– but which didn’t fit naturally into the review.
Today’s bankrupt families are deeper in debt than their counterparts just twenty years earlier, and their overall financial picutre – assets and debts – is worse. In 1981, the median family filing for bankrupcy owed 80% of total annual income in credit card and other nonmortgage debts; by 2001, that figure had nearly doubled to 150% of annual income.
One of the better parts of the book was its busting the myth that people use bankruptcy as an “easy way out” or that they’re declaring it willy-nilly. People are waiting much longer and trying much harder to avoid it now than a generation ago.
Many commenters seem concerned that the families filing for bankruptcy are not sufficiently contrite. Democractic Senator Patricia Murray from Washington argues that the Senate should make it a priority “to recapture the stigma associated with a bankruptcy filing”. The idea that they do not feel bad enough about their bankruptcy filings would have come to a shock to most of the families who filed…In our research, several mothers were willing to talk with us only on the condition that we not use the word “bankruptcy” during the telephone interview for fear that a child might pick up the extension phone and hear the dreaded word. Some said that just hearing the word still makes them cry, and they asked us to refer simply to “the event”. More than 80 percent of the families we interviewed reported that they would be “embarrassed” or “very embarrassed” if their families, friends, or neighbors learned of their bankruptcy.
Another quote along the same lines.
The odds that a worker will suffer an involuntary job loss have increased by 28% since the 1870s. Growing job insecurity has been hard on single-income families, who now face a 28% higher chance that the breadwinner will lose his job. But for today’s dual-income family, the numbers are doubly grim, as each spouse faces a higher likelihood of a job layoff. We estimate that in a single year, roughly 6.3% of dual-income families – one out of every sixteen – will receive a pink slip. That means that a family today with both husband and wife in the workforce is approximately two and a half times more likely to face a job losss than a single-income family of a generation ago.
I am too young to have strong opinions on How Things Have Changed. But I remember that back in the 90s, there were a lot of articles about The Layoffs Crisis and how layoffs were A Sign Of The Decline Of America. And now the understanding that people get laid off or downsized a lot is such an accepted part of everyday life that it seems weird that it was once a news item of approximately the same concern level as global warming or immigration. The people ten years younger than I am are going to have no idea that there was once hand-wringing over it, or that it is even the sort of thing over which hands could be wrung.
Make no mistake. Financial distress is a problem for both men and women. But we do not want to leave the impression that these phenomena are entirely gender-neutral. They are not. Mothers are 35% more likely than childless homeowners to lose their homes, three times more likely than men without children to go bankrupt, and seven times more likely to head up the family after a divorce.
So a while ago I recommended everyone be extraordinarily paranoid about feminist statistics. People gave me a lot of flak over that, and Jeff K wrote a blog post where he did some tests and said he found that feminist statistics were no worse than anyone else’s. I acknowledge the plausibility of his viewpoint – and yet extraordinary paranoia about feminist statistics has, at least for me, been the gift that keeps on giving. I suspect Jeff and everyone else reading that paragraph did what I very nearly did – assume it supported the conclusion it said it was supporting. But since I am extraordinarily paranoid, I made sure to re-read it and double-check. And so I noticed that it strongly implies there is a difference between women and men – but then it very deliberately avoids making the comparison. Mothers (ie women with children) are more likely than people without children (of either gender) to lose their home. Mothers are more likely than men without children to go bankrupt. There is no comparison between mothers and women without children, nor between mothers and fathers. I expect that if such a comparison showed any difference at all, Warren would have made it, rather than strongly imply she was doing so but in fact making distractor comparisons. The only place where women may be compared to an appropriate category of men – and even here it is left very vague – is in the last statistic, about being more likely to head the family after a divorce. But this is just the point that women get the children more often after divorce – which is not exactly the sort of gender disparity I feel we were promised.
Research shows that on average, a husband is three times more likely than a wife to take primary responsibility for managing the family’s money. But as a couple sinks into financial turmoil, this responsibility tends to shift. As families fall behind on their bills, it is wives who roll up their sleeves and do what must be done…Among couples who seek credit counseling or file for bankruptcy, the split over who was responsible for dealing with the bills was exactly reversed from that of secure families: three-quarters of the wives were exclusively responsible for trying to extract their families from their financial quagmire.
Okay, this one doesn’t even require extraordinary paranoia to start noticing alternative interpretations.
In the early 1970s, not only did most Americans believe that the public schools were functioning reasonably well, a sizable majority of adults thought that public education had improved since they were kids. Today, only a small minority of Americans share this optimistic view. Instead, the majority now believes that schools have gotten significantly worse. Fully half of all Americans are dissatisfied with America’s public education system, a deep concern shared by black and white parents alike.
I seriously doubt public schools became much worse in any interesting way, since as far as I can tell most educational philosophies kind of work about equally well. I wonder how much this has to do with the media spreading panic.
A group of solidly middle-class Americans – our nation’s police officers – illustrate the point. A recent study showed that the average police officer could not afford a median priced home in two-thirds of the nation’s metropolitan areas on the officer’s income alone. The same is true for elementary school teachers. Nor is this phenomenon limited to high cost cities like New York and San Francisco. Without a working spouse, the family of a police officer or teacher is forced to rent an apartment or buy in a marginal neighbhorhood even in more modestly priced cities such as Nashville, Kansas City, and Charlotte.
Stay-at-home parents are now difficult except for the well-off.
Single mothers who have been to college are actually more likely to end up bankrupt than their less educated sisters – nearly 60% more likely.
The floor is open to anyone who would like to come up with a just-so story to explain this.
In 2001, freshman Senator Hillary Clinton voted in favor of [a bill making it harder to filing for bankruptcy, which she had previously opposed violently]. Had the bill been transformed to get rid of all those awful provisions that had so concerned First Lady Hillary Clinton? No. The bill was essentially the same, but Clinton was not. As First Lady, she had been persuaded that the bill was bad for families, and she was willing to fight for her beliefs. As New York’s newest senator, however, it seems that Hillary Clinton could not afford such a principled positions. Campaigns cost money, and that money wasn’t coming from families in financial trouble. Senator Clinton received $140,000 in campaign contributions from banking industry executives in a single year, making her one of the top two recipients in the Senate. Big banks were now part of Senator Clinton’s constituency. She wanted their support, and they wanted hers – including a vote in favor of [what she had previously called] “that awful bill”.
Warren’s vicious attack on Hillary Clinton was a highlight, considering the current political situation. Apparently she gave a presentation on the problems with a bankruptcy bill to Clinton when she was First Lady, Clinton was very impressed and worked really hard to fight it, and then when she became Senator she turned around and supported it. You can bet this is coming up in the next Democratic primary.
To give a sense of just how expensive subprime mortgages are, consider this: In 2001, when standard mortgage loans were in the 6.5% range, Citibank’s average mortgage rate (which included both subprime and traditional mortagages) was 15.6%. To put that in perspective, a family buying a $175,000 home with a subprime loan at 15.6% would pay an extra $420,000 during the 30-year life of the mortgage – that is, over and above the payments due on a prime mortgage. Had the family gotten a traditional mortgage instead, they would have been able to put two children through college, purchase half a dozen new cars, and put enough aside for a comfortable retirement.
I will always reblog clever ways of putting numbers in perspective. Also, whoa. Something to remember when the news talks about how Americans can’t afford to save for retirement anymore. [EDIT: Eric finds some evidence this is exaggerated]
At Citibank, for example, researchers have concluded that at least 40% of those who were sold ruinous subprime mortgages would have qualified for prime-rate loans…A study by the Department of Housing and Urban Development revealed that one in nine middle-income families and one in fourteen upper-income families who refinanced a home mortgage ended up with a high-fee high-interest subprime mortgage. For many of these families there is no trade-off between access to credit and the cost of credit. They had their pockets picked, plain and simple.
