2012 July 23 Monday
Fastest Growing American Cities Poorer

America's lower classes are growing more rapidly than its upper classes. Anyone care to state obvious reasons why?

Los Angeles, CA (July 19, 2012) As communities seek new ways to emerge from the recession, many may look to growing their population as a strategy. However, the belief that population growth will bring jobs and economic prosperity for local residents is a myth. These findings are published in a new study in the latest issue of Economic Development Quarterly (published by SAGE).

"Growth may be associated with economic development success; however, it is not the cause of that success," wrote study author Eben Fodor.

Fodor examined the relationship between growth and economic prosperity in the 100 largest U.S. metropolitan areas from 2000 to 2009 to determine whether certain benefits commonly attributed to growth are supported by statistical data. He found that the slowest-growing metro areas had lower unemployment rates, lower poverty rates, higher income levels, and were less impacted by the recession than the fastest-growing areas. In fact, in 2009, local residents of slower-growing areas averaged $8,455 more per capita in personal income than those of the fastest-growing areas.

"The successful economic development program is typically the one that creates new jobs," Fodor wrote. "The new jobs tend to stimulate population growth as people move into the area seeking to take advantage of the new employment opportunities … But growth is not creating employment opportunities. Instead it is reducing them as newcomers fill job openings."

This new study used information taken from the U.S. Census to study 100 of the largest metro areas, representing 66% of the total U.S. population. It concluded with a comparison of the 25 slowest-growing metro areas with the 25 fastest growing from 2000 to 2009. The slowest growing areas were located in 13 different states, including Connecticut, New York, and Ohio while the fastest-growing areas came from 12 different states, dominated by California, Florida, and Texas.

I predict declining per capita income in the US in the coming years.

By Randall Parker 2012 July 23 10:43 PM  Civilizations Decay
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2012 July 11 Wednesday
Meal Great Way To Stir Jealousy

When you need to evoke feelings of jealousy try to have a meal with a former lover. My guess is a more attractive acquaintance would beat a less attractive former lover.

Sharing a meal with a former romantic partner is more likely than other, non-food-related activities to make your current partner jealous, according to a study published July 11 in the open access journal PLoS ONE.

The authors, led by Kevin Kniffin of Cornell University, asked undergraduate students to rate their jealousy in response to hypothetical scenarios involving their romantic partner engaging with a former partner, either by email, phone, coffee, or a meal. They found that a meal elicited the highest jealousy ratings, potentially pointing to the importance of meals for human relationships and intimacy. Interestingly, the researchers did not find any significant differences in the jealousy reported by male versus female participants.

Dr. Kniffin remarks, "Given the tradition and fashion of food sharing among co-workers, family members, and friends, our findings are notably consistent with the idea that eating together has importance beyond nutritional factors. By applying a functional view of jealousy, our studies yield the inference that people think meals can be more than just meals."

Dinner beats lunch. But all forms of interaction elicited a fair amount of jealousy. The choice of engagements isn't ideal. One wonders how a movie or sitting under a tree for an hour discussion would rate.

By Randall Parker 2012 July 11 10:23 PM  Human Nature Mating
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2012 July 10 Tuesday
San Bernardino Headed Toward Municipal Bankruptcy

Municipal unions claim another victim. San Bernardino will be hard pressed to avoid bankruptcy.

Facing a mounting budget deficit and dwindling tax revenue, the San Bernardino City Council on Tuesday is scheduled to consider drastic budget cuts, possibly filing for bankruptcy, to save the city from financial ruin.

Update: San Bernardino decided to file.

Stockton, with a population of 300,000, set a record for largest population city to file for bankruptcy. San Bernardino, with about 200k population, won't break that record. However, around 2015 or 2016, when San Jose's pension obligations force that city into bankruptcy its nearly 1 million population will enable it to set a new record for US municipal bankruptcies. Good times.

The Stockton, Mammoth Lakes, and San Bernardino bankruptcies are signs of times to come. Recent pension reporting rules changes by the Governmental Accounting Standards Board (GASB) are going to force state and local governments to more accurately report their unfunded pension liabilities. However, even the GASB changes fall short of what's needed to get an accurate recognition of the size of government pension liabilities.

A July 2 report by ratings agency Moody's Investors Service calculated that if it used a 5.5 percent discount rate, a rate more conservative than the method GASB proposed in its final rules, but closer to the way corporations value their pensions, it "would nearly triple fiscal 2010 reported actuarial accrued liability" for the 50 states and rated local governments to $2.2 trillion from $766 billion.

If economic growth remains low these liabilities will soar even higher. If Peak Oil causes an extended period of economic contraction then unfunded pension liabilities will soar while tax revenues shrink.

By Randall Parker 2012 July 10 08:17 PM  Economics Government Debt
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2012 July 08 Sunday
China Cracks Down On Illegal Immigrants

Fines, imprisonment, and deportation.

China urged its citizens to report suspected illegal immigrants as it passed a new law with harsher punishments for foreigners living or working illegally in the country, Xinhua news agency reported. The rules reflect growing concerns about foreign labor, a new issue for China as it has opened to the outside world.

Suppose living standards in China quadruple. Will commercial interests buy enough influence in China to open the doors to large scale importation of cheaper manual laborers? Or will they view this as foolish and prefer robots instead? I expect by the time living standards in China get that high demand for lower skilled workers will collapse due to automation.

If a developed country keeps out manual laborers the resulting higher cost of labor will provide incentives to automate more rapidly. If, for example, the US stopped letting in any agricultural workers the farming equipment industry we'd see a faster rate of automation. Necessity is the mother of innovation and automation in agriculture. In spite of cheap (at least for the employers - not for taxpayers) labor farming automation is undermining the demand for farm labor. Our wine industry would catch up with the Australian wine industry's use of automation for example. Higher costs for lower skilled labor would cause automation of basic services like restaurants that would increase convenience.

