mind-numbing.  Therefore, these jobs act as behavioral reinforcers of productive economic activity, investments in one's skill-level and striving for a better life.  How can one strive for what is "better" if there is no "better"?

This narrative is deeply embedded in our national political conversation.  It is to some extent true.  Those of us who are not low-skill, low-wage, low-status workers, we are glad we are not and no doubt at some point in our life made a conscious decision to not wind up as one.  We like to tell ourselves that we are "deserving" of our higher wages and status because of our merit, the skill we have acquired that allows us to offer more than arms to dig or clean with.  In many ways, there is a strong correlation between pay and merit, in the sense that the more one has to offer, the more one is compensated for it.  As an educator and parent, forefront in my mind has been the future career prospects of my students and children.  A hallmark rallying cry of public education in the past decade has been that "every child have the opportunity to go to college".  A worthy sentiment no doubt - the idea that every citizen have as much agency and human capital as possible.

Yet the reality is that millions of Americans will spend their lives in low-wage, low-skill, low-status jobs.  They are essential to our modern economy, in that there is a large portion of the citizenry with low enough levels of human and societal (H/S) capital that they will, in a practical sense, have no other option than to work in these occupations.  Many of these jobs are not essential - gardening, house cleaning, nannying for two-parent families, washing cars, etc.  But many of them are - janitorial services, cashiers, home health workers, etc.  If these jobs are the "behavioral incentive" for the rest of us to pursue more skilled, higher status and better paying employment, they are also the actual jobs that millions of Americans must work in order to support themselves and their families.

It is a convenient story to tell ourselves - especially as we avail ourselves of their cheap labor, no thought to the implications of this relationship on their family, their health, the career prospects of their children, etc. - but it relies on the subjugation, disenfranchisement and exploitation of millions.  These are the families that live in the poorest communities, go to the poorest schools, and suffer the worst of our social problems. 

If this sort of existence is so dreadful, so as to serve as the launching pad of our economic engine, that dreadful gravity so despicable we'll go to any lengths to reach its escape velocity, to propel not only our own growth but that of society - of civilization itself, it is an existence that would therefor seem required.  For, what if these jobs were compensated more fairly, thus likely regaining some status in the process.  What if instead of $8 dollars an hour, a gardener was receiving $24, able to choose where he wanted to live, pay all his bills, open a savings account, and pay for healthcare for his family? 

What effect would this have on individual striving?  What effect on economic growth overall?  Would many of us forgo college or advanced technical training for the prospect of simple, well-compensated service work?  Non-essential services like gardening would no doubt become more rarefied as they would become a less affordable market. 

The deeper question we need to ask is what is it that drives some individuals into low-SES work, and others into higher-SES work.  It simply isn't the case that every citizen has the same odds of entering either occupation.  Demographics play an enormous role, as I have discussed the concepts of human and societal capital at length on this blog.  The societal capital one is born into is enormously determinative. 

So on the one hand you have the theory of SES incentive as a driver of life success.  Yet on the other, you have the fact that this incentive appears to operate quite differently across demographics.  How could this be?  If it were the most important determining factor, you would see little demographic effect.  So it seems clearly to be of marginal importance.  No one dreams of being a gardener or maid - certainly not the students I have taught whose parents were employed thusly.  In fact, they tended to be quite angry and rebellious, feeling, yet likely not understanding in a very comprehensive way, the very real sense that society was exploiting their family. 

One might think that this would create in them an even stronger incentive to gain more skills than their parents, so as to acquire a job with better pay and higher status.  After all, they were living the example of why these jobs are to be avoided.  Yet interestingly, their feelings were more complex.  For one, they were surrounded since birth by those with a similarly low-SES.  From their family to their neighbors, to their school peers, they were exposed to a lack of high-SES examples.  None of their parents were doctors or lawyers or teachers or successful business owners.  It therefore become more normal to expect less from life.  As much as they were exposed to examples of the reality of low-pay and low-status, they were also exposed to human resilience and transcendence.  They found ways to achieve status that were defined not by larger social norms - which were outside their immediate grasp - but that could be defined within the community. 

If they were not going to get respect from society - which, it must be said, had a racial component, namely "whiteness" - they were going to enforce and maintain it within their peer groups and community.  Juan's mom may have only been a maid for a "rich white lady", but Juan was going to have a bad-ass truck with pimped out speakers.  In this way, low-status work enforces social norms that acquire status through non-traditional, "outsider" means.  Among low income whites, these norms are going to be less radical than the "white" norms of larger society.  Yet among low income minorities, these "white" norms are going to be seen as less accessible, and furthermore resented as historical barriers to acquisition of status.

The concept of low-SES being a social good, as a promoter of incentive towards higher productivity is a convenient myth.  It sounds good, especially as a salve for our conscience as we engage in a marketplace that exploits low-SES workers.  But it is an ad-hoc construct with little evidence to back up its central claim of net benefit to human agency.  Instead, it undermines opportunity and social mobility by creating an economically and socially segregated caste of workers from which few escape.  It promotes not social mobility but generational poverty by depleting societal and human capital.

