A recent economics paper shows that the court-mandated school desegregation of the 70's reduced the rate of homicides among Black youth by about 25%. It also shows that the rate of homicides among whites was either unaffected or slightly lowered by the desegregation.
The research looks good. If it is right, as I assume it is, then it means that tens of thousands of lives were saved by this action. This is extremely important, and suggests that it was a very good thing even though it didn't do much to improve the academic performance of blacks.
These results are not too surprising when you consider that, in practice, school has more to do with socialization than academic knowledge. The results suggest that the busing took children out of a bad social environment and put them into a better one, with the result that they both committed fewer crimes and were less likely to be the victim of crimes. And, contrary to the dire predictions made at the time, the process didn't do any harm to the white community.
Wednesday, November 4, 2009
Tuesday, November 3, 2009
Lucky When I Want to Be
This is a story I wrote some time ago, slightly revised and updated. It is one of my better ones:
***
Lucky When I Want to Be
Marcia Beaumont entered the casino with unmistakable confidence. Her eyes glittered with intelligence, energy and a joy de vivre that set her apart from the rest of the Vegas crowd. She was dressed in simple, tasteful clothes, the kind worn by a proud working-class woman of the South.
Thus it was that, in dress and spirit, she was the exact opposite of the typical Vegas casino patrons, with their garishly bright clothes and dull lifeless faces ensnared by the hypnotism of the gambling and the flashing lights. She was also young, where they were old. She was in her late twenties, but her good health and alertness made her look slightly younger.
She was not, however, beautiful. She wore no makeup and apparently made no effort to alter her appearance. She was a little too tall and bony. Her face was a bit too strong and angular, and her hands showed the roughness and slight calluses of hard work. She had dirt and engine oil under her unadorned fingernails.
However, such details as might have caused men to overlook another woman never seemed to matter where Marcia was concerned. It came as little surprise when she felt the security cameras following her. She looked up at one of the featureless, opaque black bulbs in the ceiling and flashed a smile at the camera operator. Let him admire her. This was her night.
After she had passed the rows of slot machines, her attitude shifted subtly. She relaxed the focus of her eyes, loosened her body, and began to wander, letting her feet go in a direction of their own choosing. In this state, she drifted serenely, sacrificing neither grace nor poise, but changing direction occasionally, as if being led around by a gentle host.
After about two minutes of drifting through the casino, she stopped at a roulette wheel. She straightened herself, blinked once, and looked around, her eyes as sharp and keen as before. She then put her hand in her purse and began to feel around. If her Walk had been done properly, she would know.
Marcia smiled as her fingers closed around a small flat circular object. She pulled it out. It was a $100 casino chip. It felt lucky.
"Place your bets." The roulette wheel was being operated by a brisk, no-nonsense middle-aged man with balding hair. Marcia idly held her chip between the index and middle fingers of her left hand and let the hand drift over the velvet table. She unfocused her eyes again, and loosened the muscle tone in her hand. The chip dropped onto number 27.
As the wheel spun, Marcia watched it with a serene confidence while the rest of the crowd waited in tense anticipation. When it stopped on 27, her only reaction was a slight smile. The other patrons cheered for her as the wheel operator slid a pile of chips toward Marcia.
Another, slightly different, camera focused on her. The man behind the camera waved his supervisor over from the other end of the camera room.
The atmosphere of the camera room was the exact opposite of the atmosphere of the casino floor it watched. It was dark, dirty, and grim, but also but efficient and businesslike.
The person largely responsible for this was slouched against a wall. His casino security uniform hung loosely and shabbily around his scrawny form. He possessed an utterly ageless ugliness. He could have been a sixteen year old ravaged by heroin, or a sixty year old ravaged by a hard life. Some people wondered what his function was. He was too weak to be a bouncer and he never seemed to watch the cameras. He simply stood around all day, staring into space, his sunken eyes focused on nothing.
There were now four people crowded around the monitor, looking at Marcia and holding a lively discussion. Phrases like "five in a row now, that's impossible" and "don't see any machines or counters" floated out of the hubbub.
After Marcia's sixth win, The supervisor made his decision. He looked up from the camera, turned toward the back of the room, and opened his mouth. But the sunken man spoke first, in a shallow rasping voice that reminded listeners of bronchitis. "Yes, I know. She is one of mine."
