More Certain About Uncertainty

May 7, 2013
Posted by Jay Livingston

It’s nice to have your hunches confirmed by real data.

Two years ago, the Republicans were blaming the slow recovery on “uncertainty.”  The job creators (businesses), so their theory went, were not creating jobs because they were uncertain about regulations and taxes that might be in store.  I was skeptical. I’ve never been in business, but I suspected that the real problem in job creation was that business weren’t doing business.  It was the demand – or lack of demand – stupid.

One of my posts (this one) actually got some attention from economists. 

That post was based data from a survey of small businesses. It’s not the highest-quality evidence – business owners could be wrong about the causes of recession and even about what was affecting their businesses – but at least it was more than the single anecdote that law professor/columnist/novelist Stephen L. Carter based his views on.

Now, real evidence is available, allowing us to compare economic recovery in the different states, those laboratories of democracy and economic policy.  If the uncertaintists are right, states where businesses ranked regulation and taxes as their biggest problem should show the slowest recovery.  But in fact there was no correlation.   Owen Zidar at the New York Times Economix blog (here) summarizes the evidence from a few studies.*
Using state-level data from National Federation of Independent Businesses, however, [researchers] found almost no relationship between job growth and the share of small businesses that cite regulation and taxes as their top concern.  (Rather, they found a strong correlation between weak job growth and complaints of a lack of demand.)
So we are now more certain about the irrelevance of uncertainty.
Zidar also reports on other state-level research that adds to our certaint about  other aspects of the economic policy debate:
  • Fiscal stiumlus boosts employment.
  • Increased taxes on the wealthy have a “negligible to small impact on job creation.”
  • Cuts in government spending (e.g., sequestration) constitute a fiscal anti-stimulus and inhibit job creation

* Zidar posted his article two months ago. I found out about it today thanks to a link on Brad DeLong’s blog.

No Keynes Please, We’re Straight

May 4, 2013
Posted by Jay Livingston

Hard money, a strong currency, Spartan-like austerity, concern that inflation will weaken the dollar.  It’s not just that the conservative analysis of the crisis has been wrong or that the conservative solutions have been disastrous (even the Austerians in Europe have had second thoughts). It’s not just that the last few years have provided much support for the Keynesian view and little for its opponents.  But until now, I never saw the connection between right-wing economics and right-wing reaction to social issues.

Then Niall Ferguson made it all clear. Never mind that the Keynesians were right and Ferguson and other conservatives wrong in predictions about inflation and interest rates.  Keynes was wrong, says Ferguson. Why? Because Keynes was gay.

According to a report in Financial Advisor,
Ferguson asked the audience how many children Keynes had. He explained that Keynes had none because he was a homosexual and was married to a ballerina, with whom he likely talked of “poetry” rather than procreated.
I think that homophobia as a term is often inaccurate.  Gay bashers don’t fear homosexuality so much just dislike it.  But Ferguson’s ad hominem (ad homo-hominem?) argument is changing my mind. Why else would he bring up poetry and ballet as at all relevant to economic theories?
Ferguson says U.S. laws and institutions have become degenerate.
It’s the classic language of a brittle machismo.

I don’t know if anyone has looked at the linguistics of economics, but I would expect that conservatives turn to this strength-vs-degeneracy language mostly for policies that bring suffering to others – the unemployed and others with little economic or political power.
Throughout his remarks, Ferguson referred to his “friends” in high places.
For policies like bank bailouts that benefit these friends – investors, traders, banksters – these same economists may choose a different set of metaphors.

UPDATE, 8:00 p.m.: Ferguson has posted a sincere “unqualified apology” (here).  Still, the thoughts he expressed and the words he used in the speech were his own.  Maybe he was drunk. He says his remarks were “of the cuff.” Whatever. It’s clear that he was not being thoughtful or careful about what he was saying. But that’s the Freudian point – and you don’t have to be much of a Freudian to see it.  It takes some effort to keep unconscious, unacceptable ideas and impulses in check.  When the conscious, the thoughtful and careful monitor, relaxes or is distracted, those untoward ideas come spilling out like an ugly oil slick. 

UPDATE 2: May 5, 8:30 a.m. Ferguson’s off-the-cuff comments came in response to a question about Keynes’s line that “in the long run, we’re all dead.”  Paul Krugman points out that Ferguson’s response, aside from its other sins, distorts the point Keynes was making when he used it.

Cute Little Shooters

May 3, 2013
Posted by Jay Livingston

In any society, parents must transmit the culture to their children, and the sooner the better.  So elitist, arugula-eating, Prius-driving parents start their kids on Suzuki violins.

But this great diverse country of ours has room for other cultural traditions, so much so that some people talk about a “culture war.”  And some parents, to make sure their kids grow up on the right side of that war are arming their little ones with Suzuki rifles. 

