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Do Fathers Matter?

It's quite well-documented that children of single mothers tend to perform much worse than children of married couples on a variety of socioeconomic metrics. The conclusion generally drawn from this is that children benefit greatly from being raised by both of their biological parents.

However, there are two other facts which are also reasonably well-documented:
1. Women* with low IQs are dramatically more likely to have children out of wedlock than women with high IQs.
2. IQ has a strong heritable component.

Which leads to a question which seems obvious in retrospect, but which I've never seen raised before: To what extent is the underperformance of children of single mothers due to being raised without fathers, and to what extent is it due to the fact that children inherit low cognitive ability and/or poor impulse control from their mothers**? Do fathers really matter?

*This may also apply to men, though I'm not personally aware of any research on the topic.
**And possibly fathers—see prior footnote.


Racism and the Death Penalty

Opponents of the death penalty often claim that the death penalty is implemented in a racist manner with the result being that blacks are overrepresented on death row. Well, sort of. Let's take a look at the numbers.

In 2007, about 42% of the prisoners on death row were black, while 56% were white*. Of the 1088 prisoners actually executed since 1984, 374, or about 34%, were black. About 1/8 of the US population is black, so relative to their representation in the general population, blacks are definitely overrepresented on death row, and in executions.

But that's a silly basis for comparison. The question isn't whether a random black person is more likely to be executed than a random white person, but whether a black murderer is more likely to be executed or sentenced to death than a white murderer. Between 1976 and 2005, 52% of all murders were committed by black offenders. So it turns out that blacks are actually underrepresented on death row relative to the rate at which they commit murder.

Granted, there could be other reasons besides an unbiased criminal justice system for the underrepresentation of black murderers on death row. It could be that black murderers are more likely to be tried by predominantly black juries, who may be less inclined than predominantly white juries to impose the death penalty. It could be that whites are more likely to commit the types of murders that invite death sentences. It could be that juries find black victims less sympathetic, perhaps because of racism, or perhaps because they really are less sympathetic (e.g., gang members). But it clearly is not true that blacks are overrepresented on death row in any relevant sense.

Besides, it's not clear to me why biased application of the death penalty should be considered a valid argument against it. If one accepts that executing murderers is a good thing in principle, then who cares that it's more likely to be applied to murderers of one race or another?

Another interesting point: The death penalty really is applied in a profoundly sexist manner. 11% of murders committed from 1976-2005 were committed by women, but only 54 (less than 2%) of the more than 3,000 prisoners currently on death row are women, and only 11 women have been executed since 1976, accounting for just over 1% of all executions. But when was the last time you heard a leftist complaining about the sexist application of the death penalty?

*For all statistics in this post, "white" includes Hispanic mestizos. I haven't been able to find good statistics broken down by race and Hispanic origin.


Her Hypocrisy Discredited Her Arguments

In a post about affirmative action in an episode of Ugly Betty, Angela Onwuachi-Willig [Correction: the post was written by Darren Rosenmblum] can't resist taking a pot-shot at Clarence Thomas:

Yet we should fear renewed criticism of affirmative action laws, now by minorities who deserve its benefits but refuse them as a sign of moral character. This isn’t Clarence Thomas, who benefited from affirmative action and then criticized it. His hypocrisy discredited his arguments.

This is wrong on three counts. First, there's nothing hypocritical about benefitting from affirmative action and subsequently criticizing it. A person may sincerely believe that affirmative action is bad, and yet decide that it's not worth unilaterally rejecting the personal benefits it offers. This is especially true in the case of Thomas, who has received not only the personal benefits associated with a seat on the Supreme Court, but also the ability to shape policy, including policy on affirmative action, for the better.

Second, even if we were to grant for the sake of argument Thomas's hyporcisy, that wouldn't discredit his arguments, any more than leftists' failure to return their share of the Bush tax cuts discredits their arguments against it. Failure to live up to an ideal is not a logical refutation of its validity. A professor of law should know better than to commit such a basic fallacy.

Finally, one of the most compelling arguments against affirmative action is that it causes people to question the qualifications of those who may have benefitted from it. In fact, Thomas himself has said that prospective employers questioned the validity of his Yale Law degree because of affirmative action, and this may have contributed to his opposition to it. And here Onwuachi-Willig Rosenblum is affirming the legitimacy of that argument by implying* that Thomas would not be in his current position under race-neutral policies.