Data-Minecraft

I never use cash any more.  Because debit/credit cards have become so ubiquitous, rarely has this been an issue for me.  I never have to deal with loose change, or folding an unfolding wads of cash, regularly replenishing the supply with trips to the ATM.  With a quick swipe of my card, my transaction is complete.  Somewhat of an introvert, I don't have to bother with rote pleasantries.  (I once had a job bagging groceries for a supermarket, and was always amazed at the way in which the cashiers had to have the same ridiculous little conversations over and over.  There was an intense sense that the customer and cashier were operating in two very different time planes; to the customer, the transaction was a sort of "button" on the shopping experience, while to the cashier it was a check-out version of Groundhog Day.  Groundhog Shift, maybe?)

All of which makes me candidate number one for data mining, the process by which companies collect digital information from consumer transactions for all sorts of purposes.  Big-name retailers keep tabs on what purchases are made by returning shoppers, analyzing their spending habits and adjusting their marketing accordingly.  Where things get really interesting is in the concept of using this data to infer the psychology and sociology of shoppers.  As the New York Times reported a few months ago, Target hires statisticians to device ways in which customer data can be leveraged.  One such employee described how Target might know if a shopper was pregant just by her purchases, and why this was so important.

“We knew that if we could identify them in their second trimester, there’s a good chance we could capture them for years,” Pole told me. “As soon as we get them buying diapers from us, they’re going to start buying everything else too. If you’re rushing through the store, looking for bottles, and you pass orange juice, you’ll grab a carton. Oh, and there’s that new DVD I want. Soon, you’ll be buying cereal and paper towels from us, and keep coming back.”

But this got me thinking the other day.  What if Target had access to all my spending data, from every purchase I make around town?  For instance, I purchased three bicycle pumps in as many years.  The first, I believe, was at Target.  When that one broke after a couple of years I bought one at Marshall's, which broke about two months later.  At which point I splurged and paid extra for a better quality pump at the local bike shop.  What if Target was able to track this data, and then analyze how many people were, like me, not finding what they wanted at Target (or Wal Mart, or the bike shop, etc.), and adjust their inventory accordingly?  Maybe Vons carries a certain brand of cheese that is really popular, and Target shoppers are buying Target eggs and butter, but skipping the cheese.

Consumer research information has long been available that can tell companies all kinds of things about what people are buying, why and where they are buying it.  But in theory it should be possible now for a company like Target to get a hold of actual individual point-of-sale transaction info.

For a price.  Ostensibly this would be a cash cow for the credit card companies, who could sell this information, presumably through third party data-mining specialists who could tailor it and package it up for big-box businesses.  One wonders just how devastating this would be for small businesses, already hit hard by POS fees, now signing up to be further cannibalized by corporations operating at scales they can't afford to compete with.

What really gets me though, is that I have no idea if this is going on.  Are there regulations against this kind of thing?  Is there language buried in my debit card contractual agreement I likely signed at some point when I opened up a checking account that basically forfeits my right to expect any kind of privacy?

I'm not reflexively opposed to data-mining.  Part of me thinks it is fascinating.  But part of me wonders what the unintended result is going to be.  In the meantime, we ought to at least know a bit more about where our data is going and who might be using it.  I can't be the first one to propose a system of such global access to one's credit card data.

Polishing the Bell Curve

Maybe it was the release of Charles Murray's latest book - which is not about race!  Or the recent firing of John Derbyshire.  Or the continued failure of NCLB to show much progress at all.  Or maybe just that we have a black president.  But paleo-conservativism seems to be getting bullish on the political incorrect notions of genetic and racial explanations of social inequality.

As I have written before, there is an enormous degree of correlation between the acceptance of right wing assumptions and the acceptance of genetic explanations for race and socioeconomics.  Because of the unconscious nature of how racism tends to operate, it is therefore appropriate to ask how much right wing assumptions are actually facilitating acceptance of racist frameworks for socioeconomic analysis.

It is easy to see why.  The right wing framing generally sees social class as meritocratic and fair.  Yet the continued disproportionate representation of blacks among the lower-SES strata presents a problem that needs to be explained.   The three general categories of answer are 1) genetic, 2) environmental, and 3) personal choice.  Because of our history of racism, civil society shies away from genetic explanations.  The left wing, comfortable with subverting traditional power structures and state intervention in social environments, tends toward environmental explanations. 

The right, to the degree that it opposes social redistribution or state intervention, is challenged to propose its own solutions.  Generally, it adopts the personal choice model; even though it accepts some of the environmental explanations (who could deny so much research?), as a practical matter - to the degree that we value justice -  it argues for the metaphysical existence of an individual's power to transcend environmental limitations.  This isn't actually supported by social research, but it apparently has great intuitive and rhetorical power.

Another choice, one favored by right-leaning individuals, is to be "politically incorrect", and adopt the genetic explanation.  The IQ-SES framing adopts the genetic explanation, with higher IQs in positions of power, and lower IQs in position of subordinance.  While intuitively "icky", this explanation at least removes the burden of having to explain stubborn patterns of racial and socioeconomic inequality in environmental or personal choice terms.

