Author: VD

The Best Little Whorehouse in Washington

Closes temporarily:

Washington Post publisher Katharine Weymouth said today she was canceling plans for an exclusive “salon” at her home where for as much as $250,000, the Post offered lobbyists and association executives off-the-record access to “those powerful few” — Obama administration officials, members of Congress, and even the paper’s own reporters and editors…. Weymouth said the paper had planned a series of dinners with participation from the newsroom “but with parameters such that we did not in any way compromise our integrity.

I don’t see what the problem was. It’s not as if they had any integrity to start with. Nor is it any secret as to why the media is dying so quickly, not with complete cretins like these in charge.

But it’s an investment!

I believe most regular readers are familiar with my opinion that taking out student loans in order to obtain pieces of paper from paper-selling institutions is usually a remarkably stupid idea. However, even those who think equate spending on education with investment must admit that the utility of the concept has its limits:

Robert Bowman was refused entry to the New York bar because of $400,000 in student debt…. “The size of this account is extremely unusual, but not surprising given that the customer took out 32 loans to pursue undergraduate, law and masters of law studies and has not made a single monthly payment over his 26-year student loan history,” Ms. Holler said.

Doesn’t the New York bar know that that studies show people with graduate degrees make loads more money over their lifetime? With an investment of $400,000 in Mr. Bowman’s education, surely he’ll be worth hundreds of millions soon!

As if this story wasn’t amusing enough, one can only wonder what Mr. Bowman would have to do in order to sufficiently establish: “the character and general fitness requisite for an attorney and counselor-at-law”. Murder his mother with an axe? Rape a baby seal? Run an underage gay prostitution ring?

Krugman and the 50 Hoovers

UPDATE: Krugman keeps piling on the verifiable historical falsehoods. It may interest you to note that I prepared a version of this chart the day before his most recent column, that’s how predictably wrong he is:

All of this is depressingly familiar to anyone who has studied economic policy in the 1930s. Once again a Democratic president has pushed through job-creation policies that will mitigate the slump but aren’t aggressive enough to produce a full recovery. Once again much of the stimulus at the federal level is being undone by budget retrenchment at the state and local level.

Where, one wonders, is this “budget retrenchment” of which he speaks. It was only Federal spending that declined in 1937 and 1938, as Krugman even notes in describing 1937 as “the year that F.D.R. gave in to the deficit and inflation hawks”,so to point the finger at the state and local governments who were doing precisely the opposite of that Democratic president is bizarre. Krugman is playing a dishonest game, implicitly referencing the two-year decline in local spending with regards to events three years later. And state spending never declined, so Krugman’s 50 Hoovers theme is not only demonstrably wrong on two levels, as can be seen in the three charts below.

Now, it must be admitted that Krugman could, theoretically, have made a case by utilizing spending as a percent of GDP. However, he doesn’t dare because that would show Herbert Hoover to have been significantly more aggressive in his use of expansionary fiscal policy than FDR and that would explode far more than Krugman’s argument for a third fiscal stimulus package in three years.

Our favorite Nobel prizewinner wrote the following back in December:

But even as Washington tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers — state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future.

Very well, let’s look at the action of Herbert Hoover and compare his four years in office to the previous four years using constant 2000 dollars in order to correct for inflation/deflation. I don’t know about you, but I sure don’t see any spending being slashed.

While the deflation of what Milton Friedman called The Great Contraction often confuses the economic analysis of those who fail to account for it, Krugman doesn’t even have that excuse as a potential fall-back position. Federal spending not only increased in real terms and as a percentage of GDP, but increased in nominal terms as well.

Now, Krugman may well be right in that the state governments will be forced to slash spending as the economy continues to contract. However, this does not change the fact that this was not the historical behavior of either Herbert Hoover or the state governments, and likely has nothing to do with economic ideology. It is nothing more than the deficit-spending of the recent past limiting their range of options.

Mailvox: better sooner than later

JB wonders what to do next:

I’ve been reading your blog ever since I finished The Irrational Atheist and I am currently participating in your Voxiversity III study. I have a question for you concerning college education.

I earned my B.S. degree in Molecular biology and worked some at a local community college teaching some basic math courses. I then applied to a PhD program in Biomedical Science and was accepted. I’ve been in this graduate program for a year now, but I have realized that I am not cut out for research and the whole degree just seems like a waste of 5-6 years (the official time for completion). I have read your statements in the past concerning the “paper-selling institutions” and the problems with college educations, and I am inclined to agree with you at this point. My problem is that I am now about to be leaving a program (which is essentially my job) and beginning a job search during a rather poor economic state (I have three weeks to find full-time work) and having very few marketable skills. Since you have investigated this more than I have, what can a guy like me do to find work? It has become clear that my B.S. degree is really quite meaningless, so I feel as though my job options are very limited. I am married and I need to maintain a certain level of income, so my situation needs resolution quickly. At this point, I’ve asked everybody I know for advice and all that they have come up with is simply “stay in the PhD program”, even though I would like to hear some alternatives.

