Saturday grab-bag

● "The smaller the government, the less happy people are." 

● Also from Wonkblog: Why is the U.S. falling behind in life expectancy? 

● Via The Browser, an article on Australian wildlife, with possibly the lede of the year: 

The platypus is an animal that looks like it was designed in a pub, by a committee, the night before it was due. To make one at home, you'll need a duck bill, a small beaver, four webbed feet, a venomous spur, some spare parts (like five X chromosomes), and a watch battery to operate the electrosensitive bill. ... There are a few anatomical giveaways that the platypus was a rush job (for example, they forgot to give it nipples, so that it has to sweat milk through its skin), but for the most part it holds together well. 

Video of the week: For my father, who turns 82 in a couple days. 

Flipping over the gerrymander

Via NewsLanc.com's link to a Scranton Times-Tribune editorial, I arrived this evening at state Sen. Daylin Leach's demonstration of the awesome power of gerrymandering:

On top is the actual, GOP-made gerrymander of PA Congressional Districts. 13-5 Republican. Below is a drawing I did of a legal 13-5 Democratic gerrymander. I flipped 8 Congressional seats with every single PA voter voting exactly the same way. So who here is relevant, the voter? Or the guy drawing the lines?

The Times-Tribune editorializes:

The answer is to make congressional and legislative districting apolitical, inherently favoring neither party.

I think I know what the T-T means to say, but jeez, what a dunderheaded way of saying it. Make districting apolitical? Nothing in politics is apolitical. Inherently favor neither party? How would that work, exactly? To take one example, Pittsburgh last had elected a Republican mayor in 1933. You let the facts on the ground stand, the Democratic machine will simply maintain in perpetuity the lock it has on the city - which is roughly as strong as the one the Republicans have in the hinterlands. Does that inherently favor neither party - or merely recognize the huge pre-existing favors they've built into the system for themselves?

It would take better causistry than I'm capable of to spin an answer to that one.

What the Times-Tribune means to say is something less unattainably idealistic, namely: "get redistricting out of the hands of the party bosses." And that would be a worthy goal, even though it wouldn't accomplish either of the aims offered in the quoted sentence.

What it would accomplish is ... well, here's how Sen. Leach puts it:

My takeaway from this map is how accurately it would represent the Commonwealth’s various regional interests in Congress, compared to the current map. It is a map where the issues big urban areas have in common with smaller, denser  deindustrialized cities and towns get a lot of strong advocates in Congress, and the big empty areas where nobody lives get the representation of 5 Congressmen, as they deserve.

"As they deserve." As Sen. Leach no doubt knows, those are fighting words. Many of the voters in the middle of the state (a) are convinced of their moral superiority to the Sodom that is Pittsburgh and especially to the Gomorrah that is Philadelphia; (b) live in fear of being sucked dry by the Big Cities' appetite for tax dollars. Asking them to acquiesce to a fair representation of Pennsylvania's urban interests is akin to ... well, they don't call it "Pennsyltucky" for nothing.

Merry Christmas!

And a happy new year!

What makes a city great

Lancaster Newspapers published a letter to the editor Sunday from a Massachusetts man who apparently quite enjoyed his time here. This is the part I liked:

It all speaks to the notion of a clean, friendly, historic and forward-looking city. Even the panhandlers were polite.

"Lancaster: Where even the panhandlers are polite." We need to get that on a T-shirt. 

Saturday grab-bag

● Esquire blogger (and epee fencer) Charlie Pierce's 10 best posts of the year

● David Brooks drunk-dials America

● The Salon article Poverty Nation references this Bloomberg Businessweek piece on government assistance to low-wage workers. The stats should certainly give one pause. One quarter of Americans with jobs are on some form of public assistance. Half of Americans in the fast-food industry are. And Bloomerg gives the lie to what I suspect remains a prevalent middle-class illusion; namely, that the typical McJobster is a callow teenager earning pocket money on top of a long-overdue introduction to the world of work discipline. Bloomberg: "68 percent of fast-food workers are single or married adults who aren’t in school—and 26 percent are raising children."

Video of the week: For Pope Francis, Time Magazine's Person of the Year:

In which Megyn Kelly reminds me of Greek philosophy

Megyn Kelly, 2013:

They have a piece that Santa Claus shouldn't be a white man anymore. Yet another person saying it's racist to have a white Santa. By the way, for the kids at home, Santa just is white. ... Jesus was a white man, too. He was a historical figure. That's a verifiable fact - as is Santa.

Xenophanes of Colophon, c. 570 BC - c 475 BC:

Ethiopians say that their gods are snub-nosed and black
Thracians that they are pale and red-haired. ...

But if cattle and horses and lions had hands
or could paint with their hands and create works such as men do,
horses like horses and cattle like cattle
also would depict the gods' shapes and make their bodies
of such a sort as the form they themselves have.

You can take Xenophanes' observation to be a powerful argument for atheism; or, if that's too ruthless a conclusion for your liking, you could say the lesson is that every culture will naturally apprehend the Godhead in its own fashion. No, no, no, insists the Fox News anchor, the real point here is, the Thracians were right ...

Saturday grab-bag

AKA what would have been called the "Friday grab-bag" if I had managed to get it written and posted on time.

● This is the best article on crime policy I have read in ages. Here's what journalists call the nut graf:

I argue that (blue-collar) crime—theft and assault, in all their varieties—is still a real and major problem; that its economic and social costs are vastly under-appreciated; that its primary victims are disadvantaged minorities and poor people; that the current criminal-justice system wrongs them by under-enforcing the law against those who victimize them (who are, of course, mostly people like them in racial and class terms); that better criminal-justice policy could give us less crime and less incarceration; and that better and more equal law enforcement ought therefore to be as central a progressive political goal as better and more equal education or health care.

● I don't think many people have heard of the Trans-Pacific Partnership yet, but they will. Here's Crooked Timber on why it matters. If CT is right, then NAFTA is a good reference point for understanding the TPP; Dean Baker explains why he thinks NAFTA was a raw deal for most Americans here and here.

● This interview with Joshua Greene makes me want to read his book Moral Tribes. Robert Wright's The Moral Animal blew me away back in the day, but that day was 1994; we've had another 20 years of research since then.