Marcia had just collected the massive pile of chips from her seventh win when she felt a dark presence approach. She turned around to see the sunken man approach her. He spoke to her in a voice that suggested he was being as polite as he possibly could be, even though it was something he was not good at. "We need to talk. Please come with me."
Marcia had not been prepared for this. She knew, of course, that she would attract official attention, but she expected it to come in the form of several men who each weighed three times as much as this one.
Marcia straightened her back, drawing herself up to her full 5'11" height and affecting an attitude of regal disdain. "If you want to talk, we can talk here." Her voice suggested both that she was willing and able to make a scene and that she knew that the crowd would take her side if that occurred.
The sunken man simply stared at her silently. It was the sort of silence that made many people uncomfortable, and caused them to start talking to fill up the silence. But Marcia was made of sterner stuff. After a few seconds of silence, she simply turned her back toward the sunken man and stepped back toward the table.
"You will look into my eyes." The sunken man spoke these words with surprising firmness, and with an air if un-opposable finality. It was almost as if he was simply stating what the future would hold.
Marcia turned back to him, curious about what this little man would say next. But he did not say anything. Once she looked down to him disdainfully and met his eyes, he simply stared at her.
But in the mind of Marcia Beaumont, a voice said, "You are not alone."
Marcia had never fainted in her life. She had never, in fact, lost consciousness by any means other than a natural slumber. So it was quite disorienting for her when she realized that she had halfway collapsed, and was being supported by a spry old man and his stout wife. The voice of the sunken man sounded like the echo of an old loudspeaker system. "It would seem that the excitement and the crowd have gotten to you. You will collect your chips, come with me, and have a cold glass of orange juice on the house to make you feel better."
Marcia got to her feet unsteadily, her weakened, wobbly knees barely supporting her weight. She knew that she was too strong to have collapsed for such mundane reasons, and she knew that any kind of mental shock could not have made her collapse. It was obvious that this person had done something to her. She decided that she wanted to learn about it this person and his talents.
She smiled to the concerned faces of the crowd and followed the sunken man away, now steady on her feet. He led her toward a door that opened into a small, tastefully decorated conference room. A waiter in a tuxedo was leaving as they approached. He held the door for them, then closed it once they had moved inside. Inside there were four chairs and a small table with a large glass of orange juice on it. The orange juice had a coating of shaved ice on top. Marcia picked up the glass, brought it to her lips, smelled alcohol, and put the glass down.
The sunken man began to speak to Marcia. "How did you win seven straight roulette spins?"
She looked at him defiantly and disdainfully. "I can be lucky when I want to be."
He looked at her sideways. "Luck of the Irish?"
"That's what my granddad used to say."
"I can not allow you to break the bank. You should have shown some restraint."
"I was doing good. I wanted to keep going."
The sunken man sighed, and began to talk softly, as if to himself. "Winnings always go up by a statistically significant amount whenever there is a full moon. That is a fairly well known fact, but most people do not understand what it means. We accept a certain amount of background talent as a cost of doing business, but if we let people get away with too much, we would go bankrupt."
He continued his odd lilting monologue. Marcia was bored by his stupid self-absorption, but she felt no need to stop him at the moment. "Why is it that Americans feel the need to go to casinos when they realize that they can do unusual things? People in other cultures might try to better their life by getting a nice person to fall in love with them, or starting a successful business, but Americans always go for the flashing lights and the quick buck. It makes me sad, really."
He paused, and looked her in the eyes. "You are a better person than that, Marcia Beaumont. You do not need or want the instant cash from a casino. Las Vegas is not for you. You want to live a simple, comfortable life surrounded by friends and family."
Marcia knew exactly what he was doing. He was trying to trick her into leaving without her money. But she would not be fooled. She had always been in charge of her own destiny, and that would not stop now. She smiled to herself and let him keep talking.
"I was once like you. I came here, thinking I would make some money and then leave. But money has power, here more than anywhere. I can never leave now. You will not be trapped as I was. You will go out there and you will start to lose. Not all at once, of course, but you will spend all night having fun and eating free food and drinking free drinks and when you have about a thousand more dollars then when you came in you will decide to call it a night and you will leave. You will make the choice that I could not, and you will leave this place behind you. Your winnings will barely cover the cost of this trip, and so you will neither gain nor lose anything and therefore this place will have no power over you. You will go home and you will be happy."
