DeLong on inequality

Brad DeLong, a Berkeley economist, has summarized his thinking on inequality. He distinguishes between international and national inequality, and sets his personal views aside...

Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal: What Kinds of Inequality Should We Worry About?

... on the level of individual societies, on the level of nations, I believe that inequality does loom as a serious political-economic problem...

... Odds are that a greater effort to raise the average level of education in America would have both made the country richer and produced a much more even distribution of income and wealth by making educated workers more abundant and less-skilled workers harder to find and thus worth more on the market.
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.. corporate CEOs and their peers and near-peers make ten times as much today relative to the patterns of a generation ago. They do not do this because a CEO's work effort level and negotiation and management skills are in relative terms ten times as valuable to a corporation today as they were to a corporation of a generation ago. They have risen because of a reduction in the ability of other corporate stakeholders to constrain the freedom of top managers and high financiers to direct the value added in their direction.

Similar patterns are found in other countries across the globe... For the most part, it looks like these changes in economy and society have not resulted in more wealth but in an upward redistribution of wealth: a successful right-wing class war. The easiest counterfactuals to imagine are those in which greater public investments in education and greater moral, legal, and cultural constraints on the freedom of action of those at the top produce an equal or greater amount of total wealth and income with a lower degree of inequality.

This kind of inequality should be a source of concern. Bill Gates, Paul Allen, Steve Ballmer, and the other hundred-millionaires of Microsoft are brilliant, hard-working, entrepreneurial, and justly wealthy. But only the first 5% of their wealth can have any justification as part of an economic reward system to enourage entrepreneurship and enterprise. And the last 95% of their wealth? It would create much more happiness and opportunity if divided evenly among the citizens of the United States or the world than if they were to consume any portion of it.

Moreover, an unequal society cannot help but be an unjust society. The very first thing that any society's wealthy try to buy with their wealth is a head start for their children. And the wealthier they are, the bigger the head start. Any society that justifies itself on a hope of equality of opportunity cannot help but be undermined by too great a degree of inequality of result.

In the United States, the problem of inequality has two dimensions: insufficient effort to educate, and insufficient control by other stakeholders' of the ability of the top 50,000 or so earners' discretion. In other countries the problem of inequality has these two but also other dimensions as well. In all it is something we should worry about, because we can see in our minds' eyes alternatives that would make for better, healthier, happier, and equally well-off societies.

I can't prove it, but I suspect that the C-suite value-redirection has a significant negative effect on corporate morale and thus productivity. Humans are hard-wired to punish cheaters, and employees see these wins as unfair.

So the CEO cut is probably contrary to the interest of shareholders as well as stakeholders ...

Thirty years from frozen to comfy -- the end of the last "ice age"

I was enjoying an excellent IOT podcast of the history of Hell (Melvyn Bragg is Anglican, so he forgot purgatory) on my morning commute when I was startled by the claim that the 'very rapid end' of the last “ice age” is a part of European folk memory. A hot Hell is a mostly medeival innovation claimed the don — older cultures write about cold Hells and warm Heavens.

Hmm. I didn’t know much about that. My ice age knowledge was more dated than I'd realized. Wikipedia brought me up to speed, (one must make allowances for some obviously polemical edits) and a bit of quick research found this 1999 article …

Sudden climate transitions during the Quaternary -- Adams et al. 23 (1): 1 -- Progress in Physical Geography

... The most detailed information is available for the Younger Dryas-to-Holocene stepwise change around 11 500 years ago, which seems to have occurred over a few decades. ...

Wow. Decades is more on the scale of "weather" than our traditional view of "climate". I have generally tracked the mainstream scientific view of global climate change (big, possibly scary, worth trying to slow), but I think I just moved a few degrees towards the anxious end of things.

A human lifetime transition from near-ice-age (the Younger Dryas was a stutter along the path from the last major ice age to our current interglacial) to wet-and-warm would make a lasting impression. Maybe a 10,000 year impression through the stories of 200 elders. Noah’s ark takes on a new meaning now …

Molly Ivins was a Minnesotan (briefly)

Molly Ivins has died. She’s been a feature on our family news page for many years, and I’ve quoted her many a time in my blogs. Her obits talk as though she was a satirist or humorist first, but I recall her as a editorialist first and foremost. She told us what she believed and why. Her once high opinion of the wisdom of the common American had been in decline for some time, but I suspect she wanted to live to see the Dems take the senate. A great polemicist, she was also a serious journalist who exposed some of the snakepits of her home state to a national audience.

What I didn’t know was that she was briefly a Minnesotan ..

