Month: April 2015

I attended an MIT alumni gathering last week. There was a slight selection bias in that all those present were people whom an on-campus group was hoping to get donations from. Inadvertently it turned out to be an interesting look into what typical career paths look like once people are 50-60 (though remember that those who’d been complete financial failures had been screened out).

The medical doctor was at the peak of his career and in no danger of being fired. The university professor had the security of tenure and was looking forward to a defined benefit pension starting six years from now. The corporate attorney was finishing up a prosperous career. The engineers who’d chosen to work in industry, however, were a varied lot. A woman who’d taken a job at a defense contractor was still there, 30 years later. The super-wizard Lisp Machine programmer was now in a senior technical, but non-supervisory role, at a multi-billion dollar dotcom (not necessarily getting paid more than a competent 30-year-old, however). About half of the engineers, however, talked about being pushed into a financially uncomfortable early retirement and/or not being able to find work. Aside from the government-related work, the world of these alums does seem be consistent with Dave Winer’s recent “I would have hired Doug Engelbart” posting (summary: age discrimination is surmountable if you happen to have been one of the most successful engineers of all time (see The Demo from 1968, featuring everything that you’re using right now, except maybe for Patchmania)).

Lesson: Unless you are confident that your skills are very far above average, don’t take a career path that subjects you to the employment market once you’re over 50 (and/or make sure that by age 50 you’ve saved enough for a retirement that begins at age 50 or 55 and during which you won’t have employer-provided health insurance for up to a 15-year gap between age 50 and Medicare age).

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Here’s something from today’s Wall Street Journal (full article) that shows the American bias toward optimism, at least regarding economic growth.

 

(Regarding the actual numbers, don’t forget that much of American GDP growth is simply due to population growth and it is unfair to compare American numbers to those of a country such as Japan or Germany where the population is stable.)

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A friend asked me for my thoughts on the riots in Baltimore. I replied with the following: We interviewed a Baltimore-based state legislator for http://www.realworlddivorce.com/Maryland and she pointed out that the laws in Maryland are crafted by rich people in Montgomery County. A system set up by highly educated high-income people is not necessarily one that will work out well for poorly educated low-income people. Maryland is a fantastically wealthy state and, despite taxing away a higher-than-average proportion of residents’ income, it is a great place to be a government worker, lawyer, lobbyist, or medical doctor. But people who have found a way to stand in a corner of the shower of gold centered on Capitol Hill probably aren’t thinking about what it would take to attract employers to the Baltimore area rather than to, say, Georgia, North Carolina, or Texas.

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Friends host two au pairs simultaneously so that their children can maintain fluency in three languages. As the children are getting older they’ve now had experience with more than 15 au pairs. Here is what we learned from them…

Immigration approval to work as an au pair is far from guaranteed. In some countries the visa rejection rate of an au pair, once selected by a host family here in the U.S., is as high as 80 percent. The American parents say “yes” but then the U.S. government says “no.” Au pairs can be hired only if the host family pays more than $10,000 to an official au pair agency, of which there are only a handful authorized by the U.S. government (if this system were operating in the Philippines or Indonesia we would call it “crony capitalism”). Do they screen candidates carefully? “Does a realtor carefully inspect the house she is selling or just try to get a commission?” responded the father. “They do the required criminal background check and nothing else.” The most common fraud is a stated ability to drive a car, sometimes augmented by a driver’s license that was obtained with a bribe. “We just take them immediately to driving school,” said the mother. Another fraud is the posting of pictures showing a very conservative way of dressing and living. “I go onto the Russian-language social networks and find the same people wearing fishnet and Spandex,” said the father.

The shared family Windows computer seems to be a source of good stories for host families. “My friend in Los Angeles was transferring files to a new machine and happened to look into the au pair’s user directory,” said the father. “There were all kinds of photos in there of the au pair having sex with multiple guys. It turned out that she had been a porn actress in Russia and just took the au pair job so that she could come to California and, except when she was with the children, act in the U.S. porn industry.”

“One of our au pairs wanted to get a green card and stay in the U.S., but her boyfriend was also a foreigner so it wouldn’t have worked to marry him,” said the father. “She convinced a young guy that she was in love with him and got him to marry her. Then she had the boyfriend punch her in the face. She showed the black eye to the police, got a restraining order against her husband, and had him kicked out of their house.” How did that help her get a green card? “I looked at her email and found her correspondence with divorce and immigration lawyers regarding the Violence Against Women Act. She’d spent months prior to the marriage researching a fast-track green card for abused women.” (Department of Homeland Security page) Did it work? “She got the green card.”

