2009 December 31 Thursday
Prosperity Gospel: Jesus Was Wealthy

Hanna Rosin argues that the prosperity gospel contributed to the real estate bubble and ensuing financial crisis. As the prosperity gospel grows in popularity its believers find more things about Christianity to reinterpret. The latest? Mary and Joseph must have been wealthy to ride on a donkey to Bethlehem and Jesus wore expensive garments.

But the Rev. C. Thomas Anderson, senior pastor of the Living Word Bible Church in Mesa, Arizona, preaches a version of the Christmas story that says baby Jesus wasn't so poor after all.

Anderson says Jesus couldn't have been poor because he received lucrative gifts -- gold, frankincense and myrrh -- at birth. Jesus had to be wealthy because the Roman soldiers who crucified him gambled for his expensive undergarments. Even Jesus' parents, Mary and Joseph, lived and traveled in style, he says.

I can see where this will go next: Mary and Joseph bought the manger in order invest in upgrades to turn it into a rustic home. They probably flipped it for a big profit on the Jerusalem real estate market.

By Randall Parker 2009 December 31 01:00 PM  Religion Christianity
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2009 December 30 Wednesday
Free Trade Failed To Lift The Poor Into First World Conditions

Writing in the New York Times Eduardo Porter points out that trade disputes have faded in importance as free trade hasn't turned out to generate as much prosperity as expected. Who had these expectations? The politically correct of course.

China’s growth stands as a beacon for the power of trade. But others that have hitched their economic strategy to trade, like Mexico, have found prosperity elusive. Despite growing banana exports, both the Latin American banana exporters and Europe’s impoverished former colonies remain poor.

The North American Free Trade Agreement turned out to be the lion that didn't roar. The wage gap between the United States and Mexico has not narrowed. NAFTA is like a non-event.

At least the elephant in the room is now indirectly mentioned via the term "human capital". As each panacea fails to usher in utopia we inch closer to the truth.

One thing we have learned over the past 15 years is that trade is necessary but not sufficient for development. Countries also need investment in infrastructure, technology and human capital. They need credit. They need legitimate institutions — like clean courts to battle monopolies — and help building them. Putting up a few barriers against banana imports, or tearing a few of them down, can’t do it all.

The users of the term "human capital" can ignore the innate parts of capability in humans. But at least the capabilities of humans are now acknowledged as mattering and differing. We can't just cut taxes, drop tariffs, and then sit back assured that the miracle of capitalism will then unfold. Sometimes when the trade barriers drop all we hear is the deafening thud of silence. But given the right set of human traits something like China's economic explosion happens. Economists will eventually approach reality on economic development. But they need to wait for the neurogeneticists to blaze the way first.

By Randall Parker 2009 December 30 06:15 PM  Economics Trade
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2009 December 29 Tuesday
California Budget Crisis Heating Up Again

The LA Times ran a story last week about how California's budget deficit is opening back up again and the Governator wants to make more big cuts in spending.

Reporting from Sacramento - Facing a budget deficit of more than $20 billion, Gov. Arnold Schwarzenegger is expected to call for deep reductions in already suffering local mass transit programs, renew his push to expand oil drilling off the Santa Barbara coast and appeal to Washington for billions of dollars in federal help, according to state officials and lobbyists familiar with the plan.

If Washington does not provide roughly $8 billion in new aid for the state, the governor threatens to severely cut back -- if not eliminate -- CalWORKS, the state's main welfare program; the In-Home Health Care Services program for the disabled and elderly poor, and two tax breaks for large corporations recently approved by the Legislature, the officials said.

The state is in a seemingly permanent financial crisis. The deficit is 20% of the general fund. Click thru and read all the details.

Since I expect Peak Oil to cause an extended period of economic contraction in the 2010s and 2020s I expect huge cuts in what governments do. As tax revenue declines the percentage of tax revenue spent on debt service will rise and spending will get cut more than tax revenue declines.

You might expect governments to raise taxes under conditions of extended declining revenue. But the voters will feel poor as their living standards decline and they won't want to give up a larger percentage of declining incomes to government.

By Randall Parker 2009 December 29 09:51 PM  Economics California
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2009 December 28 Monday
US Oil Companies Win No Contracts In Iraq Oil Fields

You might think that at least American capitalist oil companies will make massive fortunes off of the trillions of dollars the United States wasted invading and occupying Iraq. But no. US oil companies got no long term oil contracts in the latest round of bidding for oil service contracts in Iraq.

Those who claim that the U.S. invaded Iraq in 2003 to get control of the country's giant oil reserves will be left scratching their heads by the results of last weekend's auction of Iraqi oil contracts: Not a single U.S. company secured a deal in the auction of contracts that will shape the Iraqi oil industry for the next couple of decades. Two of the most lucrative of the multi-billion-dollar oil contracts went to two countries which bitterly opposed the U.S. invasion — Russia and China — while even Total Oil of France, which led the charge to deny international approval for the war at the U.N. Security Council in 2003, won a bigger stake than the Americans in the most recent auction.

The winners didn't even win much. The companies that did win contracts will get pretty measly fees per barrel of oil they manage to produce.

Russia's Lukoil, CNPC, and RoyalDutchShell accepted fees of between $1.15 and $1.40 for every barrel they produce — that's about 2% of Friday's oil futures price of $73 a barrel.

We were foolish to invade Iraq. Once we invaded we were even more foolish to stay for a long time. US national interests were not advanced by this invasion.

Imagine we had instead spent money to subsidize hybrid vehicle purchase for all new American car buyers for the last 5 years. Even at a $10,000 price premium per car the cost would have been less than a trillion dollars - much less than our total cost for the Iraq war and we would have reduced our oil imports by millions of barrels per day for years to come.

By Randall Parker 2009 December 28 07:19 PM  Mideast Iraq Costs
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Ordos II: China's Empty City

The American real estate bubble is big because we have a large economy with a large and foolish government capable of creating such a bubble. But while China's economy is still smaller than that of the United States the Chinese planners can create distortions on a level that far exceeds anything that we have in the US. Check out Ordos II in Inner Mongolia, a massive empty planned city:

I worry when I come across stories of massive misallocations of capital in China because a big downturn in the Chinese economy could set off a much bigger world recession. How can China sustain its economic growth if the market is that distorted?

By Randall Parker 2009 December 28 05:45 PM  China
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2009 December 27 Sunday
Political Correctness Plus Terrorism Makes Inconvenience

So some Nigerian Muslim tries to bring down an international flight headed for the United States and the US government imposes lots of inconveniences in place of rational profiling.

“Among other things,” the statement on Air Canada’s Web site read, “during the final hour of flight customers must remain seated, will not be allowed to access carry-on baggage, or have personal belongings or other items on their laps.”

To an old person with bladder problems that last hour plus additional time taxiing and waiting to deplane can be quite difficult. Plus, the lavatories will face even more competition for their use during their shorter available time for use. Makes one want to take a train or drive or just stay home.

The suspect in the Friday attempt, identified as Umar Farouk Abdulmutallab, 23, tried to ignite his incendiary device in the final hour of the flight while the plane was descending into Detroit.

Very few people on US domestic flights will have names or accents anywhere remotely like Umar Farouk Abdulmutallab. Most aren't in the right age bracket. Few are of the right religion. You can walk thru most flights, look at the people on them, and confidently pronounce "no terrorists here". But of course doing that amounts to profiling and profiling is verboten to our politically correct liberal weltanschauung. So millions of passengers will be unnecessarily inconvenienced. Makes me want to take a train.

Such is life in the latter years of the declining empire.

Update: America's Secretary for Homeland Security, Janet Napolitano, proudly proclaimed that the security system worked because passengers stopped yet another airplane bomber. Never mind what the security people did or did not do. Passengers are part of the system. They did their job and so nothing is wrong with the system. Glad we cleared that one up.

