Loan Sharks

December 8, 2011
Posted by Jay Livingston

Back when I knew about such things, a typical arrangement with a loan shark was the standard $100 knock-down loan.  The shylock gave you $100; you paid him back $20 a week for six weeks.  It works out to something like 175% interest a year, maybe more since in the sixth week you’re paying $20 vig even though you’ve paid off the $100 principle. I think Sudhir Vankatesh found that Chicago loansharks were offering more extended payback periods, hence a lower rate.   Still, when you consider that usury laws used to set the limit at less than 50%, 175% a year looks pretty steep.

I’m an upstanding professor, and I do not deal with loan sharks.  Instead, I have a credit card with a highly respectable bank, J.P. Morgan Chase. Last month, I must have missed their e-mail alerting me to my bill, and I didn’t pay it. It was only $175. How much could my neglect possibly cost me?  I mean, after all, I wasn’t dealing with some mobbed-up shylock. This was JP Morgan. 

Here is what my bill for this month looks like.

In effect, the bank was lending me the $175 for a month.  In return, they charged me $2.66 interest plus a $25 fee.  That works out to nearly 190% a year. 

In the great bank bailout, JP Morgan got  about $25 billion (or was it $50 billion?) in government money.  I don’t know the details of the deal. I don’t know what interest rate they settled on. But in my bill-induced reverie, I imagine Treasury Secretary Hank Paulson saying to Jamie Dimon, “You got a nice bank here, and I’d hate to see it go under.  So what do you say I fix you up with a $25 billion knockdown loan?  Only 175%. By your standards, that’s a bargain.”

Douche — Long-lasting?

December 6, 2011
Posted by Jay Livingston

A couple of years ago, I heard a thirty-ish professor evaluate something as “douchy.” The douchy item might have been a song, or a band, or maybe it was an article. I don’t remember, and it’s not important. But it did make me realize that this word was not in my active vocabulary. I was reminded of that again when a Facebook friend linked to this picture posted on the Facebook page of Kicking Ass for the Middle Class.

Sean Hannity in among the other douches.

I have never called anyone a douche. Not even Sean Hannity. I must be too old; my lexicon of epithets must have solidified before douche and douchy came on the scene. But when was that?  Surely, there are linguists who can tell us. And what was the path of diffusion?*

I also wonder whether douches are here to stay.  I have the impression that negative epithets are relatively durable.  Popular phrases come, and then they go. In a few years, will events still result from perfect storms?  Will ingrates be throwing people under buses, while creative folk push envelopes and think outside boxes? These phrases are swell, but I suspect their time is limited.  Ditto, I hope, for “my bad.”  Happy campers are fading away like old soldiers, and all the superstars have been replaced by icons. 

But shitheads and assholes have been around a long time and show no signs of leaving. Is it their location on the other side of respectability that gives them long life?  Douche has its origins in body parts and actions usually kept out of sight, but the word itself isn’t quite over the line. In this way, it’s like suck, as in “this post sucks.”  And maybe it does. But I did want to reprint that drugstore photo of all the douches.

* UPDATE:  The Language Log was no help in this matter.  A search for douche turned up mostly references to douchebag, and most of these were in the comments.  One post does have a link to a 2009 New York Times article about words you can say on television.  It quotes the creator of “Community”:  “This is a word that has evolved in the last couple of years — a thing that sounds like a thing you can’t say.”  He he’s got the history right (it’s only the last couple of years).  The Parents Television council counted 76 douches on 26 prime-time network series in 2009 (and the year still had seven weeks to go, though the year-end Christmas specials would probably be pulling down the average). That 76 compares with thirty in 2007 and a mere six in 2005.

(HT:  Jamie Fader)

Economics and Ethos

December 5, 2011
Posted by Jay Livingston
(Cross-posted at Sociological Images)

The equation of wealth and virtue seems to come almost naturally, at least among the wealthy.  The logic is simple: Virtue leads to success, therefore wealth is evidence of one’s virtue. Virtue, in this case, means the Protestant Ethic – hard work and a willingness to forgo or postpone pleasures.  It follows then that those who are not wealthy must have turned their back on virtue. 

David Brooks, in his Friday column (here),  applies this explanation to the wealth of nations.
Why are nations like Germany and the U.S. rich? . . . It's because many people in these countries believe in a simple moral formula: effort should lead to reward as often as possible.