Many of us effete urban liberals found out about these Crickett* rifles only because of the recent story in the news.
It happened in rural Kentucky.  The parents had given the boy the Crickett rifle as a present.

Andrew Gelman, in a post* tinged with irony, sees the incident as validation of Charles Murray’s assertions about “irresponsible elites.”  Murray takes the urban elite to task for practicing virtues like hard work, education, and family responsibility but refusing to preach these virtues to their White brethren lower down the social ladder.  Which is why the US is “Coming Apart.” (Coming Apart: The State of White America, 1960-2010, Crown, 2012)

In this case, Andrew says, it’s the conservative elite failing to preach sermons about guns and kids to their country cousins (and constituents)
 I assume the senators who voted against the recent gun control bill wouldn’t give live weapons to their kids (or live in neighborhoods in which kids have access to guns at home), but they don’t feel right about restricting the rights of others to do so.

I’m not so sure.  You don’t preach to people who are conforming to your ideas of what’s good.  And apparently, responsible grown-ups in Kentucky and elsewhere see nothing wrong with these mini-rifles.  I expect that the NRA leadership won’t coming out against kid-size guns for kindergarteners but will instead tout its own gun-safety programs.  (I hope they won’t come out with a statement that the only defense against a bad 5-year old with a gun is a good 5-year old with a gun.)

This view from the other side of the culture war is that there’s nothing wrong with guns, that guns are no more dangerous than cars** or swimming pools. You just have to be careful. Sure, sometimes children get killed, but they get killed in cars and backyard pools too.  Accidents happen.  So I wouldn’t be surprised if the some of the senators who voted against the gun bills had in fact given guns to their children or grandchildren.  If so, they probably take safety precautions.  But then again, so do the people in Kentucky. In the coming days we’ll probably hear that the parents are good parents. It’s just that the gun was left standing in the corner, somehow it had a live cartridge in it, and for some reason the mother left her kids alone for three minutes. 

*Andrew’s post has much better Crickett graphics – “The Crickett Club” (like the Mickey Mouse Club, I guess) and “My First Rifle.”   As I write, the Crickett Website is unavailable.  The news story gave them a sudden flood of publicity, and it’s possible the increased traffic crashed the site.  But they also weren’t answering their phone when the press called.  Maybe they became shy about their product.

**Of course we don’t allow 5-year olds, or even 15-year olds to drive.  And drivers must be licensed, and cars must be registered (funny that nobody sees vehicle registration as the first step in the government’s secret plan to seize all our cars). 

We Have a Winner. . . .

May 2, 2013
Posted by Jay Livingston

They came from all over, the students did – from biology and economics, from business and psychology, physics and earth science.  They unrolled their posters or polished their panel presentations – more than 300 graduate and undergraduate students at Montclair’s seventh annual student research symposium.

And when the dust had settled, and the judges had finished their rounds of the posters and oral presentations, four projects were deemed worthy of a prize. Two of these were by graduate students. One of the two undergraduate winners was a sociology major, Jessica McCabe.* 

Jessica’s project untangled several factors that might contribute differences in women’s health.  Her data came from an survey (n ≈9000) of women in India.
In recent years, the politicization of Islam has led many to make conclusions about the religion and the effect that it has on women. The health differences between Muslims and non-Muslims are often attributed to the restrictive nature of Islam. Therein lies the question, “does empowerment or context have the greater effect on Muslim and Hindu women's reproductive health and health-seeking behavior?”
She operationalized “empowerment” with a measure of private-sphere decisions (what to buy, etc.) and public sphere autonomy (going to the market or to see relatives).  At first glance, it looksas though the poorer health of Muslim women follows from their relative lack of power and autonomy.  But when Jessica controlled for the contextual effects from SES, location, age, etc, these differences washed out.  Here are the four points on her poster
1. Compared to Hindu women, Muslim women are more disadvantaged across several indicators of health and use of maternal health services.
2. For Muslim women, mobility in the public sphere does not influence health.
3. For Hindus in general, the effect of empowerment is washed away with the introduction of context variables. Location seems to have a greater effect on health.
4. Context (household socioeconomic status and locality) has a greater influence on health and use of services, although the exact pathways need to be explored further.
The other sociology poster was by Ian Callahan.  Using GSS data, Ian traced attitudes towards stigmatized groups – homosexuals, communists, anti-religionists, and militarists. Should they be allowed to teach in a university? 

Ian’s research found a strong generational effect –  less tolerant people tend to be from the pre-1950 cohort; they also tended to be less educated and more Southern.  Gender had no consistent effect. Women were more tolerant of gays and militarists, less tolerant of anti-religionists and communists. 

Here are our two poster children with their wonderful advisor Sangeeta Parashar.

*The other undergraduate award, for an oral presentation, was shared by eight co-authors -- too numerous to mention.