"Once this incident occurred, the system worked," Napolitano told ABC's "This Week in Washington," adding that the public is safe. U.S. and Dutch authorities are investigating, she said, but "have no suggestion" that screening was not properly done at Schipol. "You can't rely on just one part of your security system," she said. "You have to look at the system as a whole."

You can't rely on religious, national, age, sex, and ethnic profiling to identify people to search as they pass thru security. You must rely on passengers to tackle other passengers when the guy sitting next to you whips out a bomb. The "system as a whole" hassles everyone going thru security screenings in order to get everyone on the mood to watch their fellow passengers for the first move by someone to blow up a bomb. Of course that bomb carrier might just as easily be a blue-haired lady from Des Moines. So be sure in the interest of fairness to watch everyone.

Life isn't always fair though. If you show the level of vigilance necessary be ready for some unfair treatment. Ivana Trump tried to stop a terrorist threat and got removed from a flight for her trouble. Those kids could have been hatching a terrorist plot. I must say the treatment that Ivana got seems unfair. Clearly she's got the spirit of volunteerism when it comes to stopping unruly passenger behavior.

PALM BEACH, Fla. – Police say Ivana Trump has been escorted off a plane in Florida after she became belligerent when children were running and screaming in the aisles.

By Randall Parker 2009 December 27 04:44 PM  Cultural Wars Western
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2009 December 26 Saturday
Government Laying Groundwork For Next Crisis

At The Automatic Earth Ilargi says the economic recovery is a mirage created by replacing private debts with public debts. That sounds about right.

Ilargi: Many people today feel happy and positive when they look at the stock markets, because they think these reflect the real economy, and since the markets are up, things must have changed for the better in the past year.

But they haven't, not below the surface. It's all veneer and no substance. What actually has happened is that -virtually- no debt has been paid off in our economies, in fact we’ve added trillions of dollars more in debt. What is different from a year ago is that a huge part of the old debt and all of the new debt has been transferred to the public, and away from private business, in particular financial institutions (and, to an extent, carmakers).

So it comes down to the fact that people feel happy for being deeper in debt, and quite a bit deeper. Being the humans we are, we focus on the short term gratification which can be found in the Dow and a whole slew of increasingly fabricated numbers and government reports, while we conveniently ignore the enormous increases in debts, both public and private, that we will have to pay off down the line.

Ilargi writes from the perspective of someone who believes Peak Oil is going to rip the guts out of the world economy. I pretty much share that perspective - though I'm less apocalyptic in my views. I expect industrial civilization to survive intact, albeit at considerably lower living standards.

A poor handling of the current financial crisis will make for a much more dysfunctional response to world oil production decline. Marc Faber sees government credit policy as giving drugs to drug addicts.

"If we agree that excessive credit and excessive leverage led to the crisis, then what the Federal Reserve is doing is giving a wrong medicine to the patient—they are giving the drug addicts more drug instead of sending them to rehabilitation, which is not good for the economy. So I think that the whole policy will eventually end in another disaster but we don’t know when and many things can happen in between."

The price of oil will run up again high enough to cause another recession. More debts will go bad. The US governments own total debt will spike up again in the next recession.

Julian Robertson sees high inflation, depression, or both.

“I ask anyone to give me an example of an economy beefed up by huge amounts of quantitative easing that did not inflate tremendously when or if the economy improved. I think what we’re doing now will either fail, or it will result in unbelievably high inflation – and tragically, maybe both. That would mean a depression and explosive inflation, which is frightening.”

Jim Rogers says governments are suppressing a needed natural process of bankruptcy.

"The way to solve this problem is to let people go bankrupt," Rogers said.

"Then you will hit bottom and then you start over. The people who are sound will take over the assets from the people who aren't sound and we will start over. This is the way the world has worked for a few thousand years."

Government misregulation of banks (and reckless lending by the US government's own Fannie Mae and Freddie Mac) resulted in the banks issuing huge amounts of bad debts that caused a huge bubble. We can't get out of that bubble without lots of liquidation of debts. Bush and Obama have tried to prevent some of the needed adjustment. This means that when oil prices run up again and cause another recession the financial institutions will still be awash with bad debts and the next recession will be even more painful.

By Randall Parker 2009 December 26 06:53 PM  Economics Credit
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American Corporations Leaving America

Some US corporations are reincorporating abroad.

It's easier than ever for corporations to move operations overseas. And if the federal government doesn't realize this soon, more and more companies may follow the example of Dallas-based Ensco International and reincorporate overseas. Ensco's decision, announced last month, subject to approval by the majority of its shareholders, is the latest in a series of moves by energy companies to leave the U.S. and relocate in Europe.

Switzerland and Ireland are popular destinations according to the article.

One big reason for bailing is taxes.

After Japan, America has the world's highest corporate-tax rate — and Washington shows no willingness to bring those rates down. Indeed, President Obama's administration recently proposed taxing the foreign profits of U.S.-based multinationals even when those profits aren't repatriated.

The Obama administration takes for granted the machinery of wealth creation. It is just something they think they can harness toward their preferred ends. But wealth can skedaddle pretty rapidly in this era of cheap global communications, global travel, and global trade.

Incorporation in the United States has clearly become a political risk. The US government is deeply in debt and running huge deficits for years into the future. With such sick finances the federal government is capable of all sorts of desperate damaging grabs for money. Corporations are better off minimizing their risks by shifting as much as possible outside of US jurisdiction.

By Randall Parker 2009 December 26 06:17 PM  Economics Globalization
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2009 December 25 Friday
Obama Afghanistan Strategy Doomed To Failure

Writing in Foreign Policy Thomas H. Johnson and M. Chris Mason argue that Obama's strategy in Afghanistan has absolutely no chance of success.

As German philosopher Arthur Schopenhauer once said, truth is ridiculed, then denied, and then "accepted as having been obvious to everyone from the beginning." So let's start with the obvious: There isn't the slightest possibility that the course laid out by Barack Obama in his Dec. 1 speech will halt or even slow the downward spiral toward defeat in Afghanistan. None. The U.S. president and his advisors labored for three months and brought forth old wine in bigger bottles. The speech contained not one single new idea or approach, nor offered any hint of new thinking about a conflict that everyone now agrees the United States is losing. Instead, the administration deliberated for 94 days to deliver essentially "more men, more money, try harder." It sounded ominously similar to Mikhail Gorbachev's "bloody wound" speech that led to a similar-sized, temporary Soviet troop surge in Afghanistan in 1986.

One first has to picture Afghanistan. It is not a nation as we understand the term. Loyalties are to family and tribe, not to a nation that includes enemy tribes. The Pashtuns were the dominant (and largest) tribe under the Taliban (who were mostly Pashtuns). The tribes allied with the US special forces that overthrew the Taliban are the enemy as far as the Pashtuns are concerned. How are we going to build up a now heavily Tajik army to hold down the Pashtuns? How are we going to get the Pashtuns to support a national government which serves enemy tribes?

They see all of Obama's arguments for eventual success as lame.

The president's final argument, that Afghanistan is different because Vietnam never attacked American soil, is a red herring. History is overflowing with examples of just causes that have gone down in defeat. To suggest that the two conflicts will have different outcomes because the U.S. cause in Afghanistan is just (whereas, presumably from the speech, the war in Vietnam was not) is simply specious. The courses and outcomes of wars are determined by strategy, not the justness of causes or the courage of troops.

They argue that Afghanistan's national army is a joke, that negotiating with moderates is a joke, and so on. The Pakistanis think Obama will fail and are planning accordingly.

Most critically of all, Pakistan's reaction to Obama's speech was to order its top military intelligence service, the ISI, to immediately begin rebuilding and strengthening covert ties to the Afghan Taliban in anticipation of their eventual return to power, according to a highly placed Pakistani official. There will be no more genuine cooperation from Pakistan (if there ever was).