First, I should like to commend JB on at least attempting to think for himself in the face of what is likely significant social pressure. Second, I would urge him to keep in mind that a pursuing an education is not “essentially a job”, it is not a job of any kind except to the extent that one is financially compensated for pursuing it. Given the many complaints I’ve read about the sweatshop income provided to graudate students, it seems hard to imagine that one could not do better working in consumer retail, if nothing else.

The three-week time frame complicates things, of course, but the first thing that I would do is find some sort of income-producing job no matter what it is. I have seen lawyers take jobs selling computers at big box retail outlets and MBAs take jobs at department stores; at least in the case of the former it worked out extraordinarily well, so JB should not be too proud to work low-status labor. That’s just to generate a positive income flow and send a signal to the next employer that one is willing to do whatever it takes to get the job done.

The second step is to identify the employment areas that are undermanned in JB’s area. I would look at technical service areas like plumbing and automotive mechanics that see constant demand regardless of the economic situation. Talk to people, find out where the shortages are, then go speak with the owners of those firms. Employers like smart worker with personal initiative, so that fact that he doesn’t know anything but is willing to learn will be a bonus. He might consider looking to see if he can combine work as a trainee and office assistant; every business needs someone to handle the paperwork and that’s something that even a molecular biologist should be able to handle.

The most important thing to understand is that “staying in the PhD program” is not working. Unless he’s got an unusually sweet deal, it’s cost compounded by debt, not income. Nor is it an “investment”, investments have expected ROI which there’s virtually no chance that anyone has actually bothered to compute in this case. And, because of the oversupply of PhDs, JB doesn’t have any guarantee of a job at the end of the process anyhow. It’s a gamble, and an expensive one with low odds at that.

I don’t know if JB’s wife is likely to pose an additional complication or not. Is social status more important than financial stability to her? On the one hand, it might be a perceived come-down to be married to an assistant pig-keeper rather than Dr. Molecular Biologist. On the other, she might prefer not to live her life trying to claw her way out of debt during a major debt-deflation cycle. So, that may be a consideration too, since divorce imposes more financial costs than a sub-optimal career.

Done, sort of

After what in retrospect looks like a ludicrously short period of time, the first draft of the new book is now in to the publisher. I’ll be sending out chapters to proofreaders tomorrow, in case you volunteered and were wondering why I hadn’t sent you anything yet. There’s still the whole editing process to go through yet, to say nothing of the various appendices, but it’s still nice to feel as if one of the major milestones is in the rear view mirror.

UPDATE – of course, this exchange of emails may not bode so well for its mass appeal:

At the cajoling of DC, I’m writing to you about the post “laughing at myself.” We were talking about it last night, and DC said that it went well above his understanding of economics. I said, “Oh yeah. I read the first sentence and looked at the chart and tried again… looked at the chart, decided math was hard and went to look at kittens.” When DC started breathing again after laughing himself silly, he told me to email that you and that it was a new level of economic geekdom that we just didn’t get.

I have no idea who this broad is or what she’s talking about. I’m assuming she’s some crazy woman with a bunch of cats. I can tell you for certain that I often encourage people to do things. Sometimes I even persuade. But I have never, ever cajoled anyone. (I’m not even sure what that means but it sounds dirty.) Also, I find your boring, laborious, snooze-fest posts on economics down-right inspiring. As a good sycophant, when I start to nod off while trying to finish one, I assume it must be because I’m stupid and my priorities are wrong. It’s just a reminder that I’m not yet perfect and I need to work harder at being like you.

Clearly I need some better sycophants. Or at least some smarter ones. And contra the notion that the new book will be a complete snoozefest, I think I can probably guarantee it will be the only one of its kind containing a quote about collecting morning dew in human skulls during the post-apocalypse.

The education bubble

A professor from Columbia and others warn of the financial danger of pursuing degrees:

The next bubble to burst will be the education bubble. Make no mistake about it, education is big business and, like other big businesses, it is in big trouble. What people outside the education bubble don’t realize and people inside won’t admit is that many colleges and universities are in the same position that major banks and financial institutions are: their assets (endowments down 30-40 percent this year) are plummeting, their liabilities (debts) are growing, most of their costs are fixed and rising, and their income (return on investments, support from government and private donations, etc.) is falling. This is hardly a prescription for financial success…. And now the economy makes matters worse. Only 19 percent of the class of 2009 had jobs at graduation.

The problem with most analysis of the value of a college or graduate degree is that the aggregate figures include the sharks graduating from the elite schools – many of whom would have been just as successful without their degrees – and then attempt to apply it to Jane Average who is planning to attend Podunk State. Many years ago, I read a book called Class. It was a pretty funny book, but one point that I remembered was the citation of a study which showed that unless you obtained it from a university that had been established prior to some date in the nineteenth century, your degree wouldn’t add anything to your expected lifetime income. Perhaps the figures have changed in the intervening 25 years or so, but if more than 80 percent of the 2009 graduates are still unemployed, it’s pretty obvious that a degree is not the obvious choice it was once considered to be.

