Monthly Archive for August, 2007

Wal-Mart Is The Poor And Minorities Friend

Latino Politics Blog reports that, Wal-Mart Named One Of The Best Companies For Latinas…yet decided to continue its boycott of the company anyways.

You can read the blog and fellow commenter’s reason for taking that stance but I post here the other side of the argument. I left this comment on the blog (a comment that has yet to be approved):

You forget to mention one of the many, and I would say most important, positives of Wal-Mart: providing cheap products to the very poor. Have you been into a Wal-Mart lately? If you have, you must have noticed that Wal-Mart, both in its work force and its customers, is very different than the other ‘politically correct’ food chains like Vons, Ralphs, and Albertsons. Wal-Mart tailors heavily to the poor and minority. The customers and the workers there are overwhelmingly brown and poor – an area of the market that the other grocery chains business strategy has neglected.

Of course not being poor gives you the luxury of raising your nose at Wal-Mart, but to the poor and neglected, Wal-Mart is a godsend. Which is why, for example, Wal-Mart stores often receive thousands of job applications for even a handful of job openings. And why their base, both in customers and workers, is overwhelmingly brown and poor.

Me personally, I’m sticking with the brown and poor and supporting Wal-Mart, a company that has benefited the poor and minority in the two areas they need it the most – with jobs and cheaper products.

Quote Of The Day

“I’ve long believed in what I call “the Jimmy Carter test.” The process consists simply in discovering Carter’s opinions on politics and foreign policy and taking the opposite position. Carter was one of our worst Chief Executives, and he surely ranks as the worst ex-president in our history. He has an uncanny ability to say and do the wrong thing, a talent so huge that James Buchanan and Gerald Ford seem wise in contrast. At the same time, I’ve long felt guilty about the Carter test since in my biography of John F. Kennedy I argued at length that personal character is a vital component in the making of a good President. For decades, Carter has been widely thought to possess sterling character. I’m relieved to discover in Robert D. Novak’s autobiography The Prince Of Darkness that this traditional view may well be untrue. Novak, a veteran Washington journalist, considers Carter “a liar and charlatan.” “Jimmy Carter,” he writes on page 287, “was a habitual liar who modified the truth to suit his purposes.” He makes a persuasive case. Carter’s penchant for appeasement in foreign policy matters is also on display in Novak’s book, shedding light on the ex-president’s fervid hostility toward the war in Iraq and his continued trust in the United Nations.” —Thomas C. Reeves, blogging at the History News Network

Could Global Warming Be Good?

Probably not on net balance, but it can certainly have some positive affects. For example, Freeman Dyson, professor of physics at the Institute for Advanced Study, in Princeton writes:

The warming effect of carbon dioxide is strongest where air is cold and dry, mainly in the arctic rather than in the tropics, mainly in mountainous regions rather than in lowlands, mainly in winter rather than in summer, and mainly at night rather than in daytime. The warming is real, but it is mostly making cold places warmer rather than making hot places hotter. To represent this local warming by a global average is misleading.

So global warming primarily causes cold areas to get hot instead of hot areas to get hotter. Well increasing the temperature in cold areas just happens to significantly increase human life expectancy:

Now a new NBER paper strikingly argues that warmer weather is better for life expectancy, not just comfort:

[B]oth extreme heat and extreme cold result in immediate increases in mortality. However, the increase in mortality following extreme heat appears entirely driven by temporal displacement, while the increase in mortality following extreme cold is long lasting.

In other words, deaths from heat reflect what coroners call a “harvesting effect”; heat kills people who didn’t have long to live anyway. The same doesn’t hold for deaths from cold.The life expectancy benefit of heat is large, too:

These longevity gains associated with long term trends in geographical mobility account for 8%-15% of the total gains in life expectancy experienced by the US population over the past 30 years.

Dyson’s talk can be found here. The study on temperature and life expectancy can be found here and here.