An enormous amount of Machiavellian intrigue would be needed to control Afghanistan. But I do not see that the Obama Administration is up to the task. I've said it before: Obama is a lightweight. He can push for cliche left-wing causes like expanding heallth care spending. But the tricky international stuff is beyond his depth. At the same time, the US military's culture really cuts against the needed level of intrigue. One needs an enormous cynicism about human nature to handle a place like Afghanistan. Our own national ideology of multi-cultural democracy blinds officers and civilian policymakers alike from the mental model of human nature needed to do deals in Afghanistan.

By Randall Parker 2009 December 25 02:53 PM  MidEast Afghanistan
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2009 December 23 Wednesday
China Real Estate Bubble Next To Pop?

Double dip recession anyone?

“Once the bubble pops, our economic growth will stop,” warns Yi Xianrong, a researcher at the Chinese Academy of Social Sciences’ Finance Research Center. On Dec. 27, China Premier Wen Jiabao told news agency Xinhua that “property prices have risen too quickly.” He pledged a crackdown on speculators.

Halt of economic growth in China would be deflationary for the rest of the world. China's demand for oil could drop and lower oil prices. Commodities prices would fall across the board.

Real estate bubbles are great for renters.

Although parallels with other bubble markets, the China bubble is not quite so easy to understand. In some places, demand for upper middle class housing is so hot it can’t be satisfied. In others, speculators keep driving up prices for land, luxury apartments, and villas even though local rents are actually dropping because tenants are scarce. What’s clear is that the bubble is inflating at the rich end, while little low- cost housing gets built for middle and low-income Chinese.

The article points to a part of Beijing where apartments sell for 80 times average annual income of the city's residents. America's real estate bubble was wimpy by comparison. What's 5 or even 10 times annual income as compared to 80 times annual income? Once again China beats America in an economic competition. We make a bubble. They make a more distorted bubble.

Can the Chinese government keep the Chinese economy growing?

I'm reminded of Jim Rogers on the US economy. China is also using debt to reflate its economy. Though Jim Rogers is far more optimistic about China.

"It's getting worse, not better."
That's how Jim Rogers responds to the recent talk of improvement from President Obama, Treasury Secretary Geithner and Fed Chairman Bernanke, among others.

"Papering over the problem is not going to solve America's problem," Rogers says. "The idea you can solve a problem of too much debt and too much consumption with more consumption and more debt defies belief. I cannot believe that grownups would stand there and say that."

The Chinese are also effectively papering over the problem. They pursued a massively expansionist monetary policy in 2009. How much damage will the Chinese economy suffer from an end to their real estate boom?

Update: Why is the Chinese government pursuing such a reckless economic policy in order to keep the economy growing? Christopher Hayes points out that China's government derives its legitimacy from rapid economic growth and fears a rebellious population should the growth stop.

There is no formal social contract that regulates the relationship between members of this ruling class and the people they rule, but there does seem to be an implicit one. It is roughly this: we (the government) provide you (the citizens) with 8 to10 percent annual GDP growth, 24 million new jobs a year and the chance to win the capitalist lottery of sending your son or daughter off to a prestigious school with the promise of a life of industrialized luxury. In exchange: you don't question the legitimacy of the Chinese Communist Party.

This is not the easiest contract for the government to uphold, and it has already shown some signs of fraying. As recently as 2007, there were 80,000 protests a year in China, and the Internet has given a platform to increasingly rambunctious critics of government policies. The most potent issue is corruption, which captured wide public attention in the wake of the 2008 Sichuan earthquake, when many blamed corruption for the fact that school buildings that collapsed had dodged building codes. Several Chinese officials told us corruption was the biggest threat the party faces, the "threat from within," as one put it. Despite high-profile "crackdowns" (such as a trial currently under way in Chongqing involving 9,000 suspects), a recent China News Agency poll shows that corruption remains the number-one issue on the minds of Chinese citizens.

Corruption aside, there are also the raw economic challenges of maintaining hypergrowth, particularly at a moment of global contraction. Exports make up 35 percent of Chinese GDP; in the past year they fell by 25 percent. There are 6 million recent college graduates who need to find jobs. One Chinese hedge fund manager showed us an article for a newspaper about new graduates flooding a job fair, where the ratio of attendees to jobs was 7.5 to 1. What would happen, I asked one local party official in Yinchuan, a city near the infamous Three Gorges Dam, if unemployment in China went to 10 percent? Before he answered by saying that such a situation would be impossible under the current system, one of our chaperones, a very savvy diplomat who had served in the foreign ministry, leaned over to me and said, sotto voce, "The government would collapse." He chuckled after he said it, but I think he was only half joking.

Can the Communist Party stay in power?

On the bright side, the Communist Party is a bulwark against communism. The Communist Party also opposes democracy that will lead to socialism and stealing from the rich to give to the poor.

Xu argued that this is all part of the plan: "Let's look at our neighboring Asian countries," he said. "South Korea: its peak developing speed was reached using military rule.... Indonesia was successful during the reign of Suharto but recently it faces stalemate and difficulties." The reason that democracy is an obstacle to economic progress, Xu said, is that "the poor people want to divide the property of the rich people.... If we Chinese copied the directly elected situation today, people will say, 'I want everyone to have a good job.' Someone will say, 'I will divide the property of the rich people to poor people,' and he will be elected. It is useless: parity will not solve the problem of economic development. That is why we are taking a gradual and step-by-step approach in reform. As Mr. Deng said, we will cross the river by touching the stones. We will not get ourselves drowned, and we will cross the river."

By Randall Parker 2009 December 23 05:15 PM  China
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2009 December 20 Sunday
Muslim Clerics Complain About FBI Spying

A bunch of Muslim clerics are complaining that the FBI spies on them and tries to recruit them for spying.

The anxiety and anger have been building all year. In March, a national coalition of Islamic organizations warned that it would cease cooperating with the F.B.I. unless the agency stopped infiltrating mosques and using “agents provocateurs to trap unsuspecting Muslim youth.”

Poor babies. Can we review some basics though? Do some Muslim clerics exhort their flocks to kill American infidels? Yes. Do some Muslim clerics serve as recruiters for terrorist groups? You bet. Do some Muslim clerics come to the United States with the intent of supporting Jihad against the United States? Yup.

The FBI wants to deny green cards to applicants who refuse to spy on relatives living overseas.

In September, a cleric in Bay Ridge, Brooklyn, sued the government, claiming that the F.B.I. had threatened to scuttle his application for a green card unless he agreed to spy on relatives overseas — echoing similar claims made in recent court cases in California, Florida and Massachusetts.

I have an even better idea: stop giving green cards to foreign imams. Stop giving them visas. No need to spy on them here if they aren't here in the first place. If we allow a large Muslim subpopulation to live within the borders of a Western nation then law enforcement surveillance of that subpopulation is needed in order to foil terrorist plots.

“44 Ways to Support Jihad.”

For at least a decade, counterterrorism officials have had a wary eye on Mr. Awlaki, an American citizen now living in Yemen. His contacts with three of the Sept. 11 hijackers, at mosques where he served in San Diego and Falls Church, Va., remain a perplexing mystery about the 2001 attacks, said Philip Zelikow, who was executive director of the national 9/11 commission.

But in recent years, concerns have focused on Mr. Awlaki’s influence via his Web site, his Facebook page and many booklets and CDs carrying his message, including a text called “44 Ways to Support Jihad.”

Mr. Awlaki was consulted by the Palestinian-American Army Major Malik Hasan who went on a killing spree at Fort Hood.

This native black Muslim cleric serves as an example of the FBI's worries.

Detroit -- The leader of a Detroit mosque who allegedly espoused violence and separatism was shot and killed Wednesday in an FBI gun battle at a Dearborn warehouse.

Luqman Ameen Abdullah, imam of the Masjid Al-Haqq mosque in Detroit, was being arrested on a raft of federal charges including conspiracy, receipt of stolen goods, and firearms offenses.

