Risk Managers Are Worried About Inequality

October 23, 2014
Posted by Jay Livingston

Who’s worrying about inequality? It’s not just the scraggly bunch that occupied Zucotti Park, and not just the lefty economists and sociologists hefting a copy of Capital in the Twenty-First Century. Professional Risk Managers’ International Association surveyed risk managers, and they too are uneasy about inequality.

The majority (62%) said that inequality poses a risk to the economy. Only 14% were like “What, me worry?”

I’m not sure what risk managers do, but I’m guessing  the profession does not draw many  socialists to its ranks. When you see this kind of concern coming from sources other than the usual suspects (I found this graph in a Wall Street Journal banking page – here), you begin to think that the wealth gap is more than just a moral issue about what is right and fair; it’s a threat to general economic well-being.

Et in Arcadia Inflation*

October 22, 2014
Posted by Jay Livingston

What do you do when your published predictions prove wrong? How do you resolve the dissonance between your ideas and the facts?

In a blogpost earlier this month (here), I looked at the responses of twenty-three economists who had written an open letter to Ben Bernanke warning of inflation unless he ended quantitative easing and tightened the Fed’s monetary policies. Bernanke ignored the warning, and inflation didn’t happen. I made the analogy between their responses and those of the religious millenerian cult described in When Prophecy Fails.

When asked about their error, none of the economists even considered that their ideas might have been wrong. Instead, their reactions to the reporter’s questions were:
  • Ignore. Several of them didn’t respond to the query.
  • Deny. Some said that everything they had predicted had indeed happened.
  • Equivocate. Some said that they had not issued a prediction but only a “warning.” Others pointed out that they hadn’t specified a date that the inflation would start.
  • Proselytize. Most are still trying to donvince others that their  ideas are correct.
I added that for purposes of reducing dissonance, it helps to get others others to confirm your ideas by agreeing with them, publishing them, and especially paying for them. These affirmations from other people  seem to be as effective as confirmation from the facts. Now Amity Shlaes, one of the 23 letter-signers,  has expanded her reaction, and the National Review has published it.*

Well, inflation hasn’t come on a big scale, apparently. Or not yet. Still, a lot of us remain comfortable with that letter, since we figure someone in the world ought always to warn about the possibility of inflation. Even if what the Fed is doing is not inflationary, the arbitrary fashion in which our central bank responds to markets betrays a lack of concern about inflation. And that behavior by monetary authorities is enough to make markets expect inflation in future. [source: NRO]

I’m struck by the moralistic overtones, which suggest that this isn’t just a matter of economic theory. It’s about faith, about good and evil.  Inflation is sort of like Satan – supremely evil and always lurking even when you can’t see it. Note the “apparently” at the end of the first sentence – a bit like a millenerian saying that apparently the earth had not been destroyed, and apparently the UFO aliens hadn’t landed to save the faithful.  But it will still happen (“Or not yet.”) So we must not let our guard down. Bernanke and now Yellen “betray” a lack of concern. 

The distrust of quantitative easing sounds as much like Puritanical ethos as like is economic theory.  With their policy of “easy money” – as opposed to money we must work hard for – the Fed chiefs are luring us toward sin and ultimately destruction (or at least inflation), much like the governors of Pleasure Island in Disney’s “Pinocchio.”**

* The title of the post is variant of in arcadia ego.  “‘Even in Arcadia, there am I’. The usual interpretation is that ‘I’ refers to death, and ‘Arcadia’ means a utopian land. It would thus be a memento mori,” a reminder of death. [Wikipedia]

** Earlier posts using this Pinocchio-and-political-Puritanism analogy are here
 and here.

Hazing and Sexual Assault

October 21, 2014
Posted by Jay Livingston

Random thoughts on the Sayreville hazing. (If you are not familiar with this case, see yesterday’s Times article here.)

1.  At least nobody is accusing the freshmen footballers of bring the assaults on themselves by dressing provocatively – those tight, shiny spandex-like pants, their torsos sometimes bare in the locker room. Nor is anyone saying, “if you don’t want seniors shoving their fingers up your butt, avoid being on the football team” the way women are told that if they don’t want to be raped, they shouldn’t drink too much at frat parties.

 In fact, the freshmen did know that they were at risk in the locker room.

First came the shout: “Varsity’s coming in five minutes,” and they knew it was time to move. Some dressed outside the locker room, pulling on their shirts and tying their shoes. Some rushed to finish their showers, if they showered at all.

2.  Sexual assault is about power even when it’s also about sex. The seniors might even be confused by the charges of sexual assault since for them, there was nothing sexual about it.  They experienced no sexual gratification or even arousal.  What they wanted was to humiliate – always the goal in hazing – and for that purpose, genitals and anus are much more effective targets than any other part of the body. More than the punching or kicking, which also happened, groping a boy’s genitals and poking things up his anus demonstrate power. They say, “This is what we can do to you.  We can attack the most private parts of your body and self. ”

In date-rape and party-rape, the obvious sexual component allows men to ignore its enactment of power.  But for the victims, as for the Sayreville victims, the experience is much more about power and humiliation than about sexual pleasure.