This is part of what I meant when I praised Warren for being able to back up her accusations of market failure. Apparently there is not enough awareness of options for the market in mortgages to be well-functioning.
Most Americans guard their credit ratings jealously, living with a slightly prickly sensation that they could be cut off if they fell behind or forgot to pay a bill. What they don’t realize is that when a borrower makes a partial payment, when he misses a bill, and when his credit rating drops, he actually gets more offers for credit. He is not just down on his luck, behind on his bills, and short on cash, he has now joined the ranks of an elite group – The Lending Industry’s Most Profitable Customers…within six months of filing for bankruptcy, 84% of families had already received unsolicited offers for new credit.
As several commenters have pointed out, this means something different than I originally thought – having good credit rating may still be important to get low interest rates. But the fear that you will never get credit if your rating is poor is misplaced.
What does bankruptcy have to do with abortion? In Washington, a great deal. Over the past several years, pro-choice groups had scored significant court victories against a few prominent abortion clinic protesters by obtaining money judgments against them, only to see those victories turn to dust when the protesters declared bankruptcy and discharged their debts.
In a strange twist of politics, the credit industry’s version of the bankruptcy bill had been supported by Senator Charles Schumer, of New York, who had garnered strong support among women’s groups for his pro-choice politics. Ever responsive to his constituents, Senator Schumer inserted a provision into the bankruptcy bill that would make it more difficult for abortion clinic protesters to discharge judgments entered against them if they were sued for their protest activities, much in the same way drunk drivers and embezzlers cannot use bankruptcy to discharge judgments against themselves. Eager to appeal to women voters, the Senate had accepted the amendment in 2001. But in 2002, when the bankruptcy bill went back to the House with the abortion amendment in it, a coalition of right-to-life representatives refused to go along. They brought the bill to a standstill.
Desperate to get the bill passed, the banking lobby went back to the Senate, pressuring Senator Schumer to remove the controversial abortion provision. The industry ran attack ads against him in his home state, demanding that he support the bankruptcy bill — and claiming that he was costing every American family $550 a year. (The attack on Senator Schumer was particularly ironic, since he had received more campaign contributions from the credit industry than any other Senator, just nosing out fellow New Yorker Hillary Clinton.) But by this point, the pro-choice women’s groups were also mobilized, and they held firm, supporting Senator Schumer and threatening to withhold support from any elected official who moved to take the provision out of the bankruptcy bill. In one of those rare defining moments, Senator Schumer had to choose between big business and pro-choice women, both of whom had supported his campaign. He chose women, and the amendment remained in the bill.
Ultimately, two strange bedfellows — a small group of socially conservative Republicans and a handful of progressive Democrats — gathered enough momentum to defeat the bankruptcy bill against the best-financed lobbying campaign of the 107th Congress.
I feel like if I had to send a message to aliens to tell them everything they needed to know about US politics, it would be this story.
In 2001, when standard mortgage loans were in the 6.5% range, Citibank’s average mortgage rate (which included both subprime and traditional mortagages) was 15.6%.
I find this to be starkly at odds with my expectations, enough so that I am deeply suspicious of the statistic meaning what Warren implies it means. A house financed with a 15.6% mortgage would be several times as expensive as renting a comparable dwelling unit. In order for that to be the average mortgage rate for Citibank, either there must be something wrong with the statistic or Citibank must have been engaging in fraud of staggering proportions. My prior for the latter hypothesis is very low (chiseling around the edges I find plausible; systematic fraud by a large, established company with a lot to lose, much less so).
I suspect part of what’s going on is that two other categories of mortages are probably being included in that number: construction loans and so-called “hard money loans”. Both types of loans are typically taken out by sophisticated investors as short-term finance for property transactions that aren’t eligible for traditional mortgages. Construction loans, as the name implies, finance construction and major renovations; the investor borrows against the estimated value of the final project to pay for the construction. Hard money loans are unsecured loans taken out by an investor in order to raise cash to purchase a house without the lender having to approve the property as being suitable collateral. This makes the purchase process much faster and less risky for both the buyer and seller, and it allows buyers to finance a property that’s not currently in livable condition.
15+% rates are plausible for these types loans because they are generally paid off in less than a year, as the investor either sells it or refinances it with a more traditional mortgage and rents it out.
After doing a bit of searching, I think I was being too charitable to Warren. I found this paper by her, which makes the same claim, with the following footnote citation:
I haven’t read the full article because the only copy I could find of it was behind a paywall, but the preview references the statistic to a group called “the National Training and Information Center”, which self-describes as “a national policy, research, and training center for communities who were tired of seeing their neighborhoods torn apart by federal housing foreclosures and bank redlining”. Googling about them turns up a very sparse website, a short wikipedia article which is a copy-paste of their website, several small links on other pages, and several versions of articles about them being fined in 2009 for misdirecting federal grant money to lobbying activities.
I have so far been unable to find anything written directly by the NTIC talking about the sources and methods for the statistic.
Thank you. That sounds plausible.
http://www.frbsf.org/economic-research/files/Kojucharov-Martin-Martin-Xu.pdf suggests that the highest average subprime rates ever got was about 10%.
That article is about subprime housing. Subprime autos, subprime consumer loans, and subprime cards would all have much higher rates.
Cards and consumer are unsecured.
Autos are secured but the collateral is more easy to lose. No one drives a house to their uncle’s garage and changes the plates.
The typical borrower in Sunnyvale at the height of the boom was a no hablo English hispanic with no job, no income, no credit rating and no assets buying a million dollar house no money down.
As far as I could tell, all of them, every single one. Maybe some of them had credit and assets, I could not tell that by looking at them, but none of them had regular day jobs or English. In my doubtless racist opinion, none of them looked like they had assets or credit ratings either. You might suspect I am too racist to tell who has assets or credit, but my racism does not make it hard to tell who has a day job or English.
Since all of them intended to flip the house at a higher price, and none of them intended or expected to make any mortgage payments, none of them would care about the mortgage rate, and would gladly sign the papers that they could not read.
None of them were legitimately eligible for a mortgage at normal interest rates – or indeed at any interest rate.
But since loan officers were massively lying about their eligibility, you could doubtless construct statistics that the lies justified a lot more normal interest rate loans than they got.
While I don’t know the details of the Sunnyvale market and won’t comment on James depiction of it, this comment does raise the point that subprime loan originators and banks are often (maybe even typically) not the same institution. Originators create and source the loans and sell them to banks or administer as a third party a program financed by a bank.
People often lump loan originators in with banks because that’s who they talk to and they thinking of “getting a loan” as something you do with a bank. But often they are third party agents and principal agent problems are a real thing.
I would cheat like Troy and move the big comment I just left on the original post to here, but I was one second too slow to delete it. So I’ll say: Big new comment by me on original post is here. Summary, with some additions; no citations but you can look the data up yourself:
– The largest, most-sudden gain in productivity we’ve ever experienced was the sudden entering of women into the job market in the 1970s.
– If gains from productivity accrue to (workers/consumers), it will manifest as the increase in disposable income per (worker/person) being proportional to the increase in capital. If they accrue to capital owners, it will manifest as inflation.
– The largest period of high inflation we’ve ever experienced was the 1970s. Real wages per worker decreased from 1965 (IIRC) to the present; IIRC the figures indicate that disposible real income per family has remained about constant. So at first glance, it appears that capital owners have captured all the gains in productivity since around 1960, though there has probably been some unmeasurable quality-of-life improvement.
– On closer inspection, the capital owners in a few market sectors (land, college, healthcare) captured most of the gains in productivity.