Dangerous Muslim clerics in Britain and in America come with having Muslims around in the first place.

Awlaki is not an isolated case, wherein a terrorist threat has emerged from an environment where these kinds of teachings were present.

Omar abu Ali, convicted of plotting with Al-Qaeda to kill President George Bush, was a valedictorian of the Islamic Saudi Academy in Virginia. Among the teachings found in the school’s textbooks are passages promoting jihad, Anti-Semitism, and the murder of those who convert out of Islam.

Ali was also a congregant in the mosque of Sheikh Abdul Malik Johari. Sheikh Johari taught one congregation that

people see even within all of this struggle it is better to be a Muslim under these conditions than to be a kaffir [infidel] under any conditions… before Allah closes our eyes for the last time you will see Islam move from being the second largest religion in America-that’s where we are now- to being the first religion in America.

There was also Sheikh Omar Abdel-Rahman, currently serving a life-sentence for his role in plots including the 1993 World Trade Center (WTC) bombing. Sheikh Rahman was the imam of three New York mosques where he preached a militant form of Islam. His followers would go on to commit crimes congruent with his teachings. They include several others convicted with him in the New York plots. Sayyid Nosair, who murdered Jewish Defense League founder Meir Kahane, was also a follower of the cleric.

If we hadn't allowed Omar Abdel Rahman into the United States some now dead people would still be alive.

By Randall Parker 2009 December 20 05:14 PM  Immigration Culture Clash
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2009 December 19 Saturday
Happiest States: Louisiana, Hawaii, Florida, Tennessee, Arizona

What makes for happy places?

New research by the UK's University of Warwick and Hamilton College in the US into the happiness levels of a million individual US citizens have revealed their personal happiness levels closely correlate with earlier research that ranked the quality of life available in the US's 50 states plus the District of Columbia. This research provides a unique external validation of people's self reported levels of happiness and will be of great value to future economic and clinical research in this field.

The new research published in the journal Science on 17th December 2009 is by Professor Andrew Oswald of the UK's University of Warwick and Stephen Wu of Hamilton College in the US.

The researchers examined a 2005- 2008 Behavioral Risk Factor Surveillance System random sample of 1.3 million United States citizens in which Life-satisfaction in each U.S. state is measured. This provided a league table of happiness by US State reproduced below.

One pattern: sunnier places are happier. But one can find exceptions: Darker winter Alaska and Maine are happier. Sunny California is near the bottom of the happiness ranks. California's glory days were ruined by too much population growth and too much immigration. It is now a high tax, high living cost, crowded, and decaying state with low social capital. Also, Republican-leaning states are happier than Democratic-leaning states. Though again there are exceptions. Also, states with lower costs of living are happier. Yet Hawaii is in 1st place.

Andrew Oswald/ Wu ranking of happiness levels by US State

  1. Louisiana
  2. Hawaii
  3. Florida
  4. Tennessee
  5. Arizona
  6. Mississippi
  7. Montana
  8. South Carolina
  9. Alabama
  10. Maine
  11. Alaska
  12. North Carolina
  13. Wyoming
  14. Idaho
  15. South Dakota
  16. Texas
  17. Arkansas
  18. Vermont
  19. Georgia
  20. Oklahoma
  21. Colorado
  22. Delaware
  23. Utah
  24. New Mexico
  25. North Dakota
  26. Minnesota
  27. New Hampshire
  28. Virginia
  29. Wisconsin
  30. Oregon
  31. Iowa
  32. Kansas
  33. Nebraska
  34. West Virginia
  35. Kentucky
  36. Washington
  37. District of Columbia
  38. Missouri
  39. Nevada
  40. Maryland
  41. Pennsylvania
  42. Rhode Island
  43. Massachusetts
  44. Ohio
  45. Illinois
  46. California
  47. Indiana
  48. Michigan
  49. New Jersey
  50. Connecticut
  51. New York

I'd really like to see a map that breaks happiness down by county. How do rural, suburban, and city life compare? How much does crime lower happiness? How does happiness track by race or IQ or income?

By Randall Parker 2009 December 19 04:06 PM  Human Nature
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US Border Patrol Easily Corrupted By Drug Smugglers

Agents with relatives in Mexico get paid off by smuggler relatives.

Along the border, many residents have family members on both sides. Generations of residents have been accustomed to passing back and forth relatively freely, often daily, and exchanging goods, legal or not.

Federal officials believe that drug traffickers are seeking to exploit those ties more than ever, urging family and friends on the American side to take advantage of the hiring rush for customs agents. The majority of agents and officers stay out of crime. But smuggling can be appealing. The average officer makes $70,000 a year, a sum that can be dwarfed by what smugglers pay to get just a few trucks full of drugs into the United States.

An obvious solution: Do not recruit Border Patrol officers from local Mexican border communities. Recruit them from the least corrupt states in the union - near Canada's border.

Of course, to selectively recruit from some populations but not others based on their rack records for less corruption would be politically incorrect. We need to blind ourselves to evidence in the interest of fairness. In early 21st century America prevention of corruption and smuggling is deemed less important than career opportunities for lower performing ethnic groups.

The article reports that recruitment from the border area used to be avoided. But the policy was changed in order to make recruitment easier. Surely in a country with 10% unemployment lots of people could be recruited from, for example, Michigan. $70k per year would sound pretty good to a laid off auto worker.

By Randall Parker 2009 December 19 03:07 PM  Immigration Law Enforcement
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2009 December 17 Thursday
Obama Popularity Continues Decline

America's political parties compete in an unpopularity contest where they take turns becoming unpopular. Clinton famously damaged his popularity somewhat with Monica Lewinsky and a few policies. Though low unemployment from the dot com bubble really put a floor on how far his popularity could drop. By contrast, George W. Bush made bigger mistakes with the Iraq War and loose credit for housing and the Republicans lost both houses of Congress and the Presidency. Way to go Dubya! Now Barack Obama and the Democrats once more have a chance to make themselves unpopular. Barack Obama's approval rating dropped to 47% and 46 disapproved. The attempt by the Democrats to pass a big health care plan is backfiring on their popularity.

Democrats' problems seem in part linked to their ambitious health-care plan, billed as the signature achievement of Mr. Obama's first year. Now, for the first time, more people said they would prefer Congress did nothing on health care than who wanted to see the overhaul enacted.

The recession (mostly caused by George W. Bush's housing credit policies and the approach of Peak Oil) is hurting Obama because people simplistically blame the guy in power at the moment and can't remember policies of a few years ago (unless they are political bloggers who obsess on the mistakes the other party made - while not noticing the mistakes their own parties made that contributed to a mess).

Where's bottom?

"For Democrats, the red flags are flying at full mast," said Democratic pollster Peter Hart, who conducted the survey with Republican pollster Bill McInturff. "What we don't know for certain is: Have we reached a bottoming-out point?"

At 10% unemployment any US President is going to suffer declining popularity. Obama even more so because he's looking like a lightweight.

Some Democrats see health care as an issue where they could win back some popularity if they could just pass the bill. But several Senate Democrats see the current bill as a big threat to their desire for reelection. So Megan McArdle thinks some Senate Democrats secretly do not want to see a vote on the bill. Megan thinks the left of the Democratic party never had enough support for what they were trying to pull off.

This bill is, at this point, hideously unpopular. I'm pretty sure you've got a bunch of senators who would really, really love not to vote for it. Ultimately, the moderates had a very good alternative to negotiated agreement, and the progressives didn't, and that was crystal clear from Day 1. That meant the progressives were never, ever going to get very much. This was not a failure of political will or political skill. It was the manifestation of a political reality that has long been obvious to everyone who wasn't living in a fantasy world. If progressives decide that the lesson from this is that they haven't been sufficiently demanding and intransigent, they are going to find themselves about as popular with the rest of America as the Bush Republicans, and probably lose their party the House next year.