The sunken man stopped talking. Marcia saw him for the hollow shell that he was and decided that she would never allow herself to have anything in common with him. She drank her orange juice and left the conference room and started playing poker with people who she could tell needed money. When she had $1400 worth of chips, she cashed them in and left the casino.
Marcia Beaumont returned to South Georgia where she lived a long, prosperous, and happy life.
The sunken man stayed in the casino.
***
Lucky When I Want to Be
Marcia Beaumont entered the casino with unmistakable confidence. Her eyes glittered with intelligence, energy and a joy de vivre that set her apart from the rest of the Vegas crowd. She was dressed in simple, tasteful clothes, the kind worn by a proud working-class woman of the South.
Thus it was that, in dress and spirit, she was the exact opposite of the typical Vegas casino patrons, with their garishly bright clothes and dull lifeless faces ensnared by the hypnotism of the gambling and the flashing lights. She was also young, where they were old. She was in her late twenties, but her good health and alertness made her look slightly younger.
She was not, however, beautiful. She wore no makeup and apparently made no effort to alter her appearance. She was a little too tall and bony. Her face was a bit too strong and angular, and her hands showed the roughness and slight calluses of hard work. She had dirt and engine oil under her unadorned fingernails.
However, such details as might have caused men to overlook another woman never seemed to matter where Marcia was concerned. It came as little surprise when she felt the security cameras following her. She looked up at one of the featureless, opaque black bulbs in the ceiling and flashed a smile at the camera operator. Let him admire her. This was her night.
After she had passed the rows of slot machines, her attitude shifted subtly. She relaxed the focus of her eyes, loosened her body, and began to wander, letting her feet go in a direction of their own choosing. In this state, she drifted serenely, sacrificing neither grace nor poise, but changing direction occasionally, as if being led around by a gentle host.
After about two minutes of drifting through the casino, she stopped at a roulette wheel. She straightened herself, blinked once, and looked around, her eyes as sharp and keen as before. She then put her hand in her purse and began to feel around. If her Walk had been done properly, she would know.
Marcia smiled as her fingers closed around a small flat circular object. She pulled it out. It was a $100 casino chip. It felt lucky.
"Place your bets." The roulette wheel was being operated by a brisk, no-nonsense middle-aged man with balding hair. Marcia idly held her chip between the index and middle fingers of her left hand and let the hand drift over the velvet table. She unfocused her eyes again, and loosened the muscle tone in her hand. The chip dropped onto number 27.
As the wheel spun, Marcia watched it with a serene confidence while the rest of the crowd waited in tense anticipation. When it stopped on 27, her only reaction was a slight smile. The other patrons cheered for her as the wheel operator slid a pile of chips toward Marcia.
Another, slightly different, camera focused on her. The man behind the camera waved his supervisor over from the other end of the camera room.
The atmosphere of the camera room was the exact opposite of the atmosphere of the casino floor it watched. It was dark, dirty, and grim, but also but efficient and businesslike.
The person largely responsible for this was slouched against a wall. His casino security uniform hung loosely and shabbily around his scrawny form. He possessed an utterly ageless ugliness. He could have been a sixteen year old ravaged by heroin, or a sixty year old ravaged by a hard life. Some people wondered what his function was. He was too weak to be a bouncer and he never seemed to watch the cameras. He simply stood around all day, staring into space, his sunken eyes focused on nothing.
There were now four people crowded around the monitor, looking at Marcia and holding a lively discussion. Phrases like "five in a row now, that's impossible" and "don't see any machines or counters" floated out of the hubbub.
After Marcia's sixth win, The supervisor made his decision. He looked up from the camera, turned toward the back of the room, and opened his mouth. But the sunken man spoke first, in a shallow rasping voice that reminded listeners of bronchitis. "Yes, I know. She is one of mine."
Marcia had just collected the massive pile of chips from her seventh win when she felt a dark presence approach. She turned around to see the sunken man approach her. He spoke to her in a voice that suggested he was being as polite as he possibly could be, even though it was something he was not good at. "We need to talk. Please come with me."
Marcia had not been prepared for this. She knew, of course, that she would attract official attention, but she expected it to come in the form of several men who each weighed three times as much as this one.
Marcia straightened her back, drawing herself up to her full 5'11" height and affecting an attitude of regal disdain. "If you want to talk, we can talk here." Her voice suggested both that she was willing and able to make a scene and that she knew that the crowd would take her side if that occurred.