Of course, as with right wing claims about personal choice and the effects of environment on development, claims about the existence of a genetic meritocracy aren't supported by the research.  Sure, you can always find research that agrees with you.  But like evolution or global warming, the research is poorly designed and rejected by a large consensus of experts in the relevant fields.

Yet given the troubling persistence of unscientific views on the right (far more representative of majority opinion than unscientific views on the left), one wonders whether genetic explanations of socioeconomics and race will begin to become more acceptable in conservative circles, and among the base of the Republican party? 

Compensation & Ideals

In the capitalist system, labor is generally payed for out of the difference between profit from the consumer and compensation to the employer.  In other words, if a businessman can spend $1 on materials and sell a widget for $5, he has $4 with which to pay the worker and himself.  Just as there is a larger competitive market within he must sell his widget, so to is there a larger competitive market within which he must hire his workers.  If the going rate for assembling widgets is $10 an hour, he must work within some rough margin of that number.

The market for wages can often seem highly unfair.  Backbreaking labor is often rewarded very poorly, while relatively comfortable labor is rewarded highly.  By what mechanisms does this occur?

This is a question that has always perplexed me: To what degree is compensation related to skill (investment in training), value, sheer difficulty, and then of course, social rank?

The really creepy thing in this equation is the degree to which one's position is socially determined, having to do with privilege of human and societal capital.  The free marketeer would argue the market is an objective arbiter of what is fair.  Yet a more sophisticated mind would acknowledge the multiple ways in which the market merely enforces inherited privileges reinforced through institutional norms.

Regarding acquisition of skill via college vs. trade, the bias towards social rank has no doubt something to do with how we perceive the value-added component of college.  In other words, the attainment of knowledge outside a specific skill-set is thought of as worth something to society apart from labor value.  In this way, does college's conferral of social rank represent an enforcement of enlightenment as a social norm, rewarding those who pursue this value so as to uphold its continued social aspiration? 

Or is this a story we, the college-educated elite tell ourselves?  I for one admit my bias - I consider my time in college as foundational to how I have learned to think about the world.  I have been exposed to the highest traditions of civilized thought.  I can't help but imagine that had I not gone to college, I would be a lesser man for it.  How can I not be biased then against those who have not gone to college, at least in terms of a general lack of contextual knowledge and or critical thinking skills.  Let me put it to you this way: one is a better man for having read Plato and Marx, and engaged in its critical analysis.  There may be no direct correlation to a specific workplace skill, but there is no doubt that one's mind is at least marginally better at understanding the world and better contributing to it.

So again, is the added compensation for a college degree to some extent enforcing this broad social value of the expansive mind? 

The Final Transaction

I've wanted to write about this for a while now, but I never thought I had enough worth saying.  But here goes.

I'm a pretty serious music fan.  As long as I can remember, music has had an unmatched power in my life to move me in transcendent ways.  I don't think a day has ever gone by when I haven't at some point hummed a melody, whether from a popular piece of music or my own improvisation.  As a child, I used to create my own little songs, frequently nothing more than percussive rhythms composed of oral clicks and pops.

I took up the banjo at age 17.  Well, not quite the banjo, per say - I never figured out how to tune it properly.  I simply used it as a stringed instrument, something with which to experiment.  I fell in love with its possibilities.  I began to record small arrangements on a tape deck, which I would then play back as I recorded a new "track" on a different tape deck, repeating the process again until the original recording had deteriorated beyond recognition.  One of my most inspirational memories was when at one point in a particular recording a streetcar rang its bell outside in just the right spot.  The song might now be lost to history, but here's a different example of my work from that era:

I've since gone on to further develop my songwriting, eventually completing a number of complete, although unpublished albums.  Music - both its production and appreciation -  remains central to my life.

I remember my first album, a cassette tape of Bob Marley's greatest hits.  My older brother got into punk rock, and hung Dead Kennedys posters in his room.  Who could forget the controversial Penis Landscape by H.R. Giger, included in the album  Frankenchrist. In 5th grade, I dropped LSD and vividly recall the magical disbelief I felt when I was able to light a match by striking it across the cover of Metallica's Kill 'Em All.  To this day, it still bears the phosphorous mark.

Growing up in Santa Cruz, I regularly attended performances by reggae artists who made sure our appreciative town was on their tour schedule.  Marijuana was central to the experience.  And it was a beautiful thing.  For hours we would dance, reveling in the joy of the rhythm, swaying to the bass.  I remember on one occasion being drawn to a stack of bass amps that towered like a wall over my head, closing my eyes and feeling the deep, low wavelengths reverberate through me.

