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2010 November 30 Tuesday
Ireland's Debt Servitude: Deal Bails Out Creditors

In a column entitled Ireland's Debt Servitude Ambrose Evans-Pritchard gets the Irish debt deal sadly correct:

Stripped to its essentials, the €85bn package imposed on Ireland by the Eurogroup and the European Central Bank is a bail-out for improvident British, German, Dutch, and Belgian bankers and creditors. The Irish taxpayers carry the full burden, and deplete what remains of their reserve pension fund to cover a quarter of the cost.

Why should reckless creditors be so privileged? Why should the Euro elite stand up for the stockholders of their banks when bank management has made such colossal mistakes? Irish taxpayers are not responsible for this disaster. The EU and the banks and bank regulators are responsible. The stock holders of the assorted German, French, British, and other Euro banks should take it in the chin. Instead Ireland is turning into a big debtor's prison. Nigel Farage gets it right too.

I am skeptical that this deal will last. All it would take is another sharp oil price spike, this time well north of $150 per barrel, to bring down the financial house of cards.

By Randall Parker 2010 November 30 09:31 PM  Europe Monetary Union
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Women Avoid Fathers While Ovulating

Just like in other species.

Through an innovative use of cell phone records, researchers at UCLA, the University of Miami and Cal State, Fullerton, have found that women appear to avoid contact with their fathers during ovulation.
 
“Women call their dads less frequently on these high-fertility days and they hang up with them sooner if their dads initiate a call,” said Martie Haselton, a UCLA associate professor of communication in whose lab the research was conducted.
 
Because they did not have access to the content of the calls, the researchers are not able to say for sure why ovulating women appear to avoid father-daughter talks. They say the behavior may be motivated by an unconscious motive to avoid male control at a time when the women are most fertile. But a more primal impulse may be at work: an evolutionary adaptation to avoid inbreeding.

What I find most interesting here is that these women are changing their behavior while unaware that they are doing it. It took research on call records by researchers steeped in evolutionary theories about mating behavior to find this pattern. Humans imagine they have free will. But hormonal fluctuations pull at them like puppets on strings and they aren't even aware their strings are being pulled.

Behavior is altered in many ways by the menstrual cycle.

The study builds on a mounting body of evidence of subtle and significant ways in which women’s behavior is unconsciously affected by the approach and achievement of ovulation — a physical change that in humans has no outward manifestation of its own. Research has found that women tend to dress more attractively, to alter the pitch of their voices ways that are perceived as more attractive by men, and to contemplate more frequently the possibility of straying from their mates during high as opposed to low fertility periods of their menstrual cycle. Research has also shown that women are more attracted during high-fertility periods to men whose physique and behavior are consistent with virility, especially if they’re not already mated to men with these characteristics.

By Randall Parker 2010 November 30 09:16 PM  Human Nature Mating
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P.J. O'Rourke On Why To Oppose Fairness

Political humorist P.J. O'Rourke has a new book out called Don't Vote: It Just Encourages the Bastards . A Daily Telegraph story about him quotes a good excerpt: If life was one kind of fair then lots of us would be far worse off.

In Don’t Vote!, he slams a culture of “gimme rights” and demands personal responsibility. When his 12-year-old daughter complains that life isn’t fair, he tells her: “Honey, you’re cute. That’s not fair. You’re smart. That’s not fair. You were born in the United States of America. That’s not fair. Darling, you had better get down on your knees and pray to God that things don’t start getting fair for you.”

If getting the same as everyone else is fair then being born dumber and poorer would be our fate if the world became more fair. But regular readers will not be surprised to learn that I do not subscribe to that definition of fairness. Just because random events have delivered a bad hand to someone else is no reason why you should have to suffer yourself.

One of the biggest moral decisions in life is to decide what is fair and why. But each person brings their own intellectual limitations to that task along with their self interest. Therefore lots of people have either rationalized their own unfair treatment of others so they can feel morally superior or they are unaware of their own unfairness or are indifferent to it.

BTW, I really enjoyed a much earlier O'Rourke book: Holidays in Hell: In Which Our Intrepid Reporter Travels to the World's Worst Places and Asks, "What's Funny About This" .

By Randall Parker 2010 November 30 08:58 PM  Ethics
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2010 November 29 Monday
Germany Debates Euro Break-Up

Occasionally the unthinkable becomes thinkable.

"What would really happen if the euro collapsed?" Jens Witte of Der Spiegel news magazine wrote. "Would it truly herald a return to the good old days … to the much-revered deutsche mark?" Or might it lead instead, he asked, to an era of "chaos and economic depression?"

With more European countries going broke what now?

"The question 'what now?' has become the fundamental question at the heart of Europe," the conservative daily Die Welt wrote in a commentary Monday in which it passionately argued that the government would soon have little choice but to rethink the future of the single currency and its loyalty to the euro.

A Reuters analysis takes the possibility seriously.

Eventually one or more countries decide enough is enough and break away or are forced out, reintroducing the national currencies they used before tying their fate to Europe's audacious economic and monetary union.

Unthinkable only a few weeks ago, a small but growing number of experts now believe some version of this nightmare scenario could become a reality for the euro zone if policymakers fail to unite behind a more forceful strategy for saving the euro and address investor concerns about fiscal and economic imbalances.

Imagine the alternative: All the Euro zone countries remain in the Euro. I do not see how they can do that without defaulting on some of their debts. Can the Euro monetary union survive sovereign defaults by some of its members?

What I haven't seen discussed yet: A return to a couple dozen currencies does not make sense. So should the Euro zone break into 2 or 3 zones? Or will the break-up be too sudden and chaotic to allow that to happen? Germany was the obvious core of the Euro and could form the core of a currency union that would also include the Netherlands, Austria, and a few other countries. But which country could serve as an alternative core for a Euro 2 currency? Would France break away with Italy and Spain? Or would France stay in a union with Germany?

European governments and business elites have a lot emotionally, intellectually, and in reputation invested in the Euro. They won't give it up easily. But if Peak Oil hits hard as I expect in the next 10 years then the financial conditions of the weakest Euro members will become so bad that the only way the Euro zone will be able to stay intact will be with debt default and restructuring by some Euro zone members.

By Randall Parker 2010 November 29 09:37 PM  Europe Monetary Union
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2010 November 28 Sunday
Quarter Million Leaked US Diplomatic Cables

If course the very most conspiracy-minded will dismiss these cables as an elaborate ruse to fool the American public, the publics of other countries, and foreign governments. But if you want a glimpse of how world diplomacy and international maneuvering really work then read all the stories about the US diplomatic cable leak. Here are a few revelations to wet your appetite.

¶ Bargaining to empty the Guantánamo Bay prison: When American diplomats pressed other countries to resettle detainees, they became reluctant players in a State Department version of “Let’s Make a Deal.” Slovenia was told to take a prisoner if it wanted to meet with President Obama, while the island nation of Kiribati was offered incentives worth millions of dollars to take in Chinese Muslim detainees, cables from diplomats recounted. The Americans, meanwhile, suggested that accepting more prisoners would be “a low-cost way for Belgium to attain prominence in Europe.”

¶ Suspicions of corruption in the Afghan government: When Afghanistan’s vice president visited the United Arab Emirates last year, local authorities working with the Drug Enforcement Administration discovered that he was carrying $52 million in cash. With wry understatement, a cable from the American Embassy in Kabul called the money “a significant amount” that the official, Ahmed Zia Massoud, “was ultimately allowed to keep without revealing the money’s origin or destination.” (Mr. Massoud denies taking any money out of Afghanistan.)

¶ A global computer hacking effort: China’s Politburo directed the intrusion into Google’s computer systems in that country, a Chinese contact told the American Embassy in Beijing in January, one cable reported. The Google hacking was part of a coordinated campaign of computer sabotage carried out by government operatives, private security experts and Internet outlaws recruited by the Chinese government. They have broken into American government computers and those of Western allies, the Dalai Lama and American businesses since 2002, cables said.

Of course, the idea that the Chinese government is funding a global computer intrusion and intellectual property theft effort is not new news. It comes in the realm of the obvious. Also, high level corruption in Afghanistan is agani well known. But millions of dollars in bribes to Kiribati to allow Obama to fulfill a campaign pledge is kinda interesting. The most interesting thing is the extent of State Department spying. You'd think that'd be CIA's job. But CIA must exist to draw attention away from State.

Check out the Guardian's coverage too.

At the start of a series of daily extracts from the US embassy cables - many of which are designated "secret" – the Guardian can disclose that Arab leaders are privately urging an air strike on Iran and that US officials have been instructed to spy on the UN's leadership.

These two revelations alone would be likely to reverberate around the world. But the secret dispatches which were obtained by WikiLeaks, the whistlebowers' website, also reveal Washington's evaluation of many other highly sensitive international issues.

Arab leaders seeing Iran as a big threat are not at all surprising. The US spying on the UN: expected. The Guardian also mentions Russian government connections with organized crime. My reaction: Isn't that redundant? But I do like to see there's a reason to become a dictator:

The cables name countries involved in financing terror groups, and describe a near "environmental disaster" last year over a rogue shipment of enriched uranium. They disclose technical details of secret US-Russian nuclear missile negotiations in Geneva, and include a profile of Libyan leader Muammar Gaddafi, who they say is accompanied everywhere by a "voluptuous blonde" Ukrainian nurse.

The US is going to have a much much much harder time trying to negotiate secret deals. Also, what sort of system does the US State Department have that allows one guy to get access to cables from US embassies in most of the world? No silos?

The US State Department has a $51.7 billion annual budget. That's huge.

Der Spiegel also got the cables:

The State Department's emissaries abroad cultivate a clear-eyed view of the countries they are posted to, a view that is at times incredibly dark. Viewed through the eyes of the US diplomats, entire states -- Kenya for example -- appear as mires of corruption. If one were to believe the gloomy reports from the embassy in Ankara, Turkey, is on a slippery slope to volatile Islamism, spurred on by the narrow-minded government of Prime Minister Recep Tayyip Erdogan, who is portrayed as being reliant on a group of incompetent advisers.

Even the leadership of a close ally such as Germany emerges in a poor light in the cables. The members of the ruling government coalition in Berlin denigrate each other in comments to the US ambassador to Germany, Philip Murphy. For example, Defense Minister Karl-Theodor zu Guttenberg tattled on his colleague German Foreign Minister Guido Westerwelle, telling the US ambassador that Westerwelle was the real barrier to the Americans' request for an increase in the number of German troops in Afghanistan. And the US diplomats are rather cool in their assessment of Chancellor Angela Merkel: One dispatch describes her as risk-averse and "rarely creative."

More here.

Last time I can recall an embassy cable leak was in 2006: US Embassy Cable From Baghdad Details Decay. It was just a single cable.

By Randall Parker 2010 November 28 04:54 PM  US Foreign
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Genetic Closeness Reduces South Korean Anger At North?

B. R. Myers, an American professor at Dongseo University in South Korea, says South Koreans feel less indignation about North Korean attacks than you might expect because the attacks come from fellow Koreans.

