April 3, 2010

Finally, a poll on how clueless everybody is

From the Washington Post:
If he stays past this term, [John Paul] Stevens will remain on course to become the oldest and longest-serving justice in Supreme Court history. Paradoxically, he is also among the court's least-known members; in a poll taken last summer, only 1 percent of Americans could summon his name. 

They should do this more often: instead of just asking people their opinion on stuff as if the average man in the street actually knows what he is talking about, pollsters should ask more questions with objective answers.

Stevens should be better known: the press should have been asking for years why Stevens, who will turn 90 this month, hasn't done the right thing by the country and retired. That's just a ridiculous age for a Supreme Court justice, but it hasn't been an issue because he's a liberal.

As I've been writing since 1993, Supreme Court Justices should get a single 18-year term, so that they would typically serve from roughly age 55 to 73. You win a Presidential election, you get to nominate two Justices to the Supreme Court. That's fair.

March 31, 2010

Cheaper than Mayor Bloomberg's program

There is much discussion these days about expensive programs to ameliorate social problems. One plan that has been overlooked is to bribe fortunetellers.

From the LA Times:
Whether migrants should stay or leave California is a question that reaches even the palm and card reader at the El Indio Amazonico botanical shop on Alvarado Street.

Patrons usually come in with common questions about love or money. But since the economy wobbled, they also come to ask whether their future is elsewhere -- perhaps far from California.

"A lot of people ask, 'Should I go back to my country, to Mexico or Guatemala or El Salvador,'" said Juliana Contreras, 45. "People ask, 'Should I go or should I leave?' I usually tell them if it's bad here, it's worse in their countries."

Still, the streets teem less than before. Is that because fewer people are going out and spending money, or because immigrants have left?

It seems to me that slipping palm-readers a few twenties to tell unemployed illegal immigrants on the verge of leaving the country that, yes, they should go home, their moms miss them, would return more bang for the buck than any other social program imaginable.

Really, when out-of-work illegal immigrants are already asking "Should I go or should I leave?" how hard would it be to persuade them to go and/or leave?

The Obama Administration has been desperate to get unemployed illegal immigrants to stay in the U.S. through Census Day, April 1st to pump up the quotas by making them fear they'll miss the Coming Amnesty if they bail out now. But, come April 2nd, can we finally let the poor bastards go home?

When fiction turns to fact

The LA Times has an article by Alana Semuels entitled:
From bucolic bliss to 'gated ghetto'
Hemet's Willowalk tract was family-friendly. Then the recession hit.

This news story about the Inland Empire exurb of Hemet is pretty much identical to the short story, Unreal Estate, I published in the November 17, 2008 issue of The American Conservative (see posting below for the best version). From the LA Times:
Reporting from Hemet - The gated community in Hemet doesn't seem like the best place for Eddie and Maria Lopez to raise their family anymore.

Vandals knocked out the streetlight in front of the Lopezes' five-bedroom home and then took advantage of the darkness to try to steal a van. Cars are parked four deep in the driveway next door, where a handful of men rent rooms. And up and down their block of handsome single-family homes are padlocked doors, orange "no trespassing signs" and broken front windows.

It wasn't what the Lopezes pictured when they agreed to pay $440,000 for their 5,000-square-foot house in 2006.

The 427-home Willowalk tract, built by developer D.R. Horton, featured eight distinct "villages" within its block walls. Along with spacious homes, Willowalk boasted four lakes, a community pool and clubhouse. Fanciful street names such as Pink Savory Way and Bee Balm Road added to the bucolic image.

Young families seemed to occupy every house, throwing block parties and holiday get-togethers, and distributing a newsletter about the neighborhood, Eddie Lopez recalled.

"We loved how everything was family-oriented -- all our kids would run around together," said Lopez, a 41-year-old construction supervisor and father of seven. "Now everybody's gone."

Home foreclosures have devastated neighborhoods throughout the country, but the transformation from suburban paradise to blighted community has been especially stark in places like Willowalk -- isolated developments on the far fringes of metropolitan areas that found ready buyers when home prices were soaring but then saw an exodus as values crashed.

Vacant homes are sprinkled throughout Willowalk, betrayed by foot-high grass. Others are rented, including some to families that use government Section 8 vouchers to live in homes with granite countertops and vaulted ceilings.

When the development opened in 2006, buyers were drawn to the area by advertising describing it as a "gated lakeshore community." Now, many in Hemet call Willowalk the "gated ghetto," said John Occhi, a local real estate agent. ...

In Hemet, city officials have simply boarded up homes in some troubled neighborhoods. Plywood covers the windows of dozens of apartments on Valley View Drive; resident David Hall says it keeps prostitutes and drug dealers out.

Willowalk presents a different challenge. The development promised a Tiffany neighborhood for what was then something closer to a Target price.

"Leave the world behind as you unwind by our picturesque lakes," cooed one advertisement, which touted "intimate botanical gardens and walking trails, tranquil lakes" and other attractions.

At first, the reality matched the come-ons.

Maria Lopez, a stay-at-home mother, recalls gazing at the mountains in the distance as her children played with groups of neighbors their own age. The community pool was just a few blocks away, and she says she used to let her older children, ages 13 and 14, go there by themselves. ...

Now she accompanies her children to the pool -- though it has been closed of late -- because the people who now hang out there "have no class," she said, and she sits out front with her children if they play in the yard.