The sunken man simply stared at her silently. It was the sort of silence that made many people uncomfortable, and caused them to start talking to fill up the silence. But Marcia was made of sterner stuff. After a few seconds of silence, she simply turned her back toward the sunken man and stepped back toward the table.
"You will look into my eyes." The sunken man spoke these words with surprising firmness, and with an air if un-opposable finality. It was almost as if he was simply stating what the future would hold.
Marcia turned back to him, curious about what this little man would say next. But he did not say anything. Once she looked down to him disdainfully and met his eyes, he simply stared at her.
But in the mind of Marcia Beaumont, a voice said, "You are not alone."
Marcia had never fainted in her life. She had never, in fact, lost consciousness by any means other than a natural slumber. So it was quite disorienting for her when she realized that she had halfway collapsed, and was being supported by a spry old man and his stout wife. The voice of the sunken man sounded like the echo of an old loudspeaker system. "It would seem that the excitement and the crowd have gotten to you. You will collect your chips, come with me, and have a cold glass of orange juice on the house to make you feel better."
Marcia got to her feet unsteadily, her weakened, wobbly knees barely supporting her weight. She knew that she was too strong to have collapsed for such mundane reasons, and she knew that any kind of mental shock could not have made her collapse. It was obvious that this person had done something to her. She decided that she wanted to learn about it this person and his talents.
She smiled to the concerned faces of the crowd and followed the sunken man away, now steady on her feet. He led her toward a door that opened into a small, tastefully decorated conference room. A waiter in a tuxedo was leaving as they approached. He held the door for them, then closed it once they had moved inside. Inside there were four chairs and a small table with a large glass of orange juice on it. The orange juice had a coating of shaved ice on top. Marcia picked up the glass, brought it to her lips, smelled alcohol, and put the glass down.
The sunken man began to speak to Marcia. "How did you win seven straight roulette spins?"
She looked at him defiantly and disdainfully. "I can be lucky when I want to be."
He looked at her sideways. "Luck of the Irish?"
"That's what my granddad used to say."
"I can not allow you to break the bank. You should have shown some restraint."
"I was doing good. I wanted to keep going."
The sunken man sighed, and began to talk softly, as if to himself. "Winnings always go up by a statistically significant amount whenever there is a full moon. That is a fairly well known fact, but most people do not understand what it means. We accept a certain amount of background talent as a cost of doing business, but if we let people get away with too much, we would go bankrupt."
He continued his odd lilting monologue. Marcia was bored by his stupid self-absorption, but she felt no need to stop him at the moment. "Why is it that Americans feel the need to go to casinos when they realize that they can do unusual things? People in other cultures might try to better their life by getting a nice person to fall in love with them, or starting a successful business, but Americans always go for the flashing lights and the quick buck. It makes me sad, really."
He paused, and looked her in the eyes. "You are a better person than that, Marcia Beaumont. You do not need or want the instant cash from a casino. Las Vegas is not for you. You want to live a simple, comfortable life surrounded by friends and family."
Marcia knew exactly what he was doing. He was trying to trick her into leaving without her money. But she would not be fooled. She had always been in charge of her own destiny, and that would not stop now. She smiled to herself and let him keep talking.
"I was once like you. I came here, thinking I would make some money and then leave. But money has power, here more than anywhere. I can never leave now. You will not be trapped as I was. You will go out there and you will start to lose. Not all at once, of course, but you will spend all night having fun and eating free food and drinking free drinks and when you have about a thousand more dollars then when you came in you will decide to call it a night and you will leave. You will make the choice that I could not, and you will leave this place behind you. Your winnings will barely cover the cost of this trip, and so you will neither gain nor lose anything and therefore this place will have no power over you. You will go home and you will be happy."
The sunken man stopped talking. Marcia saw him for the hollow shell that he was and decided that she would never allow herself to have anything in common with him. She drank her orange juice and left the conference room and started playing poker with people who she could tell needed money. When she had $1400 worth of chips, she cashed them in and left the casino.
Marcia Beaumont returned to South Georgia where she lived a long, prosperous, and happy life.
The sunken man stayed in the casino.