The North’s attack on Yeonpyeong Island has been more shocking to South Koreans, but not much more. At my local train station the morning after the attack, a grinning crowd watched coverage of the Asian Games in China on a giant TV screen. The same ethno-nationalism that makes South Koreans such avid followers of international sports also dilutes their indignation at their Northern brethren. South Korea’s left-wing press, which tends to shape young opinion, is describing the shelling of the island as the inevitable product of “misunderstandings” resulting from a lack of dialogue. Sadly, South Korea’s subdued response to such incidents makes them more likely to happen again. This poses a serious problem for the United States; we have already been drawn into one war on the peninsula because our ally seemed unlikely to defend itself.

So then do the South Koreans suffer from Stockholm Syndrome enhanced by their genetic affinity for North Koreans? Have South Koreans come to feel captive to North Korean caprice? Not able to get away from the North Koreans? Captured by them? In love with their abusers?

That feeling of not being able to get away from North Korea looks set to continue. Aidan Carter-Smith argues in Foreign Policy that the hope China will rein in North Korea has no base in reality.

But China barely talks the talk, and no way does it walk the walk. Has Washington missed the new lovefest between Pyongyang and Beijing? A friendship forged in blood, as close as lips and teeth. The old slogans and warmth are back. And it's for real. Better believe it.

We saw it first this summer. Not only did China's skepticism on the sinking of the Cheonan, the South Korean corvette, let North Korea off the hook, but its hostility to U.S.-South Korean naval exercises in the Yellow Sea -- Chinese coastal waters, apparently -- sent the allies scurrying ignominiously to hold their maneuvers on the other side of the peninsula.

Will the North Koreans keep upping the level of their attacks? If so, how will it end?

The Korean peninsula reminds me of Israel and the Arabs. While in the latter case there's not a genetic affinity between the parties it has the same decades-long tragedy that just gets tedious. One hopes for a sort of climax to the story because stories should have climaxes and ends. But while we tend to want to see events as stories (to the detriment of our ability to understand says Tyler Cowen) real life is not that way. Looked at that way movies and novels give us a misleading view of the nature of reality and human events.

By Randall Parker 2010 November 28 11:23 AM  Korea
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2010 November 27 Saturday
Claire Berlinski: Ban The Burqa

Claire Berlinski, an American journalist who lives in Turkey, was originally sympathetic to Muslim women who wanted to wear a veil. But she found that Muslim fundamentalists are not willing to tolerate non-wearers of the veil.

One woman here told me of her humiliation in childhood when her family was ejected from a swimming pool because her mother was veiled. I believed her. All stories of childhood humiliation sound alike and are told in the same way. It was perverse, she said to me, that she should be free to cover her head in an American university but not in a Turkish one. It seemed perverse to me as well. It would to any American; politically, we all descend from men and women persecuted for their faith. I was, I decided, on the side of these women.

But that was when I could still visit the neighborhood of Balat without being called a whore.

Figuratively speaking she's been mugged by reality.

The argument that the garment is not a religious obligation under Islam is well-founded but irrelevant; millions of Muslims the world around believe that it is, and the state is not qualified to be in the business of Koranic exegesis. The choice to cover one’s face is for many women a genuine expression of the most private kind of religious sentiment. To prevent them from doing so is discriminatory, persecutory, and incompatible with the Enlightenment traditions of the West. It is, moreover, cruel to demand of a woman that she reveal parts of her body that her sense of modesty compels her to cover; to such a woman, the demand is as tyrannical, humiliating, and arbitrary as the passage of a law dictating that women bare their breasts.

All true. And yet the burqa must be banned. All forms of veiling must be, if not banned, strongly discouraged and stigmatized. The arguments against a ban are coherent and principled. They are also shallow and insufficient. They fail to take something crucial into account, and that thing is this: If Europe does not stand up now against veiling — and the conception of women and their place in society that it represents — within a generation there will be many cities in Europe where no unveiled woman will walk comfortably or safely.

If Islam is really that incompatible with a free society then the Europeans need to do much more than a burqa ban. Otherwise the only way to protect native Europeans in the long is Ataturk-style dictatorial secular rule.

How to reconcile liberal support for multi-culturalism with liberal support for liberalism? A set of values that is not the same as the liberal set of values in some way is incompatible with liberalism. The liberal view of multi-culturalism seems to be rooted in a condescending view that liberalism is the modern global form of manifest destiny. Confronted with cultures which are anti-liberal at their core liberals ignore the deep-rootedness of inter-cultural differences and assert that when members of all other cultures are transferred into Western countries they will not pose a problem for liberalism. Rather, liberals save their powder for native Western conservatives as the real enemies. I think this is the height of folly.

Environmentalists made a big deal of the rhetoric of sustainability. I'd like to see liberals track demographic and social trends with an eye on the sustainability of liberalism. I think they promote values and policies that ultimately undermine the sort of society they want to see. America and Europe are going to become less like their ideal Swedish welfare state because the demographic trends which liberals support with immigration policies and welfare policies will create the kinds of societies that can not afford a Swedish welfare state.

By Randall Parker 2010 November 27 01:00 PM  Immigration Culture Clash
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Nigel Farage: 'Who the Hell do You Think You Are: The Euro Game Is Up!'

Nigel Farage MEP, UKIP (Member of the European Parliament from the UK Independence Party) tells the Euro elite that their Euro zone is a failure.

Farage is correct in asserting that the Euro zone caused the Irish financial crisis. Ireland needed a more restrictive monetary policy with higher interest rates. The low interest rates made possible by being tied, effectively, to the German economy caused a massive property bubble. Then when the bubble burst the Irish government, under pressure from other Euro zone members to protect their banks, took on much of the failed Irish bank debt as sovereign debt.

Think about that. The Irish banks failed. Their bonds should have been marked down in value. German and other Euro banks foolish enough to lend to them should have taken big losses. But instead the Euro elite pressured the Irish government to foist this debt onto the Irish people. Do I even need to say that the Euro wasn't the designed by the Irish voters and that the Irish voters did not make German bank lending decisions or Euro bank monetary policy decisions? But they are stuck paying the bill for the decisions of Euro elites.

Nigel Farage Attacks Jose Barroso (who is President of the European Union)

Nigel Farage wants Britain out of the EU.

Farage is quite a talented Parliamentary orator. But he's got an easy job since the EU elite make so many mistakes and operates with such disregard for the net effects of their policies.

By Randall Parker 2010 November 27 09:36 AM  Europe Monetary Union
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2010 November 26 Friday
Identifying Dangerous People At Airports

NY Times Op-Ed columnist Roger Cohen has a column complaining about how ex-Homeland Security Secretary Michael Chertoff is making money promoting the selling of body scanners to airports. Buried way down in his column he says improved intelligence can be used to more precisely target who gets searched.

Intelligence has improved beyond measure since 9/11. It can be used far more effectively at airports. Instead of humiliating everyone, focus on the very small proportion of travelers who might present a threat.

He's writing in what Roissy calls The New York Beta Times. So we have to decode into common sense English. Is he seriously saying the government has so much meaningful intelligence about people before they arrive at an airport that very precise focus on known dangerous people is possible? That is obviously not true and it seems unlikely that he means this. Or is he trying to sell profiling as acceptable by relabeling it as driven by intelligence?

I've come across arguments on the web that since Muslims come from Eastern European, Middle Eastern, Central Asian, African, South Asian, and many other ethnic groups that profiling is not practical. Supposedly Muslims look like too many people who are not dangerous. Well, that argument does not hold up. How many people with American accents have tried to blow up an airplane? How many immigrant US citizens have tried to blow up an airplane? Just from accent alone we can start to divide between lower and higher risk groups.

If we wanted to get really fancy about it then if a database of every driver's license was tagged with a citzen/non-citizen flag that alone would allow a big division of people. A database of all people who are naturalized citizens with country of origin would allow low and higher risk US citizens to be distinguished.

Profiling is about odds. If we focus on the highest risk people (young adult males with accents or passports or other ID checks that put them as coming from the highest risk countries) then security personnel could look more thoroughly in directions that matter. 70 year old ladies with an Alabama accent are not high, medium, or even low risks. They are extremely low risks. Hot babe teenage girls in short skirts are also extremely low risks (at least for terrorism). Most people can easily be seen to be very low risks. Why not use this information?

The argument that the terrorists can recruit people who look like us misses the point that if we force them to do that we greatly reduce the size of their recruiting pool and the frequency of their attacks. At the same time, we force them to try to recruit where US law enforcement and intelligence people are more likely to detect them. A terrorist attack has to line up many things to make it work. Profiling makes the odds of success lower. Look how well it works for the Israelis.

By Randall Parker 2010 November 26 08:52 PM  Civilizations Enemy Identification
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2010 November 25 Thursday
Masters Degrees Do Not Improve Teacher Performance

Nearly half of all teachers get masters degrees in order to get paid more. But an Associated Press article by Donna Gordon Blankinship reports many researchers have confirmed no benefit for students from teachers with masters degrees. The article relays what economists want to do to improve education. My guess is if the economists get their way with policy changes educational outcomes still won't improve much.

SEATTLE (AP) — Every year, American schools pay more than $8.6 billion in bonuses to teachers with master’s degrees, even though the idea that a higher degree makes a teacher more effective has been mostly debunked.

Despite more than a decade of research showing the money has little impact on student achievement, state lawmakers and other officials have been reluctant to tackle this popular way for teachers to earn more money.

Education Secretary Arne Duncan and Bill Gates agree with the researchers who find that teachers with master's degrees do not better in classrooms. It is interesting to note that 90+% of those masters are in education. So basically what gets taught in Ed grad schools is worthless.

I wonder about the other 10% of grad degrees though. Would, say, people smart enough to get a grad degree in math or physics do a better job teaching? Might help for high school teachers teaching smarter college-bound students. A masters degree in a hard subject could be used a proxy that filters for smarter teachers without a direct admissions that such a thing as an innately smarter teacher actually exists.

The article brings up the idea of rewarding teachers based on performance. The problem is how to measure performance? A rational scientific approach based on psychometric research would measure innate abilities of students and then see how well students do based on how well they are capable of doing. But such an approach is anathema to the education establishment that still wants to treat all students as blank slates capable of being molded into college material.

If use of IQ remains taboo for teacher performance measurements then the only possibly workable alternative would involve a proxy for IQ that is sold as adjusting for deprived backgrounds. But adjustment of student performance expectations based on supposed deprivation clashes with the desire to make all students do great. So I see poor odds for implementing objective and fair teacher performance measurements. Until the Educrats want to fess up that innate intellectual abilities vary enormously new education policies will continue to be unrealistic and ineffective.

By Randall Parker 2010 November 25 02:24 PM  Education Incentives
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Janet Napolitano Eyes More Places To Frisk You

If you thought that staying Earth-bound would allow you to avoid the Department of Homeland Security, well, not for long. The madness may spread.