Some of my fondest memories have been digging through used record bins.  In high school, I brought home on a $.99 lark what seemed to be the silliest album I had ever seen, Larry Graham's Star Walk, with Graham on the cover in tight pants and a sequined top.  Yet as I sat listening to it alone in my room, safe from social pressures, I realized that the music - silly disco as it was -  was beautiful!  I discovered his earlier work with Graham Central Station, and the larger funk genre.  My favorite finds were Hot Chocolate and the obscure Booty People.  I couldn't get enough.  It felt like my own secret musical universe.  And best of all it was made possible by bargain-basement prices.  I found a local embroidery company to sew the letters "FUNK" into a black fitted baseball cap.  When I discovered bands like Parliament I began to appreciate just how much the sampling of these bands had been a part of the rap music I was listening to.  For a research project presentation in social studies class, I played actual examples of how music from the seventies was being used in songs from the 1990s.

With the advent of internet file-sharing, the boundaries of musical discovery have disappeared.  Anything you can possibly think of is out there for you to find, and probably download for "free".  Of course, the issue of legality arises.  Well, in most cases downloading "free" music is clearly illegal.  But the moral issue is a bit more tricky.  As with any form of digital media, the act of reproduction does no physical damage to the original work. Yet in terms of whether the increased availability of a near-perfect copy limits the original owner's ownership, and thus his ability to exploit its value, the question is open.

No one seems to have a very good answer for where the line is between outright stealing, where harm is actually done to the original owner, and sharing, where value is only added.  An argument for the former would be that compensation is limited by those who get for free what they otherwise could only have paid for.  An argument for the latter would be that the music may not have been bought, or listened to otherwise.  Many independent artists, their work traditionally lacking the institutional marketing muscle to expose themselves to the public in the first place, have argued that by their music being shared, value is added in terms of building public awareness.I think every case is surely different.  There are so many variables to the question, and so many pieces we would never be able to know about the pathways to particular artist's compensation.

But maybe a simpler way to look about this is to focus less on individual products, and on our role as consumers in society.  Because, if we are to look at the morality of our purchases, could we not then look at our own purchasing power, and our own compensation?  What rights do we possess as citizens to enjoy the fruits of society's labors at large?  Do I really deserve the condition of the street I live on?  Does my contribution to society qualify my enjoyment of its public parks, schools and police?  These are public goods paid for by taxation, a system itself designed - in principle - to fairly reflect individual obligation.

A fascinating piece to this conversation is the existence of public libraries.  We have a very long tradition of accepting the notion that it is perfectly fair one to borrow books without paying for them.  In recent decades, this notion has broadened to include music, magazines and DVDs.  The only limitation has been on the number of physical copies a particular branch is able to acquire.  And even here, there has historically been inequality among neighborhoods with regards to the selection and general quality of library branches.  Yet the library itself rests in no small part on the notion that as a purveyor of ideas, it is a pillar of democracy to spread information to all citizens - both for knowledge but also pure enjoyment.  To imagine a world without public libraries is almost impossibly bleak.

I have read many books at a library instead of purchasing them.  But I have also read many that I would not have purchased.  And what price to put on such an experience?  How much wiser am I because of it?  How much am I able now able to contribute as a citizen?

In the past 10 years, I have downloaded countless gigabytes of music.  Was I stealing, or was I sharing?  I've never been able to spend very much on music.  As I mentioned previously, I have almost always purchased music used.  In many cases, there is simply no compensation being distributed back to the original creator.  The compensation is mainly being passed back and forth between previous owners, the shop owner basically collecting a transaction fee.  One could argue, I think, that to the extent that a market in used music exist, it drives down the prices of new music.  Ought that be called stealing?

In the video game market, there has always existed a robust used market.  However, that may be changing as platforms head towards a digital distribution model.  Rumors are that the next systems will do away with portable media entirely.  You can't sell a used file.  In many ways, getting rid of the used market for media would represent a huge win for content creators.  Aside from removing the middle man, they would no longer face competition from used versions of their product, from which they derive no profit.  And should ebooks become the norm (if you don't like their inflexible, "inorganic" feel now, just imagine someday turning pages that feel just like paper and ink, yet are in fact display conduits for digital ink), what will happen to libraries?
  The physical location will be unnecessary, as all content will exist online.  Will it still be free?  Digital content exists today at many libraries, however the selection is quite limited by publishers.

Again, I suggest we return to the concept of ourselves as consumers in society, and specifically to our role as nodes in a larger web of labor transactions.  It might clear away much of the muddle if we simply look at the sum totality of our individual contribution, and determine to what extent we ought to contribute.  A good example of this model is that of listener-supporter radio.  I have determined - in my own, highly unscientific way - that I want to pay about $10 a month to my local NPR station.  For that price, I can use them as little or as much as I want.  Couldn't we apply this model to our media consumption in general?

I have taken a similar tack with regard to my music purchases.  Despite all of the music I have downloaded without paying anyone, I have continued to purchase $10-15 of music monthly.  It became convenient to do this through eMusic, as all of the artists I enjoyed could be found there at bargain prices.  Yet, I recently realized that I wasn't actually getting anything from them that I couldn't get for free via torrents, and that my main concern was really to support the artists.  Because I've always enjoyed listening to vinyl, what I could do instead was spend my money on a record each month, and then continue to download whatever I felt like.  I am buying no more or less than I always would have, I am supporting artists, and I am able to completely engage in the process of music appreciation.

