Relevant and even prescient commentary on news, politics and the economy.

Whither Social Capital?

Whither Social Capital?

This past Friday there was yet another retirement conference, this time honoring “Mr. Social Capital,” Robert S. Putnam, who is retiring from Harvard’s Kennedy School at age 77.  I was not invited, but I know some people who attended, including my sister and brother-in-law, the latter speaking at the dinner as family, the brother of  Bob’s wife, Rosemary.  As it is, I have known Bob Putnam since before he became Robert S. “Mr. Social Capital” Putnam.  That came especially with the publication in the 1990s of his massive hit book, Bowling Alone, in which he presented massive amounts of  data and arguments about the idea of social capital.  This helped trigger an outright fad among academics and policymakers, including at the World Bank, about the importance of increasing social capital in many nations so as to supposedly improve their economic and social situations.  It also led Putnam to become one of the most frequently cited living social scientists (176,000 plus times and counting, according to Google Scholar).

According to him the idea has been floating around in and out of public discourse since it first appeared in a report on education in West Virginia a good century ago.  However, it began to pick up serious academic steam starting in the late 1980s when sociologist James Coleman began studying it and writing about it.  Putnam’s own background was mostly as an expert on Italian politics, but he picked up on the idea from Coleman in the early 1990s in a famous book he wrote on Italian democracy. For him it became a crucial factor in explaining the much  better economic and social (and political) performance of northern Italy compared to southern Italy, albeit with a deep historical background.  Whereas substantial portions of northern Italy had been independent city states with long histories of civic engagement in local ruling groups, most of southern Italy spent several centuries ruled by outside and autocratic Spain, which laid the foundation for the rise of the mafia as a countervailing power, which would come to dominate the society of the Mezzogiorno with its secrecy and lying and corruption.  For Putnam one finds lots of people engaged in civic group activities in  the North, but not in the South, and I even heard him once give a talk in which he claimed that one could explain 90% of the difference in economic growth rates among Italian regions by just looking at the percentage of their populations that belonged to civic choral groups in the 1870s.  That correlation is probably correct, even if it has almost nothing to do with causation.

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A better name for The Kids Today: iGeneration

(Dan here…better late than not!)

by New Deal democrat

A better name for The Kids Today: iGeneration

You know the drill. It’s Sunday so I get to ruminate about all stuff that isn’t dry economics.
The oldest member of the Millennial generation is 38. Not only do I not think that The Kids Today would want to be lumped with that age group, but their uncool parents are probably precisely members of that group!
So what to name the generation that came after the Millennials? both “post-Millennials” and “Gen Z” are condescending and probably don’t cut it with The Kids Today. Remember, “Gen X” was originally called “the baby bust,” and Millennials were originally called “Gen Y” or “the echo boom,” before catchier names were found.
A good dividing point is whether or not you remember 9/11. If you do, and were born after 1980, you’re a Millennial. If you don’t, you’re not. Most studies seems to agree with this, using 1996 or so as the cut-off year after which you are not a Millennial. A similar if less apocalyptic marker is the Columbine school shooting of 1999. If you remember it, you’re a Millennial. If your schooling always included “active shooter” drills, you’re not.
But while the War on Terror or mass shootings have always been in the background for The Kids Today, everyday life has been dominated by something else.  If you were born after 1996, iPods were always around — and there’s a good chance you owned one. So were cell phones. For most of your youth — *always* for the younger part of this cohort — iPhones and flat screen TV’s have been around, and you probably have had one (or another smart phone) since junior high school. In fact you may spend most of your time glued to one! The term “iGeneration” captures this perfectly.

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What Happened to the Political Price for Lying? (Part 2)

by Jeff Soplop

What Happened to the Political Price for Lying? (Part 2)

Recently I wrote about the political price of lying and how there is a serious disconnect between voters (including republican voters) saying they want honesty in a politician and how they act. My initial conclusion was that many voters are lying to themselves and so, consequently, end up lying to pollsters.