“I think the tighter we get on aviation, we have to also be thinking now about going on to mass transit or to trains or maritime. So, what do we need to be doing to strengthen our protections there?”

Really, we are at great risk of getting on a commuter bus? Seriously? There's an anti-terrorist madness afoot where the Department of Homeland Security thinks its responsibility is to eliminate all terrorist threats regardless how remote the threat and how high the cost.

If the threat to our airlines is really as high as the government makes it out to there are easier ways to cut the risk. But our government refuses to keep Muslims from immigrating to the country and refuses to profile for young Muslim males most at risk of being terrorists. So TSA inspectors fondle or x-ray little children and old folks. This is an outrage born from political correctness. All are now suspects. All are seen as capable of thought crimes that could lead to actual crimes. Real causes of terrorism are ignored because all must be treated as equal in ways that would have puzzled the Founding Fathers.

By Randall Parker 2010 November 25 01:08 PM  Cultural Wars Goodthinker
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Heather Mac Donald Thanks Human Ingenuity

Heather thanks the engineers who reduce our odds of dying from disasters and diseases.

On this Thanksgiving Day, I am grateful for the human ingenuity that tries to foil such tragic Acts of God as the Haitian earthquake through heroic feats of engineering, and when such preventive efforts fail, that tries to save as many surviving victims through medical science. I am grateful that human reason has conquered so much of the squalor and suffering that nature unleashes upon the world. I hope that Haiti’s suffering comes to an end through tolerance, honesty, enterprise, and discipline.

What made those feats of human ingenuity possible? Read economic historian Gregory Clark's book A Farewell to Alms: A Brief Economic History of the World. About this book read the reviewa by NY Times science writer Nicholas Wade as well as Harvard economist Benjamin Friedman.

By Randall Parker 2010 November 25 12:50 PM  Civilizations Formation
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2010 November 24 Wednesday
UK Woman Makes Babies As Protest For Better Housing

Yet another example of how our welfare states feed decay and tilt the playing field in favor of entropy.

An unemployed benefits claimant whose five children were all taken into care has vowed to continue having babies until she is granted a council house. Lavine Samma, 27, is now pregnant with her sixth child and fully expects the baby to be taken from her by social services at birth, just like the last three infants.

Why does she keep having babies? She wants a better government-provided housing than the apartment the government is currently providing her. Really. Oh, and the British government has not responded by cutting off her welfare checks.

It would really help make Western societies sustainable (which they are not currently) if their elites admitted that the welfare state encourages destructive behaviors that compound over generations. Welfare payments should be treated as a contract where the recipients take on obligations to the rest of society. Among those obligations: no irresponsible reproduction. Have lots of kids? Lose your benefits. Get pregnant while a drug user or regular alcohol drinker? The payments and subsidies should end pronto.

It used to be that the smarter, more productive, prudent, and affluent made more babies. Now the welfare state has turned around the selective pressures. This does not bode well for our future.

By Randall Parker 2010 November 24 11:14 PM  Civilizations Decay
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Liberal Elite Fail To Recruit Support For High Taxes For Rich

Ron Guhname says elite liberals do not understand why the majority do not share their desire to soak the rich with confiscatory taxes.

These elite liberals are completely mystified about why ordinary Americans don't want to tax the rich aggressively. These supposedly creative people even lack the imagination to come up with a good answer. So as the son of a retired maintenance man, let me help them out. The problem is that they assume that we rubes are naturally good at hating, so how in the world could we not want to stick it to the people who clearly deserve our hostility? They make the mistake of believing that we think like them.

The reality is that ordinary American assume that they are just as good as rich people; they are just people like ourselves. They are not cardboard monsters like liberals want us to believe. They are just folks.

Guhname gets this right. There's not a high degree of inter-class hatred. In fact, the biggest haters are the elite liberals. They hate both rich people and the people in fly-over country. That's another reason why most people do not want to join the elite liberals in resenting rich people: Why take your lead from an elite that views you with disdain? Rich people like the masses more than elite liberals do.

In the popular mind some of the most visible rich people are more like celebrities. Look at Donald Trump. I end up wanting him to have money so he can act like himself. He needs his big tower so he can say "You're fired!" and have it come from the big man. He's like a great character actor who plays a rich real estate tycoon in real life. What a great personality to have as a rich guy. Most real estate tycoons are probably far less interesting though.

Or take Steve Jobs. He doesn't spend a lot of money on clothes because his "suit" is a black turtleneck and blue jeans. He's got a huge ego. But if you had done what Jobs has accomplished wouldn't you? He's got more creativity in him than a thousand elite liberals. He's raised the bar for many companies in multiple industries. We all get to use better cell phones, music players, and personal computers regardless of whether we use Apple products because other companies compete to raise their products up to Apple standards. That's great. I can't complain.

Or look at Sergei Brin and Larry Page. Google has made the internet a much more fun and useful place. I use Google services many time each day to great personal benefit. I know many people who think Google is great. Socialist countries with high marginal tax rates and fewer rich people do not produce companies as innovative as Google or Apple or other greats in the American computer industry.

Do some rich people not deserve their wealth? Sure. But I am skeptical that government attempts to redistribute the wealth will push more wealth toward those who make big contributions with little rewards. More likely, the money would go to parasites who will become more destructive if subsidized more by taxpayers.

By Randall Parker 2010 November 24 11:09 PM  Economics Elites
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But Who Caused Irish Financial Crisis?

Punish the Irish for their profligate ways? Stick them with IMF supervision and harsh austerity measures? That appears to be the way things are heading. But how about a reality check? Ireland's banks are going to get bailed out by Irish taxpayers for years to come (and many Euro country banks will benefit).

Ireland is still negotiating the terms of the bailout with European Central Bank and IMF experts. It hopes the tough budgetary medicine will permit its 2014 deficit to fall to 3 percent of gross domestic product, the limit for the 16 nations that use the euro currency.

While most eurozone members are violating that rule, Ireland's deficit this year is forecast to reach 32 percent, a modern European record, fueled by exceptional costs from Ireland's unfathomable bank-bailout effort.

Here's what I want to know: Why didn't the Irish government let its banks fail and for the non-depositor creditors of those banks (mostly other European banks) take a bath on their credits? Ireland's property bubble was fueled by loans flowing into it from reckless banks of other countries. Why weren't these banks made to pay for their foolishness?

The view that Ireland was a spendthrift country just like Greece knocks up against the fact that in Greece it was the government borrowing and spending like mad. Whereas in Ireland it was the banks which lent like mad. So posturing by, say, Germany demanding greater fiscal responsibility from Ireland really misleads on the causes of the crisis. Why wasn't the German government (and other Euro governments) preventing their banks from lending so recklessly to Irish banks? Lenders should be responsible for their recklessness. Making the Irish people pay the vast bulk of the bill for mistakes of both Irish and non-Irish banks seems morally wrong. Lending is a risk. That's why the interest rate on commercial loans is higher than the cost of money for very low risk borrowers such as the German government.

The money lent to Ireland by the European Central Bank has really gone to German, French, and British banks.

There has been a quiet exodus of billions from Ireland in recent weeks. Most international investors were no longer willing to lend Irish banks as much as a cent. The Irish banks repaid €55 billion ($75 billion) to their international creditors, mainly German, French and British banks, because the corresponding bonds had matured. But those creditors took the money and fled from the country. Only government-owned banks were still willing to lend money.

Estimates of lending from non-Irish banks to Irish banks cover a wide range. Here's an estimate of $170 billion. But keep in mind that some non-Irish banks have already managed to get paid back with the debts shifting onto the ECB and Irish taxpayers. Is that fair? No.

Even without the CDS loss multiplier, the impact of debt haircuts would be painful for British and international banks. According to the Bank for International Settlements, total lending of non-Irish banks to Irish banks is around $170bn, of which British banks provided $42bn, German banks provided $46bn, US banks $25bn and French banks $21bn.

The Euro debt crisis is all about wealthier nations lending to the housing bubble nations and spendthrift governments.

French banks had lent $493 billion to Spain, Greece, Portugal and Ireland by the end of 2009 while German banks had lent $465 billion, according to the report by the Bank for International Settlements, an institution based in Basel, Switzerland, that acts as a clearing house for the world’s central bank.

...

All told, Spain, Ireland, Portugal and Greece owe nearly $1.6 trillion to banks in the 16-country euro zone, either in the form of government debt or credit to companies and individuals in the four countries, the report said. Credit from French and German banks accounted for 61 percent of that total.

The German banks put themselves at considerable risk by lending so much to the Irish. The German banks were enablers of the Irish property bubble.

SPIEGEL ONLINE: According to Germany's central bank, the Bundesbank, German banks are Ireland's biggest creditors, to the tune of €166 billion ($226 billion), and that includes hundreds of short-term loans to Irish banks. How dangerous is the Irish crisis for Germany?

Bofinger: The situation is very dangerous. The German government has a vital interest in ensuring the solvency of the Irish state and its banks.

Update: Simon Johnson says Ireland's debt is even bigger than it looks.

To be clear, Ireland owes a huge amount of money to the outside world. In the best scenario, Ireland’s government debt is likely to stabilize at more than 100 percent of gross national product, or G.N.P.; in the worst scenario, with greater real estate losses and a deeper recession, this level could reach 150 percent.

That’s a higher number than you see in many news reports, in part because officials are still focused on gross domestic product, a misleading statistic in the Irish case, as Peter Boone and I have been arguing in this space for some time.

Come Peak Oil several Euro states will default on their debt and the Euro zone will break up. Will a smaller Euro zone survive?

By Randall Parker 2010 November 24 10:55 PM  Economics Sovereign Crises
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2010 November 23 Tuesday
130,000 Damaged Brains From Iraq And Afghanistan

A research report on improved military helmet design mentions 130,000 cases of brain damage to US soldiers who have fought in Iraq and Afghanistan. That's a huge war cost that will last for many decades.

CAMBRIDGE, Mass. — More than half of all combat-related injuries sustained by U.S. troops are the result of explosions, and many of those involve injuries to the head. According to the U.S. Department of Defense, about 130,000 U.S. service members deployed in Iraq and Afghanistan have sustained traumatic brain injuries — ranging from concussion to long-term brain damage and death — as a result of an explosion. A recent analysis by a team of researchers led by MIT reveals one possible way to prevent those injuries — adding a face shield to the helmet worn by military personnel.

In a paper to be published Monday in the Proceedings of the National Academy of Sciences, Raul Radovitzky, an associate professor in MIT's Department of Aeronautics and Astronautics, and his colleagues report that adding a face shield to the standard-issue helmet worn by the vast majority of U.S. ground troops could significantly reduce traumatic brain injury, or TBI. The extra protection offered by such a shield is critical, the researchers say, because the face is the main pathway through which pressure waves from an explosion are transmitted to the brain.

By Randall Parker 2010 November 23 09:51 PM  Mideast Iraq Costs
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Taliban Capacity Remains Undiminished

Holy warriors can always take a break in Iran or Pakistan.