Maybe $10-15 isn't the best remuneration for the relative value I am taking from my music consumption.  Yet whatever I am not paying music artists, I am paying the grocer, or the monthly check I send to the United way.  What is fair for any of us to contribute to society?  Isn't that ultimately the real question?  How do I spend my free time?  Am I smiling enough to passers by?  Am I giving enough attention to my daughters?  Am I being a supportive husband to my wife?  Am I doing my job the best I know how?  All of these things are transactions, whether or not someone has developed a way to monetize them.  If I fail to be gracious enough to the cashier at Target, am I stealing?

In a way, maybe I am.  I have been designed by society to give the love that I have gotten.  At least, that is what I believe.  I believe in a society in which everyone gives as much as they can to the human project, to a cultural evolution we have been embarking on now for hundreds of thousands of years.  Predestined or not, I can only do my best to make as much sense of it as I can and align my integrity with the result.

That is the final transaction, the only one that really matters.

Broken Windows and Diamond Rings

An uncomfortable reality of political ideology is the degree to which any given stance is predicated at least in part on economic assumptions.  Try as we might to corral a sense of objectivity and rationality into our views, at some point we must admit that there is just so much we do not know about the ways in which economies work.  This, even as stark and fundamental disagreement can be found among leading economists.

So take, for instance, the controversial concept of government stimulus, which in our recent case represented close to a trillion dollars of federal spending.  Projections have varied widely as to how stimulative it truly was, or could have been.  As soon as you begin to look closely at the underlying arguments, it becomes clear that any lay understanding is woefully inaccurate in forming anything but a shallow and fragile understanding.

And so, it is with this admittedly devastating caveat, that I, intrepid blogger, attempt to carve into the following subject.

I've long wondered about the relative merit of various forms of economic activity, in terms of their effect on overall productivity.  For instance, is a dollar spent on busfare to one's employer of more value than a dollar spent on a chocolate candy?  My question follows largely from the fact that as wealth has become increasingly concentrated into the hands of the rich, there has no doubt been a subsequent shift in the types of economic activity, from utilitarian spending to luxury spending.  Is the former type of spending better for overall growth?  It would seem that to the degree that spending is non-utilitarian, it is wasteful, and thus not only distasteful in terms of a moral reckoning in what ought to be a more fair and equitable society - as a sort of ill-gotten decadence, but distasteful in purely economic terms, as a net drag on the economy.

On first glance, one might say that there should be no real difference.  In each case, the dollar spent moves into the hands of another worker, who then uses it to purchase more goods and labor, and the production continues to be spread throughout the economy.  Monies spent on chocolate will fill the pockets of the chocolatier, who in turn pays his workers, buys his cocoa, etc.

Yet what about this feeling that paying for chocolate is somehow decadent?  It is certainly a luxury expense.  But what does that really mean?  No one will live or die because of it, unlike say basic food stuffs.  But no will will live or die, either, because of money spent on busfare.  Yet without it, considerable hardship might befall the rider; he may lose his job; he may have to purchase a car, leading to desperate sacrifices in other areas of his life.  Maybe the best way to think about the issue is in terms of the productive possibilities of each form of spending.  What are all the ways in which a bite of chocolate, by itself, contributes to productivity.  It surely has some merit, in that it represents a reward, something to strive for that encourages hard work elsewhere.  However this is a limited effect, and in many cases, certainly to the degree that its purchase has indeed been out of decadence, having long ago lost any meaningful pull on behavior, it could have as easily been done without.  Again, this is luxury spending, by definition.  Busfare cannot be done with in the same way.  When we look at long-term drivers of productivity, we see things like the invention of the steam engine,the automobile, the internet.  Chocolate, not so much.  While there have no doubt been great innovations in luxury, their utility in encouraging productivity is conspicuously unaccounted for.

In 1850, French political economist Frédéric Bastiat wrote the following parable about economic activity and productivity.  To economic theorists, it is known as The Broken Windows Fallacy.

     Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—"It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"
     Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.
Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.
     But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen."
     It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

Bastiat's Fallacy is popular among Austrian economists, and those who favor small government.  Their attraction is based on the parable's illustration of hidden costs; they believe that government spending is not zero sum and represents money that could not have been spent elsewhere.  While this is true enough, what ultimately matters is the projected utility of the spending.  Of course wasteful government spending is a net loss in productivity.  Yet government spending that directs investment in a worthwhile investment that increases productivity, such as a bridge, or public school, is a net benefit.

My interest in the parable is also its illustration of hidden costs, although I'm more concerned with the effects of concentrated wealth and the hidden costs of luxury spending.  To the extent that luxury spending is by itself almost entirely unproductive, and that concentrated wealth encourages it, one can argue that the concentration of wealth leads to, as Bastiat's parable might frame it, much broken glass.  Better this wealth be put to productive use.  Lord knows there is no lack of need for it in today's society.