"My next-door neighbors -- there are so many people living there, I don't know who they are," she said.

Walking through the development, there is not much evidence of the well-kept yards and friendly families Maria Lopez fondly recalls.

Many of the people answering a knock say they are renters, and won't open their doors more than a crack to see who is on their doorstep. Red-and-white "for sale" signs dot the neighborhood, clashing with the golds and browns of the homes. The contrast between occupied and empty houses is evident on one block, where high grass in weedy clumps gives way to a neatly mowed lawn with handwritten signs pleading "Please do not let your dog poop on our yard."

Homeowner Norma Hernandez, one of the few people outside on a recent sunny afternoon, can point out which families are permanent on her block.

"Rented, owned, rented, rented, rented," she said, gesturing at the gargantuan houses across the street, one after another. "It's bad," she said, shaking her head.

Nacho Gomez is paid by absentee owners to look after their rental properties. Currently, he's taking care of 17.

Doing a check of the homes on a recent Thursday, he left his van's engine running as he inspected a shattered window in one property.

"A lot of them can't pay the rent, and they leave the house a mess," Gomez said, referring to tenants.

He has had to fix holes punched in walls and replace refrigerators, dishwashers and other appliances -- even ovens -- stolen by renters on their way out.

Those tenants appear to be the exception, and the renters provide at least one benefit: Without them, there would be even more vacant homes. Even so, their presence has fundamentally changed the character of what was once sold as an exclusive community.

The Willowalk Homeowners Assn. is trying to recapture some of the community's lost spirit. In recent months, it launched a trash committee -- members pick up rubbish in the park -- and started a neighborhood watch group to keep an eye on residents' homes.

But it wasn't enough for Angelica Stewart and her family, who are leaving the $318,000 home they bought in 2006. To Stewart, living in a gated community is absurd when drug busts are a regular occurrence.

"It's not worth it for us to live in this neighborhood," she said.

The Lopez family plans to stick it out, knowing they can't sell their house for anywhere near the $440,000 they paid for it. Based on comparable prices in the neighborhood, the place is probably worth about $170,000 now, and maybe less. They're petitioning their bank for a loan modification.

My published articles are archived at iSteve.com -- Steve Sailer

March 30, 2010

"Unreal Estate"

Here's my Autumn 2008 short story about the Housing Bubble. I finally figured out a way to set up the punchline, and now it's slightly improved over the original version.