Could the Democrats lose the control of the House in November 2010? The advantage for Republicans of the Democrats maintaining that control by a small margin: Come 2012 the Democrats won't be able to spread the blame for poor economic performance across 2 parties if a single party controls both houses of Congress and the White House.

By Randall Parker 2009 December 17 09:34 PM  Politics American Presidency
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2009 December 16 Wednesday
Ugliness More Costly In Urban Areas

If you are ugly and want to feel good about yourself move out to the country where you won't have to compete so much for friends.

Do good-looking people really benefit from their looks, and in what ways? A team of researchers from the University of Georgia and the University of Kansas found that yes; attractive people do tend to have more social relationships and therefore an increased sense of psychological well-being. This seems like common sense, and might be why we spend billions of dollars each year trying to become more attractive. However, the study, published in this month’s issue of Personal Relationships, also determines that the importance of attractiveness is not universal; rather, it is determined by where we live.

The importance of attractiveness in everyday life is not fixed, or simply a matter of human nature. Instead, the impact of our attractiveness on our social lives depends on the social environment where we live. Attractiveness does matter in more socially mobile, urban areas (and from a woman’s point of view actually indicates psychological well-being), but it is far less relevant in rural areas. In urban areas individuals experience a high level of social choice, and associating with attractive people is one of those choices. In other words, in urban areas, a free market of relationships makes attractiveness more important for securing social connections and consequently for feeling good. In rural areas, relationships are less about choice and more about who is already living in the community. Therefore, attractiveness is less likely to be associated with making friends and feeling good.

The ability to genetically engineer children to be better looking will help enable more urban living.

By Randall Parker 2009 December 16 07:51 PM  Economics Human Weakness
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2009 December 14 Monday
Geeks Repel Women From Computer Science

Women don't want to be around beta geeks.

In real estate, it's location, location, location. And when it comes to why girls and women shy away from careers in computer science, a key reason is environment, environment, environment.

The stereotype of computer scientists as nerds who stay up all night coding and have no social life may be driving women away from the field, according to a new study published this month. This stereotype can be brought to mind based only on the appearance of the environment in a classroom or an office.

"When people think of computer science the image that immediately pops into many of their minds is of the computer geek surrounded by such things as computer games, science fiction memorabilia and junk food," said Sapna Cheryan, a University of Washington assistant professor of psychology and the study's lead author. "That stereotype doesn't appeal to many women who don't like the portrait of masculinity that it evokes." Such objects help create what Cheryan calls ambient belonging, or the feeling that you fit or don't fit in somewhere.

Beta behaviors are driving women away from computers. Feminists who insist on equal representation of women in all the professions should promote alpha male training (start with easy changes) for all male computer science students. It is the only solution that might make a difference.

By Randall Parker 2009 December 14 09:39 PM  Human Nature Mating
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Whole Eritrean Football Team Stays In Nairobi

After losing to Tanzania at a match in Nairobi Kenya all the players on the football team of Eritrea apparently decided to duck out of going home. Can you blame them? Nairobi looks good to an Eritrean.

What I want to know: Does Eritrea look good to a Somalian? Also, would a Somalian rather go to Zimbabwe more or less than a Zimbabwean would like to go to Somalia? Just what is the bottom in Africa?

By Randall Parker 2009 December 14 08:16 PM  Chaotic Regions
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2009 December 13 Sunday
Private Jets And Limousines At Climatefest Copenhagen

Do as we say, not as we do.

More than 1,200 limousines have flooded into the Danish capital (forget about public transport). According to this newspaper's Copenhagen diarist, "most of these stretched vehicles have been driven hundreds of miles from Germany and Sweden. Last week France ordered an extra 42 of them. Only five of the limos are hybrid; the rest are petrol and diesel."

This great emission-fest will be mightily augmented at the conference's conclusion, when the really big cheeses - presidents, prime ministers, and (naturally) the Prince of Wales - arrive in upwards of 140 private jets.

Hybrid limos. That'd make all the difference. Finally the masses would believe the arguments for global warming.

By Randall Parker 2009 December 13 11:00 PM  Elites Hypocrisy
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Boom Time For US Federal Government Salaries

Party time for higher end government workers.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.

19% make more than $100k per year. They average $70k versus $40k in the private sector and of course they have much better benefits and job security.

While lots of people are experiencing declining salaries, reductions in benefits, and suspension of bonus programs federal workers are more than keeping up with inflation.

Then-president Bush recommended — and Congress approved — across-the-board raises of 3% in January 2008 and 3.9% in January 2009. President Obama has recommended 2% pay raises in January 2010, the smallest since 1975. Most federal workers also get longevity pay hikes — called steps — that average 1.5% per year.

Longevity pay hikes. Imagine that. US government employees live in a cushy parallel economy at our expense.

It is hard to tell what this means. How has the mix of jobs done by US government workers changed over time? For example, does the federal government still employ janitors or are those jobs out-sourced? Has the average skill level risen? I'm skeptical on that point.

By Randall Parker 2009 December 13 05:39 PM  Economics Labor
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New US Government Debt Limit

The current US government debt limit of $12.1 trillion isn't big enough.

Congressional Democrats prepared to pass big spending bills and a roughly $1.8 trillion increase in the federal debt limit, all at a time when concern is growing over the government's chronic deficits.

Well, if the new debt limit is $13.9 trillion that's very close to the projected $14.26 trillion US GDP for 2009. In 2011 the outstanding federal debt might well exceed 1 year's GDP. But this is only a beginning. Surely the Obama Administration and Congress will break new debt records in future years. I see these people as achievers. Scaling new heights. Breaking new records. Doing things I would have considered impossible a few years ago. Change.

Their basic mistake: They take for granted the continued ability of the US economy to generate more goods and services.

By Randall Parker 2009 December 13 05:24 PM  Economics Government Costs
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NAFTA Not Helping Mexico Catch Up

The theory is that lowered barriers for trade will raise economic performance of all the countries in the world and they will all converge on the standards of living seen in the Western industrialized countries. The reality is that Mexico is not closing the gap with the United States over 15 years after the North America Free Trade Agreement was signed.

But a study released Wednesday by the  Carnegie Endowment for International Peace finds that Mexico has fared poorly under the accord.

“After 15 years, it seems clear that Nafta’s promise of broad-based dynamic growth did not come true in Mexico,” write the study’s authors,  Eduardo Zepeda of the Carnegie Endowment and Timothy A. Wise and Kevin P. Gallagher of the  Global Development and Environment Institute at Tufts.

Mexico's economy grew only 1.6% per capita per year since NAFTA passed. Some economists are probably surprised by this result. Oh, and get this: the wage gap between the United States and Mexico actually widened slightly - the opposite of what economists expected.

So what's the problem with economic models? The elephant in the room. If we consider the taboo then Mexico's doing about as well as we should expect. But I expect economic performance of the United States to deteriorate and so NAFTA might eventually be incorrectly praised for a future narrowing of the gap.

By Randall Parker 2009 December 13 04:53 PM  Mexico
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US Health Care Reform Bill Will Up Costs

A month ago Jeffrey S. Flier, dean of Harvard Medical School, said the big health care spending bill in Congress will accelerate the already unsustainable rise in health care costs.

In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it. Likewise, nearly all agree that the legislation would do little or nothing to improve quality or change health-care's dysfunctional delivery system. The system we have now promotes fragmented care and makes it more difficult than it should be to assess outcomes and patient satisfaction. The true costs of health care are disguised, competition based on price and quality are almost impossible, and patients lose their ability to be the ultimate judges of value.

Worse, currently proposed federal legislation would undermine any potential for real innovation in insurance and the provision of care. It would do so by overregulating the health-care system in the service of special interests such as insurance companies, hospitals, professional organizations and pharmaceutical companies, rather than the patients who should be our primary concern.

Accelerated crisis. That pretty much sums up US federal fiscal policy at this point. Make it go wrong faster.