Not only are there hidden costs to pointless consumer spending, or that which has little inherent value, but so too are there hidden costs in frivolous investment.  I think it fair to claim that much of what caused the 2008 financial crisis was a direct outgrowth of sloppy investment: concentrated wealth led to overflowing pools of money, the manipulation of which was coordinated by greedy investment bankers who saw an opportunity to make enormous profits from money that was primed for recklessness by its decadent acquisition.

I recognize that I'm now far out of my comfort zone in understanding the Great Recession.  But one can confidently make a couple of claims.  Luxury spending and sloppy banking represent poor investments, and as such are defined by their hidden costs - their monies could have been put to more productive use.  There will be many who point to the many government boondoggles as evidence of waste.  The response to this is that there is plenty of good that government does (and often that which only government can do), and the larger controversy has likely much more to do with ideology and one's political and social preferences.  But the Broken Windows Fallacy simply reminds us that there are always hidden costs to spending.  These costs place spending in moral terms, that spending represents a choice between different net social outcomes.  This is a choice we make both as individuals and as citizens of a democratic government.

Bleak Post

By now it's an old story to talk about the death of American manufacturing and our losing economic war with a third world more than happy to slave away for an existence we couldn't even dream of.  Automaticity and new technologies have allowed us much greater efficiency and productivity.  But it doesn't seem to be trickling down much, aside from fancier consumer electronics and discounts off bulk purchases.  We've seen the rich get richer, the poor get poorer, and the middle class lose whatever sense of job security it once thought it had.  As New Jersey Governor Chris Christie famously asked, "Who gets pensions any more?"

The whole field has indeed changed, and I'm not sure we can cope as a culture/society. In the past a blue-collar family could count on a simple high school education providing entrance and exit into a stable income. This essentially took care of a pretty vast swath of American humanity.

But the kind of economy we're seeing pan out is pretty brutal to these kind of family traditions. Essentially, the bar for human and social capital has been raised significantly higher than it ever was. It's all too common for commenters to make vague proclamations about needing to "fix" education, as if the problem was output. But the truth is that it is input. We simply don't have the capacity of quality families that can produce children that can excel in academics.

Now, as a teacher, don't believe for a second I'm not trying. And I honestly don't think I'm saying today's generation is any worse than it was in the past. We've always had these families, and their kids didn't need degrees to find quality careers. But it is as if we are trying to cram a square peg into a round hole. Sure, you can always tweak the education model. But the margin of improvement has far less to do with what you can do in the classroom compared with the reality of where society simply is at. 

The term "class warfare", as a rhetorical device, has been in the news lately.  But a real class war has been raging for decades.  Having lost the battle long ago to smart machines and overseas labor, blue collar American families found themselves forced to compete with the well-read and groomed upper socio-economic classes, despite a severe disadvantage in human and social capital.  Without an academic culture and strong support at home, preparing for college isn't something most can do completely on their own.  Those eventually managing to find "the world of the mind", and then going on to graduate, have found an over-saturated job market without enough supply to meet demand.

Despite the many shiny new trinkets that globalization has placed upon our shelves and inside our screens, we seem to be taking two steps back for every one forward.  Add to this our ideological spectrum bending relentlessly rightward, and our government expenditures on things that used to take the rough edges off an unforgiving economic platform - like roads, schools, police and health care, and the future looks bleak indeed.

The Solyndra Mistake

Obama is getting  criticism over the colossal failure of Solyndra, the solar manufacturing company whose stimulus package loan-guarantee had been touted as a promising investment in green jobs. 

But as others have pointed out, the failure of one investment does not argue against government investment more broadly, as many are claiming.  It could have just as easily been the case that Solyndra would have been a good investment, both in terms of creating jobs but also in easing the transition away from our dependence on dangerous fossil fuels. 

All this worry about the idea of state funding certain industries is missing a key point: these industries are vital to the national interest. The most obvious example of this is military contracting. No one ever argues that military industries shouldn't be supported by the state. The same logic applies to things like environmental, health or infrastructure industry. There are many areas of life in which there exists no natural market.

The upset over the auto and bank bailouts was based in the incorrect assumption that it was another example of the government interfering the markets, or even a government "takeover". Yet these were highly unusual cases in which the market had broken down, and the government had a national interest to uphold. In neither case was the government interested in entering these markets more than temporarily - a fact proved shortly thereafter. You can argue the counter-factual that it was bad policy, creating moral hazard and we would have been better off. But as it stands the interventions stabilized both areas in which we intervened.  Will automakers and bankers be more reckless, assuming that they might get bailed out in the future? I see no evidence of this. Automakers have gotten severe concessions from unions, and banks have tightened lending considerably.

The real question is not whether the government should be intervening in markets.  It always has and always will, as there are national interests that require investment, yet because individual companies face great risk and little reward, there is little incentive to pursue projects of great national importance.  Solyndra may have been a mistake, but it was part of an enormously important larger national project.

Ponzi Party

Rick Perry calls social security a Ponzi scheme.

Pretty ironic.