– Healthcare is highly-regulated; college became highly-subsidized in 1965; Warren argues that land was subject to government subsidy and regulation through education.
– The amount of land isn’t increasing. College isn’t getting notably better, and got less productive because colleges already had many female employees, whose wages increased, and because many scientific fields (eg physics) have an exponential increase in the cost of equipment per dissertation. Healthcare has become less productive (measured in quality-of-life-years per dollar) through technological improvements, because, as with physics equipment, it takes more and more expensive equipment to add each extra year of life.
– Therefore, gains in productivity are captured either by government-regulated sectors, or by market sectors which don’t experience gains in productivity.
This doesn’t explain much since the 1970s, though. What /seems/ to have happened since then–and I’m out of my depth here; this is based entirely on my own investigation of figures I don’t really understand–is that wealth has grown much faster than GDP, which is mysterious. If you count derivatives, the total wealth in the US has grown by a factor of, IIRC, something like 20 since 1980, far greater than the GDP/productivity increase that is supposed to underlie increase in wealth. (Sorry, I don’t remember my sources! Hopefully I wrote them down somewhere.)
My guess is that the invention of complex financial instruments has made it possible for people to magically create money, on paper. This would have a huge effect on the wealth of the very wealthy, but no effect on the middle and lower class. Prices would therefore increase in sectors where the wealthy can bid up prices. This does not happen with food, mass media, or healthcare (a wealthy person can only eat so much food, watch so many movies, or have so many surgeries), but does happen with land (they can buy any size of house) and education (because in any high-status field, about a half-dozen colleges have a monopoly on high-wealth and high-status careers).
Perhaps you are interested in this post, in particular, this thread and this comment. It was not that big an increase in the labor force. The employment to population ratio went up less than 10 points. Maybe the value went to old people, although how it got there is mysterious.
Also, I suggest you not use the word “productivity” when you mean labor. The term usually means value per hour.
Ah. Yes re. “productivity”. I was thinking something like “gross domestic product”.
The data in that comment is interesting. Note that it sounds from those figures like EPR in 1950 was about 53%, so a 10 point increase is still significant.
As to that discussion, though, I think the “missing women” may be well explained by inflation. GDP is inflation-adjusted. If each family makes more money, and spends more money, and prices rise as a result, capitalists will capture those labor gains, and they won’t show up in the GDP.
It would be interesting to recompute GDP over the past 200 years using a constant CPI basket of good produced throughout that time, like bread, coffee, lumber, nails, and miles of travel.
Er, parts of my comment didn’t make any sense.
– The surprisingly small increase in EPR and inflation are both possible explanations for the “missing women”.
– My thoughts re. the 200-year-old CPI basket were along the lines of finding things produced all that time, and recomputing GDP using them, counting units produced rather than their dollar cost. An attempt to measure technological productivity enhancement. Of course you would still need to measure the cost of production, or at least the number of labor hours required for production.
An important question is whether education works at all. We have many studies comparing two different educational philosophies, but no studies with a control group to examine whether traditional K-12 education is beneficial.
If we do, I’d say the experiment must be re-run, giving the control group web access.
Self-education using the internet: great idea. For those who are supremely self-motivated.
I know a good number of people who learned a whole lot in school that they would never have been motivated to learn on their own. I personally am reasonably self-motivated, but can only do sufficient spaced repetition to really internalise knowledge within certain narrow fields.
Differnt countries introduced mandatory education at differnt levels at differnt times. I.e. nation a and b are similar but nation a introduces mandatory education through 4th grade 20 years earlier than b. C and d are similar but c raises the age to 18 fifteen years before d.
I think the work that has been done with this sort of data points to fairly high returns to increased mandatory education. However it controls vs non education rather than education with modern alternatives, so the kinds of questions that research can answer are less than we might want.
On Scott’s Book Review I expressed skepticism with one of Warren’s central points, and I’m going to repost that here because I was several days late on the Book Review. Warren notes that
Home foreclosures have more than tripled in the past generation. … Car repossessions doubled in the five years before the book was published. Bankruptcies have approximately quintupled since 1980. Over the same period, credit card debt has gone from 4% of income to 12%, and average savings have gone from 10% of income to negative.
She seems to suggest, however, that this is a middle-class phenomenon, that the same families who are trying to send their children to the preschool equivalent of Harvard are having their homes foreclosed upon and their cars repossessed. This just doesn’t seem plausible to me. I would guess that credit card debt, bankruptcies, car repossessions, and home foreclosures are all much more common among the poor and lower-class than among the kinds of Americans Warren is profiling.
Here are two alternative possible explanations of the shifts Warren cites: (1) More immigrants (mostly from Latin America) in the past 30-40 years have brought more poor people into this country, people who are more likely to have the kinds of problems above. (2) More lower-class Americans who traditionally wouldn’t have been able to, say, buy a house or get a credit card, are doing so, and then don’t successfully pay off their debt (whether because they don’t make enough or are financially irresponsible).
Troy, what about just the regular middle class or lower-middle class? (Harvard-equivalent preschools speak of the upper-middle class to me.)
Well, it seemed to me from Scott’s book review that Warren was stating or implying that these kinds of problems are being faced by the kinds of parents sending their children to expensive preschools (a phenomenon mentioned in the review). More generally, where one class ends and another begins is vague, but I think that the class and incomes of most of the people facing these problems are lower than the class and incomes of most of the kinds of people discussed in Warren’s book. For example, here’s a quote from Scott’s review:
So, Warren argues, the common-sense conclusion that a modern family making $70,000 is nearly twice as well-off as a traditional family making $40,000 clearly doesn’t hold.
But this only follows from the dire statistics if the modern family making $70,000 is the kind of family afflicted by these troubles. If I had to throw out a number, I’d guess that the large majority of families facing home foreclosures, car repossessions, bankruptcies, and constant credit card debt make less than $30,000 a year.
Stay-at-home parents are now very difficult except for the well-off.
I can’t resist the urge to comment on this, even though I’ve made the same point in previous threads. It is in fact much easier to live comfortably on a small budget than most Americans admit. While in graduate school my wife and I brought in under $20,000 between us, and we managed to buy a house on that budget and consistently spend less than that per year. We did not have children, but I knew many graduate students (all male) in our neighborhood who brought in around the same amount of money, also owned their homes and had multiple children (2-4), which their wives stayed at home with. We all lived perfectly comfortably. We did not have many of the luxuries that most Americans enjoy — many/most of us went without a second car, Internet access, television, eating out on a regular basis, buying meat from the supermarket — but these really are luxuries.
We lived in the Midwest at the time in a place with low housing prices, and that certainly helped. But I remain convinced that most Americans spend far more than they need to to live comfortably.
From your description of Internet access as a luxury, I gather you’re writing about a time sometime in the past. And I think Warren’s whole point was that everything you said definitely used to be true, even less than a generation ago, but due to changing fundamentals is true no longer.
Internet access is no longer considered a luxury because almost everybody has it. It does not mean that life without Internet access is actually more of a hardship now than it was when it was a luxury. That illustrates the point I was trying to make above: that if you count good for good and service for service, nowadays you can have much more for your salary than you used to. It only becomes less once you start comparing with some moving target like “middle class lifestyle”, which now includes things which in the past didn’t exist or were only available to the wealthy.
By the way, it sucks to have a long comment you typed discarded with “you are posting too fast; slow down”, especially if the last time I actually posted was yesterday.
No, life without Internet access is actually more of a hardship now. Because almost everybody has it, people will *assume* that you have it, and all the workarounds that people used to provide for those who lack a connection to the civilizational hivemind have been replaced by “just fucking google it”.
