Category Archives: Economics

Business, Economics, Media Criticism, Political Commentary, Social Commentary

California’s Poverty Problem

2 Comments

It continues to get worse, and as Victor Davis Hanson noted, it’s a tale of (at least) two states:

For decades, California’s housing costs have been racing ahead of incomes, as counties and local governments have imposed restrictive land-use regulations that drove up the price of land and dwellings. This has been documented by both Dartmouth economist William A Fischel and the state Legislative Analyst’s Office.

Middle income households have been forced to accept lower standards of living while less fortunate have been driven into poverty by the high cost of housing. Housing costs have risen in some markets compared to others that the federal government now publishes alternative poverty estimates (the Supplemental Poverty Measure), because the official poverty measure used for decades does not capture the resulting differentials. The latest figures, for 2013, show California’s housing cost adjusted poverty rate to be 23.4 percent, nearly half again as high as the national average of 15.9 percent.

Back in the years when the nation had a “California Dream,” it would have been inconceivable for things to have gotten so bad — particularly amidst what is widely hailed as a spectacular recovery. The 2013 data shows California to have the worst housing cost adjusted poverty rate among the 50 states and the District of Columbia. But it gets worse. California’s poverty rate is now more than 50 percent higher than Mississippi, which long has set the standard for extreme poverty in the United States (Figure 1).

Those kinds of regulations are a luxury good, that the elites who impose them can afford. The poor get subsidized or, in much of the state, the regulations aren’t enforced on them, particularly if they’re undocumented. But the middle class gets hammered.

But as Glenn notes re the reference to Missiippi: “that was before Mississippi was taken over by Republicans, and California was taken over by Democrats.”

Business, Economics, Education, Media Criticism, Political Commentary, Social Commentary

The State Of Higher Education

8 Comments

It’s awful. Who is to blame?

And here we arrive at a way to thread this needle of collective criticism. The one thing that Deresiewicz, Lukianoff, Haidt and McArdle all agree on, surprisingly enough, is that higher education should be a non-market institution. The point of college is not merely to cater to consumer demands, whether one defines the consumers as “college students” or “the firms that will eventually hire those college students.” A vital function of universities is to convert young people into thinkers who can critically analyze the very society that they are about to join. But when people are ponying up vast sums of money to attend these places, it becomes more difficult for college administrations to ignore the whims of their students.

Cut off the spigot. If people were really spending their own money, and couldn’t borrow it foolishly at below-market rates, much of this problem would go away. Of course, so would many universities and university departments. But it’s not clear that would be a bad thing.

Business, Economics, Law, Media Criticism, Philosophy, Political Commentary

Birthright Citizenship

32 Comments

I’m hearing that The Donald is proposing putting an end to it. That’s too bad, because I think it’s a good idea that will now be tainted by the source. Here’s what I wrote about it almost exactly five years ago:

if it were my choice, I’d much rather grant citizenship to someone who was willing to brave a desert and river crossing to get to this nation, learn the language and the civics, and work for a living, than someone born here who takes the nation for granted and refused to accept those responsibilities. Who is more deserving of the vote — the immigrant who has worked for it, or the native who spurns its requirements and demands public largesse? Or worse yet, a native who gangs with others to prey on his own neighbors? Why should someone, regardless of their behavior and level of social responsibility, be a citizen of this great nation through the sheer luck of having been born here, when many other true Americans who weren’t born here but “got here as fast as they can” are not?

Note that this isn’t about civil rights, at least not the traditional negative rights as stated in the Bill of Rights. Both citizens and civilians would have rights to free speech, rights to fair trials, even rights to bear arms if they’re not felonious, but voting is not and should not be a right — it should be a privilege, because, as noted above, it’s one that many will otherwise abuse to the detriment of their fellow residents, should they not be responsible and willing to pull their own weight, choosing instead to rob them at the ballot box.

Immigrants in fact tend to be harder working and more grateful to be here, though the Latin-American influx may be different because they aren’t necessarily coming to stay.

[Update a while later]

This isn’t exactly the same, but it would have much the same effect: Tom Tancredo is once again proposing that voters pass the same test that one must to become a citizen.

Works for me. And I have become long-inured to falsely being called a racist.

Business, Culinary, Economics, Health, Media Criticism, Political Commentary, Social Commentary

First Restaurants Raise Wages

12 Comments

Then what?

Americans spend a phenomenal amount of money consuming food outside their homes, and a major reason is that with restaurant labor so cheap, the convenience and price are attractive to people who don’t feel like cooking. If the wages go up, that calculus shifts. And unfortunately those “rich bosses” can’t just take it out of their profits, because margins in the industry are under 5 percent, and the difference between making that profit and closing up shop can be surprisingly thin. Empty seats don’t just cost you rent; they make it hard to get good servers, because empty seats mean lost tip income. You can end up in a vicious spiral where your service gets worse, so your restaurant loses more customers, so the service gets even worse . . . and it’s time to call the bank and tell them you won’t be paying off that loan.

The economic ignorami don’t seem to understand that restaurants have competition in addition to other restaurants — cooking your own meals at home. In fact, the high cost of dining out is one of the reasons (though not the only one, also I can feed myself more healthily, and I really don’t enjoy sitting around being served by people) that I rarely eat out unless I’m traveling. With 25% unemployment of black youth, raising the minimum wage (or in fact having one at all) is a moral atrocity.

Economics, Media Criticism, Political Commentary, Space, Technology and Society

“The Ferrari Of Rocket Engines”

39 Comments

This is what happens when a reporter has no idea what is going on, and is simply an uncritical stenographer for NASA PAO and officials:

“It is the most complicated rocket engine out there on the market, but that’s because it’s the Ferrari of rocket engines,” said Kathryn Crowe, RS-25 propulsion engineer.

“When you’re looking at designing a rocket engine, there are several different ways you can optimise it. You can optimise it through increasing its thrust, increasing the weight to thrust ratio, or increasing its overall efficiency and how it consumes your propellant. With this engine, they maximised all three.”

The resulting engine, according to Martin Burkey of the SLS strategic communications team, blows everything we currently have out of the water.

“They ‘maximized’ all three.”

Know what they didn’t optimize? They didn’t optimize on cost. Nowhere in that article does it mention that those are actually reusable rocket engines, from the Space Shuttle. But they’re going to throw them all away the next time they use them. Ferraris are expensive, too, but at least they don’t throw the car away each time they take it for a drive.