With this in mind, the next question is this: just how dishonest are voters about their priorities? Behavioral science may help fill in part of the picture.

Some of the most salient behavioral research considers how we perceive honesty and integrity in others. In one notable study, researchers focused on how individual beliefs about the nature of intelligence altered these perceptions

The researchers divided study participants into two groups that are defined by their view of intelligence, entity theorists and incremental theorists. These definitions are supported by a broad base of research on human personality and intelligence, and were initially proposed by Carol Dweck of Stanford University.

Entity theorists tend to believe that intelligence is fixed and based on underlying traits, and so they often draw conclusions even from having only limited information about others. Incremental theorists, by contrast, view intelligence as malleable and able to be developed through hard work.

Once divided, study participants – in this case a group of MBA students – were randomly split into buyers and sellers and guided through a multi-stage exercise called the Bullard Houses negotiation case. The exercise involved negotiating over a fictional property sale and was structured such that buyers had an incentive to deceive the sellers but were not allowed to reveal their deception. Research assistants, who were blind to the hypotheses, coded the negotiations. In almost all cases (94%), buyers did in fact engage in a deception of the seller.

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Candidate Specific Response Bias in Polls

Low response rates are a problem for pollsters. The worst problem is candidate specific response bias in which supporters of one candidate are more likely to respond than supporters of another. This can make polls worthless. It is interested to the other very hard problem of predicting who will actually vote.

I am thinking of something a friend told me about 2012. Obama’s support dropped dramatically after the first debate (and this is clearer with the campaigns gigantic sample polls). You said you talked to one of Obama’s pollsters and she told you that they concluded this was due to changing responce rates to the poll — that people who supported Obama didn’t want to talk about politics.

I have been thinking about how to determine this using the rich data from voter registries which they had. I had a thought. I think it might be possible to get useful information about response rates and bias by polling as well as possible and also badly. It is hard to make the problem smaller, but easy to make it larger.

The idea is that with comparitively weak assumptions, one can figure out response bias by looking at how much larger it is with the worse interview approach. So do both human direct dial and robopoll (machine call) & compare response rates as a function of observed characteristics *and* support for candidates among respondents. Or human calls & either says thank you and hangs up at first resistence, or read a brief script asking people who say they are busy to please participate in a special super brief one minute poll.

Without this I think they had to make strong assumptions about how the disturbance to the participation probit and the support Obama regression are jointly normal. I might be ignorant, but I think this is true.

I think such different interview scripts (and human vs machine) might also be useful for predicting who will actually vote. The first election it is tried, it can only be compared to people claiming they will certainly vote, but with actual turnout data (votes are secret — who voted is not secret) things could be improved.

The point, if any, is that campaigns have huge resources compared to independent pollsters who publish results — just polling a huge sample is not necessarily the best way to use those resources.

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What Happened to the Political Price for Lying?

by Jeff Soplop

What Happened to the Political Price for Lying? (Part one of two)

James Comey’s recent interview on ABC has resurrected questions about the importance of honesty in public officials. One of the key themes of Comey’s interview, and apparently his soon-to-be-released book, is that Donald Trump is “morally unfit” to be president because, among other things, he lies constantly.

Certainly Comey’s statements reflect a broad public despair about how untrustworthy the institution of the presidency is, as shown in the following chart from the Pew Research Center.


Figure 1

 

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The Citigroup Analysis of the Amazon – USPS Relationship

Steve Hutkins of Save the Post Office blog also reviewed the WSJ/Citigroup analysis of the Amazon – USPS agreement in the second half of his article, “Fake News, Flawed Analysis, and Bogus Tweets,” April 8 on Angry Bear. As noted in the first half on Steve’s article presented at Angry Bear; Trump’s tweet about the Postal Service undercharging Amazon by $1.50 per parcel is based on a July 2017 Wall Street Journal article undercharging Amazon was based on an April 2017 report by Citigroup.