Which makes sense. The supply of college graduates has nearly quadrupled since 1950 and the limits of the demand for them has been exceeded. Therefore their price is bound to decline.

Quote for the day

The truth is that the State is a conspiracy designed not only to exploit, but above all to corrupt its citizens.
– Leo Tolstoy

Mailvox: is marriage worth it?

CW seeks for advice:

I am trying to figure out if marriage is worth it. I am also trying to figure out if dating is worth it. I was dating a man for 1 1/2yr only to have him end it because I could see us getting married and he couldn’t see it ever working for us. I am a divorced single parent and this man is the closest I have ever come to finding someone I thought I could spend my life with. The relationship was wonderful but for reasons that make no sense to me its over. Now I wonder, after having a string of horrible relationships and then having one that was so good not work out, what hope is there that I will ever find someone worth being with that will want to be with me too? I am still friends with him and he still treats me really good. I am at a lose to understand what he is doing. It was always a dream of mine to get married and have a lifelong love. Now I am afraid and my heart is hurting because I am slowly realizing this dream will never happen. Its like telling and explorer they can never go exploring again. Its a crushing blow.

Everything else I want in life I can attain because if I want to all there is to do is make it happen except this one thing. Marriage because it requires two people someone else has to be willing and I am scared I will never find that person.

Is marriage worth it? Well, I should say it increasingly depends on the sex and religion of the individual. In its present state-dictated form, marriage is very much worth it for women, it is a tolerable and necessary risk for religious men, and it is an incredibly stupid gamble for non-religious men. Was this man religious? If not, then you are not only dealing with whatever personal issues may or may not have been present, but also with the reality that you are asking him to stake his entire emotional and financial future on your passing fancies. That is problematic if you happen to be interested in men with IQs over 85.

As to the larger question, I don’t know that it’s entirely relevant. As a single mother, it very much behooves you to find a father for your child. That is more important than any questions of self-fulfillment or romantic stars, and anyhow, if you’ve had a long string of horrible relationships, it should be clear by now that the follow-your-feelings approach to acquiring a husband is probably not the optimal one. The good news, however, is that there isn’t just one perfect man that you somehow have to find and curse the luck if he happens to have been born in Tibet where he’s being raised to be a Buddhist monk sworn to celibacy and silence. More than a few of the three billion men on the planet are excellent potential husbands, the trick is to stop wasting your time on the non-starters. You shouldn’t need 18 months to determine that a man isn’t in the marriage market.

I really wish more men and women understood the concept of opportunity cost. Every day you waste with someone who has demonstrated that he is not a potential husband is one less day you have to meet a man who is. Don’t seek to change them, accept and respect their perspective and move on. The other important thing is to refuse to let the ideal become the enemy of the real. The man you marry today will not be the man you are married to in a decade, just as you will not be the same woman. Remember that marriage and love are as much processes as states.

As for the gentleman who delivered the crushing blow, I think it might be educational to have a frank conversation with him. Ask him not to let you down gently and fall back on generalities as he has done, but to explain precisely why he doesn’t see it working out. Make sure you let him know you’re not trying to change his mind, you simply want to know in order to avoid making future mistakes. Don’t argue, in fact, don’t even talk, just listen to him. The purpose is not to salvage the dead relationship, but rather to help you make more intelligent decisions about your next one. Yes, breakups can hurt, but feelings always fade with time.

I think I can safely say, as someone who never thought about getting married and never wanted to get married, that marriage can definitely be worth it. While I happened to be fortunate rather than intelligent in finding Spacebunny, that doesn’t mean that one can’t approach the process in an intelligent manner. The greatest challenge, assuming you don’t actually physically repel strangers with your looks, is that men are rightfully wary of gambling their future and family on momentary female whims. So, the more you make it clear that you will do everything and sign anything that will help reduce that unreasonable risk, the more likely it is that you will eventually find yourself in possession of a husband.

I see no way this could go wrong

Let’s hope the shark is all he jumps:

News out of Great Britain indicates that Richard Dawkins, perhaps the world’s most famous living atheist, is setting up a summer camp intended to help children and teenagers adopt atheism. As The Times [London] reports: “Give Richard Dawkins a child for a week’s summer camp and he will try to give you an atheist for life.” The camp, based upon an American precursor, is to be financially subsidized by Dawkins. According to media reports, all 24 places at the camp have been taken.

Let me get this straight. An elderly man who rejects the concept of religious morality and has repeatedly played down the harm of childhood sexual abuse is paying to have 24 children spend the night with him for a week…. Yeah, I’m sure this is going to end REALLY well.