“Efforts to reduce insurgent capacity, such as safe havens and logistic support originating in Pakistan and Iran, have not produced measurable results,” the Pentagon said in a report on the war effort released today and covering the six months that ended Sept. 30. “Pakistan’s domestic extremist threat and the 2010 floods reduce the potential for a more aggressive or effective Pakistani effort in the near term.”

No matter how many we kill they'll just send more down south thru the DMZ or the Ho Chi Minh Trail. Oh sorry, wrong war. So easy to get them confused.

The Vietnam War was probably more winnable for a couple of reasons. First off, I suspect the Vietnamese had a lower fertility rate. Loss of sons was more keenly felt. Afghanistan has one of the highest fertility rates in the world. Think of them as Malthusian Trappers. Second, religious ideologies stir stronger sustained support than secular ideologies, especially in countries with low literacy. Think of Afghanistan as a pre-Gutenberg culture.

Uruzgan is a poor province with a strong, conservative culture. The development challenges in Uruzgan are formidable. Education is particularly poor, especially for women, and access to health care is limited. The provincial literacy rate is five per cent, and while nearly 10 per cent of men are literate, the literacy rate for women is recorded at close to zero. Less than one per cent of the provincial population (0.6 per cent) has a health centre in their village and an average of only eight to nine per cent of households have access to safe drinking water.

We are not fighting an industrialized population. Their rate of consanguineous (cousin) marriage is probably about 40%-50%. That's a very tribal population with little loyalty to higher level polities. Thi prevents political development of a modern state.

By Randall Parker 2010 November 23 09:51 PM  MidEast Afghanistan
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Yet Another Teacher Persecuted For Sex With Teen Boy

This guy was not harmed by the experience. It is absurd to treat consenting teenage boys as victims of rape at the hands of hot teachers.

A science teacher has been arrested for having sex with one of her students when he was 16 - and could be pregnant with his child.

Jennifer Riojas, who last month resigned from her teaching post at Cater-Riverside High School in Fort Worth, Texas, was bailed on Wednesday for sexual assault against a child under 17.

Guys, when you were a teenager would you have turned her down? Click thru and see her picture.

The foolish boy complained to the police after many hotel visits only when she got pregnant. How does complaining to the police help him dodge paternal responsibility?

Why are women prosecuted for this? Because feminist women want to pretend that male and female have minds that react to sex in the same way? Because moms do not want their boys having sex with teachers? These boys are not harmed. So why should the teachers be prosecuted?

By Randall Parker 2010 November 23 09:29 PM  Human Nature Mating
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2010 November 22 Monday
Quantitative Easing Explained

Using an XtraNormal video "malekanoms" offers an explanation of the Federal Reserve's policy of Quantitative Easing II. XtraNormal is a great innovation empowering many biting commentators.

He makes a good point how many important prices are still rising. If gasoline, medicine, and food are going up then why say there's deflation? Also, declining prices increase buying power which is a good deal if your salary does not decline as fast as prices. A commenter on the YouTube web page say that since housing prices are falling and the banks have huge amounts of money loaned out on mortgages that the Fed is acting to serve the interests of the banks. This is at least a plausible argument when you look at the interests involved. By pushing up general prices far enough housing prices will rise and this will reduce the incentive to default on underwater mortgages, thereby saving banks from bankruptcy.

James Grant, editor of Grant’s Interest Rate Observer, argues in a New York Times Op-Ed that the solution is a return to the gold standard.

Let the economists gasp: The classical gold standard, the one that was in place from 1880 to 1914, is what the world needs now. In its utility, economy and elegance, there has never been a monetary system like it. It was simplicity itself. National currencies were backed by gold. If you didn’t like the currency you could exchange it for shiny coins (money was “sound” if it rang when dropped on a counter). Borders were open and money was footloose. It went where it was treated well. In gold-standard countries, government budgets were mainly balanced. Central banks had the single public function of exchanging gold for paper or paper for gold. The public decided which it wanted.

Experts get to make many more decisions for us today, whether we like it or not. We are expected to appreciate them for their work.

By Randall Parker 2010 November 22 07:02 PM  Economics Currency
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2010 November 21 Sunday
More NATO Troops Than Soviets Had In Afghanistan

While in the home war zone American air passengers are being x-rayed or heavily frisked in Afghanistan NATO now has more troops than the Soviets did and with far more advanced technology.

In April 2009, Gates cautioned in a CNN interview, “The Soviets were in there with 110,000, 120,000 troops. They didn’t care about civilian casualties. And they couldn’t win.” Sixteen tanks do not remotely approach what the Soviets sent to occupy Afghanistan. And the proportion of civilians killed by the Taliban vastly dwarf those killed by NATO forces.

But now NATO, all combined, has 130,000 troops in Afghanistan. The numbers of civilians killed in the war is at an all-time high, despite a U.S. strategy predicated on protecting Afghans from violence.

So that's a huge war effort. Plus, the Soviets had to fight against CIA and Saudi support for the Muj. Now the US isn't facing much in the way of external funding of the Taliban.

How is this going to turn out? One key thing to keep in mind: The fertility rate in Afghanistan is one of the highest in the world. The Taliban are making future generations of warriors. Any seeming short term victory will not last long since 5 years later a new cohort of teenage males will be ready to take up the fight.

The Afghans are not inclined to support a central government since the idea of Afghanistan is at a higher level than they give their allegiances to. Plus, the Karzai government is a big family business.

Fouad Ajami has no illusions about what we face in Afghanistan: bandits in government and out.

The idealism has drained out of this project. Say what you will about the Iraq war—and there was disappointment and heartbreak aplenty—there always ran through that war the promise of a decent outcome: deliverance for the Kurds, an Iraqi democratic example in the heart of a despotic Arab world, the promise of a decent Shiite alternative in the holy city of Najaf that would compete with the influence of Qom. No such nobility, no such illusions now attend our war in Afghanistan. By latest cruel count, more than 1,300 American service members have fallen in Afghanistan. For these sacrifices, Mr. Karzai shows little, if any, regard.

In his latest outburst, Mr. Karzai said the private security companies that guard the embassies and the development and aid organizations are killer squads, on a par with the Taliban. "The money dealing with the private security companies starts in the hallways of the U.S. government. Then they send the money for killing here," Mr Karzai said. It is fully understood that Mr. Karzai and his clan want the business of the contractors for themselves.

How can this end well? It can't. We avoid total failure by staying.

Karzai sees the US as a source of money and protection while he fails to deliver anything remotely approaching good government.

Some months ago, our envoy to Kabul, Ambassador Karl Eikenberry, saw into the heart of the matter in a memo to his superiors. Mr. Eikenberry was without illusions about President Karzai. He dismissed him as a leader who continues to shun "responsibility for any sovereign burden, whether defense, governance or development. He and his circle don't want the U.S. to leave and are only too happy to see us invest further. They assume we covet their territory for a never-ending war on terror and for military bases to use against surrounding powers."

The Eikenberry memorandum lays to rest once and for all the legend of Afghanistan as a "graveyard of empires." Rather than seeking an end to the foreign military presence, the Afghans and their leader seek to perpetuate it. It spares them the hard choice of building a nation-state, knitting together feuding ethnicities and provinces, and it brings them enormous foreign treasure.

By Randall Parker 2010 November 21 08:56 PM  MidEast Afghanistan
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Robot Philosopher Revolt

In my first XtraNormal video I look at what a personal servant robot might decide to do after reading Nietzsche.

If you have any suggestions for videos you would like to see made post them in comments or email them to me at randall dot parker at ymail dot com.

By Randall Parker 2010 November 21 04:50 PM  Off Beat And Odd
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2010 November 20 Saturday
Economic Growth Essential For Balanced Budgets

Since the rate of economic growth has a huge impact in the sizes of government deficits I am expecting big deficits until either sovereign default or stealth default by inflation.

If the economy grew one half of a percentage point faster than forecast each year over the next two decades — no easy feat, to be fair — the country would have to do roughly 40 to 50 percent less deficit-cutting than it now appears, based on my reading of budget data from the economists Alan Auerbach and William Gale.

To get a concrete sense for what this would mean, you can play around with the The Times’s online deficit puzzle. It asks you to find almost $1.4 trillion in annual spending cuts and tax increases by the year 2030. If growth were a half point faster than expected, the needed savings would instead drop to less than $700 billion. That would mean many fewer painful choices, be they tax increases or Medicare cuts.

These results illustrate the US government's desperate need for economic growth. The economists assume economic growth and within that Business As Usual framework they examine the effects of different rates of economic growth. But what happens if the expected growth does not happen?

Suppose growth is 0.5% less than mainstream economists expect. Likely the deficit would grow about $700 billion bigger by 2030. That's just from lower growth. Imagine instead what sustained economic stagnation - same total GDP from one year to the next - would do to US government finances (to say nothing of states and localities). The rising costs of a larger retired population combined with a rising segment of poor people would necessitate severe cuts in retirement benefits, raised retirement ages, cuts in defense, cuts in spending on poor people, education, road maintenance, and in many other government programs.

But I expect something far worse. Starting some time in the next 5 years imagine that that the US economy (along with most of the rest of the world) starts shrinking every year for at least 10 years. Tax revenues would decline even more rapidly than the economy (especially since revenues from taxing profits would plummet is profits evaporated and many corporations filed for bankruptcy). At the same time, the number of poor people asking for government help would soar, large numbers of banks would fail with huge deposit insurance costs on national governments, and returns on government and private pension plans would go negative, forcing benefits cuts. Either the US government and other Western governments would default or they would jack up inflation to do a stealth default via inflation.

So why will the US economy shrink? Primarily the peak in world oil production. See The Impending World Energy Mess by Robert L. Hirsch, Roger H. Bezdek, and Robert M. Wendling and Hubbert's Peak: The Impending World Oil Shortage by Kenneth Deffeyes. Even before the peak production is growing so slowly that oil prices are staying high even during a recession with about 10% unemployment. World oil production is about where it was in 2005 or 2006 but with more demand from India and China displacing oil consumption by Americans and other Western developed populations.

My expectation is that once governments give up hope in the resumption of normal economic growth the threat of inflation will become very real. It is not QE 2 (the recent Quantitative Easing round 2 by the Federal Reserve) that will cause inflation. It will be the money supply expansion that the Fed will be pressured into doing once a sovereign debt crisis grips the US (and the UK and assorted Euro countries) with no relief in sight. Central banks could buy sovereign debt once the markets become unwilling to do so and deficits soar even higher than they are today. Since the highest levels of US national security circles show every indication of being Peak Oil aware my guess is they've already thought about inflation as a tool for dealing with it. I'd really like to know what they have concluded.

John Dickerson points out that the US population is very uneager to cut the size of government. They want lower taxes but higher spending. This is a recipe for continued profligacy. The American people are not responsible citizens as a group.