Video of the week: Damn, this is a beautiful song:



Here are the lyrics (Source):

Asimbonanga (We have not seen him)
Asimbonang' uMandela thina (We have not seen Mandela)
Laph'ekhona (In the place where he is)
Laph'ehleli khona (In the place where he is kept)

Asimbonanga
Asimbonang 'umfowethu thina (we have not seen our brother)
Laph'ekhona (In the place where he is)
Laph'wafela khona (In the place where he died)
Hey wena (Hey you!)
Hey wena nawe (Hey you and you as well)
Siyofika nini la' siyakhona (When will we arrive at our destination)

The natural resource lever looks better when there isn't much to move

Matt Yglesias puts up the following chart (original source here - PDF) showing median income changes county-by-county between 2007 and 2012:

He writes:

A little natural resource boom can do wonders for your economy, at least in the short term.

That’s not quite right, and the reason why is important.

Take a look at Pennsylvania. It’s hard to see (again, try the original), but the three counties showing median income growth are Bradford, Fayette and Indiana. In Bradford and Fayette, that’s definitely due to the natural gas boom. (I’m not sure what’s going on in Indiana.)

So, hurrah for those three counties. But Bradford County’s population is 62,792. Fayette County’s is 35,660. Those are drops in a bucket for a state of 12.7 million. It’s not hard for the gas industry to have a disproportionate effect on such small economies, which is also why the Dakotas and a couple counties in Texas are doing so well.

Meanwhile, look at the Philadelphia region. All the way out to Lancaster County, an hour and a half away, you see median income decreases. That’s well over 4 million people right there. The Marcellus has not budged median incomes for the 1.2 million people of Allegheny County (home to Pittsburgh), even though they're smack dab in the heart of the Western Pennsylvania drilling region. The changes there are "not statistically significant." Maybe the county would have been purple without the Marcellus? But if that were the case, then the industry should have had no trouble boosting wages into the green range in Lycoming County, the jumping-off point for drilling in the Northern  Tier, where the population is a mere 117,168. 

A more correct statement, then, would be, “A little natural resource boom can do wonders for your economy, at least in the short term, provided you have a small population and not much other economic activity.” A boom for sparsely populated parts of rural Pennsylvania does not translate into a boom for the state as a whole. (Which is why many people find it alarming that our governor seems to base his economic strategy on the Dakota model.)

Addendum: Here's Paul Krugman saying basically the same thing last year. 

Fourth quarter urnings report

On Saturday, we held a memorial service for my mother, who passed away on Nov. 22. It was a lovely ceremony, conducted with warmth and compassion by the Rev. Gaea Thompson. A number of my parents' oldest friends attended, people I haven't seen, in some cases, since the late 1980s. The service was formal, yet touching. I think my mother would have been pleased.

Gaea is the chaplain at Canterbury Place in Pittsburgh, the long-term care facility where my mother spent her last years. I realized just how remarkable Gaea is when my uncle and I attended her Easter service in Canterbury's Alzheimer's unit last year. During the proceedings, my mother asked for blessings for "my brother and ... this other one," meaning me. Mom, mind you, was one of the highest-functioning patients there. (She got one out of two!) Yet Gaea handled it all with kindness and good humor. She conducted a truly meaningful service with people whose tapestries of meaning consist of a few tattered cobwebs in the basement. That's a rare and admirable talent.

The morning of Saturday's service, we picked up mom's "cremains" at Winter Funeral Home. It's almost impossible not to feel surreal when you're carrying the remnants of one of the most important people in your life in a metal cylinder the size of a football.

After Winter's, we had to make another stop nearby. There was a shuffle of coats and parcels, and the easiest place to put mom was the driver's seat. "That'll be nice for her," Debbie remarked, looking at the urn. "She hasn't been behind the wheel for years."

Been pretty quiet here lately

What with one thing and another, it's been tough to find time to post. Starting Monday, though, I'm going to try to get back to something approaching the previous pace.

The way things are

On the one hand:

My first year on Wall Street, 1993, I was paid 14 times more than I earned the prior year and three times more than my father's best year. For that money, I helped my company create financial products that were disguised to look simple, but which required complex math to properly understand. ... 

After a few years on Wall Street it was clear to me: you could make money by gaming anyone and everything. The more clever you were, the more ingenious your ability to exploit a flaw in a law or regulation, the more lauded and celebrated you became.

On the other hand:

The alarm rang on John Stewart’s phone at 1:10 a.m. Up at 1:30, he caught one bus north into Philadelphia a little after 2 and another bus, south toward the airport, half an hour after that. He made it into work around 3:25 for a shift that started at 4, for a job that pays $5.25 an hour, which he cannot afford to lose.

Stewart is 55, tall and thin and animated. At work he wears a clip-on tie, a white cotton shirt with a fraying collar and a pair of black sneakers he nabbed on sale for $12.99 a few days ago. He wheels elderly air passengers from the ticket counters through security and to their gates, and back again, and every once in a while they tip him. Usually for lunch he buys a candy bar. His skin flakes from psoriasis, which gets worse when he worries, which, these days, is all the time. He can’t pay for treatments to soothe the itching or for a car to shorten his pre-dawn commute.

The articles are well worth reading in full. HT for both to Mike the Mad Biologist.

Friday grab-bag

● This is the man Bill Gates thinks you absolutely should be reading (HT Marginal Revolution) 

● KKK Member Walks Up to Black Musician in a Bar - But It's Not a Joke and What Happens Next Will Astound You (HT Mike the Mad Biologist) 

● Noah Smith, Does Your Job Create Real Value? 

● As Marcellus Shale Loses Momentum, A Reassessment 

Video of the week: A song for Black Friday. 

Won't be posting for a few days

Real life is intervening.

Debunking Marcellus jobs claims: The long version is out

A consortium of think tanks called the Multi-State Shale Research Collaborative has put out a nearly 40-page report that basically corroborates everything I said in this post about Marcellus Shale jobs.

The report is titled, unsubtly: “Exaggerating the Employment Impacts of Shale Drilling: How and Why.” It exhaustively debunks, point by point, the claim that natural gas is creating jobs by the hundreds of thousands in Pennsylvania, Ohio, and West Virginia.