Via Alas.

*Probably correctly. In retrospect, Thomas has turned out to be a fine Justice and the Court's most reliable defender of the Constitution, but it's unlikely that Bush would have appointed him if not for his race. Nevertheless, the fact that doubts about the qualifications of beneficaries of affirmative action are often legitimate does not diminish their destructive impact.


Leftism Distilled

Some revealing comments from Matthew Yglesias:

As I’ve been emphasizing, if you earn over $250,000 a year, you’re earning more than the vast majority of Americans. And you’re also earning about five times what the average household takes home. At the same time, if you earn $250,000 then anyone who makes over $1.25 million is earning five times what you make. And in a very large country with an extremely large degree of “right tail” inequality, you can be in this weird position of being quite rich while at the same time there are lots of people who are orders of magnitude richer than you are. People who you might well run into at your college reunion, and who might send their kids to the same summer camp as your kids. It’s potentially a potent ground for fostering class resentment and progressive tax policy.

[...]

You couldn’t raise a ton of additional revenue that way, since you’re not talking about a very large quantity of people, and you would have some supply-side impact on earnings...but you could get some revenue that could be spent on useful programs. And soaking the very rich would have some direct benefits for the not-quite-as-rich in terms of reducing the price of luxury goods and letting them do better in pure status competition.

It won't raise a ton of additional revenue, and it would reduce economic activity at a time where we desperately need all the economic activity we can get, but hey, at least it fosters class resentment. And that, apparently, is what really matters.


Recycling: On Bank Nationalization

Half Sigma, advocating bank nationalization:

“Nationalized banks won’t efficiently allocate capital.” Is our current system of capital allocation efficient? Ha ha, very funny. First of all, bankers making bank loans don’t make allocation of capital decisions. They evaluate the creditworthiness of the borrower based on existing assets and income.

My response:

In principle, sure. But if the government controls the banks, there's going to be pressure from all sides to inject politics into this process. Democrats will want to skew the criteria to favor minorities and businesses that employ union labor. Republicans will want to skew the criteria to disfavor businesses that offend their religious sensibilities. And that's before we get to log-rolling and outright corruption.

It's easy for someone like you to sit down and come up with an intervention that improves on market outcomes. But these aren't the interventions that we'll actually get. The democratic legislative process is so profoundly dysfunctional that it's practically guaranteed to turn even the best abstract idea into a complete train wreck.


Positional Goods

Ezra Klein quotes a survey which he thinks shows that the average person cares more about inequality than about his own absolute income:

Robert Frank explains this well in his book Falling Behind: How Rising Inequality Harms the Middle Class, but a nice way to think about it is through housing: Would you rather live in a land where you had a 4,000-square-foot house and everyone else had a 6,000-square-foot house, or one in which you had a 3,000-square-foot house and everyone else had a 2,000-square-foot house? Given this choice, studies show that most respondents pick the latter. They'd rather have less home in absolute terms if it means more home in relative terms. That makes housing a positional good.

All well and good, but the conclusions Klein tries to draw from this are dead wrong. The essence of the question is: Would you rather have the biggest house around, or the smallest? Of course most people would rather have the biggest. The value of the status boost you get from having the biggest house in town rather than the smallest trumps the value you get from having an extra thousand square feet of space.

To reach the conclusion Klein wants us to reach, we need to ask a different question altogether: "Would you rather live in a land where everyone including you has a 4,000sf house except for one person who has a 40,000sf house, or a land where everyone including you has a 3,000sf house except for one person who has a 9,000sf house?"

People will accept a reduction in absolute wealth if it means that they get to be the big fish in the little pond. But if they know they're going to be average no matter what, they don't care so much about whether the biggest house is three times bigger than theirs or ten times.

The thing about positional goods is that they're...well...positional. It's not the factor difference that matters for status purposes; it's the ordinal position. If I'm at the 90th percentile of the income distribution, I don't care whether the guy at the 99.9th percentile makes 10x as much as me or 100x; my ordinal position is exactly the same either way.

And if you understand what it really means for a good to be positional, it becomes clear that there's not a whole lot you can do to mitigate inequality. Half the people will always be below average. No matter how you tinker with the distribution, you can never cram more than ten percent of the population into the top decile. Try as you might, Lake Wobegone will remain forever out of reach.