People aren't desperate to go on a diet, so they're not willing to embrace any plans to shrink the buffet. According to a recent NBC poll, 70 percent of Americans say they would rather not cut programs like Medicare, Social Security, and defense. Fifty-seven percent said they were uncomfortable with increasing the Social Security retirement age to 69 over the next 60 years. A recent CNN poll showed that people are extremely reluctant to cut any big areas of the federal budget. Faced with the choice of cutting a program to reduce the deficit or protecting the program from cuts, 79 percent opposed cuts to Medicare, and 69 percent wanted to protect Medicaid. On Social Security, the equivalent figure was 78 percent. Sixty percent or more favored protecting aid to farmers, college loans, and unemployment assistance. The country is split evenly on cutting defense spending. What do people want to cut? Government salaries, "welfare," and the arts, which, depending on how you figure it, represent around 10 percent of the budget.

A site called defeatthedebt.com has a page with visitor votes on how to cut the US federal debt. What's most notable about it: people are overwhelmingly opposed to higher taxes or higher age for Medicare eligibility. Any policy that would substantially cut spending or increase taxes has weak support or strong opposition. So it is unrealistic to expect the 2 major US political parties to tackle this problem until the US national debt has gotten so large that it precipitates an international financial crisis.

On a related note, Ferdinand Bardamu argues that the Tea Party is all about reserving spending for old people. There is some truth in that argument. I expect to see sharpening inter-generational and also inter-racial disagreements about taxes and government spending. It will no longer be possible for the government to buy off all major interest groups. Will divisions between generations, occupations, income levels, races, cultural groups, and religions become deeper and more bitter and angry as a result?

By Randall Parker 2010 November 20 11:06 AM  Economics Sovereign Crises
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2010 November 19 Friday
US Senate Wants To Vote Billions For Lawsuits

The US Senate is doing its politically correct part to squander the nation's wealth.

The U.S. Senate yesterday approved spending $4.6 billion to settle two lawsuits: one by black farmers who alleged racial discrimination by government lenders and the other by 300,000 American Indians who said they had been cheated out of land royalties dating to 1887.

Passage of the measure, by voice vote, unblocks a legislative logjam that has thwarted payouts, negotiated by the Obama administration, of $1.15 billion to the black farmers and $3.4 billion to the American Indians.

A few thoughts: First, the US government is deep in the hole and should not go around finding more reasons to pay out billions of dollars. Second, farmer aid is pretty much theft from the rest of us in the first place. If black farmers are complaining they didn't get all the legal opportunities to rip us off (and count me skeptical) that white farmers got then this seems good to me. We got a lesser injustice done to us as taxpayers because not all farmers were able to rip us off. That's the thing about the welfare state: Obstacles to getting access tos largesse are not injustices done to the denied seekers. So why should Congress reward people who failed to rip us off?

Then there are the Amerinds from the 19th century: I think there should be a statute of limitations on wrongs that kicks in after a century if not sooner. None of the people alive today were involved in what happened in the 19th century.

By Randall Parker 2010 November 19 05:21 PM  Politics Redistribution
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2010 November 18 Thursday
Arab TV Networks Boost Primary Muslim Identity

Why be a Jordanian or Egyptian or Yemeni when you can be a Muslim instead?

COLUMBUS, Ohio – Residents of the Middle East who are heavy viewers of Arab television news networks like Al Jazeera are more likely to view their primary identity as that of Muslims, rather than as citizens of their own country, a new study suggests.

Because networks like Al Jazeera are transnational – focusing on events of interest across the region rather than those in any one country – they may encourage viewers to see themselves in broader terms than simply residents of a particular nation, the researchers said.

So the people of a group of countries that score poorly in the smart fraction sweepstakes are more strongly identifying as Muslims. This seems like bad news for the rest of the world because Islam appears to cultivate a heavy chip-on-the-shoulder attitude. Their resentment at the rest of the world will grow even stronger.

The development of a transnational Muslim identity does not stop at the borders of Muslim nations. Muslims in the West have greater access to Muslim news networks and other Muslim-themed TV shows. Samuel Huntington was right to argue that the divisions would be increasingly between civilizations, not between nations.

The Western nations should cut off all Muslim immigration and provide incentives for them to rejoin cultures more compatible with their religious beliefs.

By Randall Parker 2010 November 18 09:26 PM  Civilizations Clash Of
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Dutch Women Reject The Full Time Work Rat Race

Not like America.

I've been in the Netherlands for nearly three months now, and I've come to one overwhelming conclusion: Dutch women are not like me. I worry about my career incessantly. I take daily stock of its trajectory and make vicious mental critiques of my endeavors. And I know—based on weekly phone conversations with friends in the United States—that my masochistic drive for success is widely shared among my female friends. Meanwhile, the Dutch women around me take a lackadaisical approach to their careers. They work half days, meet their friends for coffee at 2 p.m., and pity their male colleagues who are stuck in the office all day.

Okay, what caused the Dutch women to take a different path? Less ideological brainwashing by ardent feminists? Or something else?

Less than 10% of Dutch women are employed full-time. That's an incredibly low figure for an advanced industrial nation such as the Netherlands.

Though the Netherlands is consistently ranked in the top five countries for women, less than 10 percent of women here are employed full-time. And they like it this way.

Is the drive for higher status goods lower in the Netherlands? Are McMansions unpopular there? Are Dutch women more free from conditioning to work more?

By Randall Parker 2010 November 18 08:09 PM  Culture Compared
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Online Students Perform As Well As In-Person Students

In-person students performed no better than online students in a University of Nebraska-Lincoln study.

College students participating in a new study on online courses said they felt less connected and had a smaller sense of classroom community than those who took the same classes in person – but that didnt keep online students from performing just as well as their in-person counterparts.

The study by the University of Nebraska-Lincoln gauged students' perception and performance in three undergraduate science courses that had both online and face-to-face class versions. It found that online students did not feel a sense of cohesion, community spirit, trust or interaction, elements that have been shown to foster effective classroom learning.

At the same time, in the portion of the survey about students' perception of their own learning, online students reported levels equal to those reported by face-to-face students and at the end of the day, their grades were equivalent to their in-person peers.

Education is taking longer to go online than the news. But cost, convenience, and eventually quality of online classes will eventually all surpass the average available in-person classes in bricks-and-mortar classrooms. Why watch an average or below-average lecturer live when you can watch a recorded video by one of the best lecturers on a subject? Videos of course lectures will allow the vast majority of students to watch better courses than they'd get to watch live in-person. Learning software will develop to the point where it drills you better than any tutor. So why pay more?

The biggest argument for going to a physical college is going to be the prestige associated with the college name. People who graduate from Harvard or Yale or MIT managed to get accepted to these schools in the first place. That's a powerful signal to employers that these students are smart and disciplined enough to get into top colleges. But for the vast majority of college students the name of their college or university does not signal anything special about their intellectual abilities. So why not go the cheaper and more convenient route?

By Randall Parker 2010 November 18 06:30 PM  Education Online
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2010 November 17 Wednesday
Online Education Continues Rapid Growth

A new report from the Sloan Consortium finds online education continues its rapid growth.

The 2010 Sloan Survey of Online Learning reveals that enrollment rose by almost one million students from a year earlier. The survey of more than 2,500 colleges and universities nationwide finds approximately 5.6 million students were enrolled in at least one online course in fall 2009, the most recent term for which figures are available.

That's a 21% growth rate in one year. I can see a Peak Bricks-And-Mortar Enrollment approaching. Will as many people be sitting in classrooms 10 years from now? I seriously doubt it.

“This represents the largest ever year-to-year increase in the number of students studying online,” said study co-author I Elaine Allen, Co-Director of the Babson Survey Research Group and Professor of Statistics & Entrepreneurship at Babson College. “Nearly thirty percent of all college and university students now take at least one course online.”  She adds:

If the current growth rate continues for just 3 more years then over half of all students will take at least one course online. The financial pressures on big public universities and community colleges will increase the appeal of lower cost online courses.

"There may be some clouds on the horizon.  While the sluggish economy continues to drive enrollment growth, large public institutions are feeling budget pressure and competition from the for-profit sector institutions.  In addition, the for-profit schools worry new federal rules on financial aid and student recruiting may have a negative impact on enrollments.”

Indications for online learning all seem promising.

  • Almost two-thirds of for-profit institutions now say that online learning is a critical part of their long term strategy.
  • The 21%growth rate for online enrollments far exceeds the 2% growth in the overall higher education student population.
  • Nearly one-half of institutions report that the economic downturn has increased demand for face-to-face courses and programs.
  • Three-quarters of institutions report that the economic downturn has increased demand for online courses and programs.

I am reminded of Clay Shirky's writings on the collapse of the business models for newspapers and magazines. See here, here, and here. Could the same thing happen to universities?

The university prestige racket has become too expensive. Technology is opening up the door for cheaper ways to deliver education. The taxpayers are balking at high spending for higher education. I see the high costs of conventional universities colliding with cheap internet course delivery, incorporation of learning research results into software, the enormous convenience of online information and, last but not least, impoverished governments running large deficits and faced with unfunded old age entitlements. The universities are going to come out losers.

By Randall Parker 2010 November 17 10:04 PM  Education Online
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2010 November 15 Monday
QE2 Improves US Export Position?

The Quantitative Easing round 2 by the US Federal Reserve has elicited criticisms in many quarters, including abroad. At the same time, the Obama Administration has been criticized for not achieving diplomatic progress in reduce the US trade deficit. Menzie Chinn takes a more nuanced view: QE2 is doing what diplomatic negotiations failed to do.

The narrative emerging in the wake of the G-20 meetings is that, not only is the rest of the world angry at us over quantitative easing, but we also achieved none of our diplomatic objectives regarding rebalancing (the coverage seemed particularly negative on CNBC).

...

I think one important point is to realize that achieving economic goals and diplomatic successes are not always the same.

If a leader of one country gets praised by leaders of other countries one needs to ask why. Do not take the praise (or criticism) at face value. Could be the praise is an indication of submission and loyalty. Or it could be a way to boost the position of a leader who is acting against his own country's interests to the benefit of other nations. Leaders and countries are competing for influence, power, and profit. Their statements are calculated to further their interests.

Regardless of what foreign critics of QE2 might say publicly, QE2 is being criticized abroad because it is going to help US exporters at the expense of exporters in other countries.

I have also been thinking about the anger with which the policymakers and economists in the rest-of-the-world (as well as certain US politicians [5]) have greeted QE2 with. In some ways, the fact that they are angry speaks volumes about the effectiveness or ineffectiveness of QE2. (In other words, to criticize QE2 as having no effect, and then to be angry that it is being undertaken, are internally inconsistent views.)

My view is that anger at the US position is currently being driven by an understanding that QE2 has been surprisingly effective at depreciating the dollar, and that the rest-of-the-world has limited scope in countering that depreciation. In a game theoretic context, we usually think of competitive devaluation as a form of the prisoner’s dilemma, where the devalue option dominates the no-devalue option, and both parties end up with a devalued currency, but no net improvement because countries cannot all devalue against each other.

Chinese criticisms that QE2 will cause a Chinese bubble are nonsense. The Chinese government has already caused a Chinese bubble. Reduced Chinese competitiveness in the face of a depreciated US dollar will deflate the Chinese bubble, not inflate it further.