Citigroup is bullish on UPS and FedEx because, it says, they will enjoy “a better pricing environment in the future” since the Postal Service is soon going to need “to raise rates meaningfully to capture its true costs.” (Of course, if USPS shipping rates were to go up, UPS and FedEx would need to pay more for “last mile” deliveries by the Postal Service, but with higher rates or a bigger market share for their own deliveries, the net result would be to their advantage.)

If these “true costs” are not eventually covered by higher rates, says Citigroup, the taxpayer is going to be on hook for the Postal Service’s financial problems and, by extension, for the “free shipping” Amazon is offering.

In order to identify these “true costs,” the Citi analysts outline two scenarios that illustrate how the Postal Service is charging below market prices for shipping services.

Scenario #1: Paying off the prefunding

In the first scenario, Citigroup focuses on the so-called “prefunding mandate” established in 2006 by Congress with the Postal Accountability and Enhancement Act. Under PAEA, the Postal Service was required to pay $5.5 billion a year, for ten years, into a fund to cover the costs of retiree health care for decades down the road.

How this Retiree Healthcare Benefit Fund (RHBF) came to be is a long story, as discussed in this previous post. Much of the story remains shrouded in mystery, though, because the U.S. Senate decided to withhold publication of the Committee report that described its rationales for the Act’s provisions. But the long and short of it is that the decision to mandate annual contributions of $5.5 billion turned out to be a disaster.

In 2006, the Postal Service was doing great and coming up with over $5 billion a year didn’t seem like a big problem, but then the Great Recession hit, postal revenues took a dive, and it wasn’t long before the Postal Service had to start borrowing from the Treasury to make the payments. When it reached the borrowing limit, the Postal Service just started defaulting on the payments.

This prefunding mandate is responsible for almost all the deficits you read about in the news every time a USPS fiscal report is published. Were it not for the prefunding requirement, the Postal Service would be doing just fine over the past few years, usually breaking even or showing a relatively small profit or loss. According to the FY 2017 10-K report (p. 17), if one looks solely at “controllable” costs and income (i.e., excluding the RHBF payments and other actuarial issues), the Postal Service lost $814 million in 2017 and made a profit of $610 million in 2016 and $1.188 billion in 2015.

In any case, for their first scenario, the Citigroup analysis assumes that “a day of reckoning is approaching” when the Postal Service “must resume making annual prefunding payments to the PSRHBF as well as meeting the amortization schedule on the accumulated $33.9B it owes, as laid out in its FY16 annual report to Congress.”

In addition, says Citi, the Postal Service will need to contend with rising operating costs and declining Market Dominant revenues. According to Citigroup, in fiscal year 2017 the Postal Service will therefore need to bring in an additional $8.3 billion, growing to $9.6 billion in 2019.

For some reason, the Citi analysts then assume that parcel mail would need to cover all of this additional revenue. This, they estimate, would require a 50 percent hike in the price of an average parcel, an increase from $3.50 to $5.25 — or about $1.75 per piece.

The problems with Scenario #1

This scenario is seriously flawed for several reasons. First of all, there’s no reason to believe that such “a day of reckoning” is coming. If anything, we’re heading for a day when Congress recognizes the mess it created with the prefunding mandate and does something to fix it.

As reported by Government Executive, there’s currently a bill in Congress (the text isn’t available yet) under which “Outstanding payments [to the PSRHBF] would be wiped clean and USPS would make actuarial payments toward the remaining liabilities over the next 40 years.”

A 40-year amortization schedule was actually being recommended back in 2006, but the Bush administration pushed for the 10-year schedule that caused all the problems. Such a relaxed schedule would mean annual payments on the order of $1 billion rather than $6 billion, and essentially eliminate the premise on which Citi’s Scenario #1 is based.

A second problem with this scenario is that it assumes the entire $8 billion in increased revenue would have to come from shipping services. But if the Postal Service had to bring in an additional $8.3 billion, it would surely spread the hurt out over all types of mail and not put it all on parcel shippers.