In states such as Massachusetts that offer unlimited child support a sound financial strategy for an au pair is to get pregnant with a man of at least moderately high income (e.g., the host father or one of the neighbors!), let the U.S. taxpayer-funded child support enforcement apparatus establish paternity and a court order, and then spend the money back in her home country (or wherever else in the world she can live comfortably on $40,000 to 100,000+ tax-free dollars per year). It turns out that this strategy is not conventional, however, and au pairs are generally ignorant of how lucrative a U.S. pregnancy can be.

Pregnancy does come into the picture for green cards, however. “One of our au pairs found a 42-year-old guy and, a few weeks after she went back to Eastern Europe, told him that she was pregnant,” said the father. “He was a nice guy and wanted to do the right thing so he agreed to marry her. I told [my wife] that I am betting on a miscarriage at roughly the 3 month mark. Sure enough, no baby appeared.” Did it work? “She got the green card.”

Are au pairs worth this kind of drama in the house? If at-home child care is required, why not hire an American-born nanny? “You can get a smarter, more interesting person to work for a couple of years as an au pair,” responded the couple. “So our children were more stimulated than they would have been by an American. Also they are completely fluent in three languages. Finally you have to look at the cost. It works out to $8.50 per hour, less than half of what you’d pay an American.”

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Boston Marathon bomber Dzhokhar Tsarnaev has been convicted by an impartial jury of 12 locals wearing “Boston Strong” T-shirts. Now they are deciding what to do with him.

This is a tough question because we’ve amped up the sentences for ordinary crimes so much that we don’t have anything special left for those who commit especially bad crimes. If someone can get life in prison for killing one person or, in some states, simply being convicted of multiple lesser crimes, what to do with someone who killed and maimed so many people, shut down a city, etc.?

I observed a Facebook exchange in which one guy pointed out that it was going to be costly to keep Tsarnaev in prison potentially for 80 additional years (the jihadi is currently just 21 years old) and pay for exotic medical procedures towards the end of his life, explaining that it cost even more to deliver U.S.-style medicine in prison than it does in civilian hospitals. A friend pointed out that the death penalty would be vastly more expensive than imprisonment. Although economics does not seem like the right way to evaluate these alternatives, I became curious. Back in 2012 the stated cost of federal imprisonment was $34,000 per year (source) so let’s say that it is $45,000 today (adjust for inflation and for the fact that pension costs are invariably understated in public accounting; with accurate accounting California prison guards earn more than Harvard graduates). So it will be $3.6 million to keep Tsarnaev in prison for 80 years plus perhaps another $2 million in medical costs = $5.6 million total.

What does it cost to execute someone? Missouri is a state that regularly executes its unwanted citizens. This article on the recent execution of Andre Cole says that it took roughly 16 years from crime to death (back in 1995, Cole’s wife decided to get rid of him but keep the house, the kids, and a portion of his paycheck; in 1998, having fallen behind on child support payments and being pursued by the $6 billion federal/state child support enforcement bureaucracy, Cole injured the plaintiff and killed her boyfriend; he was convicted and sentenced to death by an all-white jury). Let’s assume that 16-year period is typical. The Marathon bombing was in 2013 so it would cost the government another 14 years of imprisonment ($630,000) plus legal fees on both sides of the case. This anti-death penalty group says that legal costs are between $2 and $3 million, depending on the state.

It therefore seems that it would in fact be cheaper to execute Tsarnaev. Would it be fair, though?

One argument against the death penalty is that the government often makes mistakes, thus executing people who did not commit the crimes with which they were charged. “You wouldn’t want the workers at the DMV making life or death decisions,” a friend noted. There doesn’t seem to be a whole lot of doubt regarding Tsarnaev’s involvement in the Marathon bombings, however.

An argument against executing Mr. Tsarnaev is that the entire family was open regarding their desire to wage jihad. In fact that was their reason for asking for and receiving fast-track citizenship: the Russian government was unsympathetic to their struggle against infidels. We kept the red carpet rolled out despite various family members’ strings of lesser crimes and despite being warned by the Russian government that the older brother was an active jihadi. How is it fair to execute someone who did what he said that he was going to do? If we didn’t want him to carry out jihad in Boston we didn’t have to grant him citizenship, give the brothers free housing in Cambridge, etc.

What do readers think? Consistent with what the American criminal justice system can actually do, what is the fairest sentence for Dzhokhar Tsarnaev?

[Personally I am against the death penalty for Mr. Tsarnaev following the trial that he actually had. I think that trying him in downtown Boston, despite the elaborate procedures, pomp, and circumstance, cannot qualify as systematized justice. Given the outrage that Americans felt regarding the bombings, in order to preserve the pretense of bureaucratized justice, I think we should have asked a Canadian judge and jury to hear the case and be bound by their decision. Separately, I think that keeping Tsarnaev around is a good reminder of the consequences of our hubris in thinking that our FBI was better positioned to evaluate Tamerlan Tsarnaev’s plans than were the Russian security forces (we couldn’t even figure out that Tamerlan was involved in the 2011 Waltham murders).]