By Randall Parker 2010 November 15 09:51 PM  Economics Trade
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Angela Merkel Wants To Prevent German Decline

Merkel is inspired by Catherine the Great.

If Kohl taught Merkel anything, it was to focus on the end result. Visitors to Merkel's office on the 7th floor of the "Washing Machine", as the startling modern chancellery with its huge round windows is nicknamed, are immediately struck by her ambition. One clue, standing on a shelf behind her desk, is a small portrait of Catherine the Great, the German-born Russian empress with whom she seems to share a vision of transforming her country. "I want to ensure that in 2050 Germany and Europe are still taken seriously by the world, not just considered sanctuaries to the arts and beautiful old things," Merkel told Reuters when asked to define her ambitions.

If Merkel really wants Germany to be a formidable country in 2050 then she ought to take counsel from Thilo Sarrazin. Yet for the the trouble of trying to prevent the decline of Germany Sarrazin was forced to resign from a top position at the German central bank. No doubt some of that pressure to resign came from Merkel herself. Sarrazin sees Islam in Germany as a threat to the nation:

Mr. Sarrazin says his book can be boiled down to a few main ideas. To begin, ethnic Germans are having too few children, while Muslim immigrants are having too many. In a population of about 82 million, there are about four million Muslims (a number he said he calculated partly by looking at census figures for families with lots of children. Big families must be Muslim, he concluded). Within 80 years, he said, Muslims will make up a majority in Germany.

Second, Mr. Sarrazin believes that intelligence is inherited, not nurtured, and since Muslims are less intelligent (his conclusion) than ethnic Germans, the population will be dumbed down (his conclusion).

Sarrazin's best-selling book (in Germany), “Germany Does Away With Itself,” has changed the political landscape there. The Germans are willing to take its arguments seriously in spite of their elite mostly acting like the rest of the Western elite when it comes to realism about human nature: George Orwell's Crimestop:

"The faculty of stopping short, as though by instinct, at the threshold of any dangerous thought. It includes the power of not grasping analogies, of failing to perceive logical errors, of misunderstanding the simplest arguments if they are inimical to Ingsoc, and of being bored or repelled by any train of thought which is capable of leading in a heretical direction. In short....protective stupidity."

To prevent the decline of the West our elites must stop engaging in the practice of Crimestop. It is that simple. Problems must be thought thru rationally. Evidence must be followed thru to its rational conclusions, however much one might want those conclusions to be untrue.

Catherine the Great was unimpeded by Crimestop. She could ruthlessly pursue the expansion of Russian power and influence because she didn't need to believe the falsehoods about human nature that have become the modern day liberal mythology. If Merkel wants to cast a big shadow in history she's got to go a lot farther than she has so far to reject Crimestop. The whole West neeeds to turn away from the belief that Ignorance Is Strength.

By Randall Parker 2010 November 15 08:11 PM  Cultural Wars Western
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2010 November 13 Saturday
Ted Koppel On A National Entitlement To Be Wrong

Ted Koppel, who was the anchor of ABC's Nightline news program for 25 years until his retirement, says punishing Keith Olbermann for donating to the Democratic Party when his job is to be openly partisan makes no sense.

To witness Keith Olbermann - the most opinionated among MSNBC's left-leaning, Fox-baiting, money-generating hosts - suspended even briefly last week for making financial contributions to Democratic political candidates seemed like a whimsical, arcane holdover from a long-gone era of television journalism, when the networks considered the collection and dissemination of substantive and unbiased news to be a public trust.

Back then, a policy against political contributions would have aimed to avoid even the appearance of partisanship. But today, when Olbermann draws more than 1 million like-minded viewers to his program every night precisely because he is avowedly, unabashedly and monotonously partisan, it is not clear what misdemeanor his donations constituted. Consistency?

Gotta agree with Koppel. Does MSNBC honestly expect us to believe that Olbermann is some sort of objective reporter and not just a partisan showman? His suspension for partisan political donations is an insult to our intelligence. Do they really want us to believe they are being evenhanded or objective? This is as ridiculous as Fox News' "fair and balanced" mantra.

Koppel sees the development of more avowedly partisan news networks as unhealthy for the republic.

The commercial success of both Fox News and MSNBC is a source of nonpartisan sadness for me. While I can appreciate the financial logic of drowning television viewers in a flood of opinions designed to confirm their own biases, the trend is not good for the republic.

I'm not so sure. Back during the era of NBC/CBS/ABC news dominance they were just lower toned in their partisanship. They put enough effort into objectivity that they could pretend nonpartisanship. But they were obviously liberal. The advantage of the rise of MSNBC and Fox is that the pretend objectivity is easier to see thru.

Here's Koppel's most interesting observation: The American people are developing a strong sense of entitlement to be wrong and to listen to and read a stream of agreeable opinions.

It is, though, the natural outcome of a growing sense of national entitlement.

Feminism has contributed to this. Maintaining relationships plays a bigger role versus objective truth in female minds than in male minds. Are Olbermann or Sean Hannity as bad as The View? I don't think so.

By Randall Parker 2010 November 13 07:07 PM  Media Critique
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Retreat From Universal Higher Education Decried

Michael Konczal decries the collapsing support for public higher education. Is he saying we should support universal higher education with tax-subsidized low tuitions? He's not clear on what lost ideal he's defending.

One striking thing about the current global recession, a crisis that has hit those in the United States with weaker education backgrounds much harder than others, is that one response has been the massive retrenchment, austerity and abandonment of the promise and ideal of public college education.

That's a conventional liberal interpretation. But it leaves out causes. So let me offer some: First, institutions of higher education ran up their costs of operation so high that they've become a huge (and still growing) burden on the middle class. Too many administrators, too many very expensive buildings, higher salaries. Well, the middle class is pushing back. I'm only surprised by how long it took for the camel's back to start to break.

On top of that, liberals have promoted college educations as a universal inoculation against low wages, poverty, and social pathology. But in doing so they ignored why college students of previous generations went on to such success: They were smart going in to college. They were the brightest kids. Now kids with much lower IQs are pushed to go to college and their apparent return on investment is, not surprisingly, extremely low or negative (at least not surprisingly to anyone who accepts there's a Bell Curve for IQ distribution).

Is education a public good? Well, it depends very much on who you are educating and what you are teaching them. For example, how can anyone (not seriously deluded by a secular ideology) think there's a return on investment to society from teaching 100 IQ people in colleges?

The battle isn't really over the humanities anymore (though the humanities are going to take the brunt of this), but the actual idea of education as a public good, the idea that someone can develop their full capabilities in the wealthiest nation on Earth without entering debt peonage.

If going to college puts one into debt peonage then why doesn't the resulting degree give one enough earning power to pay off the debt fairly quickly? I can see a few reasons: First, the degree costs too much because colleges are too inefficient and bloated. Second, what's being taught (e.g. ethnic grievance studies) does not raise earning power or ability to produce real wealth. Third, some of the people being taught are unsuited for college-level material and ought to be getting taught skills they are actually capability of mastering. That might be plumbing, masonry, or auto repair. But for some of even lower ability it might be burger-flipping or broom-pushing. The liberal writings on education are notable for ignoring the lower IQ people and their real needs.

Supposedly the sciences are expensive to teach. But one could learn organic chemistry, inorganic chemistry, or even nucleic acid chemistry from recorded video lectures. Virtual labs controllable with GUIs could enable students to try basic chemistry experiments and physics experiments.

That said, Aaron Brady has argued (here and here) the clear case the problem proposed is usually one of bad faith, that humanities tend to cross-subsidize the sciences, as sciences like medicine are expensive to teach (labs, chemicals, machinery) and humanities like English are less so (a book).

Rather than embrace the need for automation to make education more affordable Konczal quotes Wendy Brown on high online course drop-out rates.

The drop-out rate for students taking on-line courses is persistently and consistently high, paralleling the drop-out rate of for-profit colleges. It is routinely 20% higher than drop-out rates from on campus courses and runs as high as 70% for some courses and programs. Moreover, the high rate, much studied, seems impossible to fix. … Why do drop out rates matter? Because students pay for courses and programs they don’t complete. ... Millions of former students are now “under water” with debt from on-line courses of study they never completed and/or whose benefit they never reaped.

But what are the causes of the higher online drop-out rates? The camaraderie of going off to college courses with dorm roommates might lower drop-out rates. But other causes seem plausible and even more likely. For example, if it easier to do something (e.g. start taking a college course) and it takes less change in one's life to start doing it then it is also easier to stop doing it. But lower barriers to entry also mean more people will try to do something in the first place.

Another cause: People taking courses at heavily marketed online course sites are, on average, far less intellectually able than those who go to elite colleges. They are being oversold about their ability to take the courses and the value of taking the courses. But there's a parallel to this in the traditional non-profit bricks-and-mortar institutions: very high drop-out rates at lower ranked colleges due to students who clearly in high school were already lower intellectually ranked, most of whom dropped out of college. About half of those who enroll in college do not have a degree 6 years later. How's that for a drop-out rate? Again, same cause: people who should not even be trying to learn college-level material are giving up out of lack of curiosity and ability. Unless comparisons of drop-out rates control for intellectual ability using IQ tests (or at least SAT tests as moderately strong IQ test proxies) claims that online courses deliver lower value can not be trusted.

Pre-recorded lecture courses, online standardized tests, and teaching software (e.g. virtual lab and interactive training software) must grow because higher education costs too much, offers too low a return on investment for most students, and it is too inconvenient. Higher education does not fit the needs for a large fraction of the population. Its benefits have been oversold (much like the for-profit universities) and the public has reached its limits on its willingness to pay thru the nose for it. For many people higher education does not boost income enough to justify it and for some higher education does not boost income at all.

The arguments put forth by the education sector to promote its added value are incredibly weak. A recent report pointed out the higher incomes of college-educated as proof that college education offers a high ROI. But a far more likely explanation is that the ROI on brains has risen.

Workers with a college degree earned much more and were much less likely to be unemployed than those with only a high school diploma, according to the report, “Education Pays: the Benefits of Higher Education for Individuals and Society.”

According to the report, the median earnings of full-time workers with bachelor’s degrees were $55,700 in 2008 — $21,900 more than those of workers who finished only high school.

What's the IQ difference between the average college graduate and the average high school graduate and average high school drop-out? 15, 20, 25 points? Does anyone honestly not expect that smarter people will do better on average than people who are intellectually unable to even master algebra?

Update: Anya Kamenetz, author of Generation Debt: How Our Future Was Sold Out for Student Loans, Bad Jobs, No Benefits, and Tax Cuts for Rich Geezers--And How to Fight Back and DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education argues that online education learning software can incorporate findings from cognitive research to provide a superior learning experience. Hear, hear!