By Randall Parker 2012 July 08 06:47 PM  Immigration Labor Market
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2012 July 05 Thursday
Heartiste On The War Against Pattern Recognition

Heartiste has coined a great term to describe what has gone wrong with American intellectuals. When it comes to understanding humans there's a war in American intellectual circles against pattern recognition. This comes up in a post he did: Never Listen To A Feminist’s Opinion About Helping Boys. The title is certainly wise. In the process of eviscerating the arguments of feminist author Lisa Bloom he says:

The war against pattern recognition marches onward.

Boys and girls are different for biological (really, evolutionary) reasons. They have different reproductive strategies, desires, and specializations. Any argument about child development and the interests of boys and girls that ignores this basic fact is highly likely to be harmful to the interest of boys and likely to be harmful to the interests of girls as well.

Half Sigma did a recent post on why girls drop out of sports at a much higher rate than do boys. HS is doing pattern recognition again. This is why he finds it necessary to post under a pseudonym. The War Against Pattern Recognition includes a War Against Pattern Recognizers.

By Randall Parker 2012 July 05 07:56 PM  Cultural Wars Sexual
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2012 July 04 Wednesday
Tyler Cowen: Higher Education Next To Get Overturned

Alexis Madrigal relays a quote from Tyler Cowen speaking at the Aspen Ideas Festival. Tyler expects education to get mauled (my term, not his) by the internet.

Look at the music industry. It's been completely overturned by the Internet. My vision of the world is that everywhere will be like the music industry, but we've only seen it in a few places so far. Journalism is in the midst of the battle. And higher education is probably next.

Why should people get paid to individually relay information to small groups of people? It is incredibly expensive, wasteful of the time of those receiving the info, and very inconvenient. You've got to be near where the class is taught. You've got to go at the appointed time. The lectures for a course are spread out, 2 or 3 days a week over several weeks. What if you've got a career and other time demands? The quality of the delivered lectures is all over the map. The colleges expect you to apply to be admitted and even pay for the privilege.

Why deal with all the many downsides of higher education if all you want is, say, 25 or 30 hours of lectures, preferably by someone really good at explaining each topic? Why not be able to choose among many competing sources of lectures? Why not be able to watch the lectures at any time of your choosing?

Online courses seem to offer the most value for smart kids born to parents of modest means. For dual income parents pulling in a half million dollars per year a $50k per year private college is affordable. But for parents making $50k per year or less (especially if parents are divorced and therefore paying for 2 households) even state colleges are too expensive.

David Karpf responded to Tyler on Huffington Post, expecting less disruption, at least in the short term. Karpf also responded in the comments of Madrigal's post:

But I'm pretty confident on this one. I study disruption for a living (in the political advocacy/nonprofit space). We see the same disruptive pattern pretty much everywhere. Old industries (read: universities, record companies, newspapers) slowly adopt new technology. New competitors (read: University of Phoenix, napster, blogs) adopt it much faster. The old industries remain pretty much intact, at least partially because we've built a set of social institutions around them (read: parents' and employers' college expectations, recording contracts, press freedom protections). Change in the old industries shows up after their revenue streams become seriously threatened (CraigsList/Google-driven changes to classified ads).

So the question is how fast will the expectations about higher education shift among parents and employers? I see a migration path where some kids will earn part of their credits online, especially for the first couple of years, and then finish at a bricks-and-mortar school. I also expect working people will shift their continuing education online much faster than kids in their teens and twenties. One's time is much more valuable once one is already in a skilled occupation. So adults in the workforce have a greater incentive to go online to save time and gain schedule flexibility.

By Randall Parker 2012 July 04 10:45 PM  Education Online
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2012 July 02 Monday
Most College Grads Move Back Home

College degrees: the path to a return home to live with your parents.

More than half of college graduates move back home, sociologist Katherine Newman wrote in her book, "The Accordion Family: Boomerang Kids, Anxious Parents, and the Private Toll of Global Competition," based on surveys conducted worldwide.

Kids should do college majors that let them escape from returning to the family home, debt laden, after getting their bachelor's degree. Art history: the path to extended parental home living. Communications Studies: a great degree to give you better skills for talking with mom and dad when you move back in to live with them after college. Psychology: Useful skills for doing psychotherapy on your mom when you move back in with the parents after college and mom gets really upset you've wasted your college years.

I think every college major should have a published probability of forcing you to move back in with your parents after graduation. Then a lot more people would major in computer science and engineering.

By Randall Parker 2012 July 02 09:54 PM  Education Returns On Investment
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2012 July 01 Sunday
Widespread Spying By Indian Companies

The use of clericals as spies is very interesting.

“Over 35 percent of companies operating in various sectors across India are engaged in corporate espionage to gain advantage over their competitors and are even spying on their employees via social networking Web sites,” Assocham said in its report.

While checking out people’s activity on social media sites like LinkedIn or Twitter didn’t sound too alarming, Assocham made a stronger claim that about 900 respondents said that they plant a mole in other companies, usually as receptionists, photo-copiers and other low-end jobs.

Upper level managers trust clericals with lots more information about business strategy than the individual engineers see sitting in their cubicles. So the use of clericals as spies is an astute tactic. They do not get paid much. So to, say, offer them double would not cost much to the spying company.

What I wonder: how much of this spying ends up being against international firms with offices in India or who are using outsourcing firms in India. Are Western firms losing more secrets in India or China?

What I also wonder: how much corporate spying is done in the United States by using imported knowledge workers who were recruited into spying even before they came to the US. Are US firms asleep in the face of serious loss to spies? Also, which firms are most targeted by corporate spies?

By Randall Parker 2012 July 01 10:31 PM  Economics Corruption
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