2014 February 27 Thursday
Gregory Clark's The Son Also Rises And Economic Doctrines

In Gregory Clark's excellent new book The Son Also Rises: Surnames and the History of Social Mobility (The Princeton Economic History of the Western World) the following line leaps out:

The idea of tradeoff between quantity and quality of family life is one of the sacred doctrines of neoclassical economics, one that lies at the heart of attempts to explain the long-delayed arrival of modern economic growth.

What is wrong with neoclassical economics? It has sacred doctrines.

What is incredibly refreshing about Gregory Clark's books: They are so incredibly empirical and undoctrinal. Reading him makes reading even the best economics blogs dissatisfying because he reminds me of just how many bad assumptions underlie modern economic thinking.

What is the real reason it took so long before the Industrial Revolution started? First, the conditions needed for natural selection for much higher IQ levels had to come into existence. Next hundreds of years had to transpire during which selection process selected for higher IQ and other attributes needed for an industrial society to develop. Eventually people sufficiently smart were born and grew up to invent the steam engine and then to improve its efficiency. Then those smarties and other smarties could keep refining the technologies inventing new gadgets to enable an escape from the Malthusian Trap.

This latest book by Clark demonstrates that status is far more persistent across generations than conventional measures of economic mobility have led economists to believe. Clark's previous book, A Farewell To Alms, demonstrated that in England for centuries the higher status middle and upper middle classes left more progeny than the poorer lower classes. That caused selection for higher IQ, higher social competency, longer time horizons, and lower impulsiveness.

In the 20th and 21st centuries the selective pressures have been running in the opposite direction and industrialized societies are suffering from declining smart fractions. Until liberals throw off their tabula rasa faith we have no chance of reversing the decline.

By Randall Parker 2014 February 27 05:55 PM 
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2014 February 25 Tuesday
Is High Inequality In Richest Cities A Transitional Phase?

inequality is sharply higher in economically vibrant cities like New York and San Francisco than in less dynamic ones like Columbus, Ohio, and Wichita, Kan.

The full Brookings report is here.

San Francisco achieves a high level of inequality by having really high top earners. That requires lots of hard work and considerable talent. By contrast, Miami has found a way to achieve almost as high a level of inequality without such high-producing elites. Miami's top 5% earn less than half as much as SF's top 5%. So how do they do it? They've got much larger low performing lower classes imported from Latin America. That's great if you attach a higher value to your relative standing than your absolute standing

The "less dynamic" cities are falling behind the cities where people make the big bucks. But you can buy a much nicer house on a median income on also-ran cities than in top tier cities:

To frame this another way, the median income in metro San Francisco is about 60 percent higher than it is in Akron. But the median for-sale housing price per square foot today is about 700 percent higher.

What I'd like to know: Will SF and NYC drive out their lower classes? Are they in a transition period of high inequality until most of the lower classes leave? Erik Brynjolfsson and ‎Andrew McAfee think robots are starting to get good enough to automate a large fraction of lower class jobs out of existence. This will bring an end to Moravec's Paradox, the idea that it is easier for computers to automate middle class information-handling jobs than to automate lower class jobs that require handling complex objects in the physical world.

The trend is for middle class areas to shrink while upper and lower class areas grow. While some cities are on the rise other cities such as Philadelphia are losing the competition for the best and the brightest and losing their middle classes. Do not buy housing in a city whose lower classes are rising as fractions of the total city. Such cities are at risk of a death spiral of shrinking tax bases, more welfare recipients, and higher crime and social pathology.

I see SF especially as a city with the potential to lose most of its lower classes. The weather is much more appealing than NYC weather and the geography isolates it better from lower class regions. Throw in extensive automation of work now done by the lower classes and in 20 years it seems possible for SF to be an extremely elite city.

Liberal policies such as obstacles to construction and also higher minimum wages will help the cities where elites cluster to cater more exclusively to the top 10%.

By Randall Parker 2014 February 25 08:25 PM 
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2014 February 23 Sunday
Food Rations In Cuba Per Month?

Can Robert Zubrin be right about food rations in Cuba?

These comprise 5 pounds of rice, 5 pounds of sugar, 1 pound of salt, 10 ounces of beans, 8 ounces of cooking oil, 0.15 ounces of coffee mixed with unknown stuff that isn’t coffee, 6 ounces of very-low-quality fish, and 1 pound of a disgusting product made from unsalable animal parts, per month. No fruits or vegetables are included.