Shale has created “at best” a few tens of thousands of jobs, the report says. Claims of much higher numbers stem from: 

• Conflating “new hires” with “new jobs.” A new hire for an existing job does not expand the total number of jobs. 
• Identifying categories of jobs that relate to shale drilling, then improperly treating every single job in those categories as shale-related. 
•  Creating projections based on economic models that incorporate highly implausible assumptions.

 The nearly 40-page report includes numerous charts and tables. This one is my favorite:

The report concludes: “[T]he jobs bounty of shale drilling is not so enormous that public officials should be intimidated from honest scrutiny of its impacts.”

Hayek, Rand Paul and the donuts

It’s no surprise that self-professed libertarian Rand Paul would oppose the FDA’s plan to ban trans-fats, and it’s no surprise that he would express that opposition in rhetoric that plays to his base:

"They're coming after your donuts!" Paul said in a speech in South Carolina on Monday night.  "I want to see [FDA Agents] on the treadmill, and I want to see someone from maybe OSHA lashing them while they are working on the treadmill," he jokingly added, explaining that the people making donut rules should be the first ones to live with them.

What’s interesting about Paul's comments, as Amanda Marcotte at Pandagon points out, is that they're 100 percent wrong about what’s at stake:

[W]hat makes this particular rant of his triply idiotic is the ban on trans fats isn’t about obesity.  Trans fats will simply be replaced with other fats that have the equivalent caloric level, thus the bottom line on your bottom will remain the same. The problem with trans fats is that they fuck you up on a molecular level …

 Basically, the FDA will be requiring food manufacturers to provide, for the equivalent number of calories, less damage to your actual bloodstream. This has nothing to do with how much anyone weighs, as some fat people have pretty good cholesterol levels and some skinny people have terrible cholesterol levels. Nor is this about taking away donuts or any other high calorie treat.

 Rand Paul wants his audience to believe that this shows the government thinks you’re too stupid to make your own decisions, and that shows how stupid he actually thinks his audience is.

Marcotte goes on to heap invective on what she sees as the willful myopia of dogmatic libertarianism:

It’s idiotic to ignore the fact that we live in a complex world where the things that need to be known are so numerous that no one person can hold them in their heads at all time. We divide people up and give them ownership of certain forms of knowledge and allow each other to be the authorities for it. For example, I can rattle off all sorts of shit about reproductive health off the top of my head, but I couldn’t remember what it was exactly that made trans fat so bad. So I googled it. But even that is really too big an ask if someone is trying to do something as simple as make a $2 purchase of a donut at an airport kiosk. It really is okay not to know everything about every kind of bad thing you could eat. That’s why we, as the taxpayers, hire someone to do that job for us.

What’s interesting for me is that the point Marcotte is making hearkens back to one of the godfathers of libertarianism, Friedrich Hayek.

Hayek is famous for pointing out that prices are a way to maximize the efficiency of knowledge. In a command economy, the commanding entity has to know pretty much everything about everything; in a market economy, individual actors can know what something costs without having to know why. From Wikipedia’s article on the economic calculation problem:

Money, as a means of exchange, enables buyers to compare the costs of goods without having knowledge of their underlying factors; the consumer can simply focus on his personal cost-benefit decision. The price system is therefore said to promote economically efficient use of resources by agents who may not have explicit knowledge of all of the conditions of production or supply.

Marcotte’s argument, it seems to me, is a natural extension of Hayek's. Just because there's a local market-based transaction going on, that doesn't mean informational overload and informational asymmetry have been banished. Donuts, however simple in shape, are complex objects with varying ingredients. Price and a visual once-over do not encapsulate everything a consumer would reasonably want to know before buying one, but it would be impractically burdensome for individual consumers to collect the relevant information* – once again, we're looking at "explicit knowledge of all the conditions of production." For a donut?! So it’s efficient, in a Hayekian sense, to empower government to lighten the consumer’s informational load – to make sure we don’t all need to be experts on donuts (plus, as Marcotte points out, we'd need to have the superpowers needed to recognize invisible ingredients at point-of-sale).  

By making sure that donuts resemble our everyday conception of them as “something tasty that might be a little bad for you, but not too bad,” the government smooths transactions. We can focus on taste and price, which as consumers is what we want to focus on. No hidden gotcha's. Regulation makes the price system work better, in as Hayekian a manner as you could wish for.

On purely theoretical grounds, then, Marcotte’s position is more Hayekian than a dogmatic libertarian’s. She's for improving informational efficiency, which improves economic outcomes. I don't think I've seen the point put quite that way – maybe someone has done so and I’ve missed it – but I don’t see how you can endorse Hayek’s insight in the one instance and deny it in the other.

__________

*Yes, the consumer could ask. The seller could lie. "Ah, but then the consumer could sue for fraud." Possibly, but is it really rational to stake public health outcomes on individual consumers' propensity to litigate over a $1 bread product? 

As usual, the Onion is way ahead of us

Business Insider, Nov. 17, 2013, reporting on Larry Summers' big speech at the International Monetary Fund: 

Here's The Scary Possibility That The US Might Need Permanent Bubbles In Order To Grow

Over the past couple of decades, strong economic growth has consistently been spurred on by bubbles - the tech bubble in the 90s, the housing bubble more recently. In his speech at the IMF on November 8, Larry Summers brings up an important question: Is a bubble a prerequisite for economic growth?

Ahem. From the Onion, July 14, 2008:

Recession-Plagued Nation Demands New Bubble To Invest In

WASHINGTON—A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest. …

 The current economic woes, brought on by the collapse of the so-called "housing bubble," are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent. …

 "America needs another bubble," said Chicago investor Bob Taiken. "At this point, bubbles are the only thing keeping us afloat."

P.S.: FWIW, Paul Krugman, who strongly praised Summers' speech, gave an appreciative shout-out to the Onion's piece at the time. For me, the icing on the cake is that the Onion piece not only calls out out the economy's dependency on bubbles, but implicitly makes roughly the same criticisms of said dependence that Dean Baker does.

P.P.S.: Zero Hedge is on the case.

Friday grab-bag

When Tyler Cowen writes about how macroeconomic forces will divide society back into a few “haves” and a multitude of “have-nots,” there always seems to be a whiff of smugness about it. His latest dystopian vision appears in Politico. “Think of it as a kind of digital social Darwinism, with clear winners and losers,” he writes.