Unreal Estate
Memorial Day Weekend, 2005
“So, this guy joins a monastery where he’s not allowed to talk.” Travis, your brother-in-law, is telling a joke. He’s told it to you before. “After five years, the head monk tells him he can say two words. ‘Tiny room,’ the guy answers.”
"That reminds me,” Travis continues, “You kids have been engaged, like, what? Two years now? That’s great. No rush to get married, not with the market the way it is in West LA. Who can afford to marry and settle down in LA? I couldn’t. Georgie Cooney can’t afford to get married in LA.”
While you’re trying to figure out whether Travis means actor George Clooney or boxer Gerry Cooney, he’s already onto his favorite topic, “Still, isn’t it time to buy a place of your own? I mean, West LA’s a great place to meet somebody, but, c’mon, are you going to entrust your kids -- and I know how much my wife’s little sister wants some (you know how women are, they can’t keep a secret) -- to the Los Angeles United School District?”
You have this conversation, if you could call it a conversation, each time you visit your brother-in-law’s house. Travis lives out in the Santa Clarita Valley, an hour or two north of West Los Angeles. You get on the 405 at Pico, head over Sepulveda Pass, down through the Valley, onto the 5 and up through Newhall Pass into LA County’s northern exurbs.
You’re sitting on the edge of the Travis’s deck, overlooking a canyon lined with oaks and sycamores. It’s hotter out here than back in West LA, where your $1900 per month one bedroom apartment doesn’t have air conditioning because it seldom gets over 82. It’s hot out here, but it’s not bad. There’s a breeze blowing with a hint of the far-off ocean.
Travis says, “I’d be all for you staying in LA if you were an entertainment lawyer or something where you need to be working with the stars. But you manage a drug store and Emma’s a nurse. People buy drugs and get sick everywhere.
“I bought this place in 2000 for $255,000,” Travis says, repeating a number you know by heart now. “Here we are, five years later, and the Schmidts next door just sold their’s for $810,000. So I’m up, what, six, seven hundred thousand? The home equity loans have paid for some nice vacations, I’ll tell you. My house is my ATM.
“I know what you’re thinking,” says Travis, who generally does know what you are thinking. “You’re wondering why I’m the lucky bastard who turned 32 in 2000 and decided it was the right time in my life to get out of an apartment in LA and buy a house back when houses in California were cheap. Meanwhile, you’re 32 in 2005, when they’re expensive. Well, they seemed expensive then, too. But I took the plunge anyway.
“I also know you’re thinking you don’t have $810,000. Who does? That’s what they got mortgages for. And you’re good with numbers so you’ve already figured out what a 20 percent down payment on $810,000 is. It’s, like … a lot.
“Okay, coupla things you need to bear in mind.
“First, Emma’s told me about how your dad always talks about the years saving up for the 20 percent down payment he made when he got that 30 year fixed rate mortgage on his little place in Sherman Oaks. "That’s ancient history. Dude, nobody puts down 20 percent down anymore, no matter how iffy they seem.”
Travis’s voice has gone up a third of an octave. When he’s talking about the Lakers or whatever, he’s laidback. But when he gets going on real estate, which is more and more often over the last couple of years, he lets his inner Dennis Hopper out.
“These days, somebody arrives in California from Gautelombia and wants to buy a house, do you think they make him document his credit history? It’s in Spanish, and who knows how many million pesetas were worth a dollar in 1985, and besides, the courthouse in El Carrumbo collapsed in an earthquake anyway, so he doesn’t have a paper trail. Documents? He’s undocumented. He don’t need no steenking documents! He just pays some extra points on his rate, but that’s all on the backend. Everybody’s happy.
“Don’t you watch the news? The President says down payments are un-American because they keep minorities from buying houses. But you don’t have to be diverse to get a zero down loan. IndyMan is happy to hand them out to everybody.
“Second thing, Santa Clarita seemed like a long way out when I moved from Venice in 2000. So, maybe you got to move a little farther, like out to Palmdale, Lancaster. Antelope Valley’s the new Santa Clarita!”
You’re not quite sure how it happens, but ten minutes later, you’re standing on his driveway admiring the rims on Travis’s Lexus SUV, which are bigger than the tires on your Corolla. Soon, you’re rolling northeast on the 14, past the slanting Vasquez Rocks where, according to Travis, lots of Westerns were filmed, but you only remember them from Bill and Ted’s Bogus Journey. The highway turns north away from the mountains through the high desert. A sign says you are heading toward "Edwards AFB."
“Edwards Air Force Base!” exclaims Travis. “The Right Stuff, man! That’s where Chuck Taylor broke the speed barrier in 1957. This is All-American country out here,” he says, gesturing vaguely at the brownish-gray sagebrush. “Granted, it’s a haul from the jobs in LA, but with Iraq calming down now that they captured Saddam Insane, soon they’ll be pumping like crazy from those Iraqi oilwells and the price of gas will be back down to a $1.00 per gallon.”
You pass another sign. This one reads, “San Andreas Fault.” Travis doesn’t seem to notice.
Once off the highway, you see at least one person standing at every intersection twirling or jiggling a giant arrow pointing to an open house. “Human Signs,” nods Travis. “Like back in the Depression when guys would walk around wearing sandwich boards reading ‘Eat at Joe’s.’ But this is the opposite of a depression. Real estate commissions are six percent, so, on a $400k house, that’s $20k, which pays for a lot of twirling.”
Stretching off to the horizon are half-built houses and recently finished ones. Eventually, you follow one particularly active arrow to the Cypress Creek Estates. “Yeah, I know,” says Travis, “The nearest creek is 20 miles south and the nearest cypress tree is 100 miles west in Santa Barbara. But that’s not the point, the point is that everybody in Guatelombia grew up watching Baywatch and has wanted to move to California ever since. Do you know how many people there are in the world? Well, I don’t either, but, trust me, it’s a big number. There’s an endless supply of people who want to live in California. And their brothers, too! Do you think Bush is going to shut the borders? The President says, “Family values don’t stop at the Rio Loco.’”