Quote Of The Day

“One particular consideration I think is underdiscussed is the fact that much of the labor illegal immigrants provide substitutes for women’s home labor. And I don’t just mean nannies for rich women. I mean cleaning services, and food processing, and dry cleaning, and grocery delivery, and all the other things that make it possible for large numbers of women to work outside the home. In an ideal world, of course, women and men would take equal responsibility for the household. But in the less than ideal world that we actually inhabit, an increase in the price of those services would probably mean that fewer women would find it cost-effective to work outside the home”. —Megan McArdle blogging in The Atlantic

Shavar Jeffries On Michael Vicks Treatment

Yet another great post by Shavar Jeffries at Black Professors blog:

Ultimately, I find the entire Vick episode to be a comedy of the absurd. At the end of the day, he bet on dogfights, and subsidized an enterprise that sometimes wantonly killed dogs who weren’t top fighters. As a consequence, he’s already lost millions in endorsements and has suffered incalculable damage to his reputation. The federal court is now considering a term of up to five years; and the NFL apparently a ban of an additional year on top of his prison sentence. In my view, anything beyond six months imprisonment would be outrageous; and any suspension by the NFL beyond the several games players routinely get for violence against women or drug abuse would be equally unjustifiable. If Vick had bet on bird fights, he apparently couldn’t be prosecuted at all in many states. Severe harms are perpetrated against human beings on a daily basis with nothing remotely resembling the witch-burning Michael Vick is experiencing.

I don’t agree with everything he wrote – I don’t think it’s because of race as much as cultural differences (sport hunting vs dog fighting, for example), though race is certainly a factor – but he does hit on an important point.

The full post can be found here.

Quote Of The Day

“Why do people think that a single-payer system would be any better than Medicare or Medicaid? The way things work now, Medicare gets the gold (more political clout in the over-65 population) and Medicaid gets the shaft (absolutely no political clout in that population)”. —Medpundit

The Reality Of Affirmation Action

Gail Heriot, professor of law at the University of San Diego and a member of the U.S. Commission on Civil Rights, in an article titled, Affirmative Action Backfires, in the Wall Street Journal writes:

Three years ago, UCLA law professor Richard Sander published an explosive, fact-based study of the consequences of affirmative action in American law schools in the Stanford Law Review. Most of his findings were grim, and they caused dismay among many of the champions of affirmative action — and indeed, among those who were not.

Easily the most startling conclusion of his research: Mr. Sander calculated that there are fewer black attorneys today than there would have been if law schools had practiced color-blind admissions — about 7.9% fewer by his reckoning. He identified the culprit as the practice of admitting minority students to schools for which they are inadequately prepared. In essence, they have been “matched” to the wrong school.

No one claims the findings in Mr. Sander’s study, “A Systemic Analysis of Affirmative Action in American Law Schools,” are the last word on the subject. Although so far his work has held up to scrutiny at least as well as that of his critics, all fair-minded scholars agree that more research is necessary before the “mismatch thesis” can be definitively accepted or rejected.

Unfortunately, fair-minded scholars are hard to come by when the issue is affirmative action. Some of the same people who argue Mr. Sander’s data are inconclusive are now actively trying to prevent him from conducting follow-up research that might yield definitive answers. If racial preferences really are causing more harm than good, they apparently don’t want you — or anyone else — to know.

Mr. Sander’s original article noted that when elite law schools lower their academic standards in order to admit a more racially diverse class, schools one or two tiers down feel they must do the same. As a result, there is now a serious gap in academic credentials between minority and non-minority law students across the pecking order, with the average black student’s academic index more than two standard deviations below that of his average white classmate.

Not surprisingly, such a gap leads to problems. Students who attend schools where their academic credentials are substantially below those of their fellow students tend to perform poorly.

The reason is simple: While some students will outperform their entering academic credentials, just as some students will underperform theirs, most students will perform in the range that their academic credentials predict. As a result, in elite law schools, 51.6% of black students had first-year grade point averages in the bottom 10% of their class as opposed to only 5.6% of white students. Nearly identical performance gaps existed at law schools at all levels. This much is uncontroversial.