Annual revenues in 2017 were about $70 billion. To bring in another $8.3 billion would require an across-the-board rate increase of about 12 percent. Since such an increase exceeds the price cap on Market Dominant products, the Postal Service would need to request what’s called an exigent rate increase from the PRC due to the “extraordinary” circumstances of being required to pay off the prefunding mandate. That’s happened once before. In 2013, the PRC granted a 4.3 percent increase for about two years to help the Postal Service make up losses due to the Great Recession.

An across-the-board increase of 12 percent would be a serious matter, and mailers, large and small, would go ballistic. One of the effects would be that the rates Citigroup pays to send credit card bills and solicitations would also go up, which would cost the corporation millions of dollars. Maybe that’s why the Citi analysts assume that parcels would need to bear the entire burden of producing the additional revenue.

Anyway, a 12 percent increase on an average piece of Parcel Select ($2) might mean about 24 cents more on a typical Amazon package — not the kind of thing to generate headlines or presidential tweets.

Citigroup actually acknowledges the problems with this scenario later in its report. It notes that the Postal Service could increase postage on other types of mail, Congress might permit the partial reinstatement of the exigent surcharges previously approved by the PRC, and Congress could also provide relief from statutory obligations to prefund certain benefits obligations. Plus, if the Postal Service were to increase parcel pricing significantly, it would do so gradually.

Citigroup calls these “caveats” but they are really much more. Each of these possibilities is much more likely to happen than a 50 percent increase on parcel rates just to cover the costs of retiree health care. Scenario #1 is never going to happen.

Scenario #2: Changing the contribution to institutional costs

In the second scenario, Citigroup notes that when PAEA became law in 2006, Competitive products were assigned a 5.5% share of institutional costs. At the time, parcels represented a relatively small part of the Postal Service’s business, but with the boom in e-Commerce, parcels have become a much larger part. Competitive products now account for about a third of the Postal Service’s revenues.

Over the past few years, UPS has filed several analytic studies and legal briefs with the PRC arguing that Competitive products are not paying their “appropriate share” of institutional costs. According to UPS, the appropriate share would be 24.6% (or even more), as opposed to the 5.5% determined over a decade ago. UPS’ motives are not ambiguous. An increase in contribution to institutional costs would mean an increase in the Postal Service’s parcel prices, which would improve UPS’ position in the market — it could raise its own rates and/or grab a larger piece of the pie.

For its Scenario #2, the Citigroup analysts “work through the impact if the UPS’s suggested 24.6% estimate is instituted.” To do this, they “calculate competitive products’ share at both the current understated 5.5% rate and the updated 24.6% rate proposed by UPS. The difference between the two rates represents the incremental institutional costs that need to be allocated to competitive products.” Here’s how that works out.

For 2017, total USPS operating expenses (i.e., not including the retiree health care expense) were about $70 billion, about half of which were categorized as variable (attributable) costs and half were fixed (institutional) costs. Figured at the 5.5 percent set by PAEA and Citigroup’s estimate of institutional costs (52 percent of total costs), the appropriate share for Competitive products would come to about $2 billion (that’s $70 billion x 52% x 5.5%).

Citi then looks at what would happen if Competitive products had to cover their appropriate share of the fixed costs by using the 24.5 percent figure. The result would be that Competitive products would have to contribute about $9 billion (i.e., $70 billion x 52% x 24.3%).

According to Scenario #2, Competitive products would therefore need to pay $7 billion more for Institutional costs. That would require a rate increase on shipping services comparable to the one determined by Scenario #1 — almost 50 percent. Average parcel rates would go from $3.51 to $4.97, an increase of $1.46. That is the origin of the claim made in the WSJ article, and it’s the basis of Trump’s tweets.