A Reasonable Question

Jeff Fecke takes exception to a poll by US News regarding whether people would rather send their children to a day care center run by Michelle Obama, Sarah Palin, Hillary Clinton, or Nancy Pelosi. Given that transforming the entire nation into a day care center is essentially the raison d'etre of the Democratic Party, I think it's a reasonable question to ask, though to keep Fecke happy I'd swap Palin out for a male Democrat.

The results are interesting: Currently around 94% of the vote is going to Sarah Palin or Michelle Obama, with only 6% going to Hillary Clinton or Nancy Pelosi.

More seriously, it's interesting that Fecke chooses to label this as "misogyny." His interpretation is that the authors of the poll believe that women are only good for taking care of children, but an equally valid interpretation is that only women are good for taking care of children. In fact, I would argue that the latter is a far more prevalent attitude in society at large. People in general are much more accepting of female politicians than they are of male child care workers.

So the only way Fecke can legitimately call this "misogyny" is to start from the assumption that child care just isn't as valuable as politics. And it is precisely this attitude that feminists accusingly attribute to the rest of us: that we systematically undervalue work traditionally thought of as "women's work." Yet here Fecke is implicitly endorsing this attitude himself. Let me be the first to say that I have far more respect for child care workers who earn an honest living in the private sector than I have for politicians like Clinton, Pelosi, Palin, and their male colleagues.


Letter to the NY Post

I just fired off this letter to the editor of the New York Post regarding the allegedly racist Delonas cartoon. I'm about to head out for the night, but more on this next week:

The meaning of the chimpanzee cartoon was immediately obvious to me, and it clearly was not racist. In fact, I found it quite amusing myself. Any educated American should know that legislation in the US is created by Congress, not by the President. My one quibble is that it really isn't fair to attribute the stimulus bill to a chimpanzee, which is in fact one of the more intelligent primates. Of course, one has to make sacrifices for the sake of topicality; Delonas would never have made his deadline if he'd waited for the police to shoot a crazed manatee.

I'm somewhat disappointed that you issued even a token apology; Ignorant bullying by the likes of Sharpton should not be indulged, lest we encourage more of the same.

For those who haven't heard, police recently shot and killed a chimpanzee who had attacked his owner's friend.


The Financial Meltdown and Market Failure

Many people who weren't terribly fond of the free market to begin with have, predictably, been pointing gleefully to the recent meltdown of the financial sector as incontrovertible evidence that free-market economics has failed and that we need much more government regulation. And some more government spending and higher taxes, while we're at it.

This suggests to me a considerable degree of confusion regarding how markets work, when they don't, and when we can expect government to do better. Hopefully I can shed a bit of light on these issues.

Market failure is a real phenomenon. But it's a phenomenon that's fairly well understood. Markets tend to fail in predictable, well-defined ways. Specifically, they tend to fail in situations where people have an incentive to act in ways that produce large negative externalities, or lack incentive to act in ways that produce large positive externalities.

Pollution is an obvious example of the former; if I can make $1 of profit for every $5 worth of pollution damage I generate, I might as well do it, even though the net social value is negative*. Innovation is an example of the latter. Without patent protection, I have very little incentive to innovate, especially if it requires expensive research.

Another way markets can fail is imperfect information, but this is somewhat overhyped. Because information is valuable, markets tend to provide ways for people to get the information they need to make important decisions (e.g., reviews, third-party auto inspections, etc.).

Now, it's worth noting that market failure does not necessarily imply that government intervention is a good idea**, because government failure is also a real phenomenon. It's also a much more general phenomenon than market failure. For a variety of reasons (uninformed voters, public choice, dispersed costs/concentrated benefits, etc.), democratic governments tend not to do much of anything very well. Yes, I'm sure that you have all kinds of great ideas for improving on market outcomes. Those aren't the policies that will actually get implemented by a democratic government, though.

However, in those rare cases where externalities cause markets to fail spectacularly, democratic governments may actually be able to do better.

Which leads us to the mess we're currently in. Usually a market failure involves a bunch of really smart people totally screwing the rest of us over because they don't have any incentive not to, and laughing all the way to the bank. This is where more regulation could, in principle, come in handy.

But that's not what happened. This time, a bunch of really smart people acted in ways that were—in retrospect, at least—very clearly contrary to their own self-interest. And in the process they ended up screwing themselves over. If you're not confused by this, you're either better informed than I am (and I humbly request that you enlighten me with a comment), or you're not paying attention.