People who work hard and play by the rules should have a fair shot at prosperity. Money should go to people on the basis of merit and enterprise. Self-control should be rewarded while laziness and self-indulgence should not.

The US, Germany, and the Netherlands are Brooks’s exemplars of these virtues (Brooks uses the word ethos). The bad countries, the ones whose economies are teetering on the brink, are the grasshoppers to our ant. There they were – Brooks points his finger at Greece, Italy, and Spain – fiddling and dancing the summer away, refusing to live within their means or “reinforce good values.” 

This seems accurate, doesn’t it – the dolce far niente Italians and other Mediterraneans, taking hours at midday for meals and siestas while the industrious Americans, Germans, and Dutch are working away, wolfing down a sandwich at their desks. 

Just to be sure I downloaded some OECD data  from 2007 – the last year before the big crash – on the number of hours people in different countries work. (Brooks’s three “ant” countries are red, the “grasshoppers” dark blue.)

This is puzzling.  The US is slightly above the OECD average, but workers in Greece and Italy spend more hours at work than do Americans, while the Dutch and Germans are down at the low end of the scale.  (I do not know why the OECD still gives data for West Germany as well as Germany.)

I noticed that the OECD also had a measure of “employment protection,” which is basically how hard it is to fire someone.  I figured that workers in non-virtuous countries would be highly protected.  Since it’s nearly impossible for them to be fired, they know they can slack off on the job.  By contrast, virtuous countries would foster Brook’s ethos of “effort, productivity and self-discipline”  in workers, rewarding the industrious, firing the lazy and self-indulgent.  

I wasn’t surprised that the US anchored the low end of the scale. US laws do far less than laws of other countries to protect workers.  And Greece and Spain are above the average.  But so are Germany and the Netherlands, though only slightly, while Italy is slightly below the average.  There’s really not much difference between these three.  And if you look at the array of countries, there seems to be no strong connection between job protection and how well the country is weathering the current long recession.  I’m not sure what the best measure of the overall economy is, but the OECD has composite figure made up from ten main economic indicators.*

The US ranks above only one of the profligate “grasshopper” countries, Spain.  Why, if the US shares the work ethos of the Netherlands and Germany, does it rank so far below them?  I just wish we had better measure of Brooks’s “ethos.”


“The Labour Force Survey (MEI) dataset itself covers countries that compile labour statistics from sample household surveys on a monthly or quarterly basis. It is widely accepted that household surveys are the best source for labour market key statistics. In such surveys, information is collected from people living in households through a representative sample. Surveys are based on standard methodology and procedures used all over the world. The 10 subjects available cover labour force, employment, unemployment (including harmonised unemployment), and employees.”

Reliable Tests, Unreliable Test-takers

December 2, 2011
Posted by Jay Livingston

Great Neck is the epicenter of the cheating scandal – SATs, ACTs, fake IDs, hefty fees.  High schoolers, or their families, paid the smart ringers as much as $3600 to take the exam for them. 

The Times front page story today (here) notes that Great Neck, using the fake ID of West Egg, was the setting for The Great Gatsby, and the stories – fiction set in 1922, reality set in 2011 – are rich territory for comparison.  Success, ambition, wealth, opulence, envy.

One student
was offered cash to take the test by a more popular student. Eager to impress, and perhaps get closer to the other student’s friends, he agreed, officials said; later, he scored a 31 on the ACT under the same student’s name.
Could that name have been Tom Buchanan?

Maybe there’s even an unrequited love story that didn’t make the papers.

But for the statistically minded, there’s this:
Samuel Eshaghoff, a 2010 Great Neck North graduate, scored in the 2,100 range (out of 2,400) on his own SATs; he is accused of taking tests for at least 15 people over three years, and the people briefed on the inquiry said he obtained scores for them between 2,170 and 2,220 on the SAT.
Those numbers, though they might be barely remarked by most Times readers, are probably the lede in the ETS edit of the story.  The testing company might be faulted on security (“two of the people for whom [Mr. Eshagoff] is accused of taking the tests after showing a fake ID were girls”).

But fifteen takes with scores no more than 50 (of 2400) points apart – how’s that for reliability, old sport?