Supporters of race-based admissions argue that, despite the likelihood of poor grades, minority students are still better off accepting the benefit of a preference and graduating from a more prestigious school. But Mr. Sander’s research suggests that just the opposite may be true — that law students, no matter what their race, may learn less, not more, when they enroll in schools for which they are not academically prepared. Students who could have performed well at less competitive schools may end up lost and demoralized. As a result, they may fail the bar.

Specifically, Mr. Sander found that when black and white students with similar academic credentials compete against each other at the same school, they earn about the same grades. Similarly, when black and white students with similar grades from the same tier law school take the bar examination, they pass at about the same rate.

Yet, paradoxically, black students as a whole have dramatically lower bar passage rates than white students with similar credentials. Something is wrong.

The Sander study argued that the most plausible explanation is that, as a result of affirmative action, black and white students with similar credentials are not attending the same schools. The white students are more likely to be attending a school that takes things a little more slowly and spends more time on matters that are covered on the bar exam. They are learning, while their minority peers are struggling at more elite schools.

Mr. Sander calculated that if law schools were to use color-blind admissions policies, fewer black law students would be admitted to law schools (3,182 students instead of 3,706), but since those who were admitted would be attending schools where they have a substantial likelihood of doing well, fewer would fail or drop out (403 vs. 670). In the end, more would pass the bar on their first try (1,859 vs. 1,567) and more would eventually pass the bar (2,150 vs. 1,981) than under the current system of race preferences. Obviously, these figures are just approximations, but they are troubling nonetheless.

Mr. Sander has his critics — some thoughtful, some just strident — but so far none has offered a plausible alternative explanation for the data. Of course, Mr. Sander doesn’t need to be proven 100% correct for his research to be devastating news for affirmative-action supporters.

Suppose the consequences of race-based admissions turn out to be a wash — neither increasing nor decreasing the number of minority attorneys. In that case, few people would think it worth the costs, not least among them the human costs that result from the failure of the supposed beneficiaries to graduate and pass the bar.

Under current practices, only 45% of blacks who enter law school pass the bar on their first attempt as opposed to over 78% of whites. Even after multiple tries, only 57% of blacks succeed. The rest are often saddled with student debt, routinely running as high as $160,000, not counting undergraduate debt. How great an increase in the number of black attorneys is needed to justify these costs?

The article goes on to discuss recommendations the civil rights commission is making mainly regarding transparency. The full article can be found here. Responses from the article can be found here.

Update: More here.

Quote Of The Day

“Firstly, it’s easy to vilify banks for “predatory lending” practices when they sold strange and exotic mortgages to homeowners, but I don’t think that’s fair. “Predatory lending” kind of makes sense when your interest rate is usuriously high, and the borrower has no other options, but it boggles the mind to use that phrase when the interest rate turns out to be too low. Let me put it another way — if a car dealer gives you absolutely cut price financing on a new car, are they “preying” on you in any way, or are you “preying” on their desire to make a sale?” —Winterspeak, on the current subprime loan issue

Quote Of The Day

“Sometimes I wonder whether much of the public outcry over the gain in weight of teenagers and adults stems mainly from the revulsion that many educated people experience when seeing very fat people. Surely, though, this should hardly be the ground for interventionist policies!” —Gary Becker, Nobel Laureate in economics, writing on why a fat tax is bad public policy

Low Income Housing

Gary Becker, Nobel Laureate in economics, writes:

Let me respond to the important question of how can we reduce gentrification that replaces lower income housing by middle and upper income housing. I believe in allowing supply and demand in the housing market to determine land use. Unfortunately, the balance is frequently artificially tilted in favor of gentrification by the use of eminent domain to take land away from housing low income families, and by giving tax breaks to developers who use property for gentrification purposes.

The full post can be found here.

The Difference Between Statistical Discrimination And Racism

It always annoys me when someone confuses true racism with statistical discrimination. VivirLatino gives a perfect example of that here. More on statistical discrimination here.

