Race and Culture

by  Alex Tabarrok in

The NYTimes reports that in Queens the median income for blacks is above the median income for whites, the only large county in the nation for which that is true.  The median income for blacks in Queens, $51,836, is also well above the national median income ($46,000).

What makes the statistics especially interesting is that many of the blacks in Queens are recent immigrants from the West Indies.  Malcolm Gladwell, whose own genealogy traces to the West Indies, recognizes the implication:

The implication of West Indian success is that racism does not really
exist at all–at least, not in the form that we have assumed it does.
The implication is that the key factor in understanding racial
prejudice is not the behavior and attitudes of whites but the behavior
and attitudes of blacks–not white discrimination but black culture. It
implies that when the conservatives in Congress say the responsibility
for ending urban poverty lies not with collective action but with the
poor themselves they are right.

but ultimately he can’t accept the implication and offers instead a strained interpretation.  West Indian blacks are successful only because, according to Gladwell, they provide a convenient way for whites to distinguish "good" and "bad" blacks allowing themselves to pat themselves on the back for not being racist while at the same time continuing to practice racism against the majority black class.

Gladwell offers scant evidence for his hypothesis, the most interesting point being his claim that Jamaican blacks are perceived as bad citizens in Toronto where they are dominant but as good in New York where they can define themselves in opposition to American blacks.  Gladwell’s argument is weak, however, because West Indian blacks distinguish themselves not just in dress or accent but in just those behaviors that also increase income for whites and other successful minorities: they get married and stay married, pursue education, work hard and are entrepreneurial.  Gladwell himself notes:

When the first wave of Caribbean immigrants came to New York and
Boston, in the early nineteen-hundreds, other blacks dubbed them
Jewmaicans, in derisive reference to the emphasis they placed on hard
work and education.

The title of the post refers of course to Thomas Sowell’s classic.

GMU’s Space Tourist

by  Alex Tabarrok in

The amazing Anousheh Ansari grew up in Iran coming to the United States only in 1984 without speaking any English.  With her husband and brother-in-law she started Telecom Technologies in 1993 selling it just a few years later for half a billion dollars.  She used her share of the proceeds to help endow the Ansari X-Prize and also to become, just 10 days ago, the first female space tourist.  She has been blogging from space.  Today, she returns to Earth.

The GMU connection?  She earned her degree in electrical engineering and computing from George Mason University.

Penny Politics

by  Alex Tabarrok in

Eliminating the penny is about the most straightforward, obviously beneficial public policy that one can imagine.  The idea that eliminating the penny would increase inflation is a joke.  (Note also that although many products are priced at _.99 most purchases are of more than one product so many bills are of the form _.01 or _.02 so many bills will be rounded down even when prices are rounded up.)

But politics infects everything even the most technocratic of decisions.  The main lobbying group in favor of the penny, for example, is Americans for Common Cents, which is funded by the zinc industry (zinc being the main ingredient in pennies).  Thanks to AfCC we will have at least four new pennies in 2009 to honor that famous penny pincher Abraham Lincoln.

On the opposite side is representative Jim Kolbe who Sebastian Mallaby calls an Olympian statesman for his opposition to the special interests and dedication to efficiency.  Well maybe, but it’s no accident that Kolbe is from Arizona the dominant producer of copper the main ingredient in… you guessed it… the nickel.

Hat tip to Roger Congleton.

Why Can’t We Have a Better Press Corps?

by  Alex Tabarrok in

Kathleen Day’s article in the Washington Post on Wal-Mart’s plan to offer a $4 price for many generic pharmaceuticals is a classic example, practically a caricature, of anti-market, anti-big-business bias.   Here with emphases added are some choice quotes from the front page article:

Retailing giant Wal-Mart Stores Inc., known for forcing prices down to
dominate nearly every market it enters, said yesterday that it would
sell nearly 300 generic drugs for $4 per prescription…

Using its might as the nation’s largest retailer and its legendary
ability to force suppliers to cut prices to the bone, the company will
begin the $4 price program in its 65 stores in the Tampa area today…

…the program has the potential to transform the $230 billion
prescription-drug business the way Wal-Mart has transformed other
industries, including groceries and toys, where its aggressive pricing
has forced some competitors out of business and allowed it to dominate
entire categories of merchandise.

In the entire article there is not a single positive mention from the reporter of consumer benefits or Wal-Mart productivity.  It’s not until inside the fold that you even get a hint of consumer benefits and then it’s in the context of an absurdly biased attack on Wal-Mart.

Wal-Mart executives, criticized by labor unions and consumer groups
that say the company shortchanges its employees on pay and health care,
said they started the program to help families and retirees, especially
those on Medicare.

The only thing missing is how Wal-Mart executives achieve their legendary efficiencies by eating small children for breakfast.

For comparison the AP story, written by Mitch Stacy, covers the same angles but without bias or rancor and it’s better written.  Here’s the first sentence:

Wal-Mart,
the world’s largest retailer, plans to slash the prices of almost 300
generic prescription drugs, offering a big lure for bargain-seeking
customers and presenting a challenge to competing pharmacy chains and
makers of generic drugs.