Telephones didn’t used to exist either, but surely you will agree that they were a bonafide necessity in the same timeframe you were describing the Internet as a luxury?
I’m talking about less than 5 years ago. Of the things I mentioned, I would certainly find Internet the hardest thing to do without — and in fact, we ourselves did not do without it for most of my grad school years. But many of our neighbors did (I can think of three immediately who I know did not have Internet at home, and I’m confident that there were others, because of the mentality of the people who lived in our neighborhood). And although I would not want to give up Internet myself and very much enjoy having it, I have to admit that I don’t really need it and that I could live a comfortable life without it. Suntzuanime is right that the expectations of others would make it hard — especially for me, as an academic who gets a lot of E-mails — but I think if I had to I could do all my E-mailing at school.
Hmmm. I’ll admit I’m in pretty much the same situation as you – making an income that’s not much higher than the US average but finding it pretty easy to live comfortably despite having a stay-at-home girlfriend.
But I have no debts (parents and grandparents were VERY helpful in paying for med school), no kids, and rich parents willing to cosign a lot of things in a way that gets me lower interest rates. I also have enough savings that I don’t have to do things hand-to-mouth, which saves me money in the long term.
I definitely agree that coming from middle-class backgrounds made things easier for us. For instance, we inherited a car from my parents — not a nice car, but a car — and since we were willing to put up with its flaws (e.g., no air conditioning) for several years, that saved on expenses. But I do think that it’s possible for most Americans to live comfortably on much less than they do — maybe not always easy, but quite possible. Indeed, it’s possible to do much more than what my wife and I have done, as evidenced by BeoShaffer’s link below. And I think this is an important message because so many people, on the left and the right, in politics and in daily life, talk about how hard it is to get by these days, when in fact most Americans have an unprecedented amount of wealth by both historical and global standards.
Mr.Money Mustache gives a full breakdown of how his family of 3 spent 2013 in opulent luxury* for $25,182 a year http://www.mrmoneymustache.com/2014/01/12/exposed-the-mmm-familys-2013-spending/
*By sane historical/global standards, not those of the American middle class.
My experience matches Troy’s. We’re homeschoolers. We do fine on one income, and we know several other families who do OK on one income too. This is in 2014. It’s not that uncommon, and it’s not that hard, at least here in the Midwest.
You do have to be intentional about it. Most of the single income families we know are at least somewhat thrifty, are cautious about debt, etc.
Being offered credit is not the same as having a good credit rating. The real problem with this advice is that you need to get rid of all but one or two of your credit cards before you want credit, and that missing a single payment on one card will hurt your rating more than years of on-time payments will help it.
I had picked up various credit cards I didn’t need in order to get the free signup incentive, usually $50 or $100 worth. I was surprised to find when I wanted to buy a house that having a few extra credit cards, and having missed a few payments on some of them years in the past, would cost me, I think, $10,000-$20,000 in increased interest.
The need for recentering of the SAT due to a decline in the absolute number of high Verbal scores is evidence of declining school quality/performance.
Or of any of ten million other things.
True, but IQ scores improved at the same time, narrowing the possibilities, and it was the absolute number of high scores that fell dramatically, not just the percentage.
My impression is that by a variety of metrics literacy among the young fell during the second half of the 20th century. Could be TV or less probably lead, but school probably carries some responsibility here.
The percentage of high school students taking the SAT or ACT has risen steadily over time. It went from system of “students we expect to go on to competitive four-year colleges will take one of these tests” to a general social expectation.
This guy has assembled a rather incredible amount of data about changes in these tests over time. A chart showing the increase in the percent taking the tests just during 1992-2014 can be seen here (second graph).
Expansion of who takes the test would make it even more surprising that we can’t find as many people to get high scores. 17,500 scored above 700 V in 1972 and only 10,000 in 1993. No, the proportion taking the SAT has not grown, but stayed steady at about 50% during that period. Your graph starts after and doesn’t show much growth.
http://www.ernweb.com/educational-research-articles/the-decline-in-sat-verbal-scores/
“Senator Schumer inserted a provision into the bankruptcy bill that would make it more difficult for abortion clinic protesters to discharge judgments entered against them if they were sued for their protest activities, ”
Facially unconstitutional.
You can make it more difficult for all protesters but that would require it to be content neutral.
The aborted bankruptcy bill (pun intended) made me LOL and tremble with fear at the same time.
What. You. Said.
One of the things that makes me uncomfortable about really really smart conservatives is when they point out how many of these issues we have probably accumulated over the past two hundred fifty years that we don’t even realize anyone could think of as problems or imagine could be otherwise.
Some anarchists do this too (Ivan Illich, etc) but admittedly it’s much less of a focus for anarchism as a whole than for conservatism as a whole.
The point of having a good credit score is not to get more *unsolicited offers* of high-interest credit cards, it’s to get lower interest rates, especially on your biggest loans, such as mortgages, and save enormous amounts of money over time. Credit scores also see some use by employers in hiring screens.
And credit cards are something of a special case, since their basic business model is generally to provide loss-making interest-free loans that provide a great deal for those who pay off their balances every month as a way to get business for the high-interest parts.
Mortgages, student loans, business loans, and other larger more important uses of credit are less skewed in that direction.
“This is part of what I meant when I praised Warren for being able to back up her accusations of market failure. Apparently there is not enough awareness of options for the market in mortgages to be well-functioning.”
Subprime mortgages were often marketed with attractive low “teaser rates” which looked like a much better deal than the stodgy standard-issue mortgage offers. Only by reading them carefully did you notice that after a few years the interest rates shot skywards (indeed, the 2007 crisis was in large part caused by a whole lot of people hitting that cliff and realizing they couldn’t pay the *actual* rate of their mortgage.)
So, the problem may not have been strictly that people didn’t know that they had prime mortgages available, but a more general problem about bounded rationality and not-reading-the-fine-print.
“Jeff K wrote a blog post where he did some tests and said he found that feminist statistics were no worse than anyone else’s.”
I didn’t get that far. I identified the blog posts I intended to examine, looked over the statistics in the first one, and then stopped after you posted:
“I understand why you chose that comparison group, but if you were to ask me the one group that I would expect to be MOST likely to have the same inaccuracy rate as the feminist blogs, it would be the MRA blogs. Gender is just an awful subject in general. But I haven’t read many MRA blogs so I can’t make a strong prediction.” — http://www.jefftk.com/p/are-feminist-blog-stats-atypically-bad#fb-649351137992_972868
I would expect that MRA blogs either do not use statistics or use the obvious statistics about more men being in prison, dying in fights, etc. Almost nobody directly studies MRA issues, so MRA blogs are forced to quote credible people’s statistics from other contexts. In contrast many people directly study feminist issues, so there’s more opportunity and motive for numbers to be fudged.
> Yeaaaaaah…okay, I am definitely one of the Americans who fell for this. My parents told me when I was young I needed to start spending money on credit cards and paying it back or I’d never have a good credit rating when I was older
Not the same thing. Banks can be more willing to offer credit to those who have missed a few payments than those who have no credit history whatsoever. And while the people the author talks about may have a lot of credit offers, the quality (i.e. interest rates) may well be, ah, not what parents would want for their children.
And it does help to have a credit history.
I know a woman who ended up having to get a “secured” card where she put money in an account equal to her credit limit and went about charging and paying off in full every month for six months or more before they issued her a card, because she had been using her debit card into her thirties.
At which point she was thinking she might want to buy a house someday and wanted the history.
Scott, you are dodging the issue: for these purposes, mothers are far more important than childless women.
Let’s interpret and ask a very political question: do you want to have a Japanese-style population decline and ensuing financial strain on the Social Security and retirement-capital systems, or not? Put more simply: do you want to have a healthy economy, or a stagnant one?