The 5 lb quantities are 2.27 kg or 2270 grams. Since white rice is only 590 calories per lb that works out to 2950 calories for the rice. But the sugar is 1757 calories per pound or 8785 calories. We are at 11734 calories so far. The cooking oil is 251 calories per ounce or about 2000 calories total. That puts the total calories still below 14,000 calories or about 7 days of living. The remaining 22 ounces might provide about 20 calories per ounce. That's only 440 more calories. Are people in Cuba barely surviving on about 1000 calories per day?

Another story puts the rations in Cuba at 7 lb of rice per month with the rations lasting only 10 days per month. People buy their remaining food on the market.

Another story says Raul Castro has been cutting the food ration. Criminal punishments reflect a food scarce socialist society: You can get 4 to 10 years in prison for killing a cow in Cuba versus 7 to 15 years for killing a human.

Can the poorest in Cuba afford enough calories?

By Randall Parker 2014 February 23 08:25 PM 
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2014 February 22 Saturday
Ukraine Leader Driven From Power By Street Protesters

Deposed Ukrainian leader Viktor Yanukovych had a pretty extensive private zoo.

it boasted a man-made lake as large as several football fields with a life-sized galleon and a zoo with deer, ostriches, peacocks and other animals.

Did he get the money from that from his own government or Russia?

This is a big setback for Vladimir Putin. What can he do? Try to stoke a separationist movement in the regions with large Russian populations including the Crimea.

Will the Ukraine revolution strengthen the position of the opposition in Venezuela? Certainly Ukraine is a powerful reminder that a government can be overthrown. But in Venezuela the middle class opposition might be outnumbered by the lower class supporters of the government.

By Randall Parker 2014 February 22 07:28 PM 
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Suppose You Want To Retire Abroad

Health care costs are the biggest concern when Americans retire somewhere else:

And in almost all cases, Medicare doesn’t pay for health care provided outside of the United States.

Some companies will keep you on a policy for the rest of your life if you start paying while healthy. But it is not clear to me whether that is true in practice since premiums can rise. How much will, say, Allianz boost premiums?

If things turn really bad in the United States the advantages of living abroad could become much greater. Yet another reason to save lots of money for your old age.

By Randall Parker 2014 February 22 11:01 AM 
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Is The Decline Of The Middle Class A Crisis Of Capitalism?

David Brooks of the New York Times and Arthur Brooks, head of the American Enterprise Institute believe capitalism faces a crisis because capitalists need very few workers in order to make huge amounts of money.

But now capitalism faces its greatest moral crisis since the Great Depression. The nature of that crisis can be captured in two statistics. When Facebook entered a deal to buy WhatsApp this week, it agreed to pay a price equal to $345 million per WhatsApp employee. Meanwhile, the share of the economic pie for the middle 60 percent of earners nationally has fallen from 53 percent to 45 percent since 1970.

Um, no. It is not capitalism that faces this crisis. It is the middle and lower classes that face this crisis. The capitalists will find ways to move more of their productive assets out of the reach of the lower classes.

Take a messed up country like Venezuela where the government just killed a beauty queen at a protest (finally an event in Venezuela important enough for most people to pay attention so) and the government restricts media coverage. The lower classes in Venezuela are so incredibly short-sighted and foolish in choosing leaders that Venezuela is doomed to dysfunction. Capitalists will do very little investing in Venezuela and the most productive and able people in Venezuela will look to escape.

Venezuela reminds me of the dysfunctional and successful American cities. Some US cities become so messed up by their lower classes that their middle and upper classes flee. It becomes a vicious cycle where the remaining voters elect even more irresponsible local political leaders and better people become even more motivated to flee. Meanwhile, some other cities get into an upward cycle where the most able people flock in, drive up housing costs, and drive out the lower classes. This is the future of the world.

How does this relate to the enormous winner-take-all trend in capitalism where the most successful companies employ only upper middle class and above? This trend concentrates wealth and enables the wealthy to flock together and drive out the least able.

What is in question about this trend: Which whole countries will remain in the winners' circle? Will some currently first world industrialized countries develop such large dysfunctional lower classes that the countries will start to drive out their upper middle and upper classes?