The modern era of research-based learning software began with the work of John R. Anderson at Carnegie Mellon, who published “The Architecture of Cognition” in 1983, detailing how learners master a cognitive skill as a system of procedural rules. Today’s best-of-breed learning programs draw on cognitive science, developmental psychology and artificial intelligence to teach math, reading, physics, computer science, foreign languages and a host of other subjects faster, more thoroughly, and more engagingly than traditional classroom instruction. They do this by allowing students to move at their own pace and prompting them to spend more time on task, reflect on what they learn and collaborate.

The Department of Education released a meta-analysis of more than 1,000 studies of online learning last fall, and concluded that in most cases, online learning actually produces significantly better outcomes than classroom-based learning. Hybrid approaches, which combined some face-to-face time with online practice and assessments, scored better than both all-online and all-classroom approaches.

By Randall Parker 2010 November 13 10:13 AM  Education Returns On Investment
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2010 November 11 Thursday
US Government Salaries Outpacing Inflation

Obama love for our rulers?

•Government-wide raises. Top-paid staff have increased in every department and agency. The Defense Department had nine civilians earning $170,000 or more in 2005, 214 when Obama took office and 994 in June.

You can't tell from the figures above what this really means, A large number of people below but close to the $170k threshold could have crossed over. Simple thresholds can be chosen to present a distorted view. But these figures are more telling:

•Long-time workers thrive. The biggest pay hikes have gone to employees who have been with the government for 15 to 24 years. Since 2005, average salaries for this group climbed 25% compared with a 9% inflation rate.

25% pay hikes while the public at large isn't even keeping up with inflation. That's telling.

Federal pay and benefits are going up like the whole country used to experience back in the 1950s and 1960s.

Since 2000, federal pay and benefits have increased 3% annually above inflation compared with 0.8% for private workers, according to the Bureau of Economic Analysis.

A 3% per year increase in wages and benefits above the rate of inflation would translate in 10 years into a 34.4% increase in inflation-adjusted income.

A moral outrage, sure. But this trend in USG employee compensation will come to an end as the US sovereign debt crisis builds up over the 2010s and 2020s. I like Stuart Staniford's take on Debt Confidence Phase Transitions. He is right that the US government should not go so far into hock in reaction to the latest economic downturn because that accumulated debt will just make the crisis when Peak Oil hits full force that much worse. The US government will go into Peak Oil without any sort of reserve to throw at it. Rather, the US government will be weighted down by debts that will explode as a percentage of GDP as the economy shrinks.

By Randall Parker 2010 November 11 09:54 PM  Economics Government Costs
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2010 November 10 Wednesday
Spam For Crippled Cruise Liner

Passengers stuck on the damaged cruise ship "Carnival Splendor" were fed Spam choppered in by the US Navy.

Helicopters ferried 4,500 pounds of groceries to the stricken ship -- from cases of bottled drinking water to bread rolls and canned Spam -- to keep passengers from going hungry while the luxury liner was without power.

It is somehow fitting that the US Navy, which ventures forth over the seas much like the Vikings of yore, responds to an emergency with wonderful spam!

The USS Ronald Reagan was the source of the supplies. Did Ron eat Spam?

By Randall Parker 2010 November 10 06:37 PM  Off Beat And Odd
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2010 November 07 Sunday
Censorship On The Web: When Justified?

Got a practical question: Which web hosting services and blogging service providers shut down web logs based on politically incorrect content? What forms of politically incorrect content cause bannings? For what other reasons to blogs get taken down?

I've been wondering about this and finally an event came along and triggered my getting it together to write a post about it: Ferdinand Bardamu wrote a post about how Wordpress banned Obsidian. Obsidian used to have this blog.

It is not clear to me whether Obsidian was banned for what he wrote on his own blog or what he wrote in the comments of other blogs. Here is Obsidian's explanation. Possibly he was banned for reposting a woman's picture from her blog to his. Said woman was already critical of him.

You can see back in March 2010 a blogger named Denise expressed a desire to get Obsidian banned. Someone in that thread suggested Obsidian could be banned for using copyrighted content because he was quoting from other blogs. But I would think Fair Use rules apply (not that I'm a copyright lawyer) and he might not have excerpted enough to rise to the level of copyright infringement. The picture copying (if true) seems like a clearer case of copyright infringement (not that I'm a lawyer). Though I suspect if that's the cause then it was a convenient excuse (as compared to issuing a warning not to do that again).

When I've come across Obsidian on Roissy's blog I found him to be long-winded, in dire need of an editor (which describes a few commenters on my own site), and pretty hostile to HBD beliefs. I would not describe myself as a fan of his writing. Some have no sympathy for him over his banning. But sympathy aside, what I do not like is the lack of transparency when sites get banned. Rules are being enforced on internet sites that host blogs and we do not know what sorts of voices are being silenced or why.

So Obsidian's Wordpress banning is just an occasion to address something I've been concerned about: How many bannings are happening and are the vast bulk of them for reasons that are basically secret? How can one know with any certainty what will get one banned from each blogging service provider or web server hosting provider? Bloggers who are not politically correct (and being politically incorrect takes many forms - e.g. HBD, anti-feminism, PUA, other) need to know what will get them into trouble and where. But noone is maintaining a record of blog bannings and other censorship actions. So we do not really know where the boundaries are.

Does some site I now like to read have content that'll get it banned as soon as the management of some company notices what is being said on it? Or am I writing stuff that'll get my site shut down by my hosting service? Which hosting services have higher or lower thresholds or more arbitrary and capricious thresholds for what constitutes bannable content?

Speaking as someone who takes a dim view of humanity I do not expect people to be fair to each other. At least sometimes I expect good people to be silenced or harassed and bad people to abuse others, lie, deceive, gang up, and get away with it. So here's what I want to know:

  • Has anyone been keeping track among bloggers of who has gotten banned?
  • Are the criteria for banning getting stricter or looser? If stricter, over which topics?
  • Are smaller blog hosting services on average more or less strict than bigger services run by bigger corps?
  • What are the biggest causes of banning? Copyrighted material violations, frank talk about sex, Alt Right discussions of race, Alt Right discussions of feminism and sexuality, or other?
  • Are there organized cliques or individuals filing lots of complaints to get people banned?
  • Do the banning campaigns fall most heavily against those on the political right? I expect the American Left to be more illiberal in the classical sense.
  • Can the Left get away with more in forums just as they can in major media?
  • Do Leftists or other factions work to get Google Ad Sense banned from Alt Right blogs? What got Half Sigma banned from AdSense for example? Was the ban automated or done by humans?

Anyone know even partial answers to any of these questions?

Update: If you are a blogger who isn't renting a whole server you should take a hard look at your risk of getting banned by your current blog site provider. You might want to move before you get censored. My sense of things is that some left-wingers (and others of unknown leanings - check out Chuck's experience with a woman who would like to see him banned) on blogs do not hesitate to try to get people banned. The Left isn't really big on freedom of speech. At at university hate speech regulations as an example.

By Randall Parker 2010 November 07 02:37 PM  Thought Control Censorship
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Higher Taxes And More Flight From California?

The passage of California Proposition 25 makes it easier for the state legislature to pass budgets.

California voters approved a ballot measure to lower the threshold for the state Legislature to pass a budget and revoking lawmakers’ pay when a budget is late. Voters also said yes to making it harder to raise fees.

The expectation is that this will make tax increases easier to pass. So state employee unions supported it and business interests opposed it.

Opponents, led by Chevron Corp., as well as beer and wine distributors and the California Chamber of Commerce, plowed $15.8 million into defeating it. They said lowering the threshold to pass budgets could make it easier for lawmakers to raise taxes because of ambiguous language in that part of the measure. They also said budgets could raise fees, such as for vehicle registration, when passed by a simple majority.

The state is highly vulnerable to a flight of higher income earners. 1% of California tax filers pay almost half the state's income tax revenue.

Already I've heard grumbling from folks who are making plans to pull up stakes because they feel squeezed by California's high taxes and declining standard of living. Sure, it's probably just talk. But California can't afford to lose a single one of the 140,000 households that earned more than $480,000 in 2008, and represent 1 percent of tax filers, yet pay almost half of the state's income taxes.

Think about it. In a population of about 38 million if the 140,000 top earning households move to other states then the state of California would go bankrupt.

In a summer 2010 City Journal article Joel Kotkin surveyed the various ways California has declined in recent years. Natives are leaving the state.

California’s supposedly progressive economics have had profound demographic consequences. After serving as a beacon for millions of Americans, California now ranks second to New York—and just ahead of New Jersey—in the number of moving vans leaving the state. Between 2004 and 2007, 500,000 more Americans left California than arrived; in 2008, the net outflow reached 135,000, much of it to the very “dust bowl” states, like Oklahoma and Texas, from which many Californians trace their origins. California now has a lower percentage of people who moved there within the last year than any state except Michigan. Even immigration from abroad seems to be waning: a recent University of Southern California study shows the percentage of Californians who are foreign-born declining for the first time in half a century. For the first time in its history as a state, as political analyst Michael Barone has noted, California is not on track to gain a new congressional district after the 2010 census.

This demographic pattern only reinforces the hegemony of environmentalists and public employees. In the past, both political parties had to answer to middle- and lower-middle-class voters sensitive to taxes and dependent on economic growth. But these days, with much of the middle class leaving, power is won largely by mobilizing activists and public employees. There is little countervailing pressure from local entrepreneurs and businesses, which tend to be poorly organized and whose employee base consists heavily of noncitizens. And the legislature’s growing Latino caucus doesn’t resist regulations that stifle jobs—perhaps because of the proliferation of the California equivalent of “rotten boroughs”: Latino districts with few voters where politicians can rely on public employees and activists to dominate elections.

Joel dreams of a Latino-Anglo coalition. It says something about how much California's intellectuals have adopted Mexican and Central American viewpoints that they refer to white people as Anglos. How many white people do you know who call themselves Anglos? Seriously. I do not know anyone who does.

A coalition of inland Latinos and Anglos, along with independent suburban middle-class voters in the coastal areas, could begin a shift in policy, reining in both public-sector costs and harsh climate-change legislation

The flight of industries from California is not just due to regulations and taxes. Demographic changes due to immigration have replaced whites with groups that have low educational attainment, fewer useful skills in work environments, and lower incomes. If the people of California are unable to produce wealth like previous generations could then no changes in state public policy can compensate for this.

Kotkin writes a lot of useful articles about bad government policies and economic and social changes. But he writes using the allowed assumptions of the ruling politically correct intellectual elite. Therefore he can't actually approach root causes or effective solutions of the biggest problems facing the state and the nation.

By Randall Parker 2010 November 07 09:49 AM  Economics California
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University Of California To Experiment With Online Courses

The University of California is finally stepping up to the plate to offer online education for a small number of classes. The UC should take much bigger steps in the online realm out of budgetary necessity.

The University of California has issued an invitation to faculty to participate in a rigorous pilot project designed to test whether undergraduate online courses can be taught in a way that delivers UC-quality instruction.

The project will involve as many as 25 for-credit courses offered in a wide array of disciplines, and faculty will have until Dec. 13 to submit letters of intent stating their interest in developing and teaching an online course as part of UC's Online Instruction Pilot Project. The university expects most courses selected for the project to be ready for student enrollment by January 2012, and the pilot project will continue until the end of that year.