Monday, November 2, 2009
WEIRD Societies
It is not often that an academic paper invents an awesome acronym:
"Western, Educated, Industrialized, Rich and Democratic (WEIRD) societies"
The main point of the paper is very important. People in these kinds of societies are different, and it is not right to generalize their traits to all humans:
One notable thing from the paper is that, when playing the Ultimatum Game, people in WEIRD societies are far more 'fair' than people in primitive societies. Americans were much more likely to split money evenly than people in other societies. This is not the only study to show that, contrary to what many people claim, being in a free-market society tends to foster a sense of fairness. The authors speculate:
"Western, Educated, Industrialized, Rich and Democratic (WEIRD) societies"
The main point of the paper is very important. People in these kinds of societies are different, and it is not right to generalize their traits to all humans:
Here, our review of the comparative database from across the behavioral sciences suggests both that there is substantial variability in experimental results across populations and that WEIRD subjects are particularly unusual compared with the rest of the species—frequent outliers. The domains reviewed include visual perception, fairness, cooperation, spatial reasoning, categorization and inferential induction, moral reasoning, reasoning styles, self-concepts and related motivations, and the heritability of IQ. The findings suggest that members of WEIRD societies, including young children, are among the least representative populations one could find for generalizing about humans.
One notable thing from the paper is that, when playing the Ultimatum Game, people in WEIRD societies are far more 'fair' than people in primitive societies. Americans were much more likely to split money evenly than people in other societies. This is not the only study to show that, contrary to what many people claim, being in a free-market society tends to foster a sense of fairness. The authors speculate:
It may be that what behavioral economists have been measuring among undergraduates in such games is a specific set of social norms, culturally evolved for dealing with money and strangers, that have emerged since the origins of agriculture and the rise of complex societies.
Friday, October 30, 2009
BB&T Fail: Objectivism Versus Reality
Some time ago, one of my friends in the Econ department said that BB&T had charged her a $5 'Inactivity Fee' on her account. We all thought this was crazy. It is perfectly fair for a bank to charge you a fee for doing something that causes costs or problems, but it is completely unreasonable to charge you for not churning your account. The whole point of a bank is that your money sits there quietly while they use it to earn more money.
I don't know the details of this fee, and I don't care. My friend is intelligent and financially sophisticated. She has over two years of postgraduate education in Economics and her husband works at a bank. If she says that the fee was senseless, I believe her. If she says it made her angry enough to cancel her account, then that fact alone is enough to ensure that I will not do business with BB&T anytime soon.
I mention this because John Allison, Chairman of the Board of BB&T, recently came to our school to give a couple of talks. One was to the Econ faculty about his experiences with the economic and banking crisis, and the government's reaction to it. The other was a motivational speech to undergraduates.
The most interesting thing I learned in the faculty talk was that it is actually illegal to record government officials over the phone. I was flabbergasted by this. It seems to me that one of the most essential liberties in a free society is the ability to keep track of what agents of the state do. If it is illegal to record what they are doing, and share this information with the press, then we have lost a fundamental freedom. There was a big stink recently of someone being arrested in the UK for taking pictures of a policeman. But according to Allison, our laws in this respect are just as bad.
But that issue is not the point of this post. BB&T is.
Allison is known for being a die-hard Objectivist. He gives millions of BB&T's money away to promote the works of Ayn Rand. While his economic discussion was not overtly Objectivist, his presentation to the undergraduates was. I wasn't the only one who noticed this; some guys sitting behind me were commenting on it. It really was interesting the way he had distilled and repackaged Rand's philosophy into a ten-point self-help 'how to improve your life' talk.
One of the main points he emphasized was honesty, a complete willingness to face reality and adjust your behavior to it. This in turn implies fair dealing, treating people right. He talked about how the bank refused to make subprime or predatory loans, because he saw no value for the consumer in them. This is true, and BB&T is by all accounts a well-run bank that has survived the crisis quite well.
But human nature being what it is, I am far less likely to trust everything he said now that I know his bank is violating his espoused values and hitting my friend with stupid hidden fees.
He would probably argue that he did nothing dishonest, that the fee was in the contract that my friend signed. And legally he would be correct. But people don't care what is written in long complicated documents. That's not how they deal with reality.
Those contracts are probably never read. If you actually have the intelligence and education necessary to understand them, then your time is too valuable to spend reading them carefully. Gossiping among your friends is a much better way to protect yourself from nasty surprises than reading the contracts. Given the cost of our time, signing whatever is put in front of us and then complaining loudly to warn each other away from whoever mistreats us is the most efficient way of dealing with things.