Travis’s voice gets intense. “They’re coming, man, and nothing can stop them. It’s the American Dream!”
“Same with the money,” he continues, in a more relaxed tone. “When the Chinese get a check from Wal-Mart for a billion bucks for their latest boatload of plastic crud, they ask the smartest guy in Peking where to invest it. He calls up the smartest lad in London, who tells him, "Lend it to people buying California real estate. It’ll be safe as houses.” Nobody cares where they lend in California, just so long as it’s in California. You should see the prices they’re getting this year for dumps in Hawaiian Gardens, Bakersfield, Pacoima, Compton. Compton.
“See, in Abu Dubai, nobody knows nothing about Hawaiian Gardens, other than it’s in California. Over in Arabia, Sheik Rattleandroll thinks, ‘It’s like “Hawaii” and it’s full of “Gardens,” so how bad could it be?’
“Although, you’d figure," muses Travis, shaking his head, “That by now, even an Arab would’ve heard of Compton.”
“There’s no stopping them. And the same with normal American people moving to the exurbs. Every year, kids get out of college and move from Mom and Dad’s house in the boring ‘burbs to an apartment in the sexy city. They love hanging out in Hollywood. But after ten years or so, they’ve found somebody. The one. They start looking at the price on those cute little cottages around the corner from their favorite restaurant on San Vicente. The price has seven digits. And it doesn’t start with a “one.” They wonder, “How does anybody buy in the city?” They finally realize: people do it family style. If they’re American and they buy on the Westside, then you know that Mom and Dad gave them a half mil, at least. If they’re Armenian, they have mom and dad move in with them, along with cousin Aram and his uncle-in-law. But Americans can’t live with their relatives. We go nuts. So, it’s out to the exurban frontier for us. It’s a perpetual motion machine.”
You pull up in front of an attractive Mediterranean-style model house. Two stories, 3,150 square feet, the sheet says. It seems enormous -- both compared to your apartment and to its lot, with its miniature front yard consisting of a tiny sapling and a tinier sodded lawn. It’s hotter than in Santa Clarita, so the walk from the Lexus to the front door through the grit-laden wind has you sweating. “It’s breezy out here, but that’s good, it lowers the wind-chime factor,” observes Travis.
Then you’re hit by the blast of air conditioning, and you’re standing in the Great Room, with a 20’ ceiling. “Sure, it seems kind of big, but that’s the crucial element,” explains Travis. “What are they asking, $450k? That’s not a cost to you, that’s an investment, like joining a country club. The sticker price keeps out the riff-raff. You don’t want every peon in Guatelombia who grew up dreaming about Baywatch moving in next door to you, do you?
“What you want is like … well, look at Valencia High School near my house. It’s diverse. It’s … What does the LA Times call the neighborhood when there’s a gang shooting in South Central? … It’s vibrant. But Valencia High School is not too vibrant, if you know what I mean. Valencia’s like mostly white, some Asian, the black kids’ parents are all celebrities. The son of what’s his name, Wesley Snipe Dogg, rushed for 2,500 yards last year. The Latino kids are all from solid home-owning families, no accents, everybody’s dad is a contractor or something. You can’t afford to buy in my neighborhood if you aren’t in a cash business.”
One stair creaks loudly as you ascend to the lavish master bedroom suite on the second floor. “The construction’s just settling in,” assures Travis. “This house is only, it says here, nine months old. The owner is flipping it. Probably moving to a 4000 square foot house with the $50k he’s going to make and do it again. With a no down payment mortgage and a low teaser rate for the first two years (which you deduct on your 1040, by the way), that’s about a … a million percent return on investment. Can you get that kind of interest on your CDs?”
“In fact, I think I’m going to pick up one of these babies, too, and sell it in six months. We’ll be neighbors! Sort of. The mortgage company get a little snottier about down payments and interest rates when you tell them it’s an investment, so I’ll just check the “owner occupied” box. The broker doesn’t care. He gets his commission, then Countrywise bundles it up with a thousand other mortgages and sells it to Lemon Brothers. The Wall Street rocket scientists call this "secretization" because nobody can figure out what anything’s worth. It’s a secret.
“Lemon sells shares in the package all around the world. The Sultan of Brunhilde ends up owning a tenth of your mortgage. Do you think the Sultan’s going to drive around Antelope Valley knocking on doors to see if you’re really living there?”
“Maybe you’d like to come in with me on it, buy yourself a one-eighth share?”
Thanksgiving, 2005
The sky over the Antelope Valley is blue, your Marathon Sod minilawn is green, the temperature is 68, and your bride and her sister are cooking the turkey in your new granite counter-topped kitchen. Travis and you are standing in your driveway in Cypress Creek Estates, admiring the house you two own next door. Travis is explaining, “So, after ten years, the head monk, the abbatoir, tells the new guy he can say two more words. And the guy replies, ‘Roommate snores.’” By the way, this couple from Hermosa Beach counteroffered me $477k on our little investment. I told them I’d think about it. Nice people, they’d make good neighbors for you. But, I don’t think I’m going to sell it yet. I’m going to wait for an even $500k. There’ll be no problem getting that next spring. Yeah, it’s a nice neighborhood. Quiet."
That it is. You don’t have all that many neighbors because about a third of the homes on the street appear to be unoccupied, owned by speculators waiting to flip them. And the people who do live on your street tend to start their commute to LA before dawn and get back after dark. It’s quiet, except on Sunday, when a stream of looky-loos pour through for the open houses.
Voice Mail, April 2006