Syndicated Columnist Molly Ivins Dies | World Latest | Guardian Unlimited

... Born Mary Tyler Ivins in California, she grew up in Houston. She graduated from Smith College in 1966 and attended Columbia University's School of Journalism. She also studied for a year at the Institute of Political Sciences in Paris.

Her first newspaper job was in the complaint department of the Houston Chronicle. She worked her way up at the Chronicle, then went on to the Minneapolis Tribune, becoming the city's first woman police reporter.

Ivins later became co-editor of The Texas Observer. She was the featured attraction in October at a huge Texas Observer fundraising ``barbecue,'' at which politicians, journalists and entertainers honored her.

She joined The New York Times in 1976, where she worked first as a political reporter in New York and later as the Rocky Mountain bureau chief, covering nine mountain states.

But Ivins' use of salty language and her habit of going barefoot in the office were too much for the Times, said longtime friend Ben Sargent, editorial cartoonist with the Austin American-Statesman.

Ivins returned to Texas as a columnist for the Dallas Times-Herald in 1982, and after it closed she spent nine years with the Fort Worth Star-Telegram. In 2001, she went independent and wrote her column for Creators Syndicate. ...

The NYT stopped regularly carrying Molly in the 1990s, but by then the web had come. I was able to read her at the Star-Telegram and Working for Change, though her national voice had clearly waned. I imagined she made too many enemies along the way, no matter what compliments they may pay her in the obits.

Molly never “got” the net. She never had a “feed”, she never had a public email address, she never leveraged the net to spread her influence. She was a person of another time. Her closest heir is probably Paul Krugman, and the legions who inhabit the electronic world where she was, ironically, best known at the end.

Trailer parks and the new suburbs: how is my world changing?

I live in the urban residential core of the “twin cities”, a relatively wealthy mid-sized north american metropolitan region. We’re colder than average, I suspect the relatively harsh climate accounts for why we’re also healthier and wealthier than average (selection pressure). The climate has probably also slowed our population growth, but we still have massive urban sprawl — among the worst in the north.

It’s an interesting spot to watch America evolve. Which brings me to trailer parks and the new suburbs.

We have a lot of trailer parks (?modular homes?) in the metro area. The more I look for them, the more I see. They’re surprisingly invisible; it’s only on a second look that an apparent wooded area resolves into a trailer park.

In the urban core they’re old, but there are many new ones on the urban perimeter. I assume they’re subsidized by speculators who want to buy large amounts of land for future use while minimizing taxes and generating a revenue stream. I’d like to know how many people live in these parks, and if they’re becoming more common. It would be interesting if urban sprawl and tax laws were shifting people from urban appartments and low income housing to peripheral trailer parks, and whether that’s a good think or a bad thing for the families involved.

On the other hand, when my children’s hockey team visited the northern home of the fierce Polars, we killed a few minutes driving around a massive suburban development just north of the National Sports Center in Blaine MN. The current sat map is misleading — that open space is all homes now. Hundreds, perhaps thousands of homes. A small town with a handful of non-gated entrances from the surrounding ring roads. Town homes, separated homes, bigger homes, fancy homes, large homes on a golf course — homes for the middle class and the upper middle class about a one hour commute north of the metro center. It looks like a factory town from the outside, but it’s not quite so bad in the middle of it.

Of course it’s not built for my family — to me it feels claustrophobic and eerily robotic, something straight out of the Truman Show with its planned migration from the middle to the upper class. There’s no poverty and no retail; a few modest parks, but no grand parks. It’s almost, but not quite, treeless. There are sidewalks on at least one side of each street, but no interesting lanes or bicycle paths or walking paths — the space is used efficiently. In a hundred years it will either be gone, quaint, or a slum. I don’t know which.

There’s a large trailer park about a mile from this massive suburban development.

Trailer parks and Disney World inspired urban suburban settlements. The world moves on in novel and unpredictable ways.

Update 1/12/09: Flash forward.

Credit card scammers: the story continues

In late 1998 I was one of thousands defrauded in the $40 million Netfill credit card scam. I wrote up a web page, helped track down the baddies, was even on Japanese TV. My fame was very minimal and very fleeting, but the problem didn't go away. A system that was designed for person-present brick-and-mortar transactions has deep flaws on the web, but, absent legislation, banks have very good business reasons not to fix things.

Reading this Wired News story brings back old memories ...

Wired News: I Was a Cybercrook for the FBI

.... The full scope of the problem is hard to judge, but nonetheless staggering. U.S. banks lost $546 million to debit card fraud in 2004, according to banking research firm Dove Consulting, and credit card fraud losses were estimated to be about $3.8 billion globally in 2003 according to The Nilson Report. The Federal Trade Commission estimates that 10 million Americans are victims of identity theft each year. The financial impact of identity theft remains untold."