This, by the way, is one of the main reasons that poor people don't use banks. Many poor people have bad experiences with banks hitting them with fees they don't understand. Those check cashing places and payday lenders are horribly expensive, but they are open and honest about their fees. They charge a simple, easy-to-understand cut off the top, and never surprise anyone with hidden fees and complicated contracts. This means that nobody ever feels cheated. It could be argued that poor people are simply purchasing a higher level of service and convenience than people who use normal banks.
These facts lead us to two important contradictions in Objectivist philosophy. The first contradiction is that they say that all things, including humans, must act according to their nature, but then they actively work to change or deny several important aspects of human nature. The second contradiction is that they say that we should always act in accordance with reality, but they refuse to accept or adapt to the reality of how most humans think and act.
Objectivists, many economists, and most libertarians share the implicit assumption that all people are willing and able to read and understand complicated contracts, and that they have a meaningful choice among different contracts. They believe that people should be bound by whatever is in the contract they sign, and that it is irrational to complain about anything in a contract you signed.
But people don't view the world that way. They see the contract as just another piece of meaningless paperwork, especially if it is too long and/or complicated for them to understand. The cost of reading it is simply much higher than the benefit.
This is especially true because nobody has any real choice about the contract they sign. If you don't sign the contract, all you can do is go to another bank that offers a contract that is 99% identical.
So people's mental idea of 'cheating' or 'dishonesty' has nothing to do with the contract. It is based on how the behavior of the bank or company matches their expectations. Most of us have an idea of what a bank should and should not be doing. We expect banks to act according to those expectations, those social rules. When they don't, we feel cheated and get angry. And we talk about who made us angry and warn our friends about them. In the end, this is a much more effective policing mechanism than courts and a lawsuit. A company can usually survive a court settlement, but a loss in market share will kill it.
'Objectivists' who do not understand this fact about reality or refuse to acknowledge it are doomed to failure.
In addition to this fact, most bankers just don't understand how their entire business model is a creation of the state. The fundamental difference between a banker and a mafia loan shark is that the mafioso has to pay someone to hunt down and punish delinquent borrowers, while the banker can get the state to do it for free. Banks have lower operating costs and can charge lower interest rates because the machinery of the state exists to do all their contract enforcement for them.
Given that the government is providing free kneebreaking services for the bank, it is perfectly fair for the government to have some input into how the bank is run. At the very least, the government should be able to choose not to enforce certain contracts. The government is a tool of the people, and it would be wrong for it to enforce contracts that harm the population at large.
I definitely support anything that makes deals more transparent. Consumers should be told, up-front and in meaningful terms, what they are getting into. Financial products should be labeled in a standard way, just like food products are, so people can compare them with minimal effort.
I don't know the details of this fee, and I don't care. My friend is intelligent and financially sophisticated. She has over two years of postgraduate education in Economics and her husband works at a bank. If she says that the fee was senseless, I believe her. If she says it made her angry enough to cancel her account, then that fact alone is enough to ensure that I will not do business with BB&T anytime soon.
I mention this because John Allison, Chairman of the Board of BB&T, recently came to our school to give a couple of talks. One was to the Econ faculty about his experiences with the economic and banking crisis, and the government's reaction to it. The other was a motivational speech to undergraduates.
The most interesting thing I learned in the faculty talk was that it is actually illegal to record government officials over the phone. I was flabbergasted by this. It seems to me that one of the most essential liberties in a free society is the ability to keep track of what agents of the state do. If it is illegal to record what they are doing, and share this information with the press, then we have lost a fundamental freedom. There was a big stink recently of someone being arrested in the UK for taking pictures of a policeman. But according to Allison, our laws in this respect are just as bad.
But that issue is not the point of this post. BB&T is.
Allison is known for being a die-hard Objectivist. He gives millions of BB&T's money away to promote the works of Ayn Rand. While his economic discussion was not overtly Objectivist, his presentation to the undergraduates was. I wasn't the only one who noticed this; some guys sitting behind me were commenting on it. It really was interesting the way he had distilled and repackaged Rand's philosophy into a ten-point self-help 'how to improve your life' talk.