3.  The law is a clumsy instrument for dealing with much of what goes on among teenagers. These boys may be charged with
aggravated sexual assault, aggravated criminal sexual contact, conspiracy to commit aggravated criminal sexual contact, criminal restraint, and hazing for engaging in an act of sexual penetration. [CNN]

These charges do not distinguish between the hazing offenses, which some of the victims shrugged off as trivial, and far more serious crimes. This “one size – the largest – fits all” approach also applies to the 10th-grade girl who has a topless selfie on her iPhone. She is violating kiddie-porn laws that make little distinction between her and a someone who distributes thousands of such images, and these laws come with a hefty prison sentence. (See Hanna Rosin’s recent Atlantic article (here) on teen sexting.) What happens is almost entirely at the discretion of a district attorney. The broader the law, the greater the power of the DA.  As Justice Jackson said 75 years ago, “The prosecutor has more control over life, liberty, and reputation than any other person in America.”

4. Racial comparisons are inevitable, though I will evade them here save to note that in the press and in comments from ordinary people, those charged are usually referred to as “boys,” never as “thugs,” certainly not as “criminals.”

5.  While nobody blames the victims for their victimization (see #1 above), some people do blame them for the consequences – the cancellation of the football season and the possible legal punishments might happen to the offenders. In Jonathan Haidt’s schema of conservative moral thinking, these people invoke the principle of tribalism, or as Haidt calls it, loyalty.  The victims have gone against the group (the team, the school, the town).  They should have suffered silently, taking one for the team. In this case, taking one for the team also means taking it from the team.

Names – The Last Shall Be First

October 16, 2014
Posted by Jay Livingston

What to name the baby has become more and more of a problem. A few generations ago, you could give a boy a name that had always been in the family. When is the last time your heard a parent call, “Junior, come here”?  Parents in a high-status family could give a son a family name as a first name. Calvin Trillin used to say that his upper-class Yale classmates in the 1950s were named things like Thatcher Baxter Hatcher, III (and had nicknames like Mutt and Biff).

In more recent generations, parents have been choosing names the way they might choose a work of art for the living room. It has to be different – you don’t want the same thing that everyone else has – but not so different that it’s weird. And if you are a college-educated person of some taste, an enlightened person, you don’t want a name that’s the equivalent of those cottage-and-stream cliches or Elvis on black velvet.

Hence, the proliferation of books with advice on what to name the baby. The graph from Google nGrams shows the number of mentions of the phrases “what to name the baby” and “baby names” in books since 1900.

Even during the baby boom (1946-1964), interest in baby names did not increase. That boom didn’t start until the late 1970s. 

My favorite baby-name book was Beyond Jennifer & Jason : The New Enlightened Guide to Naming Your Baby.  As the title says, you want to get beyond the currently popular names – the book was first published in the 1980s – and note also that word Enlightened.  The title of the most recent edition is Beyond Jennifer & Jason, Madison & Montana: What to Name Your Baby Now.

As the lede in a Huffington post (here) put it, “We’re always looking for baby names that are wonderful but also unusual.” It then offered a list of “100 great names given to fewer than 100 babies in the U.S. last year.” The names on the 100 under 100 are not so unusual as to be weird. Many are revivals (Winifred and Mamie, Roscoe and Chester), some are foreign transplants (Pilar and Romy, Laszlo and Aurelio), some are borrowed from other things – flora and fauna mostly.

Then are the last names that have become first names
  • Baker
  • Baxter
  • Mercer
  • Shepherd
  • Slater
These follow others that have already become widely popular, though they first started out as names that enlightened, upscale parents chose – like Carter as in Burden (b. 1942), identified by the Times as a “progressive patrician”). Last year, Carter was the 32nd most popular name for boys. Here are others in the top 100:
  • Mason (4th)
  • Hunter (36th)
  • Taylor (59th for girls)
  • Tyler (63rd)
  • Parker (74th)
  • Cooper (84th)
Like Thatcher Baxter Hatcher, these names suggest ancestry going back to the Mayflower and before that to landed English gentry. But only to our American ears. No upper-class British parent would have given a kid these names.  Like Thatcher and Baxter and Hatcher, they are the names of commoners whose family names come from an occupation.  These are ordinary tradespeople. (Hatcher is topographical – like Hill or Forest – rather than occupational. It denotes someone who lived near the gate or hatch. Baxter is a variant of Baker.)

Parker et. al are not so popular across the pond. Only two of these trade-names made the UK top 100 last year –  Mason (27th) and Tyler (37th) – and I suspect that neither of these will turn up very often on the rolls of Eton.  In Britain, if you want to suggest good family, you don’t give your kid a name like Baxter or Cooper.  George, Harry, William, and James will do nicely, thank you, especially if they are prefaced by something like Prince.