The fatal flaw in Scenario #2

The fatal flaw in Scenario #2 is the assumption that competitive products are currently contributing only 5.5 percent to institutional costs. This 5.5 percent share is actually just the floor set after PAEA was enacted back in 2006, when the PRC determined (as stated in the ACDR) “that if Competitive products contribute at least 5.5 percent toward the Postal Service’s total institutional costs, then, as a whole, they will cover an appropriate share of the Postal Service’s total institutional costs” (p.92).

But competitive products contribute much more than 5.5 percent. According to the 2017 Compliance report, “In FY 2017, the total institutional costs of the Postal Service were $29.700 billion. To comply with 39 U.S.C. § 3633(a)(3) for FY 2017, Competitive products must have contributed at least $1.634 billion toward the Postal Service’s institutional costs. In FY 2017, the total Competitive products contribution was $6.806 billion (approximately 23 percent), which exceeds the minimum contribution requirement.” (italics added, p. 92).

While the numbers differ slightly from Citigroup’s estimates for 2017, the point is clear enough. Competitive products are not contributing 5.5 percent to institutional costs; they are contributing more than four times that amount, and they are contributing almost exactly what Citigroup and UPS say they should be contributing, about 23 or 24 percent.

The Citigroup report observes in a footnote that UPS has subsequently argued that competitive products’ appropriate share should be even higher, like 29 percent. Even at that level, the impact on the prices of Competitive products would be modest compared to what Scenario #2 envisions.

For the past couple of years, there’s been a lively debate at the PRC about how much Competitive products should contribute to institutional costs. (See, for example, PRC Docket No. RM2017-1 on “Institutional Cost Contribution Requirement for Competitive Products.”) While UPS has argued for a higher minimum floor, others have argued that there doesn’t need to be a minimum at all. In its comments on the issue (January 23, 2017), for example, Amazon states this:

“Competitive products are covering almost are four times the share of the Postal Service’s institutional costs that the Commission mandated five years ago. The contribution and cost coverage of competitive products are now far too high to support any credible allegation that a binding minimum contribution requirement is needed to preserve a ‘level playing field’ for the Postal Service’s competitors, let alone to avoid cross-subsidy, predatory pricing, or any other alleged form of unfair price competition, or provide a margin of safety.”

Whatever the Commission ultimately decides to do about the minimum contribution level, the key point here is that Citigroup’s Scenario #2 is based on the mistaken assumption that Competitive products are currently covering only 5.5 percent of the Postal Service’s institutional costs, when in fact they are contributing more than four times that amount. There’s no shortfall of $7 billion that needs to be made up by a big increase in parcel prices.

Considering how sophisticated the Citigroup analysts are when it comes to making projections, it’s perplexing that they missed this basic fact.

The $2.6 billion in additional costs for Amazon

The other number that Trump has tweeted also comes from the Citigroup report. In this tweet, Trump says, “If the P.O. ‘increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.’ This Post Office scam must stop. Amazon must pay real costs (and taxes) now!”

Here’s where that number $2.6 billion comes from.

The Citi analysts outline a “worst case scenario” in which Amazon must bear a 50 percent increase in its costs with the Postal Service, plus a 20 percent price jump with FedEx and UPS, which will be able to raise their prices thanks to the price hike by their competitor.

The analysis gets pretty complicated, but the bottom line, says Citigroup, is that Amazon would incur an additional $2.6 billion in shipping costs.

Trump’s tweet makes it sound as if the Postal Service itself is missing out on $2.6 billion a year in revenue from Amazon, but that’s not the case, and it’s really misleading, to say the least, to make such a claim.

Cost coverage on the Amazon deal

If you want to get even deeper into the weeds on all this, let’s take a look at the cost coverage for the type of mail Amazon is using.

While the Amazon NSAs are nonpublic, one can get a good sense of just how successfully the products are covering costs by looking at a couple of USPS financial reports.