Science is not a faith.

In 1964, Arthur Danto realized, thanks to Andy Warhol, that art had stopped being special. (Warhol's ongoing influence is a big part of why, despite the best efforts of art critics to pretend otherwise, the 2013 Carnegie International is so chock-full of not-special things.) (HT The Browser)

Video of the week: Earlier this week, a friend linked on Facebook to what may be the greatest Literal Video of all time. And it even has fencers! 

The financial sector is really, really big

Writing in Jacobin, John Quiggin argues that the growth of the financial sector can’t be justified in terms of the value it produces; that is, those of us not in banking and finance would be much better off if that sector were much, much smaller. Along the way, he reminds us how astonishingly large it is:

The financial services sector as a whole accounts for more than 20 percent of US GDP, and this share has grown by around 10 percentage points since the 1970s. Additional expansion has taken place in the business services sector, encompassing law and accounting firms and other outgrowths of a financialized economy. Overall, it seems reasonable to conclude that Wall Street in its various forms accounts for around 20 percent of total US income, a share comparable to that of the US government.

I don’t know about you, but I’m just floored by the notion that the moving-money-around sector of our economy accounts for fully one-fifth of the total. And that’s just the private sector. If you add in government redistribution programs,* it turns out that more than one-third of our economy is devoting to creating and distributing purchasing power, rather than to creating and distributing the goods and services we’re actually buying. 

Imagine that as you go through your daily routine, there’s a banker following you. (Or, if you like, two bankers and a federal employee.) He holds your wallet. Every time you pay someone $2, you pay the banker $1. You buy an $8 lunch, you give the banker $4. You buy a car for $20,000, you give the banker $10,000. As a country, that’s basically what we’re doing. 

There’s an old joke about a community whose economic activity consists of “taking in each other’s washing.” If only those folks had had computers – they could have gone into finance, and become rich taking in each other's zeroes and ones.  

__________ 

*According to the Center on Budget and Policy Priorities, U.S. government spending equals 23 percent of GDP. Federal redistribution programs include Social Security (22 percent of federal spending), Medicare, Medicaid and CHIP (21 percent), welfare (12 percent) and benefits for veterans and federal retirees (7 percent), for a total of 62 percent. Sixty-two percent of 23 percent is 14.26 percent. 

Walmart suffers the Walmart effect

The Washington Post’s Wonkblog posted an article Thursday on America’s bifurcated economy and retailers’ holiday prospects. It seems Macy’s, which caters to fairly affluent folks, expects a solid Christmas, whereas Walmart “decreased its earnings projections for the holiday season, citing the poor financial state of its core demographic.”

The article included this extraordinary statistic: 18 percent of all food stamp disbursements are spent at Walmart! I was curious to know where that figure came from; according to the Wall Street Journal, it comes from Walmart itself:

Walmart estimates it rakes in about 18% of total U.S. outlays on food stamps. That would mean it pulled in $14 billion of the $80 billion the USDA says was appropriated for food stamps in the year ended in September 2012.

Wow.

It would be interesting to know how much of that $14 billion is being spent by Walmart associates. The company has long been criticized for paying its workers so meagerly that they must seek government assistance. To take one example, Ohio disburses about $2 million in food stamps to nearly 15,000 Walmart employees and family members in a typical month, according to a newspaper investigation. (There are roughly 50,000 Walmart associates in the state.)

Moreover, Walmart gargantuan influence drives down wages at other retailers. Every Walmart that opens in a county decreases wages in the “general merchandise” sector by 1 percent, according to this study (PDF).

The company's defenders insist this is just good old-fashioned capitalism at work. Yet Walmart could increase its workers wages by 50 percent without shortchanging stockholders, according to CNN Money/Fortune senior editor Stephen Gandel. And he’s not just handwaving; he did the math. Read his article: His figures indicate average salaries could rise from $22,000 to $33,000 and still leave investors with a 20 percent ROE.

So let’s review. Walmart’s sales are hurting because low-income Americans are strapped. Walmart is a big part of the reason they are strapped. Walmart could raise its workers’ salaries significantly without harming its financial performance. States could then save millions of dollars they are now spending on food stamps and Medicaid. Other retailers might be able to pay their workers a bit more. Folks might use their raises to buy more stuff at Walmart.

There seems to be a moral here, but darned if I can figure out what it is. 

Pa.'s claim of 200,000 Marcellus jobs doesn't add up

Gov. Tom Corbett

The Associated Press and StateImpact PA are pushing back a bit on Gov. Tom Corbett’s claim that the natural gas industry supports 200,000 jobs in Pennsylvania. Unfortunately, thanks to the ineluctable "he said/she said" conventions of news reporting, neither story really conveys unequivocally just how questionable the claim is. So let me offer my take.

First of all, no one disputes the direct jobs numbers. As the AP reports, “core” oil and gas extraction and pipeline jobs grew by 17,414 to 28,155 in four years. Those are Marcellus jobs, no doubt about it – it’s not as though anyone else was digging wells at the time. So we're good so far. 

But 17,414 new jobs (or 28,155 total jobs) are a far cry from 200,000. Where do the rest come from?

As AP and StateImpact report, they originally came from the Department of Labor and Industry’s monthly “Marcellus Shale Fast Facts” report. The Fast Facts include a large table showing the number of jobs in “Marcellus Shale related industries.” Here's the September edition: 

It's a bit hard to see, but note the 203,814 jobs at the bottom there. Those are the "200,000 jobs" we're talking about. 

At first, people assumed these were actual Marcellus-related jobs. Then someone realized the agency was just reporting statewide category totals, without making any effort to determine what fraction of them actually had a connection to the gas industry. Think about that: It's like measuring the effect of building a stadium in Pittsburgh by including all the construction workers in Philadelphia, Altoona and Scranton. 

The DLI's disclaimer on this point is interestingly cagey: 

While the vast majority of Marcellus Shale related employment can be found in these industries, not all establishments in these industries are involved in Marcellus Shale.

Since "not all" can mean anything down to "almost none," the DLI has granted itself a fudge factor roughly as wide as its data. 