That's a lot of losses, and I bet less than half of the losses are ever detected, so total unrecovered losses to consumers are probably about equal to this number. In addition, outside of North America, banks are notoriously bad at covering losses, so any number based on bank losses is really an underestimate. Speaking of unresponsive financial services ...

The Schwab [brokerage] case illustrates a running theme in Thomas' dealings with the FBI. Although Thomas says he provided his handlers at the Seattle FBI with logs depicting desertmack's scheme, the bureau apparently never acted on that information -- the Oregon FBI only learned of the theft because Campbell, the victim, reported it himself after it occurred. "If we had left it up to Schwab, they might never have gotten the FBI involved at all," Campbell says...

Schwab, too, was less than responsive. Campbell got his money back from the company only after several calls to the firm pointing out the obvious security flaws in a system that failed to flag a wire request made on an account a day after contact information on the account was changed. "Schwab was pretty bad with customer service," Campbell says. "For a long time they wouldn't tell me they were going to take responsibility for it and return (the money)." (Schwab had no comment).

The Terrifying Toothpick Fish - I'll take the hungry shark please

Damn Interesting: The Terrifying Toothpick Fish. A disaster for the fish of course, but not so good for the human either. Most of us would prefer to take our chances with a hungry shark.

Revolution Health: an onerous linking policy

If you sign up to try Revolution Health (AOL Case’s project), including it’s personal healthcare record (PHR), you are legally committing yourself to obey their linking policy. Emphases mine:

Terms of use and service - Revolution Health

... 4. Linking To This Website

Unless you have a written agreement with us that specifies how you may link to the Site, following are the rules for adding a link to the Site from your website:

* The link must be a text-only link clearly marked "www.revolutionhealth.com"
* The link must "point" to www.revolutionhealth.com and not to other pages within the Site
* The appearance, position and other aspects of the link may not be such as to damage or dilute the goodwill associated with Revolution Health good name and trademarks
* The appearance, position and other aspects of the link may not create the false impression that an entity is associated with, sponsored by, or endorsed by Revolution Health
* The link, when activated by a user, must display the Site full-screen and not within a "frame" on the linking website and linking may not trigger any interstitial or pop-up or pop-under windows
* The link may not be used in connection with or appear on a website that a reasonable person might consider offensive, obscene, defamatory or otherwise malicious
* We reserve the right to revoke consent to the link at any time in our sole discretion. If we revoke such consent, you agree to immediately remove and disable any and all of your links to the Site ...

I wonder how standard such a linking policy is, I think the middle four requirements are fine but the bolded ones, especially the last are onerous. It doesn’t mean you can’t say anything nasty about them of course, you just have to remove the link on their request.

The contract required to establish a "My" account is long and complex. A lawyer would tell you not to sign without an expensive legal evaluation ...

NY Mayor Bloomberg is an ass

New York's Mayor is an ass:

The City That Never Walks - New York Times

... In December, the police say, a bicyclist was killed on the Hudson River Greenway by a drunken driver speeding along a bike lane that was completely separated from the road. Asked what was being done to improve safety in light of the biker’s death, Mayor Michael Bloomberg suggested that bikers “pay attention.”

“Even if they’re in the right, they are the lightweights,” he told a reporter.

A marvelously revealing statement.

Lest we forget: how Microsoft used to do business

I've heard similar stories from others. Tim Bray is a respected source. In the days of its ruthless ascent to omnipotence Microsoft behaved like the modern GOP:

ongoing · Life Is Complicated

... in 1997, I was sitting on the XML Working Group and co-editing the spec, on a pro bono basis as an indie consultant. Netscape hired me to represent their interests, and when I announced this, controversy ensued. Which is a nice way of saying that Microsoft went berserk; tried unsuccessfully to get me fired as co-editor, and then launched a vicious, deeply personal extended attack in which they tried to destroy my career and took lethal action against a small struggling company because my wife worked there. It was a sideshow of a sideshow of the great campaign to bury Netscape and I’m sure the executives have forgotten; but I haven’t...

The blog is an incredible thing. Irrefutable evidence.

It's less common now, but once upon a time morons with column inches would rant about the vacuity of the blogosphere. This was invariably a sign of a journalist who'd earned their inches by chance, blackmail and flattery rather than skill and insight.