The Politics Of Unions

Gary Becker, Nobel Laureate in economics, writes:

Unions always favor increases in minimum wages, even when as in this case the minimum only apply to some employers. Any increase in the minimum wage would raise the demand for unionized skilled workers who would substitute for the less skilled employees displaced by the minimum. Unions have an additional reason to try to raise the costs of big box companies like Wal-Mart’s since these companies do not have unions, and aggressively oppose them. Higher costs forced on non-union companies reduce the competition they offer to unionized companies.

The full post can be found here.

Why No Talk About The Federal Deficit?

Have you noticed that talk of the ‘looming federal deficit’ is conspicuously missing from the Democrat presidential nominees? The reason it is missing is because the federal deficit is quickly disappearing:

A month ago, the White House slashed its forecast for the 2007 deficit, saying it now expects to run a $205 billion deficit, down from its earlier $244 billion projection. The narrowing is being driven by better-than-anticipated tax receipts, particularly from corporations and wealthy individuals.

So far this year, individual income taxes are up 11% to $965 billion, with much of the increase stemming from taxes on investments and other sources of income more important to the wealthy. Receipts from these so-called nonwithheld taxes are up 13.5% so far this year. Corporations also helped to fill the coffers, with corporate tax receipts up 10.7% so far this year to $289 billion.

The federal deficit ” is shrinking toward about half the size that it has averaged since 1970, when analyzed as a percentage of gross domestic product”.

More can be found here and here. Link via Mark Perry’s blog here.

The Power Of Competition

Gary Becker, Nobel Laureate in economics, in response to comments on a post arguing for the privatization of highways writes:

The USPO illustrates the worst of public monopolies. It has lagged virtually all the important mail delivery innovations in recent decades. It is grossly overmanned, and its employees are often surly and unpleasant. The need to subsidize mail sent to remote places is no justification for a public monopoly. Such mail can be subsidized-if that is desirable- without having a public monopoly. Simply subsidize Fed Ex or any one else for their deliveries to such places. Take away the protection of the law and subsidies, and the USPO would collapse within a short time.

Many public institutions in higher education offer very fine products, but that is because they face stiff competition from each other and from private universities. Eliminate that competition-as in Germany, France, or Italy- and one sees how ineffectual public universities become.

Phone service has become much cheaper, not more expensive, since the telephone market was opened up. It is far cheaper to make long distance calls, including international ones, than it was before. Imagine what the phone system would be like if ATT still had a monopoly: where would wireless, cable, and Internet telephony be? ATT would have used its political power to resist and handicap every one of these and other innovations.

The full post can be found here. His initial post is here. Richard Posner is here and here.

Airport Security

Gary Becker, Nobel Laureate in economics, writes:

Incidentally, since I believe private security usually performs very well, I never was convinced by the arguments to federalize employees who search baggage at airports. Private companies would do the job better than a single (monopoly) government employer if the standards of performance were clearly set by the government agency in charge of airport security. As in other sectors, a considerable advantage of private employees over federal government employees would result from the competition of different security companies for the business of providing airport security. I would expect competition among companies to have produced more innovation and greater efficiency in airport security checks than we have received, or will get, with federal employees.

The full post can be found here.

Why Are We Getting Fatter?

Gary Becker, Nobel Laureate in economics, explains why we are getting fatter:

Several factors explain why the average weight of Americans (and those in other developed countries) increased a lot more rapidly after 1980 than it had before. The effective price of fatty foods began to decline rapidly at that time, in part due to the growth of fast food chains, like McDonald’s. Also important, especially for teenagers, is the attraction of sedentary activities resulting from computers, email and instant messaging, and video games that replaced time at sports and other more physically challenging activities. (Television viewing by Americans did not increase, and may have declined, during the past 25 years.) The development of many drugs that combat high blood pressure, high cholesterol levels, and other ill health caused by being greatly overweight, and a reasonable expectation of further medical progress in the future, also contributed to the declining concern about being greatly overweight.

He goes on to show how social causes could have multiplied these changes. See here. Richard Posner has more here.