This USPS report shows that in 2017 Parcel Select brought in $5.67 billion on 2.8 billion pieces. This second USPS report shows the cost coverage for each type of mail. It doesn’t mention Parcel Select, but it provides data for Total Ground mail, which includes Parcel Select, Standard Post, and Parcel Return Service. It shows that in 2017, Ground brought in about $6.2 billion in revenue on about 2.88 billion pieces. Parcel Select thus accounts for almost all Ground mail, so the data on cost coverage for Ground can give us a ballpark view of the cost coverage for Parcel Select and, by extension, the Amazon NSAs.

The second report shows that the average Ground piece brought in $2.148 in revenue. The variable cost was $1.221; the rest — $0.927 — was contribution to institutional costs. The cost coverage was 175.86 percent.

If you compare this to the cost coverage for other types of mail, you’ll see it’s typical. First Class letters, for example, have a cost coverage of 164 percent, and First-Class mail overall has a cost overage of 210 percent.

A few types of mail have a cost coverage below 100 percent. Standard Mail flats, for example, have a cost coverage of about 74 percent, and Periodicals, about 70 percent. While these types of mail do not cover their attributable costs, there are legal and policy reasons why some of that failure may be considered excusable. In any case, the issue is regularly discussed in the PRC’s compliance reviews, and all the stakeholders are well aware of the issues.

If the cost coverage on Amazon’s Parcel Select is anything like 175 percent, there’s clearly no cause for concern that the Postal Service or the taxpayer is somehow subsidizing Amazon delivery.

Perhaps an upside

There are many reasons to criticize Amazon — its success is hurting brick-and-mortar businesses, it exploits its workers with low pay and poor working conditions, and it’s “no fan of labor unions” — and there are plenty of reasons for criticizing the Postal Service as well, like the way it underpays its non-union employees and abuses the emergency suspension provision to close post offices without due process.

There are also reasons to raise questions about the relationship between Amazon and the Postal Service, as we’ve done on this website since the deal to deliver for Amazon on Sundays was first announced in 2013. STPO contributor Mark Jamison’s posts on Amazon and the lack of transparency in the NSAs are still worth reading. (Our Amazon posts are archived here.)

Criticisms aside, there’s little reason to believe that the Postal Service is significantly undercharging Amazon for delivering its parcels. The cost coverage data show that parcels are more than covering both their attributable and institutional costs, the PRC has reviewed the NSAs and found them in compliance with the relevant statutes, and there are serious flaws with the Citi analysis on which the claims for underpaying are based. There’s absolutely no evidence that the Postal Service is losing a fortune on the Amazon deal.

While Trump’s tweets on the post office are bogus, perhaps we should at least be thankful to the President for raising some important questions about the Postal Service. Perhaps his tweets will lead to some thoughtful Congressional hearings on postal topics. Perhaps the pension and health care cost issues will finally get clarified. Perhaps the Postal Service will address public concerns by providing more transparency about the deals it strikes with companies like Amazon. Perhaps, perhaps.

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In The News

The OM Wiener award goes to House Speaker Paul Ryan. Paul Ryan can’t just leave, go home, and check with Oscar Mayer to see if he can still drive the OM Wiener Mobile again like he did as a college student. Naaaw, instead he is threating baby boomers with making them pay again for their SS.

Ryan: “The one thing I obviously care a great deal about is entitlement reform and in particular health care entitlement reform,”

To put it into Randian language, the end of Medicare, Medicaid, and the ACA.

Ryan: “The boomer generation is retiring and we have not prepared these programs,”

Before we give Paul the keys to the OM Wiener Mobile and he cracks it up, maybe he should explain? In spite of baby boomers building up a trust fund which has been used to cut taxes for corporations, the 1%, and other special interests, Paul who went to college on SS Survivor Benefits wants baby boomers to pay again and more.

– Then there is Kentucky Governor Matt Bevin.
Angry teachers took to the streets at the Kentucky state capitol in Frankfort Kentucky during the final days of the legislature shouting; “What do we want? Funding! When do we want it? Now!”