When a bunch of a really smart people fail to look out for their own self-interest, this isn't something that can obviously be fixed by more regulation. Politicians and bureaucrats aren't any smarter than the people on Wall Street. And they clearly don't have nearly as strong an incentive to prevent financial institutions from going broke as do the people whose money is actually on the line.

Is there really any evidence that Democrats would have prevented this if they'd been in power? My guess is that their actions would have been limited to grandstanding about executive pay and demands that banks make even more questionable loans to poor and minority borrowers. With the benefit of hindsight, it's easy to pass regulations to stop what went wrong from going wrong again, but the regulations that actually get passed are likely to be a mix of pointless (because the banks already know better) and harmful (because, again, democratic governments tend not to produce very good policy).

I honestly don't know what went wrong. I've been hearing rumours of what struck me as blatantly irresponsible lending since 2005 at least, and I don't understand why anyone would have purchased mortgage-backed securities in the last few years without thoroughly vetting them. My first suspicion, when I hear of people acting contrary to their own self-interest, is some mix of government regulation, subsidies, and political pressure—and I gather that there was some of that going on with Fannie Mae and Freddy Mac, at least—but I just don't know the whole story. And I doubt very much that those rushing to assert that the problem was too little government know the whole story, either.

*Actually, this isn't necessarily true; we've left consumer surplus out of the equation. If in addition to my $1 profit, I generate $5 in cosumer surplus, then the net social value is positive.

**I refuse to get involved in a discussion of IP here, but I'll grant that positive externalities are not a slam-dunk argument for patent protection.


Money Isn't Everything

I will grant that there's a legitimate argument to be made in favor of taxing people on the basis of the blessings they have been given. For example, the fact that I'm smart enough to make a good living as a computer programmer while most others aren't is a matter of sheer luck; I haven't really done anything to deserve the cognitive advantage I have over someone with an IQ of 90.

Of course, there are also compelling arguments against this. For one, the government isn't really in a good position to decide how much each of us has been blessed. The criteria will be determined by politics rather than science, and whatever the criteria, people will engage in inefficient attempts to game them. And wealth redistribution in general is morally sketchy at best. But I'll grant that the idea is at least somewhat defensible, particularly when it comes to distributing the burden of paying for genuine public goods.

But I make no such concessions for the idea that people should be taxed on the basis of income. Consider two men of roughly equal intelligence, from similar class backgrounds, who go to school together and end up going to the same college—men who have been more or less equally blessed. When they reach college, their paths diverge. One decides to become an artist, the other a doctor. Ten years later, the doctor is paying 10-20 times as much in taxes as the artist.

Becoming a doctor is hard; it involves many years of study and very hard work, with no payoff until age 30 at least, and as late as 35 for some specialties. Ultimately there's a large monetary payoff, but the doctor pays a heavy nonmonetary price (not to mention student loans, which are not tax-deductible). The artist doesn't make much money, but he enjoys the nonmonetary benefits of being an artist, such as leisure, more enjoyable work, and art groupies.

Anyway, if we assume that the artist has made a rational choice, then that means that the net payoff of becoming an artist is roughly equivalent to the net payoff of becoming a doctor. The difference is that the artist's benefits are nonmonetary, while the doctor's benefits are monetary. What moral justification can there be for taxing only the doctor? Why should the artist be excused from his duty to pay his fair share just because he's chosen to take the blessings he was given in nonmonetary form?

Or we could assume that the artist just made a bad choice—that any rational person in his situation would have become a doctor, or a businessman, or perhaps an engineer. In that case, why should the artist be excused from his duty just because he squandered the blessings he was given?

There are many things in life that are at least as important as money. And it's perfectly reasonable to make choices that lead to a lower income, if it pays off in other ways. But when two people have the same opportunities in life, there's no moral justification for taxing the one who chooses monetary rewards more heavily than the one who chooses nonmonetary rewards.

The takeaway lesson: If you're not living up to your earning potential, then you're not paying your fair share, and you have no business accusing people who already pay ten times more in taxes than you do of not paying theirs.


Leftism and Antisemitism

Have you ever noticed that a lot of left-wing rhetoric sounds an awful lot like antisemitic rhetoric with "Jews" crossed out and "affluent white males" written in? This Gentile Privilege Checklist (scroll down to the list with arabic numerals) written by Julie over at Alas really seals the deal.