One of the main points he emphasized was honesty, a complete willingness to face reality and adjust your behavior to it. This in turn implies fair dealing, treating people right. He talked about how the bank refused to make subprime or predatory loans, because he saw no value for the consumer in them. This is true, and BB&T is by all accounts a well-run bank that has survived the crisis quite well.
But human nature being what it is, I am far less likely to trust everything he said now that I know his bank is violating his espoused values and hitting my friend with stupid hidden fees.
He would probably argue that he did nothing dishonest, that the fee was in the contract that my friend signed. And legally he would be correct. But people don't care what is written in long complicated documents. That's not how they deal with reality.
Those contracts are probably never read. If you actually have the intelligence and education necessary to understand them, then your time is too valuable to spend reading them carefully. Gossiping among your friends is a much better way to protect yourself from nasty surprises than reading the contracts. Given the cost of our time, signing whatever is put in front of us and then complaining loudly to warn each other away from whoever mistreats us is the most efficient way of dealing with things.
This, by the way, is one of the main reasons that poor people don't use banks. Many poor people have bad experiences with banks hitting them with fees they don't understand. Those check cashing places and payday lenders are horribly expensive, but they are open and honest about their fees. They charge a simple, easy-to-understand cut off the top, and never surprise anyone with hidden fees and complicated contracts. This means that nobody ever feels cheated. It could be argued that poor people are simply purchasing a higher level of service and convenience than people who use normal banks.
These facts lead us to two important contradictions in Objectivist philosophy. The first contradiction is that they say that all things, including humans, must act according to their nature, but then they actively work to change or deny several important aspects of human nature. The second contradiction is that they say that we should always act in accordance with reality, but they refuse to accept or adapt to the reality of how most humans think and act.
Objectivists, many economists, and most libertarians share the implicit assumption that all people are willing and able to read and understand complicated contracts, and that they have a meaningful choice among different contracts. They believe that people should be bound by whatever is in the contract they sign, and that it is irrational to complain about anything in a contract you signed.
But people don't view the world that way. They see the contract as just another piece of meaningless paperwork, especially if it is too long and/or complicated for them to understand. The cost of reading it is simply much higher than the benefit.
This is especially true because nobody has any real choice about the contract they sign. If you don't sign the contract, all you can do is go to another bank that offers a contract that is 99% identical.
So people's mental idea of 'cheating' or 'dishonesty' has nothing to do with the contract. It is based on how the behavior of the bank or company matches their expectations. Most of us have an idea of what a bank should and should not be doing. We expect banks to act according to those expectations, those social rules. When they don't, we feel cheated and get angry. And we talk about who made us angry and warn our friends about them. In the end, this is a much more effective policing mechanism than courts and a lawsuit. A company can usually survive a court settlement, but a loss in market share will kill it.
'Objectivists' who do not understand this fact about reality or refuse to acknowledge it are doomed to failure.
In addition to this fact, most bankers just don't understand how their entire business model is a creation of the state. The fundamental difference between a banker and a mafia loan shark is that the mafioso has to pay someone to hunt down and punish delinquent borrowers, while the banker can get the state to do it for free. Banks have lower operating costs and can charge lower interest rates because the machinery of the state exists to do all their contract enforcement for them.
Given that the government is providing free kneebreaking services for the bank, it is perfectly fair for the government to have some input into how the bank is run. At the very least, the government should be able to choose not to enforce certain contracts. The government is a tool of the people, and it would be wrong for it to enforce contracts that harm the population at large.
I definitely support anything that makes deals more transparent. Consumers should be told, up-front and in meaningful terms, what they are getting into. Financial products should be labeled in a standard way, just like food products are, so people can compare them with minimal effort.
Thursday, October 29, 2009
Correlation and Causality 3: Smoking
I personally believe that smoking is a noxious, loathsome habit, and that anyone who smokes is both stupid and rude. But that does not mean I will tolerate bad data or journalism about smoking. This chart and the accompanying text are extremely misleading, for several reasons.
The WHO data actually says that there are a few countries where over 20% of people over 30 years old die of smoking-related illnesses. But that got turned into "Nearly one in five deaths in rich countries is caused by smoking..." This is wrong in three ways. First, a few countries got turned into 'the rich world'. Look at the chart and you will see plenty of rich countries with lower listed mortality from smoking. Second, the article omitted the important bit about 'people over 30'. And third, dying from a smoking-related illness is very different than getting killed by cigarettes.