In effect, while the legislation would enhance access to insurance, the trade-off would be an accelerated crisis of health-care costs and perpetuation of the current dysfunctional system—now with many more participants. This will make an eventual solution even more difficult. Ultimately, our capacity to innovate and develop new therapies would suffer most of all.

By 2019, the number of uninsured could be reduced from an estimated 57 million to 24 million under the current Senate healthcare reform bill. However, the accompanying additional demand for services that would accompany this expansion would be difficult to meet initially with existing health provider resources—leading to "price increases, cost-shifting and/or changes in providers' willingness to treat patients with low-reimbursement health coverage," according to a Dec. 10 memo compiled by Richard Foster, the Centers for Medicare and Medicaid Services (CMS) chief actuary.

Foster does not expect some of the proposed Medicare savings to really save money and expects some of them to be repealed by Congress - as they have been repeatedly in the past. Lower pay-out rates to doctors result in fewer doctors agreeing to see Medicare patients. So then old folks complain to their Congressional representatives.

Higher costs are coming. I expect at best stagnation of living standards.

The report, compiled by the chief actuary at the Centers for Medicare and Medicaid Services, estimated that total health costs in the U.S. would be $234 billion higher than if the bill weren't passed.

Parenthetically, if you want to watch for reports on the health reform bill coming out of the Medicare Office of the Actuary then watch this page for new PDFs that analyze Congressional bills.

Meanwhile a bunch of liberal Democrat Senators oppose putting people into Medicare starting at age 55 since that would make Medicare supplier shortages even worse.

“We appreciate the rationale underlying the proposed Medicare expansion,” the lawmakers wrote in the Dec. 11 letter, “but fear that provider shortages in states with low reimbursement rates such as ours will make such a program ineffective, or even worsen the problems these states are experiencing.”

If you are an American citizen expecting Medicare to pay for your medical care upon retirement think again. Since Medicare pays doctors less than private insurers many doctors only accept patients paid for by private insurers.

David Gratzer, a physician and author of Why Obama’s Government Takeover of Health-Care Will Be a Disaster, points out that while a larger percentage of GDP goes to health care in the United States other Western countries are experiencing similar percentage rates of growth in health care costs.

Countries like Canada and Britain spend a fraction of GDP compared with the U.S. But, in recent years, government-run health care has lost control of costs. Between 2000 and 2006, the average real annual growth rate for health expenditures for OECD member countries was 4.9%; American health inflation over the same period was 4.95%.

Take Britain. Even with top-down management, the annual budget of the National Health Service rose between 5% and 10% faster than inflation through most of the decade.

Aging populations combined with more expensive newer treatments translate into much higher costs. Unless individual patients have incentives to demand less care the costs will keep going up until living standards go down.

By Randall Parker 2009 December 13 11:05 AM  Economics Health
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2009 December 12 Saturday
Will Greece Go Bankrupt?

The European Monetary Union is threatened by the threat of default on growing public debts in Greece, Ireland, Spain, and some other spendthrift European countries. Der Speigel takes notice.

Practically unnoticed by the public, an issue has returned to the forefront in recent weeks -- one that was a cause for great concern at the height of the financial crisis but then, as optimism about the economy began to grow, was eventually forgotten: the fear of a national bankruptcy in the euro zone. And the question as to whether such a bankruptcy, should it come about, could destroy the common European currency.

Greece was always at the very top of the list of countries at risk. But now the danger appears to be more acute than ever.

Greece could conceivably exit the Euro and bring back their drachma if the crisis hits an acute state where the Greek government loses the ability to refinance debt at affordable interest rates. This crisis looks set to get worse before it resolves. The Greek sovereign public debt shows America her future.

Brussels says Greece's public debt will rise from 99pc of GDP in 2008 to 135pc by 2011, without drastic cuts. Athens has been shortening debt maturities to trim costs, storing up a roll-over crisis next year. Some €18bn comes due in the second quarter of 2010 (IMF).

America's fiscal path is more like that of irresponsible southern European countries than like that of the staid solid Germans. We can watch how events play out in other reckless spending countries to get a taste of our future.

There is a risk of financial contagion in southern and eastern Europe.

The European Commission projects Greece's 2009 budget deficit at almost 13% of gross domestic product, versus an EU average of just under 7%. Greek government debt, currently about 112% of GDP, probably will balloon to 130% before stabilizing, Fitch said.

Fitch cut Greece's rating a notch to BBB+, still within investment grade, citing its lack of decisive action to rein in the deficit. High debt and a sluggish economy are shared by Portugal, Ireland and Spain, creating a risk of contagion if investors flee Greek assets.

If you enjoy the chaos of a fiscal crisis then find a way to go live in Greece for a couple of years. Mish Shedlock also sees a possible crisis in eastern Europe.

"This raises question marks over the long-term viability of the euro's current membership," said Simon Tilford, chief economist at the Center for European Reform, a London think tank. "On current trends," he added, "we'll end up with economic stagnation and mounting political tensions in the euro zone, and, at worst, fiscal crises and a loss of political support for continued membership."

The acute crisis might come by the end of 2010.

Dec. 11 (Bloomberg) -- Greece and Ireland are among countries in an “intolerable” economic situation, which may lead to bailouts or even an exit from the euro area by the end of next year, according to Standard Bank Plc.

You can see the market's appraisal of the risks by looking at interest rate premiums over German government debt. Greek leads the way toward default with a premium of 2.5% with Ireland following at 1.8%.

On Thursday, the risk premium that investors demand for holding 10-year Greek government bonds rose again by 0.13 percentage point to 2.50 percentage points over German government bonds, which are seen as safe, according to Barclays Capital. This spread — a key gauge of market fears — has jumped 85% since Nov. 12 and hasn’t been this high since April.

The Spanish and Portuguese interest premiums are substantial but small in comparison.

Thursday, the so-called “spread” between Spanish and German government bonds widened 0.04 percentage point to 0.66 percentage point, while the spread on Portuguese bonds versus German debt is 0.075 percentage point wider to 0.77 percentage point.

...

The spread between Ireland’s government debt yields and the German equivalent widened further by 0.105 percentage point to 1.80 percentage points.

Harvard economist Martin Feldstein says the European Monetary Union allowed the Greek government to be far more irresponsible.

"The current situation in Greece shows the problems created by a single currency," says Martin Feldstein, a Harvard University economist who is perhaps the euro's most prominent skeptic.

...

"The single currency enabled Greece to issue enormous amounts of government debt until it reached the current crisis level," Feldstein said in an e-mail interview.

Will the Germans bail out the Greeks in order to protect the monetary union? I do not see how that can solve the problem without a simultaneous large scaling back of the size of Greek government. How will this crisis resolve itself?

Can Euro zone ejections be limited to only a few smaller reckless countries?

First off, the "oh, it's only Greece, it's only small" argument falls apart. As currencies analysts at Commerzbank said Wednesday, "the euro zone is only as strong as its weakest link."

A high trust high social capital society is a precious vulnerable thing to have (a point that pro-open borders libertarians and liberals do not understand). Greece has low trust and high contempt for government. One in four workers in Greece work for this government that most do not like.

The underground economy, which some estimates place as high as 30 percent of gross domestic product, helps people in countries like Greece that have European prices but salaries below the European average.

As he sat in a cafe with friends in the chic Kolonaki area on a recent afternoon, Antonis, 33, who disclosed only his first name, proudly announced that he refused to pay taxes.

“Why should I pay?” he asked with a grin. “I don’t care about my government; I don’t care about my country,” he added. He conceded, however, that he did care about soccer and women.

Update: Mexico's credit rating is as low as Greece's and the market thinks Mexico's default rate is much lower than its credit rating.

Credit-default swaps, contracts investors use to protect against non-payment of debt, show Mexico trading as high-yield, or junk -- placing it three levels below the nation’s BBB+ grade from Standard & Poor’s and Fitch Ratings -- on concern the tax increases will fail to stave off downgrades.