Recycling

A comment I posted at Alas*:

The president leads the employees of the executive branch of the government. To say that he leads the citizens of the US in general suggests a deeply flawed view of the proper role of government in our lives.

And one I posted over at Megan McArdle's blog, in response to the italicized text (by commenter Chet):

There's a space for a discussion about whether a given function is so necessary we can't trust it to the free market (like basic mail service to rural areas)...

No there isn't. We entrust to the free market any number of things that are more important than mail service to rural areas. For example, the production of food, clothing, automobiles, soap, computers, and a great many other things. The criterion is not importance (indeed, history suggests that food production is too important to be entrusted to the government), but whether something is more vulnerable to market failure than to government failure.

Actually, rural mail delivery is a prime example of something that should not be subsidized by the government. If you want to live out in the middle of nowhere, you should pay the associated costs, including the full cost of mail delivery. If you don't want to pay for mail delivery, you can always rent a post office box in the nearest town and pick up your mail when you go shopping. If neither of these options is acceptable, maybe you should move closer to town.

When people are able to offload the costs of their choices onto others, this is called an externality. While most people associate externalities with market failure, the externality created by the USPS's universal service guarantee is an example of government failure; a private mail delivery service would not be vulnerable to this inefficiency.

One addition: I wonder how much overlap there is between those who decry the evil and wastefulness of suburban sprawl and those who insist, when the topic of a free market in phone service or mail delivery comes up, that it's absolutely essential that the government subsidize rural sprawl.

*In the past, I've recommended Alas due to the fact that Ampersand is one of the more reasonable and thoughtful lefties out there. Unfortunately, over the past year or two, he has both cut back on his own blogging and made some exceptionally poor choices in co-bloggers, which has greatly diminished the average quality of posts on Alas. As a result, I can no longer recommend Alas, but Blog by Barry, which consists of cross-posts of all of Ampersand's Alas posts and has a more liberal comment moderation policy, looks promising.


Speaking of Tax Rates...

While writing my last post, I got to wondering where the pre-Reagan top marginal rate of 70% kicked in, so I looked it up. In 1980, the top marginal rate of 70% (50% for wage income) kicked in at $215,400, which is equivalent to roughly $550,000 in 2008 dollars. That surprised me; I had always thought it was much higher than that.

There was also significant bracket creep due to the high inflation of the '70s; in 1965 the 70% bracket kicked in at $200,000, or over $1.3 million in 2008 dollars.


Synergy!

An interesting property of a capital gains tax that isn't adjusted for inflation is that it can, in times of high inflation, turn gains into losses after adjusting for inflation. For example, suppose that inflation in a particular year is 7.6%. If you earn an 8.6% return on your investment and face a capital gains rate of 39%, then your nominal return, post-tax, is only 5.2%, which is a real loss of greater than 2%.

This is not merely theoretical; the numbers I gave are for 1978, when inflation was 7.6% and 6-month CDs returned 8.6%. There were similar results for other years around that time. And actually, I think a 6-month CD might be taxable as ordinary income, which would mean an even greater real loss for people in the higher brackets.

If investment income were indexed to inflation, this would not be possible, as you would only be taxed on your returns above and beyond inflation. I would propose that all investment income be adjusted for inflation, but it would be unwise to give the government any further incentive to understate inflation. I think the wisest course is to abolish tax on investment income altogether, especially given the nation's dismal savings rate.

By the way, what would be the correct word to use if I wanted to give this post a non-ironic title? Is there a word that describes two bad things which combined are worse than the sum of the parts?


Barack the Magic Negro

A few quick points regarding the "Barack the Magic Negro" incident, recently upgraded to a kerfuffle:

1. The targets of the satire are Al Sharpton and a subset of white people, not Obama specifically nor black people generally.

2. The lyric borrows very heavily from this editorial in the LA times, written by a black man. In fact, I would go so far as to say that there's virtually no original material until the last part, which is pure mockery of Sharpton.

3. Magic Negro is in fact a fairly accurate description of the way many of Obama's white supporters view him.

4. Saltsman didn't send out a mix tape to which he specifically chose to add "Barack the Magic Negro." What he sent out was Paul Shanklin's latest album, We Hate the USA, in its entirety.

5. It's disappointing to see so many Republicans jumping on the dogpile. Disingenuously crying racism is the McCarthyism of the left, but I expect better (at least on this one issue) from Republicans.