Wouldn’t the whole supply-side BS the current Republican crop and Tea Party zealots hold sacrosanct fit the definition of Ponzi scheme perfectly, i.e. work hard and play by the rules and you’ll enjoy a comfortable standard of living, access to health care, well-funded public infrastructure and a secure retirement? We trade our hard work for the promise of these things, even if it isn’t directly reflected in our paycheck, because we are doing work that needs to be done, and we assume that the rest of society will do its part to contribute to the collective good, to the extent that they are able. Yet the wealthy don’t end up paying their fair share because free market apologists pretend that their hard work is somehow more important than than that of the rest of us. They assume that the market is meritocratic. They deny inherent structural inequalities of capitalism and only see governmental responses as the true inequalities. (For example, denying that there is anything wrong with inherited wealth and fighting government attempts to introduce fairness into what is essentially an aristocratic dynamic)

Yet as health care costs rise and access dwindles, infrastructure crumbles, and retirement seems ever more ethereal, they tell us this is the fault of greedy public workers, regulatory protections, and the recipients of the safety net. The idea that a police officer can expect to retire on a modest pension with access to health care, while living in a clean environment with functioning roads, libraries and parks, somehow represents everything that is wrong with society. Who does he think he is, they tell us. Because through their policies of tax cutting and deregulating, they have made his simple world seem somehow luxurious. Only by bringing him down, they tell us, will we too get to enjoy his success. If that doesn’t seem like the greatest Ponzi scheme of all time, than nothing does.

A Question of Leverage

A basic underlying disagreement between the right and the left is the concept of taxes.  Specifically, the right resents the idea that the wealthy should be taxed at a higher rate.  So too, do they resent the idea that a portion of those taxes ought to pay for government services for the less-well off.  This ultimately goes back to fundamental questions of human agency and social capital. Just as financial capital is leveraged for profit, so too is social capital.  The left sees this reality and uses it as a frame for understanding how to not only measure, but create more fairness in society.


We live in a society filled with opportunities, many of which go unexploited. Why is this? The basic premise of science is that there are causes to most everything. This is the premise of social science. We look at society and see causes. We look at billionaires and poor people and we see causes.

Yet this basic premise is denied. Why? While opportunities exist to be exploited, why do we we assume that everyone can exploit them? If one does not know how to exploit them, how can he? And if another knows how to exploit them, why would he be expected to have done otherwise? Social capital is a causal factor.
But so if you correct for social capital, and luck, what do you have left? From where does human initiative come? This seems to me the final question. The billionaire and the pauper in Mc Donalds are two completely different people, who’ve had different life experiences, and – specifically – had different levels of access to social capital. If the two could be said to have possessed the same social leverage in their lives, one single price, or one single tax rate would be fair. But they clearly had not. The billionaire cannot claim to have earned his wealth apart from the leveraging of opportunities beyond his control. Likewise the pauper.

Marx had the insight that the leveraging of inequities in financial capital creates inequities in society. So too inequities in social capital, whether by birth or by family learning and culture, are leveraged by degree. Society is an organism that cannot be separated and reduced to the pseudo-scientific conception of actions that are free from temporal or spatial causality. We are society, warts and all. To deny this basic reality is not only a scientific error, but one that serves to prop up and excuse the most egregious forms of inequity, those that are inevitably exploitative and corrosive to the conception of the human right to freedom and self-realization.

My Achy Economics Bone

It's just a hunch, but something tells me Mark Kleiman just finished Tyler Cowan's book, The Great Stagnation.  (David Brooks essentially used it to fill his column today, in which he spun this really odd tale about a man born in 1900 vs. a man born in 1973, and how the former "built wealth" while the latter shuffled his ipod.)  Kleiman worries that something called the Baumal Effect necessitates an increase in teacher productivity.  From Wikipedia, the Baumal Effect:

involves a rise of salaries in jobs that have experienced no increase of labor productivity in response to rising salaries in other jobs which did experience such labor productivity growth.

Kleiman's solution?  Video-screens! No, seriously.

This crap makes my economics bone hurt.  I would ask this question: where is the morality of shared interest in this economic equation? There are plenty of things in life that are good, valuable services yet which will likely, in 1000 years, be about as productive. Like parenting, for instance. The husband or wife who chooses to stay home and raise the babies is doing something invaluable. So how do we value it? Mark might suggest we find ways of increasing the productivity of parenting – maybe involving videoscreens?


We’ve become so used to business-speak about “growth” being this magic genie that grants all things good, that we have lost sight of what really matters in society. Once we discovered that there were millions of starving people in the 3rd world willing to live on slave wages (because at least slaves get to eat), we sold our neighbors out faster than you can get to page 6 of the WSJ.

Now, I’m not suggesting I have any grand answer to trade and productivity. But I do think that we’ve bent so far over the altar of *quantified productivity* and *growth outcomes*, that we’re forgetting the real value of the real work that real people do. Just because Mark Zuckerburg figured out how to print gold, it doesn’t mean that schoolteachers, firefighters, waiters, taxi drivers, professors, mechanics, cashiers and the rest of us now have to have our god-damned stock diluted.