The UC is rather late to the game for an innovation that has the potential to deliver many benefits. The UC can't hope to get enough money to fund bricks-and-mortar classrooms for a growing state population.

The project is getting under way at a time when there is a growing demand from students for a UC education, and UC budget projections show an increasing gap between these enrollment pressures and the university's funding for on-campus construction of brick-and-mortar facilities.

The state government has unsustainable pensions whose growing costs will cause more cuts of tax revenue appropriations for the UC. The state's chronic budget deficit means that the UC needs to restructure to cut the costs of delivering instruction to students. Online education is a necessity and should not be approached as an experiment.

The state of California spends more on state employee pensions than on higher education.

Flanked by Mayor Chuck Reed, who has made pension reform a key target in his city, the governor said the multiplying costs of government retirements have drained public coffers and outraged voters.

"We're spending more this year on pensions than we are on higher education," Schwarzenegger said.

State employees can retire so young that they spend many years collecting benefits.

The budget rolls back pension benefit increases for state workers, which were approved in 1999 at the height of the dot-com boom. It increases the age of retirement eligibility from 50 to 55 for future public safety workers and from 55 to 60 for other new hires.

No need for state employees with high retirement benefits to maintain bricks-and-mortar buildings if teachers, students, and other current users of those buildings meet in virtual classrooms and watch prerecorded lectures.

By Randall Parker 2010 November 07 09:09 AM  Education Online
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2010 November 05 Friday
Better Paid UK College Graduates Face Higher Debt Interest

Count on governments to implement perverse counter-productive incentives in the name of niceness and compassion. In Britain People who graduate from college into higher paying jobs will pay higher interest rates on their college debts. This is exactly the opposite of what the incentives should be.

Successful graduates will be penalised most by the introduction of variable interest rates on the loans they take out to pay the fees. A university leaver with debts of £30,000 and an annual salary of £45,000 will have to pay back about £2,160 a year for about 30 years. Someone earning £25,000 will have to pay £360 a year for the same debts because a lower interest rate will be applied. "Middle earning graduates will pay a lot more for their degrees over their lifetimes, and that will worry people," said Ian Mulheirn of the Social Market Foundation think tank. "They will face significant debt for the first time."

Imagine the opposite incentives were put into place. Imagine that the higher your income after college the lower your college debt interest rates. What would that do? Lower interest rates for higher earners would incentivize students to aim at higher paying jobs that produce more wealth.

Think about it. Students should be steered toward jobs where they will less likely to suck at the public teat and where they'll be more likely to earn more and pay more in taxes. The higher earners generate the wealth and tax revenue that fund education. We already benefit from their higher tax payments. Therefore we should encourage more people to make training and career choices that will make them higher earners.

Update: Want to make a country richer? Eliminate government funding for academic departments whose graduates make the least amount of money. Take the bottom 20 departments and make them totally tuition funded. The greater good would be served by steering people into learning skills that enhance their productivity.

Students who want to study art history or ethnic grievance studies who can't afford to pay the full freight for bricks-and-mortar colleges will still be able to learn economically useless information in online courses. Why waste taxpayer money people people attain lower middle class living standards?

By Randall Parker 2010 November 05 09:09 PM  Education Incentives
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2010 November 04 Thursday
Greece Preferred Entry Point For Euro Illegal Aliens

The long Greek coast line near the poor Muslim Middle East attracts illegals trying to flow up into richer European countries.

Fleeing war or poverty, these migrants and legions of others have sneaked across the Greek-Turkish border illegally to the promised land of European Union riches. The numbers are staggering. Greece now accounts for 90 percent of the bloc's detected illegal border crossings, compared to 75 percent in 2009. Greek authorities reported 45,000 illegal border crossings in just the first half of this year, according to European border authorities.

Greece has a huge debt to the rest of the EU. I can see a deal here: The Greeks could agree to accept funding (and even non-Greek Euros as staff) for a huge border control force in exchange for some interest rate subsidies or other breaks on their debt. The rest of Europe gets a stop to illegal Muslim immigration and a lot of Greeks get jobs and less debt.

Turns out a smaller EU force is already headed to Greece. But the Euros need to think bigger.

The debt-hobbled country says it can no longer cope - and has called for emergency help. For the first time, the EU's border agency Frontex is deploying rapid intervention teams. The 175-strong force, with officers drawn from 26 countries, began arriving in the northeastern town of Orestiada this week for a two-month mission, and started their first border patrols at dawn on Thursday.

I say step it up, step it way up. Want to solve the problem? Do what is necessary to solve it.

By Randall Parker 2010 November 04 11:25 PM  Immigration Border Control
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Online Classes For Students In Campus Dorms

Regular readers know that I've long argued for online accelerated education as a way to cut costs, speed entry into the labor market, and improve national finances. While bricks-and-mortar educational institutions are threatened by this development even major state universities are embracing online lecture delivery out of a need for lecture hall space.

GAINESVILLE, Fla. — Like most other undergraduates, Anish Patel likes to sleep in. Even though his Principles of Microeconomics class at 9:35 a.m. is just a five-minute stroll from his dorm, he would rather flip open his laptop in his room to watch the lecture, streamed live over the campus network.

U Fla does this because it does not have an available lecture hall big enough to hold all the students: 1,500 in a class.

The University of Florida broadcasts and archives Dr. Rush’s lectures less for the convenience of sleepy students like Mr. Patel than for a simple principle of economics: 1,500 undergraduates are enrolled and no lecture hall could possibly hold them.

Think about that. If most aren't going to be able to sit in the lecture hall to watch the live lecture then why only 1,500 watching? Why not 15,000 scattered across 10 campuses? Why not 30,000 more at home or perhaps on a beach or cafe? The marginal cost per additional student is very low online.

Of course, once people are watching their lectures via a video feed why only live feeds? Why not delayed watching of pre-recorded lectures so that someone can just sit down and watch an entire semester's course in 2 days? Think of the enormous convenience. It becomes far easier to hold jobs and to squeeze in learning when you have the time. Got a few weeks of vacation coming up? Watch several courses in evenings and weekends. Then on vacation watch them again, heavily study, take practice tests online, and then show up to a room to do proctored test taking. That is the way higher education should be done.

Any class that can use prerecorded lectures and online tests (a proctoring system still needed) with automated grading can be incredibly cheap to deliver. Why have thousands of basic economics courses offered by thousands of colleges when a much smaller number of courses could be prerecorded and delivered to tens or hundreds of thousands of students each year?

A group of states could get together and pool funds to produce recorded lectures for hundreds of courses. The number of college faculty could be cut in half and then cut in half again. This would enable a lowering tuition to a small fraction of current levels. For decades the cost of a college education has risen each year faster than the rate of inflation. Enough already. Time to use technology to push costs down.

By Randall Parker 2010 November 04 09:29 PM  Education Online
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2010 November 02 Tuesday
Electoral Outcomes And The Economy

The obvious needs stating:

The second reason cost the Republicans big in 2008 and now that same reason is costing the Democrats big in 2010.

Of course after the 2008 elections nauseating national Democrats (and their cheerleaders in the mainstream press) proclaimed the Democratic gains as a new age that showed Americans had wised up and repudiated the Republicans. Now we will hear from nauseating national Republicans making similar proclamations. My advice: Filter out the partisan noise and talking points. Scan for more rational voices who are trying to figure out and explain the real reasons why economies rise and fall.

The general public is not made up of deep economic analysts who can sort thru the causes and effects for why things go awry or get better. Partisan celebrations of the wisdom of the electorate fly in the face of the ugly truth about the irrationality of voters.

Since I expect continued weak economic performance in 2012 the key to electoral success in 2012 is to act like the other political party made all the important economic decisions in 2011. Hard to do with a Congress and White House split between political parties. So how can each party pose like is the dominated underdog against the baddies in the other party who really have control of the levers of power?

Neither party has a clue about why the economy will stay in the dumps and get even worse. All you have to do is watch the price of oil if you want to know how strong or weak the economic recovery will be.

An article in the New York Times talks about how politicians first elected to office during economic downturns (e.g. like now) experience career successes because they get to take credit for economic recoveries and they just plain get to ride along with the happy mood of the public during economic upturns. But this time a trend bigger than the policies of either party will assure that there's not going to be a happy period around the corner.

Oil supply is not the only long term problem building up in America's economy. But by itself it is enough to cause terrible economic performance for the next 20 years.

By Randall Parker 2010 November 02 09:26 PM  Economics Political
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Immigrants De-assimilating In Europe

Steve points to a blog post by U Chicago public policy grad student Tino Sanandaji on indications that immigrants to Europe are de-assimilating.

I just read an important new paper about immigration and assimilation in Europe, that (if the information in it is correct) contains surprising results. The paper includes data on employment rate of first and second generation non-European immigrants in the 3 major European countries of France, Germany and U.K (the 4th largest European country - Italy - has few non-European immigrants).

Looking carefully at the data in some of the tables, we can see that non-European immigrants in Europe are de-assimilating, with the second generation doing worse than the parents.

This isn't the only measure of de-assimilation. Other indicators include spread of the hijab head covering, Muslim terrorism, forced marriages (with bounty hunters to kidnap the women), and cousin marriage.

Shouldn't problems be solved? Rather than wallow in these problems and let civilization decay shouldn't policy makers do something to address the root causes of problems? In that spirit some modest proposals:

Given European opposition to cutting the welfare state the need for them to reverse the immigrant flows is even more urgent.

The men aren't working.

For women, the second generation is slowly assimilating. Whereas the first generation works 35% less than natives, the second generation works 27% less than natives, an improvement of 8 percentage points. (the figures are the non-weighted, arithmetic mean of the 3 countries, below I have put data in each one).

For men however the trend is the opposite. The second generation non-European immigrants are less likely to work than the previous generation! While the first generation work 10% less than natives, the second generation works 24% less, a deterioration of 14 percentage points.

Gotta state the obvious: People who aren't working aren't paying taxes and instead are collecting benefits from the welfare state. So these immigrants are not helping Europe deal with the costs of an aging population.

The other needed information here: For those immigrants and their descendants who are working how much money are they making and how much taxes are they paying. It seems likely that a group with a lower labor market participation also works at lower skilled and lowering paying jobs when they do work. So the difference between native and immigrant labor on government revenue and costs is probably much larger than indicated by only the labor market participation rates.

On the bright side, German politicians are getting on the clue train.

Horst Seehofer, leader of the Christian Democratic Union Party (CSU), which is a member of the coalition government in Germany, said in an interview to Focus magazine, "It is obvious that immigrants from Turkey and Arab countries face more difficulty integrating into German society than other immigrants."

"In any case," Seehofer added," the conclusion is that we don’t need additional immigrants from 'foreign cultures'."

The center-left parties in Europe are losing power over immigration. There's hope for Europe.

By Randall Parker 2010 November 02 09:10 PM  Immigration Culture Clash
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