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I’m catching up on the news and I can hardly believe the riches in the New York Times opinion section today.

“How to Attract Female Engineers” dovetails nicely with my “Women in Science” article. The author says that the way to get women interested in engineering is to change the goals of engineering employers. Instead of hiring engineers to make the brakes in a Honda Accord last longer so that more people with cash will spend it on an Accord instead of a Camry, Honda needs to start developing products to improve the lives of people who don’t have any money: “the key to increasing the number of female engineers may not just be mentorship programs or child care centers, although those are important. It may be about reframing the goals of engineering research and curriculums to be more relevant to societal needs. It is not just about gender equity — it is about doing better engineering for us all.” (where “us all” does not include people who are currently buying the products of companies that employ engineers)

“Why Massachusetts Led the Way on Same-Sex Marriage” includes this gem:

“Because it fulfills yearnings for security, safe haven, and connection that express our common humanity,” Ms. Marshall wrote then, “civil marriage is an esteemed institution, and the decision whether and whom to marry is among life’s momentous acts of self-definition.” Decisions about sexual intimacy and raising children are, the opinion said, “among the most basic of every individual’s liberty and due process rights.”

This is peculiar because out of all 51 jurisdictions Massachusetts probably offers the largest financial incentives to people who marry for the cash, intending to divorce after a few years, and/or get pregnant after a one-night encounter with a high-income partner and/or get pregnant in order to market the abortion for cash. And it can’t be the case that decisions about raising children are some sort of due process right in Massachusetts because the state’s family courts nearly always dispose of one parent in favor of a “primary parent” who will keep the house, the kids, the child support cash, and all of the practical decision-making authority. (See the “Massachusetts” chapter of Real World Divorce.)

“Think of Undocumented Immigrants as Parents, Not Problems” is interesting for its sentimental attitude toward children who lose a parent because of the cruelty of U.S. immigration policy. Americans spend $50 billion per year on the family court system which, in most states, operates to strip children of one parent. (Statistically the parent who has been ordered to pay the bills and see the children at most every other weekend eventually fades from the scene.) If we don’t mind deporting a U.S. citizen from a child’s life why should we get upset about deporting a non-citizen parent from a child’s life?

“Ted Cruz’s Gay Marriage Opposition Is No Secret” is interesting because the writer and others are beating up on and boycotting a couple of gay hotel owners in New York for hosting a dinner for Ted Cruz. Mr. Rosenthal is apparently a one-issue voter, but why does he demand that the gay hotel owners be one-issue voters? Why can’t the hotel owners have some other issues on which they agree with Cruz that are more important to them? And if Ted Cruz is so hostile to gay people, wouldn’t it be best for everyone if he got to know some more gay Americans? Then he can say “Some of my best friends are extremely rich gay people.” (I’m standing by my refusal to learn anything about any Republican candidate so I don’t have an opinion on whether Ted Cruz is actually hostile to gay citizens. And it is tough to be passionate about the gay marriage issue one way or the other after hearing the perspectives of divorce litigators on the subject (previous posting). I think the whole concept of marriage being for heterosexuals might now be irrelevant due to the transgender revolution; if one spouse changes gender the couple is not automatically divorced and therefore there will be at least some same-sex marriages everywhere.)

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T-Mobile charges $60 per month for a single mobile phone line with 3 GB of LTE data. The same service is $20 per month per line on a 6-line family plan (2.5 GB LTE data per line). Why then are there individual phone subscribers? Assume six single people who happen to be at least casual friends and all of whom want to use the same carrier. Why wouldn’t they form a family of 6 and then cooperate to pay the joint bill?

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The New York Times editorial board (photos; note that all are white except for a token Asian woman, a token black guy, and a token Indian) has written “Forcing Black Men Out of Society” in which they complain that low-skill low-income black men have been excluded from work and traditional family life. There is no reflection, however, on the fact that the policies for which the New York Times has tirelessly advocated are to some extent responsible.

First, it isn’t clear that skin color has much to do with this. A white man with poor skills, little education, and a criminal record is not first on anyone’s list to be hired or as a mate. Let’s chalk the emphasis on race to the fact that white people at the New York Times enjoy writing about skin color. There aren’t too many unemployed black doctors or lawyers and most of them presumably are sought after as mates and/or as child support payors. So really this is an article about the low-income portion of the distribution of American workers.

What policies has the Times advocated for?