If the elites of the US weren't so foolish they'd try to make sure that US immigration policy turned the US into the place where the most able came to in order to escape social pathology and destructive government policies elsewhere. Those of less than high ability would be kept out.

The most innovative people and companies increasingly do not need the masses for any purpose other than as customers. The middle classes in industrialized countries should be very mindful about whether immigration policies and other policies will drive their most able to somewhere else.

There is an opening here for a few smaller countries to become niche places for the most able and productive people on the planet.

By Randall Parker 2014 February 22 10:12 AM 
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Gap Store Minimum Wage Headed To $10 Per Hour

CEO Glenn Murphy probably thinks he'll get a more productive workforce.

Burt P. Flickinger III, managing director of the Strategic Resource Group, a retailing consulting firm, said Mr. Murphy used to run Shoppers Drug Mart, a pharmacy chain in Canada that tended to pay higher wages than its rivals. “By doing that, they got more productivity per person and they really eclipsed the other Canadian drug chains,” he said.

Even if minimum wage does not increase unemployment it might increase unemployment of the least skilled. More able people might be enticed to work more if they can get more per hour worked. Consider that more able (smart, motivated, skilled) people tend to live with each other rather than with less able people. So one can live off the work of the other and stay home. But bump up wages enough and at the margin and then some idle but able workers will decide to go get a job (and I know examples of such people).

As these relatively more able people decide to work more they will show up at the Gap or other establishments and the hiring manager will recognize their qualities and favor them for new positions. If more productive people do the work either the quality of services improves or fewer people are needed to do the work.

In order for retail establishments to survive online competition they are going to need to offer services that require a more skilled workforce. For example, a retail clothing outlet could employ seamstresses to customize clothes and even to make custom clothes on the spot.

Another consequence of higher wages: more investments in labor-saving equipment. I think we are moving toward a society where the least skilled and most skilled will be increasingly separated geographically. In cities with lots of highly paid workers and high housing costs the average service establishment (e.g. restaurant, beauty parlor) will use more automation.

You can read nuanced discussions of the effects of higher minimum wages. But all the measures of short term effects will get swamped in the long run by changes in business strategies and technological innovations.

My guess is that in the long run the economy will have little use for the least skilled workers and the main effect of a higher minimum wage is to accelerate the arrival of that eventual future.

By Randall Parker 2014 February 22 09:18 AM 
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2014 February 19 Wednesday
Indentured Servants In Hong Kong

The upper classes can't be trusted with lower classes.

The minimum wage for foreign maids in Hong Kong — a flat rate of $517 per month — works out to be significantly lower than it is for locals, which is about $3.85 per hour. By paying foreign maids much less for longer working hours, Hong Kong has, in effect, created an underclass of foreign female laborers. The women who take care of Hong Kong’s children and elderly are on the lowest rung of the socioeconomic ladder.

Some maids get beaten by their masters and get their travel documents taken away so they can't leave. Read the whole thing. The Indonesian government even forces the women to go into debt before leaving so that back in Indonesia some parasites can live off the domestic workers once they are in Hong Kong.

Upper classes can't be trusted with lower classes. They just want bigger and more subservient lower classes. That's the story of the business lobbies for low paid jobs who want even lower paid workers. Look at Hong Kong where the upper classes are happy to use foreigners who have to work 7 days a week for long hours as domestic servants for about $17 per day.

By Randall Parker 2014 February 19 08:42 PM 
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2014 February 18 Tuesday
Obama Beats Dubya At Debt Accumulation

Obama wins: During the George W. Bush presidency marketable debt of the US government grew 93%. But under Barack Obama marketable debt grew 106% and Obama still has more years in which to rack up bigger losses. Plus, that 106% growth was off of a bigger base.

China is selling US debt.

American citizens are also playing their part to achieve new heights of debt creation.

...consumers took on $241 billion in new debt in the fourth quarter of 2013, the largest quarterly increase since 2007.

Many national governments shot their wad in the the last financial disaster in 2007-2009. With far more accumulated debt when the next financial disaster hits sovereign debt defaults and larger scale panic seems likely. If it hits as gobal oil production starts to decline we will go into an economic depression.