By Randall Parker 2009 December 12 10:29 AM  Europe Monetary Union
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2009 December 09 Wednesday
The Fall Of Mexico: A Low Grade Civil War?

Writing in The Atlantic Philip Caputo reports on how the fighting in Mexico is taking on some of thee characteristics of a civil war.

To clarify the crime. Of the many things Mexico lacks these days, clarity is near the top of the list. It is dangerous to know the truth. Finding it is frustrating. Statements by U.S. and Mexican government officials, repeated by a news media that prefers simple story lines, have fostered the impression in the United States that the conflict in Mexico is between Calderón’s white hats and the crime syndicates’ black hats. The reality is far more complicated, as suggested by this statistic: out of those 14,000 dead, fewer than 100 have been soldiers. Presumably, army casualties would be far higher if the war were as straightforward as it’s often made out to be.

The small amount of attention given to these events by the US press shows how situational ethics can be. Imagine a US ally in Central America disappearing communist guerrillas out of their houses in the 1980s. Of course Congress would be crying about the evil Republican anti-communists and trying to cut off funds to that country. But drug lords are seen as worse than communists. Or maybe ethical standards have changed since the 1980s? Or perhaps the fact that Mexico is directly on the US border makes our elite more supportive of war tactics by a government.

The army appears to be carrying out lots of executions.

What, then, accounts for the carnage, the worst Mexico has suffered since the revolution, a century ago? To be sure, many of the dead have been cartel criminals. Some were killed in firefights with the army, others in battles between the cartels for control of smuggling routes, and still others in power struggles within the cartels. The toll includes more than 1,000 police officers, some of whom, according to Mexican press reports, were executed by soldiers for suspected links to drug traffickers. Conversely, a number of the fallen soldiers may have been killed by policemen moonlighting as cartel hit men, though that cannot be proved. Meanwhile, human-rights groups have accused the military of unleashing a reign of terror—carrying out forced disappearances, illegal detentions, acts of torture, and assassinations—not only to fight organized crime but also to suppress dissidents and other political troublemakers. What began as a war on drug trafficking has evolved into a low-intensity civil war with more than two sides and no white hats, only shades of black. The ordinary Mexican citizen—never sure who is on what side, or who is fighting whom and for what reason—retreats into a private world where he becomes willfully blind, deaf, and above all, dumb.

How many of the killings done by the Mexican Army or police are really done on behalf of drug smugglers? How many are done by local factions of the government for reasons unrelated to the drug war? How many of the killings done against the drug gangs are basically mistakes? Oops, we thought you were something you aren't. In the fog of war you have to expect some friendly fire casualties.

The United States government ought to build a very formidable barrier along the entire border with Mexico and then hugely increase the staffing of border crossings in order to cut the drug flow. Border control would insulate us from Mexico's violence while also reducing the flow of corrupting drug money and guns into Mexico. The US government should also increase DEA and FBI staffing to run down and tear apart Mexican organized crime in the US.

I urge you to click thru and read the whole article. Mexico is what we should not want to become like.

By Randall Parker 2009 December 09 07:34 PM  Mexico
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2009 December 07 Monday
Texas Beats National Average In Health Uninsurance

Texas is on the cutting edge of America's decline.

Nearly a third of people in Texas who are of working age do not have health insurance, Baylor University researchers found as they analyzed U.S. Census Bureau data.

Texas is the fastest-growing state, but 31percent of those ages 18 to 64 are uninsured.

The national average is 20.2 percent for that age group, said senior research analysts Debbie McMahon and Wes Hinze of Baylor’s Center for Community Research and Development.

Texas belongs with a cluster of states with lower medical insurance rates. Of course Texas represents America's bleak demographic future, the evidence for which can be found at very young ages. Texas and California show where we are going as a nation.

We are going to have to adjust our expectations downward. Delusion funded by taxes and subsidies for the lower performers is another option which Barack Obama and the Democrats in Congress are promoting.

By Randall Parker 2009 December 07 11:22 PM  Economics Health
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2009 December 05 Saturday
Smart People Start Having Sex Later

Smart people put more thought into the consequences of their reproductive actions. This is a tragedy for the West. Jason Malloy reports the details.

Depending on the specific age and gender, an adolescent with an IQ of 100 was 1.5 to 5 times more likely to have had intercourse than a teen with a score of 120 or 130. Each additional point of IQ increased the odds of virginity by 2.7% for males and 1.7% for females. But higher IQ had a similar relationship across the entire range of romantic/sexual interactions, decreasing the odds that teens had ever kissed or even held hands with a member of the opposite sex at each age.

While these authors leave off at grade 12th, it would seem plausible to expect that this relationship extends beyond high school. To explore this, plenty of interesting facts come from a 2001 campus sex survey by the joint MIT/Wellesley college magazine Counterpoint (PDF). Looking within and between colleges, IQ appears to delay sexual activity on into young adulthood.

By the age of 19, 80% of US males and 75% of women have lost their virginity, and 87% of college students have had sex. But this number appears to be much lower at elite (i.e. more intelligent) colleges. According to the article, only 56% of Princeton undergraduates have had intercourse. At Harvard 59% of the undergraduates are non-virgins, and at MIT, only a slight majority, 51%, have had intercourse. Further, only 65% of MIT graduate students have had sex.

The student surveys at MIT and Wellesley also compared virginity by academic major.

Studio art majors are easy.

The chart for Wellesley displayed below shows that 0% of studio art majors were virgins, but 72% of biology majors were virgins, and 83% of biochem and math majors were virgins! Similarly, at MIT 20% of 'humanities' majors were virgins, but 73% of biology majors. (Apparently those most likely to read Darwin are also the least Darwinian!)

This is the biggest tragedy of the modern age. The people most capable of raising kids and most likely to produce offspring who can generate wealth are the least likely to make babies. Many lines of evidence point toward dysgenic breeding practices.

Ron Guhname recently pointed out another line of evidence for dysgenic breeding. Women with bigger vocabularies have fewer babies.

The first year of the General Social Survey was 1972. I looked at white women ages 50 and over for all surveys conducted in the 70s. The mean number of kids for dull women (Wordsum 0-4) was 3.02. It was 2.22 for smart women (Wordsum 8-10). That's a ratio of 1.36. Looking at this decade, I calculated means for white women ages 45-59. For the unintelligent group, the mean number of kids is 2.38, and it's 1.76 for the bright group. That's a ratio of 1.35.

There is no difference between the two periods. The higher fertility of dull women seen prior to 1970 continues to the same degree today.

I've gradually lost interest in what passes for the mainstream inside-the-beltway policy debate in Washington DC because it rarely constructively addresses the biggest problems facing the Western nations. The relevant evidence has been rendered taboo by the anti-knowledge forces of political correctness. Meanwhile, the West declines. What will some future Edward Gibbon write about our era?

By Randall Parker 2009 December 05 04:35 PM  Civilizations Decay
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2009 December 03 Thursday
Is Feminist Socialism Beta Aversion?

In the comments of a post by Audacious Epigone an anonymous commenter advances a pretty succinct formulation of the idea that the welfare state allows some women to avoid long term relationships with men they find insufficiently attractive while still being able to make babies.

With regards to women and socialism, I don't think it's merely risk-aversion. Socialism allows them to have their cake and eat it too. They get the financial support of provider males while mating with whoever they want. They basically get to cuckold half of the male population. It's more beta-aversion than risk-aversion, IMO.

Beta aversion. An interesting way to look at a certain variety of socialism. What do you think of this argument?

This comes in response to comments by Audacious Epigone about women who vote for alpha males as an exercise in fantasizing.

The treatment potentially accorded those who make a Watson- or Summers-esque comment in a public setting usually limits my discussion of HBD issues to face-to-face conversations or pseudonymous online postings.