None of the news stories I've seen convey how truly off-base this table is. Take a look at it, and think about the real world. The guy laying down a sewer main in York? He’s a Marcellus Shale worker, under “water, sewer and related structure construction.” The woman driving a bakery truck to Lancaster’s Central Market? “General freight trucking, local.” Every engineer in Pennsylvania counts. Every road worker.  Every "non-residential site preparation contractor." It's absurd. 

Perhaps in response to such criticism, the Corbett administration has backed off citing the Fast Fact numbers in the past few months. Officials now say the 200,000 number really refers to the industry's impact on overall economic activity, the so-called multiplier effect. From the AP story:    

For instance, [administration energy executive Patrick] Henderson said, any tally should count the extra employees hired at a convenience store and gas station to accommodate the heavy patronage by drilling hands. In any case, the exact number is not as important as is the idea that a significant number of people base their livelihoods on the industry, and policymakers need to be mindful of that, Henderson said.

Well, it's interesting that an exact number used repeatedly in speeches and ads and industry publicity turns out to be "not important" when it's questioned. That criticism aside, clearly at minimum the Corbett administration wants us to think the 200,000 figure is the right order of magnitude. Is it? Here’s another chart from the Department of Labor and Industry:

As you can see, 200,000 is roughly the number of jobs Pennsylvania has gained back since the recession bottomed out in early 2010. In other words, if the Corbett administration’s assertion is correct, than to a first approximation, all of Pennsylvania’s post-recession jobs gains are Marcellus jobs. Moreover, we managed to add 200,000 jobs without reducing our unemployment rate below 7.7 percent (as of August, the most recent figure). Does either of those claims seem plausible to you?

Think about that latter claim a second. Pennsylvania has about 500,000 unemployed people. If the Marcellus is the only thing standing between us and another 200,000 unemployed, that means unemployment would be 40 percent higher without the gas industry, putting it at 10.78 percent. 

That's two percentage points higher than the 8.8 percent unemployment Pennsylvania had at the height of the Great Recession. It's 1.28 percentage points higher than in beleaguered Nevada, which thanks to its historic housing bust has the worst unemployment in the U.S. In other words, by attributing 200,000 jobs to the Marcellus industry, the Corbett administration is essentially accusing itself of disastrously mismanaging the rest of Pennsylvania’s economy!

                                                                                                                     

Fortunately for us all, it's not true: 

Tim Kelsey, a Penn State professor of agricultural economics and a co-director of the university's Center for Economic and Community Development, said an academic economist's very rough calculation of the job impact would be closer to multiplying by two the increase in core jobs - 17,414 - to get a figure of about 34,000 or 35,000. And that includes ripple effects, Kelsey said.

So why say otherwise?

"You get to a certain number where people realize it's a big enough deal that you have to pay attention to the public policy that affects it, and that's the goal," Henderson said. "Without question, the number of Pennsylvanians working in oil and gas is a big number."

Translation: “If people believe it’s this big a jobs creator, they won’t oppose the industry-friendly policies we favor.” If fudging the numbers by a factor of six is what it takes, then so be it.

Friday grab-bag

● Via Marginal Revolution, an editorial describing Puerto Rico's economic woes.

● Ed at Gin and Tacos says student athletes have a worse rep than they deserve. 

● State Impact PA pushes back against Gov. Corbett's Marcellus Shale job creation claims. (Note administration energy executive Patrick Henderson's appearance in the comments.) 

Video of the week: How have I managed to blog since July without posting anything by Tom Waits? 

Better make it a double:

The Buy Indian Act of ... 1910?!

I picked on Timothy Taylor’s blog post on driving vs. walking yesterday. I visited his site again today, and this time, I can do nothing but shake my head in bemused agreement with his latest post, “103 Years to Implement: The Buy Indian Act”:

Here's a write-your-own punchline fact: The Buy Indian Act was signed into law by President William Howard Taft on June 24, 1910. The regulations that allow the law to be implemented and enforced were just completed on July 8, 2013, only 103 years later.

Um ...  better late than never? According to the Minneapolis Fed article that Taylor links to, the Bureau of Indian Affairs has informally encouraged procurement from American Indian businesses since 1965. However, formal rule-writing to implement the 1910 law didn’t begin until 1983, and then proceeded “in fits and starts over the next 30 years.” 

No particular reason for the 103-year delay is given; it was just one of those things that happens, apparently.

Taylor comments further:

I confess that I'm not a big fan of rules that require the government to purchase goods and services from firms run by people of a particular ethnicity or gender. When government is buying goods and services, it should seek to get the best possible deal for taxpayers. Set-asides always come with the need for a bunch of well-meant rules.

And boy, are those rules a mess. I wrote an article about set-aside programs in 2011. Basically, what you have is an arms race in which companies try to game the system while officials try to craft rules specific enough to stop them. The result is a mountain of paperwork and a bureaucratic maze so byzantine that many companies eligible for set-asides just don’t bother. “The process is overwhelming,” one chamber of commerce official told me.

I don't know what kind of help native Americans were looking for from the federal government in 1910, but I'm guessing it was something better than, "Your great-grandchildren will have a leg up in selling us stuff, provided they have the right kind of business (or are creative enough to make it look that way) and are extremely proficient in filling out forms."

P.S.: For a taste of just how hair-splitting the federal government's set-aside rules can be, feel free to enjoy the Department of the Interior's 13-page summary of comments on its proposed rulemaking for the Buy Indian Act and its adjudications thereof. 

No, driving is not better for the environment than walking

Timothy Taylor, citing Richard B. McKenzie, says you can make “a plausible argument” that driving is environmentally friendlier than going by foot.

The argument hinges on two premises. The first is that the human body is less efficient at converting fuel to energy than an internal combustion engine. That sounds plausible; I don’t doubt it. The second is that our food production system is a major source of global warming. Think tractors, cow farts, fertilizer, 18-wheelers, packaging and distribution, the whole shebang from soil to plate. Also, the complexity of the food system means it is incredibly lossy: According to McKenzie, only 1.3 percent of the energy used to produce food is output as human activity.