39 school districts, including the state’s largest in Louisville and Lexington closed as a result of teachers taking days off to go to Frankfort and protest the lack of action by the legislature. The bill passed by the legislature failed to shore up a state employees’ pension system that has less than a third of the money on hand that it needs to pay retirees.

Governor Matt Bevin had this to say about the teachers at the state capitol: “I guarantee you somewhere in Kentucky today a child was sexually assaulted that was left at home because there was nobody there to watch them, I guarantee you somewhere today a child was physically harmed or ingested poison because they were home alone because a single parent didn’t have any money to take care of them. I’m offended by the idea that people so cavalierly and so flippantly disregarded what’s truly best for children.”

R.Lee Ermey died April 15, 2018 at the age of 74. For those of you who may not make the connection, honorary Gunnery Sergeant Emery played the Platoon Commander during Boot Camp in Stanley Kubricks “Full Metal Jacket.” I thought he was a lifer like my cousin who was a Master Gunnery Sergeant. Ermey served from 1961 to 1972. He did give a very convincing display of a drill instructor and convinced me of his authenticity. There was a private Joker, Snowflake, and Pyle. I was in Boot Camp with them. Staff Sergeant was in country for 14 months in 1968. He earned his honorary second rocker. Semper Fi.

A picture of a Trump staff meeting showing Vice President Pence in attendance and reviewing the strike on Syria was now said to be a meeting on Thursday night when Trump was updated on Syria. White House spokesperson Sarah Huckabee Sanders used this picture to show a meeting which occurred on Friday night.

Unfortunately for Sarah Huckabee Sanders, VP Pence was in Peru on Friday night when the strike occurred. However, the picture was not on Thursday night either as UN Representative Nikki Haley was pictured in a striped shirt which she wore on Wednesday and not Thursday. Damn those eagle-eyed Whitehouse Press Correspondents.

From Peru, Vice President Pence was busily updating Congress on the air strike. Something President Trump would never had thought of doing.

– Like Father, like son. Apparently, Trump junior as a judge on the show Apprentice felt it was necessary to interview one of the contestants. Michael Cohen was able to get US Weekly to pull the story. Trump Jr is ending his 12 year marriage to his present wife Vanessa. The apple has not fallen far from the tree. I am sure there is more to be discovered with Michael Cohen.

– Finally, it is April 15 and here near Ann Arbor Michigan we have had snow and freezing rain again. It must be some of that fake climate change stuff going on which some of our commenters deny is happening. The climate is changing and not for the better.

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Eviction Data Base shows we have a housing crisis

I am posting this NPR Fresh Air radio article here because it talks about a part of our society that has not been talked about much.  When it comes to discussion of taxation, social programs, how our economy works, the basic premise of free market misses an awful lot.

From the page:

For many poor families in America, eviction is a real and ongoing threat. Sociologist Matthew Desmond estimates that 2.3 million evictions were filed in the U.S. in 2016 — a rate of four every minute.

“Eviction isn’t just a condition of poverty; it’s a cause of poverty,” Desmond says. “Eviction is a direct cause of homelessness, but it also is a cause of residential instability, school instability [and] community instability.”

Desmond won a Pulitzer Prize in 2017 for his book, Evicted: Poverty and Profit in the American City. His latest project is The Eviction Lab, a team of researchers and students at Princeton University dedicated to amassing the nation’s first-ever database of eviction. To date, the Lab had collected 83 million records from 48 states and the District of Columbia.

“We’re in the middle of a housing crisis, and that means more and more people are giving more and more of their income to rent and utilities,” Desmond says. “Our hope is that we can take this problem that’s been in the dark and bring it into the light.”

One stat that stood out: The average age of the homeless is 9 years old.  That is how many homeless are children.

Incomes have remained flat for many Americans over the last two decades, but housing costs have soared. So between 1995 and today, median asking rents have increased by 70 percent…So when we picture the typical low income American today, we shouldn’t think of them living in public housing or getting any kind [of] housing assistance for the government, we should think of folks who are paying 60, 70, 80 percent of their income and living unassisted in the private rental market. That’s our typical case today.