"Hey, it’s Travis. Look, my accountant was crunching the numbers, and he says I’ve got a slight cash flow problem, what with me paying for 7/8ths of an empty house and the market not quite hitting our target price yet. So, he says that we should rent it out for awhile, just until we sell it. The thing is, what with everybody out there buying with no money down, there aren’t that many people left in the rental market. Most of the local jobs are in construction, building houses. (Well, construction and being a Human Sign.) Now, my accountant keeps the books for this contractor, who tells him he’s got some construction workers from this village down south who need a place to live. Real quiet hardworking types. You hablo un poco Espanol, right? If you need to talk to them, talk to their leader, Juan. He speaks Spanish. The rest of them only speak Mixed-Up. It’s an Indian lingo. But you won’t need to talk to them. They’re very quiet.”
July 2006
It’s Sunday afternoon. Travis peers down as you pry a flattened disk of lead out of the miniature crater in your driveway. “Well, they are real quiet, hardworking types from Monday through Friday,” he says. “You’ve gotta admit that. I guess they just want to relax on Saturday, have a little fiesta, drink some cerveza, shoot their pistolas in the air. It’s their culture. What are you, prejudiced?”
You look at Travis.
“Okay, okay, I’ll go talk to Juan.”
He comes back 20 minutes later. “Juan is gone, man. That’s what they kept telling me: ‘Juan is gone.’ One of the fellows had his stomach bandaged up. He just got back from the emergency room. I couldn’t quite follow what they were saying, but I think Juan had a bottle of tequila on Saturday night and stabbed this dude. Nothing serious. Just a friendly little argument. C’mon, they aren’t gangbangers, they’re working men … Okay, well, then Juan headed for the Border like OJ in his white Bronco. Juan is gone, and with the rent money they all owed us, too. Oh, man…”
Voice Mail, September 2006
"Hey, it’s Travis. I got good news. We’re not going to mess around anymore trying to extract our rent from some mob of illegals. No way, Jose. Instead, we’re going to get paid by check on the first of each month straight from the U.S. Treasury! The Department of Housing and Urban Development. Section 8 rent vouchers. They’re tearing down a housing project in the, uh, LA - Long Beach area, in, uh, Compton, I guess, to be precise, and they’ve got this highly respectable elderly grandmother who needs a place to stay with her family. Really cute grandkids. A few daughters, too. She wants a safe place with good schools to raise them. Actually, she’s not all that elderly. The HUD man said she’s 39. A church lady, you know, pillar of the community, big hat, all that. You’ll like your new neighbors.”
Voice Mail, December 2006
“It’s Travis. Okay, okay, I’ll admit that I hadn’t really thought through the part about the daughters having boyfriends, or grandma having boyfriends either, for that matter. But I think this whole Bloods v. Crips thing is being blown way out of proportion. It’s just graffiti. And lots of kids wear red these days. It’s a very In color. And these days all the young people make those goofy signs with their hands. For that matter, how can anybody know for sure that the Chevy that cruises by every night is full of MS-13 gangbangers planning a drive-by on the Bloods next door as payback for the race riots at the County Jail in Castaic? Are you sure you read the tattoos on their necks right? It’s nighttime, how can you be certain that their neck tattoos say ‘MS-13.’ Maybe they just have, like, ‘Mom’ tattooed on their necks. Did you think about that?”
May 2007
“So, after fifteen years, the abbadabbadoo tells the new monk he can say two more words, and—Whoa!” Travis flinches when the 120-pound Presa Canario lunges at him. The steel chain securing the dog to the front of the house across the street from your house snaps taut and its massive jaws come up short. “Man,” says Travis, shaken, “That’s one of those dogs that the Aryan Nation breeds to guard meth labs, isn’t it? What’s in that house? A meth lab? No, don’t tell me. I don’t want to know.”
“Look at this neighborhood,” he says, his dismissive gesture taking in the empty malt liquor bottles on the curb, the wheelless car jacked up on a brown front lawn, and the knots of sullen youths playing hip-hop and reggaeton on boomboxes. “All these speculators buy houses, hit a little bump in the road, need some cash, then start renting them out to lowlifes to get by until they can cash in. Property values drop like a rock. It would be no problem if just one investor did that, but when all these speculator jerks do it, the whole ‘hood is hosed.
“Oh, yeah, I came by to mention that in June the mortgage rates reset after two years. Bush put this new guy in at the Fed, Ben Barnacle, and he’s raised interest rates. So that will push up your share of the payment.”
Voice Mail, June 2007
“It’s Travis. Sorry to hear about you having to sell both your cars to make that new monthly nut. Taking the bus to work in that heat, man, that’s rough.
“But, that’s all history. I’ve got great news! I sold the house next door. To the Section 8 grandma. Who else would buy it? I only got what we paid for it, but I figure that was the smart play. She didn’t think she could qualify for the mortgage, but I told her to put down as her household income all the money made by all the people who have ever stayed there. What, is Washington Mutant going to be so racist as to question that a woman like her could have an income of $160,000?
“Don’t thank me for getting you out of that monthly payment. It’s the least I could do for you, bro.”
Phone call, October 2008
You pick up the ringing phone.
“It’s me, Travis. Long time no hear! Hey, I’m sorry about houses in your zip code being down 55 percent versus last year. Bummer.
“Anyway, I’ve been listening to Senator Omama’s speeches about how he is going to invest hundreds of billions to make America energy independent in ten years. So, I wanted to let you in on the next big thing. Alternative energy! When the Democrats get in come November, alternative energy will be bigger than houses. I’ve got great investments lined up with some start-ups in this emerging growth sector. Like biodiesel trolleys. Al Gore is this close to making a big investment. I just need a little help making the minimum required investment. They don’t need chump change. This is just for the big money boys. So, are you in or are you out?
You say nothing.
“Are you going to quit on me? Remember, quitters never prosper.”
You say: “I quit.”
Travis says: “Well, it’s about time. You’ve done nothing but bitch and moan since I met you.”