• high minimum wages
• regulations on employers that push up the cost of labor
• comfortable welfare benefits
• profitable child support

As Milton Friedman noted 42 years ago,

A minimum-wage law is, in reality, a law that makes it illegal for an employer to hire a person with limited skills. Playboy: Isn’t it, rather, a law that requires employers to pay a fair and livable wage? Friedman: How is a person better off unemployed at a dollar sixty an hour than employed at a dollar fifty? … the effect of a minimum-wage law is to produce unemployment among people with low skills. And who are the people with low skills? In the main, they tend to be teenagers and blacks, and women who have no special skills or have been out of the labor force and are coming back. This is why there are abnormally high unemployment rates among these groups. … Blacks get less schooling and are less skilled than whites. Therefore, the minimum-wage rate hits them particularly hard. I’ve often said the minimum-wage rate is the most anti-Negro law on the books. Playboy: Couldn’t those who are hurt by minimum-wage legislation be trained for more skilled jobs at better wages? Friedman: The minimum wage destroys the best kind of training programs we’ve ever had: on-the-job training. …

The Times has advocated for regulations that require employers to provide various benefits, that allow employees to sue for various kinds of discrimination, etc., all of which drive up an employer’s costs to the point that isn’t worth having a low-skill worker around (see “unemployed = 21st century draft horse?”). A lot of people do seem to like the idea of a world in which everyone who has a job is paid well and consequently not everyone can have a job. But if that is what you want, why then express surprise at the fact that a subsection of people are not in the work force?

What about in the domestic sphere? If a woman can have a child out of wedlock and use the child (poor single mother status!) to get a house, food stamps, TANF cash, Medicaid, cell phone, heating oil assistance, etc., what use would she have for a low-income man in the house, especially if she can tap into what income he may have through the child support system. And if having three children with three different men yields twice the revenue of having three children with one man, what would be the rational economic basis of a low-income woman for settling down with one man?

Why do blacks come in for special criticism? In interviewing attorneys for Real World Divorce most of the people they told us about who were behaving contrary to conventional 1950s morality were white. White people were eager to tap into the income of two partners instead of one. White people were eager to profit from children, whether conceived via a one-night encounter or a short-term marriage. White people were eager to collect court-ordered financial transfers (e.g., alimony, child support, property division of premarital assets (traditional gold-digging), etc.) rather than work (see the Massachusetts chapter for a University of Pennsylvania graduate’s 3.2X earnings from a 4-year marriage and a 2-year-old child compared to the average working Penn grad’s income). White people were presumably more likely to tap into a private defendant than the government, but this is an example of differential opportunity not morality. (When the (white) Times reporter Liza Ghorbani was seeking $3 million in tax-free child support revenue she targeted a white married (to someone else) guy; their respective behaviors were not portrayed as behavior defects for white people overall.)

The subtext of this editorial is perhaps “Yes we created all of these incentives for low-income Americans to behave in certain ways but we are certain that they can’t be intelligent enough to follow the incentives. Thus we are going to attribute their following of the incentives to prejudice by white people other than ourselves.”

If the Times is so sure that low-income criminally convicted black men are not getting a fair deal from prejudiced white employers, why doesn’t this multi-billion dollar profit-seeking corporation hire them and thereby boost profits? And if settling down behind a white (black?) picket fence with a low-income black guy is something black women should be enthusiastic about doing, why are Times reporters instead choosing to have profit-yielding out-of-wedlock children with high-income white guys?

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This is a pretty old idea (see the French movie The Closet from 2001, for example), but with more states adding protections for workers who are gay or transgender I am wondering if it wouldn’t be rational for employees who fear that they are losing the rat race to come out to their bosses prior to their next performance review. A white male worker can thus transform himself from a non-protected worker into a difficult-to-fire member of a protected class (depending on the state).

Employers aren’t supposed to be asking a lot of questions about who was sharing an employee’s bed the previous night or what activities took place in that bed. Nor is there any business situation in which an employee’s identification with a different gender and potential for medical procedures could be discussed. If an employer crosses the line and asks “But aren’t you married with two kids?” an employee can always answer “My wife is very understanding.”

What’s wrong with this idea in practice?

[How much is a meritless employment discrimination case worth in California? Kleiner Perkins offered Ellen Pao $964,502 (Mercury News), too much of a discount from her $10 million demand, apparently, and about the same as she would have received by having sex with a $250,000/year earner in Massachusetts and harvesting guideline child support for 23 years (though the child support would be tax-free whereas the settlement money might have been taxable as a substitute for lost wages).]

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The media seems to be gearing up to get excited about the 2016 U.S. presidential election. Pew Research, however, shows that 48 percent of Americans are Democrats and just 39 percent Republican. If we assume that those who aren’t affiliated are roughly equally likely to vote for either party, we should be able to predict the result of the 2016 election: 54 percent Democrat; 45 percent Republican; 1 percent Other. (For comparison, the 2012 election was 51/47/2.)

Learning about Republican candidates would seem to be completely pointless. If there were some serious primary challenger to Hillary Clinton perhaps that would be worth studying, but after the primaries the election should be essentially over.

If the above analysis is correct why do people bother watching TV or reading news articles on this subject?

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