What is understood after listening is again, as a nation we are penny wise and pound foolish.  Somehow, some way we have to get this nation to understand it is less expensive to take care of people than it is to let them live in disparate poverty.

Stabilizing a home has all sorts of positive benefits for a family. The kid gets to finish school. The neighborhood doesn’t lose a crucial neighbor. The family gets to root down and get to understand the value of a home and avoid homelessness. And for all of us, I think [we] have to recognize that we’re paying the cost of eviction because whatever our issue is, whatever keeps us up at night, the lack of affordable housing sits at the root of that issue. …

 

Enjoy.

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Unresolved Issues In Happiness Economics From The Conference Honoring The Retirement Of The Field’s Founder

Unresolved Issues In Happiness Economics From The Conference Honoring The Retirement Of The Field’s Founder

That would be Richard A. Easterlin, age 92, retiring this spring from the U. of Southern California after being there since 1981, following an earlier stint at U. of Penn, where he got his PhD under Simon Kuznets.  Kuznets in turn got his from Wesley Clair Mitchell, who was in turn the student of Thorstein Veblen, and it was mentioned (by me actually) at this conference that happened over this past weekend at USC that Easterlin’s work has emphasized the issue of social comparisons that was strongly developed by Veblen in his 1899 Theory of the Leisure Class.  This applies not only to his famous Easterlin Paradox, the starting shot shown in his long ignored 1974 book chapter that started happiness economics, but also in his earlier Easterlin Hypothesis on demography in economic history.  As it was, this conference focused on happiness economics, with several leading figures in the field present.  I shall note some matters that were disputed at the conference and remain open.

Probably the most hotly disputed is the matter of the relationship between age and happiness (more frequently labeled “social well being” or “life satisfaction”).  The current more or less conventional  view is that this is on average a U-shaped relation, at least in the US, with people happy at 20 but with this declining to about 45 or so, and then rising after that.  There are serious problems with measuring this, especially the fact that we do not have full panel data following individuals throughout their lives so as to avoid the bias induced by the fact that happier people tend to live longer than unhappy ones, which skews results at the upper age end for simple cross-section studies.  A more recent finding from European nations suggests this may be more of an M-shape, with happiness actually rising a bit from 20 into the late 20s or so, declining to about 45, rising to about 70, but then either plateauing or even declining slightly after that.

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Pseudo-Equity: Further Remarks on the Politics of Mandatory Diversity Training at Evergreen

Pseudo-Equity: Further Remarks on the Politics of Mandatory Diversity Training at Evergreen

This post follows the previous one and explains why I get so exercised about the politics of equity at a place like Evergreen State College.  The single issue at the heart of activism at Evergreen for the past two years is mandatory diversity training for faculty.  This was first proposed by the Equity Council (which was set up by the college administration and whose name changed a bit from year to year) and brought before the faculty, where it failed on a secret ballot.  Equity people were furious and concluded that (a) the faculty had just demonstrated its deep-seated racism, and (b) they would have to go directly to top administrators to impose these trainings anyway.  This perspective was picked up by activist students, who felt that only confrontation could rid the campus of its plague of professors who refused to deal with their own racism.  This is a bit of a cartoon version, I admit, but it is broadly accurate and provides essential context for understanding why someone like Bret Weinstein got the treatment he received.

So what about mandatory training?

I agree completely that it takes a tremendous amount of skill to negotiate issues involving race, gender and sexual preference in the classroom.  I’ve learned a lot over the years, and I definitely don’t think I’ve arrived at perfect wisdom.  I’m always trying to improve.  For me this is about both better serving the students in front of me and addressing the larger inequalities we’re all enmeshed in because we live when and where we do.  I’m absolutely in favor of providing lots of resources for all faculty to work on this front.

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