By Randall Parker 2014 February 18 10:59 PM 
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Going Down In Venezuela

Socialism with price controls, state control of the media, and currency abasement still does not work. Venezuela's government has just arrested the biggest opposition leader. The currency is in a tail spin.

The bolivar fuerte (or “strong bolivar,” as Chávez had the currency renamed) weakened precipitously against the U.S. dollar, and dropped, on the black market, from roughly 8 to 1 (at Chávez’s death) to now 87 to 1. Maduro’s response? State intervention that has worsened matters, making it harder and harder for the private sector, on which Venezuelans rely for food, to operate.

But if you can smuggle in dollars then life there is very cheap.

Price controls are causing shortages and of course gutting the economy.

A cable news network in Venezuela, NTN24, has been taken off the air by the government because it covered anti-government protests.

Caracas is not the place to be. Read this whole story to get a sense of how much you would not want to live there.

In the serene private clubs of Caracas, there is no milk, and the hiss of the cappuccino machine has fallen silent. In the slums, the lights go out every few days, or the water stops running.

Venezuela's oil production has declined and it has big debts to China.

Okay Latin American commenters who think Venezuela shows the way to oppose Yankee imperialism, come out and defend Venezuela.

By Randall Parker 2014 February 18 09:20 PM 
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2014 February 17 Monday
Minimum Wage Against Open Borders Coalition

A large coalition of really big money pushes for open borders. Why? Their desire for cheap labor.

How to take the energy out of that coalition? Make the minimum wage so high that the users of really cheap labor would not benefit from a larger supply of it.

How to raise the minimum wage? Thru voter referendums in all the western states.

By Randall Parker 2014 February 17 10:32 PM 
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Executive Tyranny More Likely In American Future

Daniel Larison takes a look at some ridiculous Netflix TV show about corruption in politics (House Of Cards) and then makes the interesting point that majority parties are very very unlikely to impeach a President of their party. Hmmm....

We are on the path to a one party state due to demographic changes caused by immigration. Once the Republican Party becomes road kill and loses both houses of Congress how can a US President ever get impeached?

If a US President ceases to be vulnerable to impeachment then the checks on executive branch action from the other 2 branches of government wither and fade. Future Presidents will be far more powerful within US borders (even as the US loses power over the world as a whole).

We face a pretty rocky road before we get to that point. For example, I'm expecting a massive economic downturn when world oil production starts going down. Plus, the welfare state will grow some more and old folks will get poorer. Not clear on how all that will play out.

By Randall Parker 2014 February 17 08:45 PM 
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Fools Insist On Dead End Hollywood And NY Media Internships

Willing slave laborers: A sliver of the Millenials is determined to throw themselves at companies that do not need them.

The intern glass ceiling isn’t limited to Hollywood. Tenneh Ogbemudia, 23, who aspires to be a record executive, has had four internships at various New York media companies, including Source magazine and Universal Music Group.

These sick kids are addicted to the idea of working in mass media. Maybe deep down they think mass media control the minds of everyone else and they want to be one of the controllers rather than one of the controllees.

Lea won't reveal her last name because she doesn't want to jeopardize her next chance for a dead end low paid job or no paid internship. How she's managed to waste her time so far.

So far, her résumé has been limited to three internships — planning events for teenagers at the Walters Art Museum in Baltimore, compiling news clippings for a public relations agency in New York, and being the “fetch-the-coffee girl” at an art gallery.

I bet they could get jobs with a North Dakota oil exploration company or even with a company that installs wind farms in plains states. But no. Not good enough for them.

By Randall Parker 2014 February 17 08:01 PM 
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2014 February 16 Sunday
The Demographic Crunch Of The Talented

South Korea is near its economic peak.

South Korea’s working-age population is falling by 1.2% annually – the fastest decline among OECD countries.

South Korea has been on an amazing economic tear. But the most talented are having the fewest kids. They are going to lose their economic vitality just as Japan has done. An older and shrinking population isn't going to work insanely hard to make their industries world winners.

Modern economies provide incentives to put work ahead of reproduction, especially for the most talented. This boosts growth and profits in the short term at the expense of the long term.

By Randall Parker 2014 February 16 08:50 PM 
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Shortage of $21k Per Year Pilots?