There are times when discipline fails me, though. A friend answered in a facebook social interview question asking what she'd talk to Barack Obama about by responding that she hoped the two of them wouldn't do much talking. Trying to maintain levity, I commented:

Great illustration of another reason it was a mistake to give women the vote! Because politicians of prominence tend to be in their early forties at the youngest, female politicians are sexually invisible to most men (with rare exceptions like Sarah Palin, who apparently puts lead in the pencils of many middle-aged guys). Women fall for social dominance, which consists primarily of financial affluence, social prestige, good frame (physical attractiveness, deep voice, facial symmetry, etc) and occupational success--all hallmarks of successful politicians (our current President being no exception). And men don't wilt in their twenties, occasionally remaining in full bloom into their senior years (see Silvio Berlusconi). So we have women voting for politicians in the hopes that it'll somehow bring their personal fantasies to fruition!

The idea of cuckolding taxpayers reminds me of a recent Robin Hanson post about cuckolded ex-husbands who are forced to pay child support. Hanson argues that if an ex-husband should be expected to pay child support why don't the people who support this idea support the taxing of all other non-fathers to support the same kid?

I find these contrary arguments to be extremely weak. If we worry about the kid’s financial security, why don’t we tax everyone instead of just this one man? What basis could we have for calling this man’s reluctance “irrational,” if the rest of us are equally unwilling to pay for this kid?

Men need to become more conscious of female interests and female strategies in relationships and politics. Know better how your own interests are harmed by females following their instincts.

By Randall Parker 2009 December 03 11:31 AM  Cultural Wars Marriage
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2009 December 02 Wednesday
Costs Of The Proposed US Health Care Plan

A Wall Street Journal article points to a Congressional Budget Office study which finds Harry Reid's health care bill will boost premiums for individual buyers.

We have now reached the stage of the health-care debate when all that matters is getting a bill passed, so all news is good news, more subsidies mean lower deficits, and more expensive insurance is really cheaper insurance. The nonpolitical mind reels.

Consider how Washington received the Congressional Budget Office's study Monday of how Harry Reid's Senate bill will affect insurance costs, which by any rational measure ought to have been a disaster for the bill. CBO found that premiums in the individual market will rise by 10% to 13% more than if Congress did nothing. Family policies under the status quo are projected to cost $13,100 on average, but under ObamaCare will jump to $15,200.

Fabulous news!

"No Big Cost Rise in U.S. Premiums Is Seen in Study," said the New York Times, while the Washington Post declared, "Senate Health Bill Gets a Boost." The White House crowed that the CBO report was "more good news about what reform will mean for families struggling to keep up with skyrocketing premiums under the broken status quo."

The Wall Street Journal didn't provide a link to the article but it was easy enough to find. Curiously, in spite of the title "No Big Cost Rise in U.S. Premiums Is Seen in Study" the New York Times piece does admit that the bill in Congress will raise the costs of individual buyer premiums. But Congress and the Gray Lady pretend that since taxpayers will fund the higher costs that individual purchasers won't really pay higher prices. Um, at least some individual health insurance purchasers do pay substantial amounts of taxes, right?

Before taking account of federal subsidies to help people buy insurance on their own, the budget office said the bill would tend to drive up premiums. But as a result of the subsidies, it said, most people in the individual insurance market would see their costs decline, compared with the costs expected under current law. The subsidies, a main feature of the bill, would cost the government nearly $450 billion in the next 10 years and would cover nearly two-thirds of premiums for people who receive them.

So if you are self-employed, buying your own health insurance, and you are not going to qualify for the subsidy then your health insurance premiums are going to go up even faster.

The Gray Lady also has an article comparing claims by Republicans and Democrats in Congress about what this bill will do.

Senate Republicans say that it is unlikely that Congress would follow through on many of the cost-saving measures included in the bill and that the projections are therefore misleading. Democrats say the budget office does not give them any credit for many provisions, like new prevention and wellness programs that they believe will potentially save billions of dollars but that cannot be attributed directly to the budget.

Savings from prevention and wellness programs are pretty bogus. Most people are pretty immune to dietary and exercise advice. Most of what gets labeled as preventive medicine amounts to early diagnosis. That can cut costs. But I doubt the savings will be large. Electronic medical records aren't saving money where they are used.

One of the proposed savings for this bill is a reduction of Medicare pay-outs to doctors. This same proposed savings was used to pay some of the costs of the Medicare drug benefit which George W. Bush signed into law. Congress claims the pretend saving and at the same time does not pass legislation to achieve that saving. Why? Because too many doctors would stop seeing Medicare patients if the payment for seeing them goes down too far.

What I continue to find most amazing about this new health care bill: The United States is alreadly deeply in debt and going deeper. We are on an unsustainable path before adding yet another spending program to the pile. Yet the people in Congress are like train operators throwing coal on a steam engine as the train approaches a bridge that is out. Congress is going to spend us into another financial crisis. I think it is unavoidable.

Here's a list of talking points about the Senate plan from the Senate Republicans:

  • Page 324 includes an $8 billion tax on individuals that have non-government "approved" health plans.
  • Page 348 levies a $28 billion tax on businesses that cannot afford to offer insurance to their employees.
  • Page 1979 raises an almost $150 billion tax on many middle-class workers using so-called "Cadillac" health insurance plans.
  • Page 1997 will cost families and individuals an additional $5 billion by prohibiting the use of savings set aside for health care expenses through health savings accounts, flexible spending accounts or health reimbursement accounts for the purchase of non-prescription or over the counter medicines.
  • Page 2010 will make the cost of lifesaving medicine more expensive by taxing pharmaceutical research firms an additional $22.2 billion.
  • Page 2020 will ultimately lead to increases in the cost of advanced medical devices like pacemakers by raising taxes on medical device manufacturers an additional $19.3 billion.
  • Page 2026 will increase the health care premiums paid by millions of Americans through a new $60.4 billion tax on health insurance companies
  • Page 2040 increases the Medicare payroll tax on those earning more than $250,000. This new tax would cost $53.8 billion.
  • Page 2044 will eliminate a tax break in current law on Blue Cross / Blue Shield Providers and Beneficiaries, which equals about half a billion dollars annually, if at least 85 percent of revenues are not spent on clinical services. This new tax will result in higher premiums.
  • Page 2045 will create a $5.8 billion tax for patients receiving elective cosmetic surgery.

You can read the whole plan yourself or just look up the page numbers mentioned above. Judge for yourself.

By Randall Parker 2009 December 02 08:33 PM  Economics Health
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2009 December 01 Tuesday
Tyler Cowen: America Threatened By China Bubble

In a column for the New York Times Tyler talks economic sense on China.

PRESIDENT OBAMA’S recent trip to China reflects a symbiotic relationship at the heart of the global economy: China uses American spending power to enlarge its private sector, while America uses Chinese lending power to expand its public sector. Yet this arrangement may unravel in a dangerous way, and if it does, the most likely culprit will be Chinese economic overcapacity.

China's macroeconomic mismanagement is on a scale similar to the US's macroeconomic mismanagement. Can we avoid a resulting depression?

Developing major economies all experience bubbles.

China has had a 30-year run of stellar economic growth. But it’s only human nature for such expansion to breed too much optimism, overextending an entire economy. Americans have found this out the hard way in their own financial crisis.

History has shown that no major economy has grown into maturity without bubbles, crises and possibly even civil strife or civil wars along the way. Is China exempt from this broader pattern?

Tyler does not predict a crisis. But he thinks we should prepare for the possibility. If it happens Tyler expects interest rates to rise in the United States and for the US government's fiscal situation to become unsustainable.

I doubt the ability of the world's central bankers to manage the huge imbalances in ways that avoid a crisis. We had a crisis last fall. I suspect we will have some more such crises of a similar scale in the next decade.

By Randall Parker 2009 December 01 08:54 PM  Economics Business Cycle
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