You can see where this is going: The inefficiencies in food production are so massive, and human energy output so low, that gasoline-based transport starts to look good by comparison. McKenzie outsources his ultimate conclusion to Derek Dunn-Rankin, described as an engineering professor “and an avid environmentalist": 

“[A] 180-pound person walking one mile to and from work at a pace of two miles per hour will burn 200 calories above the 2,000 calories burned each day to maintain the body's basic metabolism. However, the production of those 200 calories in food takes fifteen to twenty times as much energy in the form of fossil fuels. This means that driving a high fuel economy car (40 miles per gallon) will use, in fossil fuel energy, only about two-thirds to one half the energy that the person uses in replacing the calories expended on walks. … Energy use and pollution do not have a one-to-one correspondence, which causes Dunn-Rankin to conclude, "My bottom line would be that walking can be 1.5 to 2 times more polluting than driving (if you use a high mileage car). If you use a monster car, you are better off walking always.”

The 19 footnotes in McKenzie’s post give it an air of rigor, and his conclusion is just the sort of thing that could go viral, given its counterintuitive frisson. “Stupid environmentalists,” I can hear conservatives saying, “always complaining about cars and suburbs. Don’t they know it’s been proven that driving is better for the environment than walking?”

And that would be a shame, because it’s nonsense. Here are three reasons why. 

First, if you’re going to look at the entire food chain to determine the energy cost of human walking, it’s only fair to do the same thing for the car. That means you have to factor in the energy costs of producing it. It’s not clear how much that adds, but it’s significant: Estimates range from 10 percent to 100 percent and everywhere in between. I’m not going to speculate on the exact number, but if it’s 50 percent to 100 percent, then we’ve just put walking right back on par with driving, mile for mile.

Second, Dunn-Rankin’s result depends on the use of a high-mpg car, around 40 miles per gallon. If you drive a pickup truck or an SUV, your mileage is worse, and you have to adjust the figures accordingly. 

Third, doing this calculation on a per-mile basis ignores the obvious and important point that people typically drive much farther than they walk. No one buys a car to go half a mile here, a quarter-mile there. Moreover, land use patterns change as cars become more prevalent in society – you get less density and more suburban sprawl. To see the real impact of driving vs. walking, you have to take that into account.

Suppose someone walks a mile to work each way – a 20 to 30 minute journey, not unreasonable. Compare that with the average U.S. commute, which was 16 miles one way as of 2005. Each day the walker travels 2 miles, the driver 32. Thus, even if you accept the notion that walking is twice as bad for the environment as driving, the average driving commuter still does eight times the daily damage of a walker.

And again, that's for someone driving a car that gets 40 miles per gallon. If the driver is in a pickup getting half that mileage, the commute is 16 times worse for the environment than walking.

It’s boring and obvious to suggest that walking is gentler on the Earth than driving. Unfortunately, it also seems to be true.

"In God We Trust"

Reading the pros and cons proffered in Lancaster Newspapers’ article on a bill that would require Pennsylvania public schools to display the national motto “In God We Trust,” I’m struck by how disingenuous some of the arguments are on both sides. 

According to state Rep. Ryan Aument, House Bill 1728 is primarily pedagogical:

“We should use the national motto and the controversy behind this issue as a teaching point to engage students in debate,” he said. “By displaying the motto, it opens the door for educators to have that talk with students." 

Aument said the debate is less about religion and more about our history as a people.

"Our history is what it is, our founding documents say what they say and I think we should have an open and candid conversation with students about that fact," he said.

This is pretty much the standard line taken on public displays of religious symbols and texts, and with good reason: it’s the one justification that federal courts have countenanced, albeit narrowly and, some would argue, inconsistently. You can’t proselytize or endorse, but you can teach history and commemorate heritage.

But does anyone really believe legislators want to post four bare words on school walls, stripped of context, merely to improve historical understanding? If that were the motive, wouldn't there be better ways to proceed - say, by improving history standards or increasing class time? 

The bill’s opponents, on the other hand, have an equally implausible reason for fighting it. Scott Rhoades, founder of the Lancaster Freethought Society, and Hempfield School District Brenda Becker both argue, in part, that the measure should be opposed because of its cost:

"I certainly have no aversion to the national motto, but this is another situation where it will cost us precious resources to have these signs created and posted,” [Becker] said.

It’s good to be thrifty with the public purse, but let’s keep things in perspective. The bill calls for one plaque per school building – you can get a decent metal plaque online for about $100. (You can get this one for $9.99 if you’re OK with the addendum, “All others pay cash.”) Add in another $50 for labor, double the total to be on the safe side, and you’re talking maybe $300 per school. Out of a multi-million dollar school district budget, that’s a rounding error. No school is going to fail in its mission because of $300, or even $1,000. 

                                                            

True, the bill might put school districts at risk of being sued by church-state separation activists. Those costs could quickly become big enough to matter. But the plaques themselves, not so much.

Here’s my theory: If you support placing the motto “In God We Trust” in public schools, it’s because you trust in God and think society would be better if everyone did.  If you oppose displaying the motto, it’s because you’re deeply suspicious of the coercive power of the state, and you think schools have better things to focus on than a religious dogma, even an attenuated, ecumenical one. The other arguments are just cover stories. 

                         

Just for fun, let’s take a look at the history of “In God We Trust,” which the bill’s supporters say they are so anxious to inculcate. As HB 1728 strenuously emphasizes in its preamble, Pennsylvanian James Pollock was director of the U.S. Mint when the idea of putting God on our currency originated. Here’s the U.S. Treasury’s account:

Secretary of the Treasury Salmon P. Chase received many appeals from devout persons throughout the country, urging that the United States recognize the Deity on United States coins. From Treasury Department records, it appears that the first such appeal came in a letter dated November 13, 1861. It was written to Secretary Chase by Rev. M. R. Watkinson, Minister of the Gospel from Ridleyville, Pennsylvania, [Why does Watkinson not get a shout-out in HB 1728? – ts] and read:

Dear Sir: You are about to submit your annual report to the Congress respecting the affairs of the national finances. 

One fact touching our currency has hitherto been seriously overlooked. I mean the recognition of the Almighty God in some form on our coins.

You are probably a Christian. What if our Republic were not shattered beyond reconstruction? Would not the antiquaries of succeeding centuries rightly reason from our past that we were a heathen nation? What I propose is that instead of the goddess of liberty we shall have next inside the 13 stars a ring inscribed with the words PERPETUAL UNION; within the ring the allseeing eye, crowned with a halo; beneath this eye the American flag, bearing in its field stars equal to the number of the States united; in the folds of the bars the words GOD, LIBERTY, LAW.