Capitalists won't be satisfied until we are all making the minimum wage. So better raise the minimum wage. Regional airlines complain there is a pilot shortage. It costs over $100,000 to train to become a pilot. Guess what they start at. This Businessweek article reveals the numbers: Yes, There’s a Pilot Shortage: Salaries Start at $21,000.

When will automated systems totally take over pilot work?

A fully automated F-16 can outmaneuver a human-piloted aircraft.

The QF-16 can pull a 9G turn, which very likely would render a live pilot unconscious.

The QF-16 can't yet analyze a really complex battle situation. But send some of them along with human-piloted aircraft and the humans could do the evaluating and send orders to the automated aircraft. In 10 to 15 years the automated aircraft will exceed the humans in ability to analyze a battle situation.

By Randall Parker 2014 February 16 07:29 PM 
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Hous Democrats To Try Discharge Petition To Raise Min Wage

They just need 17 Republicans in the House Of Representatives to come to their senses.

Consider: the lower a person's wage is the more entitlements benefits they are eligible for. Also, the higher the minimum wage the fewer jobs there are for low skilled immigrants. That is a huge benefit right there./

Plus, if high school kids face a labor market where no one will hire them if they drop out of high school they'll have more incentive to stay in school.

A $15 per hour minimum wage would work wonders. It would do the same thing that strong industrial unions did: Accelerate the development of automation technologies. The Marxists are upset about this btw. But at least they provide the facts: high union wages in the coal mining industry led to automation and a huge decrease in the number of coal miners employed.

Under this leadership 200,000 coal miners in 1959 produced more coal than 1,000,000 in 1949, and the membership of the United Steel Workers declined from one million to 796,000 while production increased 50%.

I think all dangerous jobs should have an even higher minimum wage. Roofers should make $20 per hour and loggers should make even more.

Higher minimum wage cuts welfare use.

But the job has trade-offs. As Ms. Lowry’s income surges toward $18,000 a year, from about $10,000 at her previous part-time minimum-wage job at Kmart, the government assistance she receives — helping her pay for food, rent and after-school day care for her 7-year-old son, Darian — will all go down.

People who make more money pay more in taxes and get less in welfare benefits.

By Randall Parker 2014 February 16 06:28 PM 
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Create Private Communities To Restore High Trust?

Americans have less trust of others.

These days, only one-third of Americans say most people can be trusted. Half felt that way in 1972, when the General Social Survey first asked the question.

I'd like to know how much of this declining trust is due to rising ethnic diversity and how much due to other causes. I'd like to see the trends on trust over the same time period restricted to areas which ethnically have not changed much in the last 50 years.

It is no fun watching the slow death of American exceptionalism and the decline of the lower classes. One wonders whether reverse of that decline, at least in small areas, is possible and how.

Imagine this: a community gets founded with the requirement to submit a DNA sample to test for signs of psychopathy or other attributes that would tend to make one not worthy of being trusted. People could even get tested under an MRI machine and their heart beats measured for signs of criminality.

Do you think such tests are impossible to create? See Adrian Raine's The Anatomy of Violence: The Biological Roots of Crime. Any filtering for better people would be less than perfect. But it would work. If a community had a lot of applicants it could set its filter level to have more false negative than false positives.

Currently it is possible for some religious groups to create member-only communities. Can other groups find a way to do this? Will they have enough motive? A religious group can farm in very rural locations. But most people need to live and work near large pockets of civilization and have lots of specialized skills that would tend to scatter the people who would share the sentiments that would make creation of such a community possible.

Of course the US government no longer recognizes a right of free association. So the legal environment would be hostile to creating a restricted access community that used biological tests as part of their entrance requirements. But think about the whole world and not just the United States. In some countries it might be possible for an organized group to legally pull off creation of such a community.

But I see another problem: People feel fewer bonds to community and have become more atomized. To create a community with restricted entry requires stronger bonds outside of the family to organize against entry of people who do not fit the community requirements.

By Randall Parker 2014 February 16 06:25 PM 
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2014 February 08 Saturday
Clueless George Will: Thinks 500M Americans Will Be Working

Check out this debate between George Will and Laura Ingraham about immigration. George Will doesn't think the existing lower class and waves of low skilled immigrants will all have jobs a few decades hence.