If you want a healthy economy, you need to have either slight population growth, population replacement, or sufficient rises in per-capita productivity to make up for population decline. All of these, but actually, the last most especially, dictate that society needs policies supporting parenting, especially good parenting of the kind we all either hope to practice or hope was practiced upon us.
Mothers are a canary in the coal-mine, chirping a decade or two before the problems hit everyone else.
Everything you’re saying is about parenting, not motherhood. And that’s half of Scott’s point; as well as refusing to compare comparable groups of men and women, the author is unwilling to do a direct comparison between mothers and childless women, or parents and the childless in general.
Just wanted to point out that the population decline problem is also combated (more directly) by immigration. If you are in support of pro-natalist policies on the basis of preventing demographic decline, are you also in support of increased immigration? If not, what is your true justification for natalism?
PS:
“for these purposes, mothers are far more important than childless women.”
What exactly are “these purposes”? I don’t think Scott mentioned any “purposes”…
No, it isn’t. Immigration does not combat population decline in the types of population actually being considered. It only combats decline in, “the number of people living within these borders,” which is not at all the same thing. People and peoples are not fungible.
Seconded.
Another point about immigration and pensions:
If you have a state-run “pay as you go” pension system, where money in is paid out straight away, then a declining population means lower payouts. Either pension payouts must go down, or have immigration to maintain the population at a constant level. But that is no argument for immigration to grow the population overall.
But if you have an insolvent pension system, where you have made more promises than you can keep, then immigration cannot solve this in the long run, because immigrants have children too. Immigration just postpones the problem. Either the payouts must be lowered or the inputs increased: the system must be made solvent. Any pension system which relies on a constantly growing population is unsustainable, regardless of whether the population is increased by births or immigration.
(The sensible alternative is not to have a pay-as-you-go pension system. Have private pensions which are actually backed by investments. If you want a state pension, have the state give people money with which to pay into private pensions.)
James, that’s a very bad choice of abstraction that causes you to get answers that are 100% backwards. Yes, if a plague randomly kills 10% of the population, without regards to age, that isn’t a problem for a pay as you go pension system. But that never happens. What’s happening now that it people aren’t having children. So the population of elderly is growing while the tax base is shrinking. Which is terrible for a pay as you go pension system.
And private investments don’t really change the situation. Money invested abroad does allow the purchase of imported finished goods, regardless of population, but when the young population declines, the labor available to provide the services the elderly were expecting, such as nursing homes, becomes scarce and expensive.
Scott’s point is that a comparison that is supposed to tell you something about either gender, or about having children, should compare people that vary only in gender, or in having children. Those comparisons conflated the two, but pretended to be about gender.
Children need their biological father and their biological mother. We have a mass of policies designed to remove biological fathers from families, and to deter biological fathers from participating in their children’s lives, the most recent being the obamacare marriage penalty.
You cannot have full female autonomy and at the same time have replacement fertility, and families with fathers. If females have full sexual autonomy, they don’t want to have kids during their fertile years because if they got a late night booty call from Jeremy Meeks, the kids would be in the way. So you get low fertility and fatherless families.
In the ancestral environment, you could in principle have female autonomy, high fertility, and fatherless families, because the girls all get pregnant with Jeremy Meeks. This is what progressive anthropologists call “Matriarchal societies”. They are matriarchal in the same way the ghetto is matriarchal. Males are not attached to society, and predate upon women and children. As the crime victimization statistics show, if females actually are autonomous, they are not protected. Surprisingly, this is still almost as true in today’s environment as it was in the ancestral environment.
In the modern environment, fatherless children are such a serious inconvenience that women use contraception, abortion, and infanticide to solve the problem, unless they are sufficiently poor that, due to welfare, children represent a good income source. So in the modern environment, female sexual autonomy leads to low fertility among everyone except the underclass (and alarmingly high fertility among the underclass)
We don’t really have plausible examples of high fertility matriarchal societies among primitive peoples. Looks like absent contraception and absent welfare, matriarchal societies have very high infanticide rates. It is just tough raising fatherless children.
Thanks for writing this. I didn’t realize that the under replacement fertility could be a result of the same instincts that worked relatively okay for our ancestors. Despite having all the necessary information, and knowing the LW lesson about adaptation executers.
Another effect of political mindkilling, I guess. For one side, it is a taboo to speak about replacement fertility at all. For the other side, it’s all caused by the recent decline of morality or something. But here is a likely explanation that it is actually a result of having the same instincts as always, but living in a slightly differently working environment, thus getting completely different results.
>> Single mothers who have been to college are actually more likely to end up bankrupt than their less educated sisters – nearly 60% more likely.
> The floor is open to anyone who would like to come up with a just-so story to explain this.
Perhaps they just have a much harder time paying off their student loans on a one-salary family income.
(i.e. A two-income family which has to only pay off one college education is obviously going to be a lot better off than a one-income family that must pay off for two.)
A college education correlates with and perhaps even causes a greater knowledge of the world, including knowledge of bankruptcy options.
A college education correlates with greater consumption, due to exposure to a social group with higher average incomes and consumption.
I have a more cynical possible interpretation. The quote says “have been to college” — it doesn’t say they graduated. College drop-outs have a lot of debt and not much to show for it. I’d be not at all surprised with her statistic if most of the single mothers who have been to college are drop-outs.
This makes sense. I don’t know about all loans, but when predicting student loan defaults the binary variable graduated is the one with the most predictive power.
Several of the large state university systems with loan programs have given data to researchers so there is a lot of info available here.
“I seriously doubt public schools became much worse in any interesting way, since as far as I can tell most educational philosophies kind of work about equally well. I wonder how much this has to do with the media spreading panic.”
I wouldn’t be so confident; school effectiveness isn’t just about educational philosophy. For one thing, intelligent women used to be severely undervalued in the labor market, and schools would often pick up smart women as schoolteachers for next to nothing. In my fairly recent experience, most classes today are taught by drooling imbeciles. Admittedly, I have only anecdotal evidence that teachers used to be smarter, much of it from everything-was-better-in-my-day types. (Does anyone have any useful statistics?)
This is more on the general effectiveness of the education system. Teachers nominally have more credentials now, that is well established, but hardly proves “smarts”
Well, according to some statistics in the 1980s a higher proportion of college degrees in the US than at any time before or since were in certain STEM fields. The raw numbers were high too, even with the lower overall population of the United States and lower numbers of college students, so these statistics seem to indicate good success for a lot of students up through the college level. Except a lot of evidence also indicates the statistics published by the Department of Education here are just fraudulent, that there are unknown accounting errors in old data from like the 1980s that no one is going to ever sort out. Anyone with access to direct, source level data feel free to chime in (like, name of university, field, number of degrees raw data for everything). Very general, clearly factually true trends are things like the total enrollment in US colleges has been rising for decades, but that also represents population & culture shifts besides cohort effects.
The context for this is a lot of general news and political argument in the present day about education reform and Common Core and so on (don’t discuss the Common Core in response to this point here). Math education in US K-12 like many subjects has some changes being made under the Common Core, just for factual background.
For instance, there are often comparisons between current reform efforts and what was known as a “New Math” initiative in mid-late 20th century US public schools. All evidence would indicate the “old old math” was a failure compared to the time period afterwards and the present day but other factors – economic and demographic developments etc. trend in time too. Though there are independent material specific and pedagogical arguments for the general soundness of New Math, but again most important for this discussion is that instead of arguing about present day reforms, decades of students already went through schools teaching the 20th century New Math and we can look at their statistical outcomes.