Carrots without sticks

From the New York Times, an article on an experimental program in NYC that had been very popular among economists: using carrots (but no sticks) to get the poor to behave better.
City to End Program Giving Cash to the Poor

An unusual and much-heralded program that gave poor families cash to encourage good behavior and self-sufficiency has so far had only modest effects on their lives and economic situation, according to an analysis the Bloomberg administration released on Tuesday.

The three-year-old pilot project, the first of its kind in the country, gave parents payments for things like going to the dentist ($100) or holding down a full-time job ($150 per month). Children were rewarded for attending school regularly ($25 to $50 per month) or passing a high school Regents exam ($600).

When the mayor announced the program, he said it would begin with private money and, if it worked, could be transformed into an ambitious permanent government program.

But city officials said Tuesday that there were no specific plans at this time to go forward with a publicly financed version of the program. In an announcement at BronxWorks, a nonprofit social services agency, Mayor Michael R. Bloomberg pointed to a few examples of success: High school students who met basic proficiency standards before high school tended to increase their attendance, receive more class credits and perform better on standardized tests; more families went to the dentist for regular checkups.

But the elementary and middle school students who participated made no educational or attendance gains. Neither did high school students who performed below basic proficiency standards before high school. ...

The program was certainly expensive: Mr. Bloomberg and Linda I. Gibbs, the deputy mayor for health and human services, traveled to Mexico to learn more about Oportunidades, the welfare program there on which the New York City effort was based.

About $40 million in private donations, including from Mr. Bloomberg’s foundation, was collected to finance the effort, called Opportunity NYC Family Rewards. Two years into the program, more than $14 million had been paid out to 2,400 families. An additional $10.2 million is for operating costs, and $9.6 million for research and evaluation.

So, poor people got $14 million and middle-class administrators and researchers got $19.8 million? And what happened to the other $6.2 million in donations?

While most behavioral changes were not large, the cash provided to the families had a short-term effect: Those who participated earned, on average, more than $6,000 a year in the first two years. Largely as a result, those participating families were 16 percent less likely to live in poverty.

The families used the money to pay for basic living expenses, school supplies, electronic equipment and going to the movies, among other things.

More than 80 percent of the families were led by a single parent, 43 percent had three or more children and just over half of the parents held jobs. All lived in low-income areas in the Bronx, Brooklyn and Manhattan....

Ms. Gibbs said many families had been perplexed by the guidelines that were laid out for them. Cash payments were eventually eliminated for actions like getting a library card and follow-up visits with a doctor.

“Too many things, too many details, more to manage in the lives of burdened, busy households,” Ms. Gibbs said, standing next to the mayor on Tuesday. “Big lesson for the future? Got to make it a lot more simple.”

A good lesson to learn.

The city has been somewhat sensitive about the results of the program. Ms. Gibbs and other city officials cautioned that the report released on Tuesday reflected only initial results, and said that they were in line with other early results from similar conditional cash transfer programs in Latin America.

A program in Mexico that bribes peasant moms to not pull their kids out school and put them to work after 4th grade in the fields but instead keep them in school through 8th grade so they can learn enough math to be carpenters would appear to be less vulnerable to diminishing marginal returns. In contrast, a program in America where a goal is, say, to keep kids from dropping out after 10th grade and have them learn enough math in 11th and 12th grade to get a fancy Regents' diploma would have a big diminishing marginal returns challenge.

On international tests of schoolchildren, Mexican-Americans average quite a bit higher scores than Mexicans, which suggests that Mexico has a long way to go to improve education. By the way, Mexico has a single national schoolteachers' union that is so powerful that teachers' jobs in government schools are becoming hereditary. Mexico has been like the old Soviet joke about how they pretend to teach us and we pretend to study.

But the whole concept of diminishing marginal returns appears to be off limits for thinking about education.

“There have never been these overnight, miraculous turnarounds,” Ms. Gibbs said. “These are programs that are working on deeply entrenched, long-term behaviors.”

One Brooklyn family who participated in the program said they collected more than $7,610 in two years. Janice Dudley and her 16-year-old daughter, Qua-neshia Darden, of East New York, said they received rewards for school attendance, good test scores and receiving regular medical checkups.

How much would it cost to bribe new mothers not to name their daughters "Qua-neshia?" Whatever it costs, it would probably be worth it. What employer could read the name "Qua-neshia" on a resume without betting that if he hires her, she'll sue for racial discrimination the first time she doesn't get the promotion she wants?

My published articles are archived at iSteve.com -- Steve Sailer

"This is weirdly fascinating."

A friend comments:
This is weirdly fascinating. The proposition that individuals can differ by innate mental ability and that races can differ by the average of such abilities:

1) conflicts with no major Western religious tradition;

2) conflicts with no major Western philosophical tradition;

3) is consistent with everyday experience;

4) is probably believed by the majority of ordinary people of all races;

5) is consistent with the weight of evidence from the most exhaustive and sophisticated empirical studies;

6) is consistent with, indeed is an almost inevitable implication of, the most basic version of evolutionary theory, which theory all educated people are supposed to accept.

And yet the operative assumption of government policy and the protocols of almost all public journals are that this proposition cannot be true.

Here is another, perhaps related paradox. The overwhelming majority of black people I see who work in the private sector, whether in prestigious or decidedly un-prestigious occupations, are efficient and friendly and seem reasonably happy. Disgruntled and dissatisfied blacks are common, on the other hand, in 1) government, 2) education and 3) on street corners, begging.

In other words, we have actually constructed a society in which it is possible for almost everyone who practices a modicum of self-discipline, whatever their innate mental gifts, to earn a reasonably decent living doing not terribly onerous work.

So the question becomes, when will American government, media and educators stop hitting America over the head with a hammer about a problem that is not really a problem anymore?

My published articles are archived at iSteve.com -- Steve Sailer

March 29, 2010

Speaking of five children ...

In contrast to the five poor daughters theme of Pride and Prejudice and Fiddler on the Roof, there's the five rich sons theme of the real-life Rothschilds. From the NYT:
Rothschilds Bring In an Outsider to Run the Show

LONDON — More than 200 years ago a German banker, Mayer Amschel Rothschild, sent his five sons to different European cities to guarantee the survival of what became one of the most prominent banking dynasties.

This month, his great-great-great-grandson David de Rothschild, a baron, took an equally unusual step to ensure the future of the family-owned firm: For the first time, he passed some responsibilities of running Rothschild to someone outside the family.

So, how did Rothschilds stay in control of the family firm for so long? What happened to regression toward the mean?