The Minimum Wage Fantasy

by  Alex Tabarrok in

MaxSpeak is pushing a letter from economists, already signed by notables Alan Blinder, Clive Granger, Rebecca Blank and others, to raise the minimum wage.  Don’t worry, I won’t bore you with the usual story about unemployment.  A small increase in the minimum wage will have only a small unemployment effect, nuff said.  Nevertheless, parts of the letter strikes me as absurd.  The letter says, for example, that "The minimum wage is also an important tool in fighting poverty."  Rubbish.  But don’t take my word for it. 

The minimum wage is a blunt instrument for reducing overall poverty, however, because many minimum-wage earners are not in poverty and because many of those in poverty are not connected to the labor market.  We calculate that the 90-cent increase in the minimum wage between 1989 and 1991 transferred roughly $5.5 billion to low-wage workers…. an amount that is smaller than most other federal antipoverty programs, and that can have only limited effects on the overall income distribution.

The source? Card and Krueger in Myth and Measurement (p.3).

The letter also states that most of the people earning the minimum wage are adults.  Most workers are adults so this is hardly surprising.  What is more surprising is that 25% of the workers earning the minimum wage are teenagers, even though teenagers are a much smaller percent of the workforce.  In addition, over half the workers earning the minimum wage are younger than 25.  The letter can spin things how it wants but it would be more informative to say that most of the workers earning the minimum wage are young workers who with a little age and experience would have their wages increased in anycase.

That brings me to a second strange statement, the idea that "the minimum wage helps to equalize the imbalance in bargaining power that
low-wage workers face in the labor market."  One wonders how bargaining power is defined.  Do these economists really believe that the fat cats are getting rich slurping up surplus from the low-wage workers?  If you measure bargaining power as a difference between wages and marginal productivity it is surely high wage workers who lack bargaining power.

The real rebuke, however, to the bargaining power idea is this: a lot of people earning the minimum wage are teenagers but more than 90 percent of working teenagers earn more than the minimum wage.  Either most teenagers are very good bargainers or wages depend less on "bargaining power" than on productivity.  Either way the letter is confused.

The debate over the minimum wage is more about rhetoric than reality. 

Let the Dog Out!

by  Alex Tabarrok in

Dog the Bounty Hunter was arrested and jailed recently on charges related to his capture of Andrew Luster in Mexico.  Here’s a couple of paragraphs from a long-term project:

Andrew
Luster had it all, a multi-million dollar trust fund, good looks, and a bachelor
pad just off the beach in Mussel Shoals, California. Luster, the great-grandson of cosmetics
legend Max Factor, spent his days surfing and cruising the clubs. His life would have been unremarkable if sad had
he not had a fetish for sex with the unconscious. When the first woman alleged rape, Luster
claimed mutual consent but the videotapes that the police discovered when they searched
his home told a different story. Eventually
more than ten women came forward and Luster was convicted of twenty counts of
rape and sentenced to 124 years in prison. There was only one problem. Luster could not be found.

Shortly
before he was expected to take the stand, Luster withdrew funds from his stock
accounts, arranged for his dog to be taken care of and skipped town on a one
million dollar bail bond. The FBI put
Luster on their Most Wanted list but months passed with no results. In the end, the authorities never found him.  But Luster but he was brought to justice – by
a dog. Duane Chapman, now known by the
title of his television show, Dog: The Bounty Hunter, had been tracking Luster
for months. He picked up clues to his whereabouts
from old phone bills and from Luster’s mother who inadvertently revealed that
Luster spoke fluent Spanish. Finally, a
tip from someone who had seen Dog on television brought Dog to a small town in Mexico with great surfing. Days later Dog spotted Luster at a taco stand and made the arrest.

Unfortunately for Dog, bounty hunting is illegal in Mexico and the US authorities, who in my opinion are embarrassed by their failure to capture Luster, haven’t tried to intervene with the Mexican government to let the charges drop in the interests of justice.

For more on the effectiveness of bounty hunters versus the police see my paper.

The Rich Sleep Efficiently

by  Alex Tabarrok in

According to a recent paper in the American Journal of Epidemiology the rich are more efficient sleepers.  Not that they sleep fewer hours, in fact they sleep more than the poor, but their sleep latency, the time spent lying in bed trying to get to sleep is lower than for the poor.
The image
Graphic from University of Chicago Magazine.

Me?  I have money but I sleep like a pauper.

Hat tip to Robin Hanson.

Defining Terrorism Down

by  Alex Tabarrok in

Would you believe that the median sentence length given to a terrorist has fallen since 9/11?  In fact, it’s fallen by a lot, from 41 months of prison time to just 20 days of prison time.  Have we gotten soft on terrorism?  Of course not.  In my judgment, sentence length has fallen because in an effort to increase the terrorism stats and scare us all into compliance the FBI and other government agencies have defined terrorism down. The situation has gotten so absurd that in recent years Federal prosecutors have declined to prosecute approximately 90% of the international terrorism cases brought to them by the investigative agencies.

Read the whole report here.

I am at least heartened by the fact that our decentralized system of justice means that prosecutors need not feel that they must march in lockstep with the agencies and the administration.  This is another reason to oppose abandoning the traditional American system of justice for "military tribunals" and other dependent courts not subject to checks, balances and review.

Hat tip to Boing Boing Blog.