WILL: When, in the lives of our children and grandchildren, there are 500 million Americans, they’re all going to be working! Because we’re gonna have economic dynamism, aided by immigration

In an era of which features a very long sustained decline in labor market participation, shrinking middle class, declining median household income, increasingly dysfunctional lower classes and the populace's loss of the qualities that define American Exceptionalism George Will thinks we can benefit from mass immigration? What is this guy thinking?

Will is ignoring the implications of the rise of computer intelligence. Robots are the next big thing. A substantial fraction of the population won't be able to do anything more cost effectively than the same work done by robots and other automation systems.

Economic dynamism? No, we want higher living standards. What is even worse: Some immigration proponents recognize the coming wave of massive job demand destruction due to robots and yet remain pro-immigration. Do they want an average wage of $1 per hour? What is their end goal?

The Wall Street Journal wing of the Republican Party is the enemy of the large majority of the American people of every race.

By Randall Parker 2014 February 08 10:17 AM 
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2014 February 05 Wednesday
Demography And Regionally Higher Minimum Wages

Suppose some left-leaning states enact much higher minimum wages. This will drive some of the Democrat-voting lower classes to move to (primarily Republican) states with lower minimum wages in order to get low paid jobs. The lower classes will migrate to states with low housing costs and lower levels of government services. They'll vote for politicians who will raise taxes on the Republican-leaning upper middle class married couples with kids.

So what should Republican states do? Raise minimum wages before the Democrats arrive. If the Republican states put their minimum wages up to $15 or so then they'll have a much better chance of remaining Republican.

This is funny. In the name of helping the lower classes the middle and upper class Democrats want to raise minimum wages. This will help them gentrify their states as the lower classes move away. So the Republicans need to engage in a sort of demographic arms war and make their states unappealing to the lower classes.

First mover derives the biggest benefits. They'll get rid of sizable portions of their own lower classes and block the arrival of new lower classes. The Republican states could do this more effectively because they offer fewer welfare benefits to their lower classes. Anyone unemployed in a Republican state has a bigger incentive to move.

How to make this work even better? A sharp Republican state governor could, in the name of labor mobility and helping the poor, offer state citizens funding for nationwide job hunting and moving costs for anyone on welfare, unemployment, or otherwise in desperate economic straits.

Tyler Cowen predicts a shift of poor people away from coasts and cities into the interior. Such a shift will turn red states blue. The Republican states have the ability to push back hard against the forces driving this shift and reverse it. People of the plains states hear my call.

By Randall Parker 2014 February 05 10:06 PM 
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Snipers Knocked Out Power Station

Some snipers knocked out an electric power substation in April 2013. Took them 20 minutes. In the future it will be possible to do this faster. Imagine what could be done with smart rifles of the sort the US military is testing.

Government really depends on the consent of the governed. Critical infrastructure is very vulnerable. A small group with sufficient talent and training could do enormous damage. These snipers have not been caught so far.

Also last year sabotage at a coal electric power plant in Yallourn power station in Gippsland Australia knocked out a quarter of the power for Victoria state in Australia.

Will we live to see the day when this stuff gets done on a larger scale?

By Randall Parker 2014 February 05 08:37 PM 
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2014 February 02 Sunday
Teen Girls Want Idols Who Won't Tell Them The Truth

Athlone McGinnis explains that male celebrities need to avoid describing anything they would not like in a woman so as to avoid hurting the feelings of their followers.

These female fanbases consist of young (usually anywhere from 12-25) women who are, more often than not, quite insecure. Their fandom is often based heavily on the maintenance of a mental “relationship” with the celebrity: they may never date him, but they like to maintain the fantasy that they could someday and often place themselves in that position in their own hearts and minds. The maintenance of that relationship is the key to his celebrity: it is what keeps these girls going to his premiers, buying tickets to his shows, subscribing to every one of his social media accounts and snapping up every song he makes on iTunes. This imaginary relationship is extremely important to these girls on a personal level, and they are extremely insecure about any notion that could take it away from them. What does the relationship actually look like? Think of it like this: when he sings a love/romantic song, they imagine that he is singing to them personally.

A young social media star named Nash Grier made the mistake of making a video where he and his friends each described things they do not like in women. Large numbers of girls emoted painfully

This last bit is key because of her insecurity: she has built up this fantasy and the last thing she wants is to have it contradicted in any way, especially by the male in question. When he says there is something that he doesn’t like in a girl, she will imagine that he is speaking directly to her. If she perceives herself to be lacking some trait he explicitly desires, she’ll get very upset.