So, Chase was influenced by people who thought it was important to let future historians know we were a Christian country. Hmm.

Anyway, Chase sent Pollock a letter telling him to develop a motto "expressing in the fewest and tersest words" the nation's trust in the Almighty. Pollock proposed the mottoes “Our Country; Our God” and “God, Our Trust.” Chase amended those to “Our God and Our Country” and “In God We Trust.” Incidentally, that means Chase, not Pollock gave the motto its final form. That's a detail HB 1728 gets wrong. It says, "Pollock suggested the motto 'In God We Trust' be featured on all United States currency." He didn't; his version was "God, Our Trust."

Here’s a fun fact about Pollock. He was a member of the National Reform Association, or NRA, a group formed during the Civil War and devoted to founding U.S. governance on explicitly Christian principles. Here’s how the NRA proposed rewriting the preamble to the Constitution:

"We the people of the United States, humbly acknowledging Almighty God as the source of all authority and power in civil government, the Lord Jesus Christ as the Ruler among the nations, and His revealed will as the supreme law of the land… ..." 

Take that, heathens! The NRA’s proposal did not succeed, but its purpose lives on today among the Christian dominionists.

If I put an NPR or a Fox bumper sticker on my car, you can assume I generally endorse NPR or Fox. I'm not just reminding you that NPR or Fox exist or that they have a particular history. The same is all the more true when public entities display symbols and slogans. Their display is never just pedagogy, absent some indication that makes the pedagogical function explicit. 

At root, the “we're just teaching history” move is the same one resorted to by creationists – the “teach the controversy” gambit. Creationism is Christian literalism gussied up as science … but if schools teach the controversy, partisans will argue, they’re not “endorsing” religion per se. That notion doesn’t pass the smell test, and it doesn’t pass it in this case, either.

No, the controversy really does comes down to whether you think public schools should be in the business of promoting (a trust in) God or not. The notion that this is about teaching history and tradition is a Trojan Horse. 

Ramen kills orangutans, planet

I was disgruntled a couple months ago upon belatedly realizing that instant ramen, is not what you would call a foundational element of a heart-healthy diet, given that it’s fried in palm oil, which is 49 percent saturated fat. Well, according to this article, reached via a link at Mike the Mad Biologist’s page, palm oil not only is bad for you, it’s also terrible for the environment:

[P]alm oil is one of the planet’s most destructive ingredients. It is largely responsible for the massive deforestation of Borneo. As companies slash, burn and bulldoze rain forest to plant uniform rows of oil palm trees, they’re decimating the island’s legendary biodiversity, driving up greenhouse gas emissions and destroying the livelihoods of local subsistence farmers. … The race to plant more oil palm trees is driving orangutans to the brink of extinction. If orangutans die out, it will be almost single-handedly due to global demand for palm oil.

Deforestation also threatens the Sumatran tiger, the Asian rhino and the Malaysian tapir, according to Palm Oil Investigations.

The loss of Indonesian and Malaysian forest is particularly bad for global warming, because the soils are peat soils. According to the Union of Concerned Scientists:

Peat is mostly carbon, and when the forest over it is cleared, the peat begins to oxidize and decompose. As a result, many more tons of carbon dioxide are released into the atmosphere over the succeeding years.

I think I would prefer to eat things that did not indirectly threaten weird-looking jowly red primates with extinction.

Friday grab-bag

Can you call an article inspirational when it’s about a man who reads corporate tax filings in his garage all day? Hell yes, you can.

‘Economics as a moral science,’ or why sometimes a Pareto efficiency is just a Pareto efficiency.

                                                                 

I already posted this link on Facebook, but holy heck, what hackers can do to you if they get you in their sights.

Video of the week: Wouldn't be right not to mark Lou Reed’s passing:

If the comments are to be believed, air guitar guy is someone named Rich Miller:

I waited 8 hours on line to get that seat. Was 23 at the time in law school. In the audience was Andy Warhol, Lou Reed's parents, Adam Ant, members of the Go-Go's. Amazing show. I was shocked to see VHS/DVD with my face splattered all over this song. My 15 minutes of fame

And it was alright …

Mick Jagger's eclectic reading habits

This is totally random, but I’ve always thought this interview was funny, ever since I came across it about a year ago.

It’s the Rolling Stones’ 1981 tour, in support of Tattoo You. The interviewer asks Mick how he keeps himself entertained during the inevitable downtimes of touring, and Mick says he reads, mostly biographies and novels. “What’s the current biography?” the interviewer asks. “Bernard Baruch,” Mick answers.

Bernard Baruch?! Mick Jagger, lead singer of the Greatest Rock ‘n’ Roll Band in the World, Mr. Jumpin’ Jack Flash himself, the darling of millions of rebellious teenagers, in 1981 spent his spare time reading about Bernard Baruch, early 20^th century financier, advisor to presidents, a man who practically defines the Establishment?

Rock and Rolllllllll!!!!! Not. Yet somehow it fits. 

Buzzfeed for economics junkies

“Critiques of the foundations of economics are a dime a dozen,” I wrote last week. Coincidentally, but conveniently, the three posts shown below popped up within the next few days, offering guidance on how to know whether you’re getting fair value for your 10 cents.

• Chris Auld, “18 Signs You’re Reading Bad Criticism of Economics”
• Richard Lawson, “18 Signs Economists Haven’t the Foggiest”
• Jason Collins, “Six Signs You’re Reading Good Criticism of Economics”

Obviously, the posts disagree with each other, and there are distinct whiffs of "no true Scotsman" here and there, but I found them all worthwhile. 

Carnegie International artist Taryn Simon does not know her fencing weapons

I was in Pittsburgh last weekend, and one of the things I did was visit the Carnegie International, the big international art show that comes to the Carnegie Museum every few years. I hope to say more about the exhibition later on, but for now, I’d like to air one very specific, particular gripe.

A lot of people have been talking about the piece “Birds of the West Indies,” by artist Taryn Simon. It consists of 190 photos depicting the various women, cars and gear from the James Bond movies. "Using this inventory of individuals and props, Simon seeks to undermine the never-dying masculine ideal that is Bond by detailing how the film’s accessories have upheld the myth of the 'seductive, powerful, and invincible western male,'" writes Ashton Cooper in the blog In the Air. Well, quite. 