OK, I took a breath. You want productivity? A school teacher who turns out good students prints gold. A taxi driver who can drive you home from a bar at 2am prints gold. A plumber who can fix the gushing pipe in your basement prints gold.  Since when have we become so blind to the value we bring to each other that quarterly growth and performance targets have come to define us?

Singing Songs

Andrew Sable, looking for inspiration in the glory of the unsung laborer, recommends this speech by Patton:

An Army is a team. It lives, sleeps, eats, and fights as a team. This individual heroic stuff is pure horse shit. The bilious bastards who write that kind of stuff for the Saturday Evening Post don’t know any more about real fighting under fire than they know about fucking! We have the finest food, the finest equipment, the best spirit, and the best men in the world. Why, by God, I actually pity those poor sons-of-bitches we’re going up against. By God, I do.
…
All of the real heroes are not storybook combat fighters, either. Every single man in this Army plays a vital role. Don’t ever let up. Don’t ever think that your job is unimportant. Every man has a job to do and he must do it. Every man is a vital link in the great chain. What if every truck driver suddenly decided that he didn’t like the whine of those shells overhead, turned yellow, and jumped headlong into a ditch? The cowardly bastard could say, ‘Hell, they won’t miss me, just one man in thousands.’ But, what if every man thought that way? Where in the hell would we be now? What would our country, our loved ones, our homes, even the world, be like? No, Goddamnit, Americans don’t think like that. Every man does his job. Every man serves the whole. Every department, every unit, is important in the vast scheme of this war. The ordnance men are needed to supply the guns and machinery of war to keep us rolling. The Quartermaster is needed to bring up food and clothes because where we are going there isn’t a hell of a lot to steal. Every last man on K.P. has a job to do, even the one who heats our water to keep us from getting the ‘G.I. Shits’.

…One of the bravest men that I ever saw was a fellow on top of a telegraph pole in the midst of a furious fire fight in Tunisia. I stopped and asked what the hell he was doing up there at a time like that. He answered, ‘Fixing the wire, Sir.’ I asked, ‘Isn’t that a little unhealthy right about now?’ He answered, ‘Yes Sir, but the Goddamned wire has to be fixed.’ I asked, ‘Don’t those planes strafing the road bother you?’ And he answered, ‘No, Sir, but you sure as hell do!’ Now, there was a real man. A real soldier. There was a man who devoted all he had to his duty, no matter how seemingly insignificant his duty might appear at the time, no matter how great the odds. And you should have seen those trucks on the road to Tunisia. Those drivers were magnificent. All day and all night they rolled over those son-of-a-bitching roads, never stopping, never faltering from their course, with shells bursting all around them all of the time. We got through on good old American guts.

It's a great speech. 

Sable then puts out a call for similarly inspiring odes to the working man.  Beyond the physical rewards for labor, he writes, the work cannot be honored enough - especially by the left.

But one wonders – is any of this more than blather without the actual existence of rubber-meets-the-road improvements in lives? Like decent pay, benefits, pensions, etc? Ooooh… I said pensions!  Because now more than ever, it seems we need less speeches and more actual, real-world "trickling down".


Because I recall the time I proposed to a conservative, in a conversation about trade schools vs. college, that we don’t respect the working class in this country. She assumed to remind me that I would sure respect a plumber when he came to fix my broken pipe. Well, that was my point. Not only do we not respect their work, but in terms of pay, physically demanding labor is often valued less – certainly the less skill it requires. Anyway, many of the traditional tools we have had for guaranteeing some measure of wage equality (unions, minimum wage, health care, regulations, etc.) are hated by the very same people who would champion such oratory.

I realize there are nuanced arguments for how unions, minimum wage, health care mandates, etc. all end up hurting the lowly worker. But those aside, there is a substantial degree of meritocratic pablum out there, in which each man is measured not by his work, but by his wage. And that there is no real inequality in making less, because that is simply what one deserves, according to the wisdom of the market. So if you can barely pay your rent, can’t afford health care, work in unsafe conditions with no job security and no retirement benefit – well it’s your own miserable fault. (You just need to work harder and you too can be like Rush Limbaugh with your fat suits and thick cigars.)

All of this ends up doing two things: it avoids offering any prescriptive measures for change, and reminds us that there need be no real change anyway. Things are fine just the way they are. Except they aren’t, really. So the class anger – which is real – is magisterially woven into a narrative about Cadillac union memberships, wine and cheese college elites, public pension cartels and anyone else getting “payed off” by a Democratic party less interested in social justice than funneling taxpayer money to liberal interest groups and rubbing their pagan social mores in the faces of mustachiod Nascar mechanics.

What’s interesting to me about this set-up is that it offers a tragic salve: it recognizes that there is an injustice out there, but buries the blame in a phantasmagorical, Freudian blend of class resentment and cultural fundamentalism, none of which actually gets at the real truth. Public pensions are not to blame for the fact that pensions don’t exist anymore. Unions are not to blame for the fact that so many people are without health care. The minimum wage, child labor laws and regulations are not the reason that all of our jobs have gone overseas. Well, actually they are. But that’s just sad.