So there is very little reason to complain about the old New Math as if it was a failure when all the data indicate it was a success, (very general K12 metrics like progression of generic test scores by race and such will reflect this too). Or if some of the old information is fraudulent about the results of students, there is hardly cause to draw conclusions without uncovering the fraudulent data first.
It is notable some “old New Math” goals like completely adopting the metric system in US education were unfinished, but again, the results obtained by that generation of students seem as good or better than anything in education at any other time.
I have absolutely no doubt about this, but would exhort you greatly to get rid of the idea that it’s just feminist statistics to be extraordinarily paranoid about. You should be that paranoid every single time someone uses statistics to prove their point. I greatly doubt that feminists are actually worse in their use of statistics, I just believe that statistics are ridiculously misused everywhere. I don’t know if that was the point of Jeff K’s blog post, but to me, that sure seems to be what it shows.
I actually have an amusing anecdote about this, from years ago when my dad was listening to a bunch of conservative books in his truck. I was driving with him one time, and after one chapter (I think it was about healthcare), he knew I held the opposite position, so he asked me what I had thought of the arguments. I told him that I thought every single statistic he had brought up to support his arguments actually supported mine, and convinced my dad that I was right, at least about those specific statistics. In this case, both me and the author (I’m pretty sure it was Mark Levin) believed the exact same statistics supported the complete opposite sides of the argument, which both me and my dad had a chuckle over.
I would also maintain that it’s almost certainly not intentional in most cases, too. People will read a statistic, and just fit it into the model they have of the world in their head without even checking if it really says what they think, or supports what they say. I try to be careful about this as best I can, but I’ve seen this happen to myself in the past.
Just to be clear, I have no interest in the debate about whether or not feminists are worse with statistics than everyone else. I really feel that debate has happened enough on this blog. I was just taking this opportunity to talk about the misuse of statistics, which I always feel people aren’t paranoid enough about.
+1
Yes. The problem is that people do not generally start by looking at statistics and then form their beliefs based on them, people start with their beliefs and then go looking for statistics that (can be twisted to) support them. In the former case, you can sometimes get away with uncontrolled correlations; in the latter case, statistics that are not locked down very very tightly are meaningless.
If statistics are 80% reliable, an ideologue of a falsity will only have to cut the statistics five different ways to find a statistic that supports their belief. And 80% is generous, especially since most statistics admit enough interpretations that you can use them in support of pretty much anything they share some words with.
It’s not just that. CaptainBooshi made a parenthetical comment about this, but it’s important enough that I wanted to highlight it: statistics are all filtered through our models of the world, and those are imperfect. And sufficiently convincing statistics can (potentially) cause one to alter or reject one’s model, but until they reach that threshold there are a lot of conclusions they just can’t induce. Your data are fitted into your model because they don’t mean anything until you plug them into a model.
So for instance if you believe that group X is unfairly disadvantaged, then seeing them underperform is clear evidence of that discrimination. If you believe that group X is less talented as a group, seeing them underperform is clear evidence of their lack of talent. And this sort of stuff is ubiquitous.
And this isn’t even a wrong way to handle things. Eliezer Yudkowsky has an essay somewhere about the possibility of saying “I reject your evidence”. I always think about Feynman’s story from when he published the theory that eventually won him a Nobel. It was matching all the experimental data, except this one very good experimentalist who’d run some very good experiments one one phenomenon that was way out of line with predictions from Feynman’s theory. And Feynman basically said, “I’m confident that he’s making a mistake somewhere, because my theory is right. I also have no idea where the mistake is, and he’s much better at this sort of thing than I am. So I’ll just wait for him to figure it out.”
Sorry, I no longer really distinguish between intentional hypocrisy and “honest” motivated cognition, and I sometimes forget that other people still do (in their hypocritical attempts to defend their own hypocrisies). I certainly did not mean to imply that this was only a problem of explicitly dishonest people – I think even many feminists nominally believe what they say!
Worse than that, if you believe that academics are mostly charlatans. Which is not something I quite believe yet, but I’m getting closer to that position every day.
Suntzuanime: Sorry, my point wasn’t about motivated cognition at all, really. My point was that it’s flat-out impossible to reason without having a (explicit or implicit) model of the world, and that all facts are filtered through that model. And this is true even of a hypothetical Perfect Bayesian Reasoner; a lot of the work of doing Bayesian statistics, for instance, is finding helpful ways to specify your models.
If you have a model of the world that you have reasonably high confidence in (read: a high prior), then the epistemically rational thing to do is to interpret new data in terms of your model. If you wind up with data that is in extreme conflict with your model, or lots of data that’s a strain on your model, then that should lower your confidence in your model; we call the first situation “experimental refutation of a theory” and the second “epicycles”.
But below some threshold, there’s nothing you can do other than (1) possibly slightly weaken your confidence in your model and (2) interpret data through the lens of your model. A single statistic standing alone has no meaning at all without a model to interpret it through.
As someone who has much warmer feelings toward feminism generally than I infer Scott does, but whose initial reaction to the passage was “Well, I won’t count that as evidence for anything except women being awarded custody more often,” I second this. Skimming over the numbers is never safe.
I agree – the first time I read that passage I assumed it was nonsense, because of the lack of a direct comparison between fathers and mothers. Scott was completely right to call bullshit on that passage.
Scott, did the book give a source for its statistics in that passage? Maybe the original source gives information regarding fathers.
However, I think it’s a mistake to say (as Scott did) that post-divorce custody statistics indicate that “courts more often grant custody to the woman.” Although statistics in this area are very limited, it’s generally agreed that fewer than 5% of child custody decisions are made by courts; in the majority of cases, the custody arrangements are agreed to by both parents without stepping into a courtroom.
(The book “Dividing The Child,” the best study done on this matter, came out in 1992 and may be outdated. However, I don’t know of any empirical study, ever, which has found that U.S. child custody decisions are primarily made by courts rather than parents.)
If you know how the court is going to rule, then you can save yourselves a lot of trouble by just implementing their ruling without actually going to court. This doesn’t mean the arrangement is not decided by the court; without the ultimate threat of the court hanging over the negotiations, a different arrangement would have been reached.
That is certainly one possible explanation for the statistics. It is not, however, the only possible explanation; another explanation is that parents have a bias towards deciding to leave the child(ren) in custody of the parent who has done the largest amount of direct childcare prior to the divorce. There are other possible explanations as well. (“Dividing the Child” has a good discussion of this).
As far as I know, available statistics don’t allow us to determine which explanation(s) are true and to what degree.
In any case, I don’t agree that “decided by the courts” and “decided by parents in anticipation of what the courts will decide” are 100% interchangeable in meaning.
I agree with Sun Tzu that courts are a powerful weapon even when unused. When a robber points a gun at me, almost certainly it will result in a mutual agreement that I hand over my money without the gun ever having been used, but the better-armedness of one party has a strong effect on the unarmed solution. One can’t just say “since no gun is fired in most cases, we can assume that all monetary transfer is unrelated to inequalities in armedness”.
For example, here’s a story by a father who says that “Like most men I had adopted the common belief that men always lose in divorce proceedings so why not just surrender everything now and avoid the inevitable.”
As for the statistics, I have a really hard time finding them for something that’s this controversial, but HuffPo says “In custody decisions, mothers are more likely to receive primary residential custody than fathers. Although in the past decade there has been an increase in equal residential custody, mothers are still much more likely to be awarded primary residential care. Across a wide range of jurisdictions the estimates are that mothers receive primary custody 68-88% of the time, fathers receive primary custody 8-14%, and equal residential custody is awarded in only 2-6% of the cases” (they don’t cite their sources) and McNeely says “mothers receive primary residential custody of the children about 90% of the time when custody is first determined by court”. These are both old sources and I would not be at all surprised if things were much better today.