Lance Morrow offered two explanations in Time in his review of Niall Ferguson's 1998 book on the Rothschilds:
What was the Rothschilds' secret? Commercial genius and intermarriage [he means inbreeding -- intermarriage is the opposite]. Rothschilds married Rothschilds; first cousins wed first cousins; and in one case an uncle took his niece as his bride. The 19th century was ignorant of the genetic risks--and in that respect, as in others, the Rothschilds were lucky. Close breeding kept the fortune cohesive. It ensured a unity of decision making and cooperation among the family's five great banking houses--the world's first multinational, with offices in London, Paris, Frankfurt, Vienna and Naples.

Obama's Race to Nowhere

My new VDARE.com column is a far-ranging review of Diane Ravitch's book, The Death and Life of the Great American School System: How Testing and Choice are Undermining Education. It's particularly timely in light of today's Washington Post story:
Delaware and Tennessee won bragging rights Monday as the nation's top education innovators, besting D.C. and 13 other finalists to claim a share of the $4 billion in President Obama's unprecedented school reform fund.

Education Secretary Arne Duncan picked the winners after a team of judges in the Race to the Top competition unexpectedly gave tiny Delaware the highest ranking, with Tennessee close behind. Delaware won as much as $107 million and Tennessee could be awarded $502 million.

Leaders in both states pledged to establish national models for data-driven reform, tying teacher evaluation to student performance in an all-out effort to close achievement gaps....

In my review, I explain why this obsession with closing racial gaps that has been central to the Bush-Kennedy-Gates-Obama-Duncan mainstream consensus on education is fundamentally wrong-headed, and I conclude by offering a new, more practical, and more just alternative goal. The WaPo story continues:
The competition has generated enormous buzz in education circles and a flurry of action in statehouses to ease limits on autonomous public charter schools, revamp teacher pay and evaluation, expand the collection of student achievement data and take other steps in line with Obama's agenda. ...

Delaware's bid, backed by teachers unions statewide, indicates that the state will send a corps of "data coaches" into schools to help teachers track student performance and target lessons where needed. The state will begin new tests in the coming school year, generating achievement data to help evaluate teachers and principals.

Under the plan, student growth must be considered satisfactory for educators to be rated effective. Those rated ineffective could be denied tenure or face other consequences. The state will also offer bonuses to highly effective teachers to work in struggling schools and take other steps to link performance ratings to compensation.

I've been thinking about education statistics a lot longer than Arne Duncan has. My new VDARE.com column offers a longer perspective on these issues. Here's an excerpt pointing out that the purported research behind Duncan's trendy idea that developing data systems to find the best teachers in white schools and then assign them to Non-Asian Minority schools would, finally, Close The Gap is wholly conjectural.

According to Diane Ravitch:
"So, depending on which economist or statistician one preferred, the achievement gap between races, ethnic groups, and income groups could be closed in three years (Sanders), four years (Gordon, Kane, and Staiger), or five years (Hanushek and Rivkin). "

Ravitch marvels:
"Over a short period of time, this assertion became an urban myth among journalists and policy wonks in Washington, something that that ‘everyone knew.’ This particular urban myth fed a fantasy that schools serving poor children might be able to construct a teaching corps made up exclusively of superstar teachers, the ones who produced large gains year after year."

The hot new idea embraced by the Obama Administration and the Gates Foundation is to develop statistical techniques to find effective teachers, so that they can be taken out of white schools and sent to black and Hispanic schools.

It’s crucial to keep in mind that these influential papers are not studies of actual success stories of school districts that closed the racial gaps. Nobody has done that. Instead, they are merely mathematical projections of what might happen if all else remained equal. The authors are just assuming that the effect seen in one year of a good teacher over a bad teacher can be multiplied by any number of years.

For example, Gordon, Kaine, and Staiger write:
"Therefore, if the effects were to accumulate, having a top-quartile teacher rather than a bottom-quartile teacher four years in a row would be enough to close the black-white test score gap."

But that turns out to be a big "if." Ravitch notes:
"The fact was that the theory had never been demonstrated anywhere. No school or school district or state anywhere in the nation had ever proved the theory correct. Nowhere was there a real-life demonstration in which a district had identified the top quintile of teachers, assigned low-performing students to their classes, and improved the test scores of low-performing students so dramatically in three, four or five years that the black-white test score gap closed."

Ending the black-white disparity has been the Holy Grail of education reform since LBJ. Considering all the rewards that would befall any educator who could achieve it, you might assume that absence of evidence after all these decades is evidence of absence.

And, theory alone suggests we should be skeptical that the effects of star teachers would "accumulate" for three, four, or five years in a row. That’s due to one of the most famous concepts in economics: diminishing marginal returns.

Consider a hypothetical example from a different kind of teaching: golf instruction.

These days, I have the money and time to only play golf about twice a year. I now average about 40 strokes per round worse than the superstars of the game.

But imagine that I somehow convinced the swing coaches of Tiger Woods, Phil Mickelson, Pádraig Harrington, and Jim Furyk to drop their most famous clients and instead each work with me intensively for one year in succession.

Assume that during the first of these four years, Tiger’s new ex-coach Hank Haney helps me cut 10 strokes off my average score, from 108 to 98. Does that mean I would therefore be on track over four years to cut 40 strokes, all the way down to 68, and thus challenge my teachers’ former pupils for the green coat at the 2014 Masters?