The research defines a 'smoking-related illness' as anything that smokers are more likely to have than non-smokers. If someone who has ever smoked dies from one of those diseases, that person is recorded in the statistics as 'dying from a smoking-related disease'. But this is wrong, because it confuses correlation with causation.
People who smoke generally have a lot of other bad habits. Smokers tend to be more obese and less likely to exercise. They generally have worse nutrition and more alcoholism. The bad effects from all of these other things are getting mixed in with the smoking deaths because people are not doing the statistics right.
For example, delerium tremens would be classified in these statistics as a 'smoking-related disease'. A random smoker is more likely to have DT's than a random non-smoker, because smokers are more likely to be alcoholic. So if someone died from DT's, these numbers would add him to the list of people 'killed by cigarettes'.
If you run the numbers properly, you find that smoking actually kills about 150,000 people in the USA every year, instead of the 400,000 figure that keeps making the headlines. And most of those people are very old when they die, meaning that smoking actually just took a few years off their lives.
So the government really should focus more on fighting crime than fighting smoking. Yes, secondhand smoke is a problem, but you can fix it with the appropriate cigarette tax. There is no need to keep lecturing people, who usually know the risks and are willing to cut their lifespan a few years to get whatever benefit they get from cigarettes. The proper role of the state is to prevent innocent people from getting hurt and killed by the actions of others. Cigarettes should be a low-priority concern.
The WHO data actually says that there are a few countries where over 20% of people over 30 years old die of smoking-related illnesses. But that got turned into "Nearly one in five deaths in rich countries is caused by smoking..." This is wrong in three ways. First, a few countries got turned into 'the rich world'. Look at the chart and you will see plenty of rich countries with lower listed mortality from smoking. Second, the article omitted the important bit about 'people over 30'. And third, dying from a smoking-related illness is very different than getting killed by cigarettes.
The research defines a 'smoking-related illness' as anything that smokers are more likely to have than non-smokers. If someone who has ever smoked dies from one of those diseases, that person is recorded in the statistics as 'dying from a smoking-related disease'. But this is wrong, because it confuses correlation with causation.
People who smoke generally have a lot of other bad habits. Smokers tend to be more obese and less likely to exercise. They generally have worse nutrition and more alcoholism. The bad effects from all of these other things are getting mixed in with the smoking deaths because people are not doing the statistics right.
For example, delerium tremens would be classified in these statistics as a 'smoking-related disease'. A random smoker is more likely to have DT's than a random non-smoker, because smokers are more likely to be alcoholic. So if someone died from DT's, these numbers would add him to the list of people 'killed by cigarettes'.
If you run the numbers properly, you find that smoking actually kills about 150,000 people in the USA every year, instead of the 400,000 figure that keeps making the headlines. And most of those people are very old when they die, meaning that smoking actually just took a few years off their lives.
So the government really should focus more on fighting crime than fighting smoking. Yes, secondhand smoke is a problem, but you can fix it with the appropriate cigarette tax. There is no need to keep lecturing people, who usually know the risks and are willing to cut their lifespan a few years to get whatever benefit they get from cigarettes. The proper role of the state is to prevent innocent people from getting hurt and killed by the actions of others. Cigarettes should be a low-priority concern.
Connections and Murder
Many people think, based on media reports, that random murders are common. But as this post points out, "approximately 75% of all homicides in the United States from 1995 to 2002 occurred between people who knew each other prior to the murder"
So the best way to avoid getting killed is to not get involved with the kind of people who are likely to be violent. Simple, time-tested advice.
So the best way to avoid getting killed is to not get involved with the kind of people who are likely to be violent. Simple, time-tested advice.
Monday, October 26, 2009
Runaways
This is an excerpt from a NY Times article on runaway teenagers:
Teenagers living on their own ... told of a harrowing existence that in many cases involved sleeping in abandoned buildings, couch-surfing among friends and relatives or camping on riverbanks and in parks after fleeing or being kicked out by families in financial crisis.
The runaways spend much of their time avoiding the authorities because they assume the officials are trying to send them home.
So, despite the fact that their lives are miserable, they put a lot of effort into avoiding being sent back to their parents. The question we should be asking is this:
Is the situation of living with their parents objectively worse than being homeless, or is their fear of returning home irrational?
If the former is true, it means that some percentage of American parents are giving their kids a life that is worse than living on the streets.
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