However, I accept your criticism that I should have been more careful to differentiate “women get awarded children more often by courts” and “women end up with children more often”.
All that means is that divorce cases settle. Almost all cases of every kind settle. But the settlement is always, always, deeply informed by the 5% of the cases that go to court.
Thank you, I appreciate you saying that.
I agree that perceived chances in a court has an effect on outcomes even among those who don’t go to court. However, there are other factors as well; I don’t think we can conclude from the fact that women are more likely sole custodians that the ONLY significant factor is how courts rule in the tiny minority of cases in which a judge makes the custody decision. Nor is it clear that when courts do decide contested cases, they give custody to women as often as the stats you quote say.
In “Dividing the Child” – a study that I’ve seen both feminists and father’s rights advocates treat as reliable, and which uses good methodology – the authors write:
“Dividing The Child,” an empirical study of California custody outcomes, is now decades old, but I think their analysis of how little we can determine about court bias merely by looking at outcome percentages still applies. (Not that you’ve said otherwise, Scott!)
Disturbingly, there is no reliable national data on custody outcomes. Literally no one systematically collects that data. (To be fair, it’s incredibly hard to collect the data, because it’s not reported in a systematic, complete fashion.) Given the lack of nationwide, systematic data, any source claiming such-and-such percentage of mothers or fathers win custody, without describing the data’s source and limitations, is – in my view – dubious.
However, one thing to keep in mind is that what data we have indicates that custody outcomes are changing rapidly, so old data is especially unlikely to reflect current realities. See, for instance, “Who Gets Custody Now? Dramatic Changes in Children’s Living Arrangements After Divorce,” published in Demography this year. Using detailed data from Wisconsin courts, the authors found that sole-mother custody is very quickly decreasing, and joint custody is quickly increasing. (Sole-father outcomes haven’t changed much). If that trend continues, joint custody will very soon be the most likely outcome of custody, at least in Wisconsin.
Lesser Bull, to say “always, always, deeply informed” is, I think, an exaggeration. For instance, there are some parents who genuinely don’t want custody, regardless of their chances in court.
Barry: If I am reading you here right, you made that same argument from that same book eight years ago, then conceded that the real number was “mothers win twice as often as fathers” and the 50/50 number was only for the subset of people who go through all appeals. Am I reading you right? If so, do you still believe that?
That takes me back, Scott. I stand by my correction to what I said about “Dividing The Child” in 2006. However, I don’t think that makes a difference to my comment here.
I was trying to make two points with the “Dividing the Child” quote here:
1. That it’s not universally agreed among empirical sources that women win 90% of contested cases that are decided by courts. (A 2 to 1 ratio is very different from a 9 to 1 ratio.)
2. More importantly, merely knowing the outcome percentages doesn’t tell us why courts reach those outcomes. (I don’t think you disagree with me about that.)
The distinction between 2 to 1 at all levels of the conflict pyramid versus 1 to 1 at the top level does not, as far as I can tell, matter for either of my points.
By the way, rereading that 2006 post, I have to say I no longer trust the Massachusetts Supreme Court’s Gender Bias Study as a source, and would not use it today. In fact, the MSCGBS could easily be another data point for your “feminist information is unreliable” theory (if we assume the authors were feminists).
Thank you for the clarification.
I will join you in “it is creepy to have blogged for so long that other people can find things you wrote before and link you back to them”
All I know is that in a book absolutely full of statistics, I didn’t notice any others at the same level of problematicness as this one.
(I freely admit it may be because I haven’t learned sufficient paranoia about economics statistics and so missed the tricks there)
The only one that came close was the way she presented tax numbers – as complained about by another commenter – but I just multiplied it out and got the real numbers and didn’t feel especially tricked.
I think her wording was bad, but she wasn’t trying to be misleading and her statistics were correctly used. She was saying that, because women are more likely to get custody of the child, these issues hurt women more than men. Not because there’s unfair treatment of women, just because these two coincidences combine.
That is a fair interpretation.
If Andrew and Eric Rall are correct, then pretending that a data point means “Hillary Clinton is in the pocket of the banking industry”, when in reality it means, “people from New York donated money to Hillary Clinton’s campaign”, that seems like a much bigger manipulation.
That’s a very common mistake, and one outside Warren’s personal expertice as an academic economist (given that this was written before she launched her policital career). I think it’s likely that it’s an honest mistake on her part.
The misleading presentations of financial statistics and the citation of implausible financial statistics from dubious sources are much less forgivable, since as an academic economist, finding good statistics and drawing sound inferences from them is supposed to be one of her core competencies. Her best defense on this front is if Scott’s correct and the book contains a handful of bad statistical arguments among thousands of good ones.
“Senator Clinton received $140,000 in campaign contributions from banking industry executives in a single year, making her one of the top two recipients in the Senate” and “since [Schumer] had received more campaign contributions from the credit industry than any other Senator, just nosing out fellow New Yorker Hillary Clinton.”
Aren’t these things measured based on who the person who donates works for? So if I work for at a bank and donate to such and such a candidate, that gets added to their donations from the banking industry? So what we have is a city full of rich bankers (NYC) donating to the winning senators’ campaign. I’m shocked, shocked to find democrats in New York City.
Aren’t these things measured based on who the person who donates works for? So if I work for at a bank and donate to such and such a candidate, that gets added to their donations from the banking industry
Yes, it is. All direct contributions to candidate committees come either from political organizations (other candidate committees and PACs) or from individual donors. Individual donations of over $200 get reported by the individual donor and by the donor’s employer and industry of employment.
There is nothing in the quoted passage that supports the idea that bankruptcies now have more stigma than they used to.
Also, the fact that people go more into debt does not mean their situation is worse. To the contrary: you’re more likely to go into debt if you know that even if you’re unable to pay, things won’t be that bad for you (because of the safety net and the generally high mean to revert to). You know where people don’t go much into debt? China. Or so I heard.
Regarding the layoffs, yes things have changed. Back in the day you had one job and you held onto it for life. You did not go looking for another job even if things were not going well at all. The reason you did not was fear. Now people are less afraid, possibly for reasons similar to why they’re less afraid to go into debt. But yes, the downside is that with the less firm humanjob connection sometimes you find yourself out of job even when you don’t plan to.
I very strongly suspect that despite all the carefully chosen data points to the contrary, Americans in 2014 have much better lives than Americans in 1970 had, and that it holds at all levels: poor, median, wealthy. How many people in 1970 could afford vacation abroad? What fraction of houses in 1970 lacked indoor plumbing? Was the exotic fruit selection at Safeway as good as it is now, regardless of season? Given a choice between the CPI basket of goods from 1970, and one from 2014, which are nominally equivalent after inflation, would anyone choose the one from 1970?
Were people really afraid to change jobs, rather than just not wanting or needing to?
well, it fed on itself. If most people hold onto their jobs until retirement, why are you looking for a new job?
My girlfriend’s father worked at Ohio Bell, he was a software engineer and an eng manager. He was one of the early adopters of COBOL (I must have smirked when he told me that, because he started defending COBOL; it’s great, you see: you don’t have to re-write your code from scratch to run on a different CPU architecture; also it’s self-documenting, whatever that means).
So they had this big system which was implemented in the assembly language like everything else and he wanted to port it to COBOL. He got the resources and with a team of a couple of engineers they implemented a COBOL version. It was complete and tested. And the time has come for the company to start using some new machines on which the legacy version wouldn’t run. Then he was told that his project was canceled.
My girlfriend’s dad did fight for his project. He ruffled some feathers. Eventually someone had a private chat with and explained that there was that other guy who needed to be promoted, and that other guy was going to lead the effort to reimplement the system in the assembly language for the new machines.