Do celebrity men get trained on what to say? Or does natural selection make honest men into losers in the competition for celebrity status.

An example response to his video from xxPunkRockGirl13xx:

Why the hell would you tell us to be ourselves when you clearly don’t like nor will you find interest in who some of us are? My self esteem was already low, but now, its worse. Thanks Nash. Congrats, you lost a vine follower.

Another good example from Fishylove123:

I find Nash’s comment at 7:10 so ironic… Be yourself? How can I be myself when you have such a long list of things that I need to be to be good enough? Thank for making me feel self conscious about myself.

I see a larger problem here: We live in an era where honest and realistic descriptions of human nature are seen as mean. The feminist left sees the masculine right as a bunch of meanies. The claim of a Republican war on self esteem shows twisted the sensitive have become in their placement of feelings ahead of truth.

When Jack Nicholson famously said "You can't handle the truth" what he said really describes American society. Will the pendulum swing back?

By Randall Parker 2014 February 02 11:01 PM 
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What A Relief: Upper Classes Big On Personal Spending

When I describe a future where capitalists move their robots offshore to small countries where most goods get produced some people raise the objection that if wealth gets too concentrated at the top demand for consumer goods will collapse. Hey, an article from the Gray Lady has great news: Companies are scrambling to satisfy the demands of the top 20%.

In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmann’s, whose Chelsea store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models.

Get this: the top 20% account for 61% of personal consumption expenditures already. The top 5% are responsible for more than half of that. So we are well along in the transition to a society where most people either do not work or do not make much money. Yet the economy has not collapsed. This means the decline of the middle class and the expansion of lower class are in the cards. The heavily robotic global economy is probably going to be successful at least for the owners of robots and natural resources.

A much bigger threat to the economy than rising inequality: declining Energy Return On Energy Invested (EROEI). The growth in oil exploration and extraction spending is slowing. Charles Hall thinks we are in danger from the decline in EROEI. This isn't just a problem for those of us who still have jobs. You welfare recipients and retirees need us to keep working and for the economy to keep humming or you are going to find yourselves in a world of hurt.

By Randall Parker 2014 February 02 09:14 PM 
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2014 February 01 Saturday
MTV TV Show Discourages Teen Pregnancy

It isn't often that cultural products in our era send useful messages to cut dysfunctional behavior in our lower classes. MTV's "16 and Pregnant" is cutting the single teen motherhood rate.

A new economic study of Nielsen television ratings and birth records suggests that the show she appeared in, “16 and Pregnant,” and its spinoffs may have prevented more than 20,000 births to teenage mothers in 2010.

Imagine that the creators of TV and movie screen plays decided they needed to steer the lower classes away from making assorted life mistakes and that TV shows focused heavily on portraying the worst mistakes of the lower classes as choices that the lower classes should stride and struggle to avoid. The message we get from the media would become much more constructive.

By Randall Parker 2014 February 01 09:56 PM 
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Rising Oil Extraction Costs

Oil production costs have been rising rapidly because the remaining oil is much harder to reach. What oil companies had to do to just keep production flat:

According to Mark Lewis writing in the Financial Times, “upstream capital expenditures” for oil and gas amounted to  nearly $700 billion in 2012, compared to $350 billion in 2005, both in 2012 dollars. This corresponds to an inflation-adjusted annual increase of 10% per year for the seven year period.

That 10% annual rate of increase held up through 2013. However, in 2014 spending on exploration and production is expected to rise by only 6.1%. The big international oil companies are struggling to maintain their production rates and profits are down at Shell and Chevron. Higher spending has failed to lift output of the majors and they are reporting big drops in profits for last quarter. Shell is cutting spending 20% in 2014.

At some point the oil field development costs for new fields will go higher that the world economy can afford to pay for oil. The big question: When? Once that happens world oil production will start to decline.

I think the high cost of oil is one of the reasons that about half the US counties still haven't recovered from the last recession. 6 years after that recession began those counties are still producing less than they did before the recession began. Think about where you live and work now. Are you well situated to weather the next recession? If the outlook isn't good then far better to make a career change before you are forced to.

By Randall Parker 2014 February 01 08:18 PM 
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