My complaint? One of the photos, cataloged as B.69, is captioned “Foil, 2002." (See this online list.) The photo isn't online, but I studied it carefully at the museum. The weapon depicted indeed appears to be the one Pierce Brosnan wields in this scene in Die Another Day:

As any fencer will tell you, that's no foil. That’s an epee.

                             

I'm not one of those people who gets bent out of shape if a soldier in a movie fires a Makarov PM when he should be using a Tokarev TT-33. But there are only three weapons in fencing, and they're really different! If you're going to be undermining a never-dying masculine ideal, this is the sort of thing you should get right.

Friday grab-bag

Busy tomorrow, so posting the Friday grab-bag on Thursday.

● The funniest sentence I read this week was in the Guardian’s article, “Why have young people in Japan stopped having sex?”

In her business pamphlet, she offers up the gloriously random confidence that she visited North Korea in the 1990s and squeezed the testicles of a top army general.

Later in the article, one learns that 90 percent of young Japanese women think staying single "is preferable to what they imagine marriage to be like."

● They’re both behind the paywall, but the New Yorker’s articles on Elizabeth Smart and Norman Mailer are fantastic. Smart is the young Salt Lake City woman who was abducted from her bedroom in 2002 and held captive by a rapist for nine months. She has since become an activist. I came away tremendously impressed by what the article accurately calls her “extraordinary resilience.” As for Mailer, I know there’s no reason why being brilliant should necessarily give you a better purchase on reality than anyone else, but still – that brilliant, yet that batshit crazy? It makes you wonder.

Video of the week: While doing a Google search for Woody Allen, I stumbled upon Allen Woody (1955-2000), bass player for the Allman Brothers and Gov’t Mule. How appropriate that a guy with the opposite of Woody Allen’s name, so to speak, would indeed be pretty much the opposite of a neurotic Jewish comedian and sometime jazz clarinet player from Brooklyn. So here they are, Woody Allen and Allen Woody, together at last. 

On the fourfold root of the principle of insufficient reason

Economist James Crotty has a guest post on the blog Triple Crisis titled “The Man Who Won a Nobel Prize for Helping Create a Financial Crisis.” (The man in question is Eugene Fama, he of “efficient markets hypothesis” fame.) Crotty accuses much of modern-day economics of being an intellectual con. He's hardly alone in that claim, but I think he makes a better case than usual.

Critiques of the foundations of economics are a dime a dozen. The normal procedure is to take issue with the field’s premises. Rational actors with perfect information, market equilibria, exogenous shocks – what crazy, unrealistic assumptions and simplifications! Who would ever think you could derive useful insights about human behavior from models based on such constructs? And so we declare economics a ridiculous pseudoscience, feel very smug and holier-than-thou, and get on with our lives.

Crotty, however, offers an augmented analysis. The bait-and-switch, as he describes it, has not one step, but four:

Step one: Formulate a theory based on assumptions that are “grossly unrealistic” and “patently false.” (Crotty’s characterizations)

Step two: When those assumptions are criticized, assert that their realism or lack thereof doesn’t matter, as long as they yield good predictions. (methodological positivism)

Step three: Test your theory, but do so using methods that can’t possibly falsify it.

Step four: Declare your theory validated. Use it to implement your ideologically preferred policies, and use its “scientific” status to trump any and all objections.  

To me, steps one and two are not necessarily objectionable. That’s not what Crotty argues – he vehemently criticizes all four steps. For him, unrealistic assumptions are bad assumptions, ipso facto. The thing is, though, “unrealistic” assumptions have often served science quite well. Consider physics. Reducing a thrown stick or a falling piano to a point mass is “grossly unrealistic” and “patently false,” but it’s a great way to calculate a trajectory using Newtonian mechanics – which happens to be a “patently false” approximation to relativity theory. Unrealistic ontology, but excellent predictive power.

Moreover, it’s not necessarily clear before the fact whether a given theoretical construct will turn out to be realistic or not. Lamarkism looked plausible for awhile, as did the luminiferous ether. We’re accustomed to think of atoms and molecules as “real” because of what we’ve been taught in school, but imagine what atomic theory would sound like to an Amazonian tribesman or someone from 1500. “You mean to tell me solid objects are made out of infinitesimal particles that are mostly empty space? That’s realistic?!?" Well, yes it is, but we needed roughly a century of highly sophisticated physics research to know why.

So I’m OK with steps one and two. But I am absolutely not OK with step three. Scientific theories are supposed to be testable, dammit. According to Crotty, however, testing economic theories with econometrics is the ultimate grading on a curve – the theory always passes:  

                                               

[E]conometric tests can at best provide suggestive, not conclusive evidence in support of the empirical validity of predictions generated by economic theories. With today’s computing power, it is possible to run literally millions of regressions to test a theoretical proposition. … As a result, virtually any hypothesis can be shown to be statistically significant if enough different regressions are run. This is why both sides of every important debate in economics can provide econometric evidence in support of their positions.

Falsifiable in principle, unfalsifiable in practice. For an ideologue, the perfect science! Notice that Crotty doesn't accuse economists of ignoring empirical data – the standard complaint. They're checking their work, all right, he says – just not in a way that would ever be decisive. 

And so, ever since 2008, we’ve had step four ad nauseum. Our model works; if reality isn't cooperating, it must  be your problem.

Sounds like economists really need to read their Popper.

P.S.: For what it’s worth, Noah Smith makes Crotty’s point with less ire and more sympathy in section No. 10 of his long post on judgment calls and the philosophy of science:

[A]lthough I am not a strict “falsificationist”, I think that rejecting models is almost certain to be an essential feature of using evidence to select the best set of models to use in practice.
 And what I suspect is that macroeconomics went so long without any hope of matching any data that it developed bad habits. Internal consistency and the collective intuition of macroeconomists were overemphasized, and what little data there was was often ignored. Theoretical tolerance became the norm, and models that were essentially never useful remained prominent in the toolkits of economists and policymakers alike. And the large reliance on judgment seems (unsurprisingly) to have allowed some political bias to seep into the profession.