It's rare now, but, even so, it's handy to keep examples like this at hand. It will shut down even the dullest mouth:

Daniel | Cosmic Variance:

... I am delighted to announce the addition of another new member of the Cosmic Variance team. Daniel Holz is a Richard Feynman Fellow in the theoretical astrophysics and particle physics groups at Los Alamos National Laboratory, working on the interplay between general relativity, astrophysics, and cosmology. Dan is a particular expert on gravitational lensing and gravitational waves...

This is the golden age of journalism ...

Elbow pads and snowboarding

If you're over 45 and given the choice between a slow painful death and snowboarding lessons, I highly recommend elbow pads. I came up with this on my own, using a pair of $30 hockey pads. I am typing now only because of those pads.

True, it takes some serious geekiness and a rock solid ego to wear elbow pads over your snow jacket, but a hockey jersey makes it look even weirder. I recommend both.

The pads have not only saved my elbows, but they make it much easier for me to fall on my forearms and protect my wrists. They even reduce impact force transmitted to the humerus, thereby sparing my shoulders a bit.

I was proud of my own invention, until it occurred to me that someone else must have thought of this. Google revealed you can buy official snowboarding elbow pads. Hmmphh. These are puny compared to my hockey pads -- they do nothing to pad the forearm. Forget these and buy the hockey gear.

Update 1/28/07: After, or even before, the repetitive falls on icy snow produce disabling back pain, consider Crash Pads 2600 power underwear.

Higgs?

A particle physicist dares to speculate that his team has spotted the Higgs boson. Odds are this is a false alarm, but there's a decent chance its real. Readers of Cosmic Variance have a ringside seat. Either we'll see the pain of everyday science or the joy of a momentous discovery.

The comments are quite good.

How to hack a human: start with the insula

Say you want to hack a human. You want to alter what they love, what they hate, what they want. You probably start with the insula:

In Clue to Addiction, Brain Injury Halts Smoking - New York Times

... The patients’ desire to eat, by contrast, was intact. This suggests, the authors wrote, that the insula is critical for behaviors whose bodily effects become pleasurable because they are learned, like cigarette smoking.

The insula, for years a wallflower of brain anatomy, has emerged as a region of interest based in part on recent work by Dr. Antonio Damasio, a neurologist and director of the Brain and Creativity Institute. The insula has widely distributed connections, both in the thinking cortex above, and down below in subcortical areas, like the brain stem, that maintain heart rate, blood pressure and body temperature, the body’s primal survival systems.

Based on his studies and others’, Dr. Damasio argues that the insula, in effect, maps these signals from the body’s physical plant, and integrates them so the conscious brain can interpret them as a coherent emotion.

The system works from the bottom up. First, the body senses cues in the outside world, and responds. The heart rate might elevate at the sight of a stranger’s angry face, for example; other muscles might relax in response to a pleasant whiff of smoke.

All of this happens instantaneously and unconsciously, Dr. Damasio said — until the insula integrates the information and makes it readable to the conscious regions of the brain.

“In a sense it’s not surprising that the insula is an important part of this circuit maintaining addiction, because we realized some years ago that it was going to be a critical platform for emotions,” Dr. Damasio said in a telephone interview. “It is on this platform that we first anticipate pain and pleasure, not just smoking but eating chocolate, drinking a glass of wine, all of it.”

This explains why cravings are so physical, and so hard to shake, he said: they have taken hold in the visceral reaches of the body well before they are even conscious. ...

Between the cortex and the subcortex, a processor that translates sensations into emotions, wants, feelings. Humans will do bad and good things with this.

The NeXT Years: Steve Job

Holy cow. The NeXT Years: Steve Jobs is not exactly the CEO story one reads in the Harvard Business Review. It's a raw mess of chaos, brilliance, randomness and mass delusion that somehow produced a vast amount of wealth -- for someone. Even Canon might have got a bit of their NeXT investment back.

The article is all about Jobs, who is both appalling and fascinating in roughly equal measures. It's obvious there are some other very important minds that are doing the real work under the radar, but their stories are probably less scandalous.

Despite himself, Jobs ends up being inspirational. He was despised, discarded and abandoned, but he kept coming back. It's a story worth remembering when misfortune strikes; it's truer and more useful than the usual fraudulent tales of CEO perfection.

I wonder what Jobs parents make of him ...

All DeLong all the time: Egregious Moderation

Can someone tie Brad DeLong down before he exhausts the rest of us? In addition to his personal blog and shrillblog, he's now launched ...

Egregious Moderation

...An egregiously moderate forum: for people who want one online source for punchy liberal analysis and evisceration; especially evisceration...

He reads voraciously, writes incessantly, and is widely believed to be a full-time professor and productive economist. One theory is that he's an early experiment in shared-consciousness clonal breeding.

I need to create a "DeLong" category in my bloglines feed...