Of course not.

That’s almost as mindless as saying that if I then got a fifth year of world-class golf instruction, I’d be averaging 58 strokes per round and winning every pro tournament by 20 strokes.

Read the whole thing here.

My published articles are archived at iSteve.com -- Steve Sailer

March 28, 2010

"Pride and Prejudice" and "Fiddler on the Roof"

Have you ever noticed how the musical Fiddler of the Roof has the same basic set-up as Jane Austen's Pride and Prejudice: man has five unmarried daughters without doweries? Fiddler is Pride, with Elizabeth's father Mr. Bennett turned into the main character, Tevye.

Over the last decade, Pride and Prejudice has become the most cited literary work for illustrating evolutionary psychology. It seems to me that Fiddler could serve a similar role, perhaps an even broader one extending beyond the rather narrow limits set by evolutionary psychology. Having recently watched a high school production of Fiddler, I was surprised by how so much of the plot and dialogue revolves around the kind of human sciences questions that interest me. Yuri Slezkine's The Jewish Century uses Sholem Aleichem’s source material Tevye stories as a central metaphor, and I suspect that many other theories could find something colorful and well-known in Fiddler to use as examples.

I mentioned this recently, and an anthropologist friend replied:
Some thoughts on Pride and Prejudice and Fiddler on the Roof:

On the one hand, comparing the two shows how traditional Eurasian societies are broadly similar in some respects, compared to societies in Africa or New Guinea, say. Having lots of daughters in Africa or New Guinea isn’t really a problem: you might be worried about not having sons around to protect the family, and carry on the patrilineage, but marrying off daughters is hardly a problem. In polygynous settings, women are in short supply, and daughters are often welcome as a source of bridewealth. By contrast. in Eurasia, where polygyny is not very frequent, finding a “single man in possession of a good fortune” for a daughter (let alone five daughters) is a real problem. (The alternatives – having them marry a man with no prospects, or become a rich man’s mistress or a prostitute, are pretty unsatisfactory). Some Eurasian societies – classical Greece and Rome, India, and China – dealt with the problem ruthlessly by killing baby girls. But this is (officially) not allowed for Jews, Christians, and Muslims.

On the other hand, the big difference between P&P and FotR (apart from social class) is that marriage in the latter case was arranged. Arguably this is one area where Christianity made a difference (ref below). The guys who adapted Sholem Aleichem’s Tevye stories as a musical and movie were Americans, and probably shaded things somewhat in a pro-marriage-choice direction, compared to the original. They even make Mr. Tradition unbend just a little at the end about his third daughter’s intermarriage (in the movie at least; I haven’t seen the stage musical). In the original stories, she’s socially dead, never seen again.

One note about love marriages versus arranged: societies with love marriages have a greater frequency and importance of dances (ref below). This shows up in both cases: Austen’s young ladies are constantly looking forward to the next ball, which is a major arena for mate choice. And Tevye (at least in the movie) shows a shocking progressive streak by actually dancing with his wife. The lines of guys dancing with guys, women with women, that you see in the earlier part of the movie, before Tevye mixes it up, is what you generally get in societies with arranged marriages. Something for all you h-bd-ers to think about as you try and figure out which folk-dancing class to take.

References:

Unilineal Descent Organization and Deep Christianization: A Cross-Cultural Comparison Andrey V. Korotayev Cross-Cultural Research, Vol. 37, No. 1, 133-157 (2003)

Courtship Patterns Associated with Freedom of Choice of Spouse
Paul C. Rosenblatt and Paul C. Cozby Journal of Marriage and Family, Vol. 34, No. 4 (Nov., 1972), pp. 689-695

My published articles are archived at iSteve.com -- Steve Sailer

Flynn Anti-Effect

Here's a 2007 New Zealand Herald article quoting James Flynn, of Flynn Effect fame:
Brainier mums needed to maintain future generations' intelligence, says professor
8:21 AM Sunday Jul 8, 2007

An internationally recognised expert on intelligence warns New Zealand children could get dumber in three or four generations unless women with higher education started producing more babies. Otago University emeritus professor Dr Jim Flynn was commenting on census figures that show mothers without a higher education were the anchor of New Zealand's current fertility rate.

"Everyone knows if we only allowed short people to reproduce there would be a tendency in terms of genes for height to diminish. Intelligence is no different from other human traits," he told the Sunday Star-Times. "A persistent genetic trend which lowered the genetic quality for brain physiology would have some effect eventually."

Statistics show women without tertiary qualifications who had reached their early 40s had produced 2.57 babies each. In contrast, women with a higher education were producing just 1.85 babies each.

Dr Flynn said at 73 he was too old to worry about offending anyone.

Unplanned pregnancies by less educated women could be reduced, perhaps by future scientific advances. "I do have faith in science, and science may give us something that renders conception impossible unless you take an antidote," he said. "You could of course have a chemical in the water supply and have to take an antidote. If you had contraception made easier by progress, then every child is a wanted child."

Commissioner for Children Cindy Kiro said Dr Flynn was getting into "dangerous territory". "Rather than talking about encouraging smart women to have babies and dumb women not to have babies, what we do need to do is make the commitment to good quality education."

My published articles are archived at iSteve.com -- Steve Sailer