After that, he couldn’t stay in the engineering department, he’d burned too many bridges. So that was the end of his software engineering days. He moved to some other department. He never wrote code again. He told me he wanted to learn C++ or Java, but never got around to it.
I asked him “Why didn’t you go work somewhere else as a software engineer?” He said, “I grew up in the depression era. You had a job, you held onto it. I had four daughters to feed.”
If the CPI basket includes real estate, health care, and tuition at a leading university, I’d take the one from 1970.
1950: .353
1950: .245
1960: .103
1970: .043
1980: .018
1990: .0078 or .011
2000: .0064
2013?: .0051
If you swap contemporary healthcare for that available in 1970s, I hope you don’t get colon cancer. Or any other cancer. I also suspect you may not like your dentist visits.
Thank you for finding the indoor plumbing data, is it just confirmation bias or does it really seem to support my point?
I interpreted it as evidence against your point–by 1970, 95.7% of Americans had indoor plumbing. (The first number should say 1940, not 1950.) But it’s almost a philosophical question how to interpret that. Do you measure the utility of indoor plumbing, and average it over the population? If so, how do you measure the value of indoor plumbing, given that market price measures its utility only for the extremely poor? Do you figure that you’re not going to be in the bottom 5%, and be indifferent? Do you penalize the extremely poor in your social utility function for being unvirtuous, as most people do?
In my mind there’s nothing philosophical about it, if you’re poor in 2014 you’re eight times less likely to not have indoor plumbing than in 1970. The example of plumbing is intentionally something that only affects the poor, I was trying to substantiate my claim that things got better for everyone not just median/wealthy.
What I’m going to say next is a stretch but bear with me. The next paragraph is not meant to convince you or to prove anything but to present what I think is a real insight.
So, just for the moment let’s call the bottom 10% “poor”. Going by your data, and if we pretend indoor plumbing is the only measure of quality of life there is, we see that the situation of poor people in 1970 is the same as the population as a whole in 1940: about 40% of them has no indoor plumbing. Now, let’s look at the interval 1970..2014: we see that the population of 1970 poor has undergone the same transition in that period as the country as a whole did during 1940..1970: now it’s only four percent of the poor that are lacking indoor plumbing. I think there is real value to this perspective: there are many orders of magnitude on the quality of life scale and everyone tends to think of the lifestyle of people near them in time and space as normal, and thinks that people one rung below them have it bad, and that people one or two rungs above them have everything a decent person might want, and only engage in pursuit of positional goods because they already have everything that actually affects the quality of life. While on the absolute scale ranging from the starving children in Africa to Larry Ellison the points corresponding to those whom you consider poor and those you aspire to become are so close you’d need a magnifying glass to tell them apart. And in good time, if our civilization doesn’t crumble, everyone will have better life than Larry Ellison does, at least when it comes to what’s available to them materially (he probably also gets a lot of utility from his high status, but that’s another story).
OK now for the part when I am going to try to convince you. So you mentioned three goods which you imply are less accessible today: real estate, health care, university education.
Real estate: Today’s new homes are 1,000 square feet larger than in 1973, and the living space per person has doubled over last 40 years.
Health care: When it comes just to availability, you chose the example wisely. According to this report, the fraction of uninsured Americans in 1972 was 16.7%, and in 2007 it was 16.6%. Not much change. I can say a couple of things: (a) Uninsured in 2007 is not the same thing as uninsured in 1970. There is a law now that says if you show up at an emergency room and need treatment they have to give it to you. So even if you are uninsured you will be treated, albeit at a ruinous cost (typically, forcing you into bankruptcy). I think that was not the case in 1970. (b) Those who have insurance are getting much better health care in 2014. There is a large number of medical conditions which can be treated now but couldn’t in 1970. (c) I hear there’s this groovy new Obamacare thing which is going to make things much better in that department.
College education: In 1970, a little over 50% (reading from the graph) of high school graduates went to college, in 2009, over 70%. Now I know you said “a leading university”, which is not the same thing as any college. Still, I don’t suppose there are fewer leading universities now than there used to be.
So, for all goods you brought up Americans today consume more or at worst the same amount of them than they did in 1970.
http://www.nytimes.com/2009/04/24/health/research/24cancerside.html?_r=0
And that’s with massive reduction in smoking since 1970
I didn’t say they were “less accessible”. That’s not well defined. I said I’d choose the 1970 bundle of goods, because you get more for your money. All those things are more expensive now, even on a per square foot or per year of life * quality basis. College and healthcare especially so. Housing prices don’t appear to have risen much, but I believe that’s because we measure in inflation-adjusted dollars instead of hours of work, and so the inflation due to switching from one-income to two-income families is hidden by the inflation adjustment.
Michael, I would expect cancer rates to increase as deaths from other diseases of the old decrease.
Anon:
By that measure (multiplicative ratios), going from 2 people in the world not having indoor plumbing to only 1 person in the world not having indoor plumbing would be exactly as significant as going from 2 billion people not having indoor plumbing to 1 billion people not having indoor plumbing.
Phil, Michael’s link explicitly addresses your comment about cancer. Anyhow, the point is that Anonymou’s example of cancer is a terrible example of medical progress.
Douglas, my comment was specifically addressing what Michael’s link says about cancer. The fact that cancer deaths stayed constant, rather than rising, suggests cancer treatment improved. Cancer is the disease that people die of when they don’t die of something else first.
@Phil
I understand that these things are nominally more expensive now. However, the fact stands that people consume more of them. We could go into theorizing why, but if you have more of everything than you are better off, no matter what the price tags on each item says.
@Michael I admit I was lazy and clicked on the first link on wikipedia not checking that it had data for the UK not the US: http://www.bbc.co.uk/news/health-15726810
Kind of surprising that it should be different though, so maybe your article just slices the data differently?
In any case I don’t think anyone will argue with the larger point that healthcare in 2014 is much better than it was in 1970, even if it indeed turns out not true for cancer specifically (which surprises me).
Anonymous, it is not at all about US vs UK. The statistic in your link, survival rate, has risen quickly in both places. The whole point of Michael’s link is that survival rates are a worthless statistic. They are higher purely because of earlier diagnosis and false diagnosis.
Since not dying from cancer is all about early diagnosis, I don’t see how the number to which the earliness of diagnoses contributes could possibly be worthless.
Anonymous, I hereby diagnose you with a trillion cancers, one per cell. In the unlikely event that you don’t die this year, the cancer survival rate will be 99.9999999999%.
Or you could just click on the link.
Number of US citizens on international flights, divided by population:
1970: .080. 16.260 million passengers, 203.392 million people
2012: .090. 28.500 million passengers, 316.149 million people
Tuition at University of Pennsylvania
1970: $2350 ($13,911 in 2013 dollars)
2013: $40,594
With college costs isn’t it a bit trickier than just raw cost data? First of all, what’s the cost minus financial aid in those periods? Only relatively well off students get no financial aid. Another question is the size of the college wage premium. If that’s significantly larger now, then people may be paying more for a more valuable product.
Also I think it is important to remember that positional goods (like college arguably is given the signaling model of education) should rise quickly in costs as society gets wealthier to keep the good limited to the wealthy. Fast increases in positional good costs are a sign of expanding prosperity as greater numbers of people reach income levels that previously allowed income to be spent on those status symbols, necessitating their price rise.
I expect the college wage premium has gone down, due to so many more people having degrees. But the college wage premium for ivy-league schools has gone up, because elite employers have responded to the sudden increase in non-ivy degrees by filtering out people without ivy degrees.
Good point about positional goods.
Also, houses have gone up in size by like 40%. I don’t know why they’re being measured in number of rooms (which you would expect them to decrease with decreasing family sizes anyway) when people measure houses by square footage.