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Jennifer Gonnerman writes “A Daughter’s Death” (New Yorker, October 5, 2015) and inadvertently answers the question of what young New Yorkers do when they don’t have to work or study. How large a slice of the NYC population is this?

Murphy and Haynes never called the kids they met “disconnected youth,” but that is how academics and policymakers would describe many of them. (The term refers to young people who are neither in school nor working; the group comprises about twenty per cent of New York City residents between the ages of sixteen and twenty-four.)

It turns out to be quite a contrast with the ever-more-gold-plated Manhattan that most of us see:

Since Chicken’s death, the violence in Grant and Manhattanville had grown worse. A sixteen-year-old was shot in the shoulder, a twenty-one-year-old was shot in the leg, and at least three bystanders were hit. Taylonn, Jr., was still living in the Grant Houses with his mother, and during this time he acquired a rap sheet. At the end of 2012, he was arrested for burglary, after a dispute involving a cell phone; he was charged as a “youthful offender” and put on probation. The next summer, he was arrested again, accused, with four others, of punching a Manhattanville resident and robbing him of a hundred dollars.

At the same time, the neighborhood was rapidly gentrifying. Double-decker tour buses frequently drove by the projects, and passengers took pictures of the residents. “It’s like they’ve never seen people before,” Arnita Brockington said. Meanwhile, a sleek, nine-story glass block, designed by Renzo Piano, was rising right across Broadway. It will house Columbia University’s new science center, the first of sixteen buildings to be erected as part of a six-billion-dollar addition to the main campus.

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The only thing that I like less than watching TV is watching politicians on TV so I didn’t watch this evening’s debate. Did anything interesting happen? Here’s what I can find from the transcript:

I have five daughters. Amy works with disabled veterans, Sarah is an emergency room nurse, Julia is a massage therapist, Emily and Georgia are still in school. My son Jim fought as an infantry Marine on the bloody streets of Ramadi. (Webb)

i.e., nobody in this next generation is doing anything that might result in economic growth. #investinasia

What I’m talking about is this, our middle class is shrinking. Our poor families are becoming poorer, and 70 percent of us are earning the same, or less than we were 12 years ago. We need new leadership, and we need action. The sort of action that will actually make wages go up again for all American families. (O’Malley)

The Great Father in Washington will supply higher wages to Americans; there is no need for anyone to study or worker harder. #investinasia

Today, the scientific community is virtually unanimous: climate change is real, it is caused by human activity, and we have a moral responsibility to transform our energy system away from fossil fuel to energy efficiency and sustainable energy and leave this planet a habitable planet for our children and our grandchildren.

Today in America, we have more people in jail than any other country on Earth. African-American youth unemployment is 51 percent. Hispanic youth unemployment is 36 percent. It seems to me that instead of building more jails and providing more incarceration, maybe — just maybe — we should be putting money into education and jobs for our kids. (Sanders)

If more and more Americans are unemployed, why do we have to worry about our shrinking role in greenhouse gas emissions? What is the CO2 footprint of someone who lives in a government-provided apartment and plays Xbox all day? More money into education? We’ve more than doubled per-pupil spending, adjusted for inflation, since 1970 (source). Can we truly spend our way out of the fact that American companies don’t want to hire a good-sized subset of the U.S. population?

Yes, of course, raise the minimum wage, but we have to do so much more, including finding ways so that companies share profits with the workers who helped to make them. (Clinton)

The folks that Sanders mentioned above that companies don’t want to hire at $8/hour are now going to be priced at $15/hour. Who will figure out which workers actually contributed to a multinational company’s profits and apportion them? What if it turns out that people in Asia and Europe are responsible for most of the profit? Will the central planners in D.C. order the company to pay out most of its profits to folks in China, Korea, and the Netherlands rather than to shareholders in the U.S.?

You were against same-sex marriage. Now you’re for it. (moderator)

Well, actually, I have been very consistent. (Clinton)

Is there a consistent meaning for “consistent”?

And what democratic socialism is about is saying that it is immoral and wrong that the top one-tenth of 1 percent in this country own almost 90 percent — almost — own almost as much wealth as the bottom 90 percent. (Sanders)

Why stop at the border? There are a lot of low-wealth folks beyond the U.S. border. In a globalized economy why is the interesting analysis just within the U.S.?

I think we should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people. (Sanders)

Denmark is a country that has a population — Denmark is a country that has a population of 5.6 million people. (moderator)

Nobody is willing to consider the possibility that Scandinavians are, on average, smarter, better educated and/or harder working than Americans. (See schools in Finland; schools in the U.S.) And are Americans actually prepared to live like Scandinavians? What politician is going to support reducing the profit opportunity from collecting child support from its current level down to between $2,000 and $8,000/year (see the International chapter)? How would Americans who currently collect $50,000 or $100,000 per year in tax-free child support transition to the Danish or Swedish upper limit?

You don’t consider yourself a capitalist, though? (moderator to Sanders)

Another English language puzzle. If a person is providing capital to businesses then he or she could be considered a “capitalist.” How are politicians, who spend money rather than invest money, “capitalists”? Maybe a politician could have a friend who was a capitalist or support the idea of capitalism.

You’re looking at a block of granite when it comes to the issues. (Chafee)

An odd way to describe oneself. What is the distance between this statement and “dumb as a rock”?

In one year alone, though, 100,000 arrests were made in your city [Baltimore], a city of 640,000 people. (moderator to O’Malley)

#investinasia

Senator Webb, in 2006, you called affirmative action “state-sponsored racism.” In 2010, you wrote an op/ed saying it discriminates against whites. (moderator)

I have always supported affirmative action for African Americans. What I have discussed a number of times is the idea that when we create diversity programs that include everyone, quote, “of color,” other than whites… (Webb)

He is not going to be invited to Sheryl Sandberg’s house! But even if sorting school and job applicants by race is to be done, isn’t it getting harder for people to agree on what is an “African American”?

Also I believe, and I’ve fought for, to understand that there are thousands of people in this country today who are suicidal, who are homicidal, but can’t get the healthcare that they need, the mental healthcare, because they don’t have insurance or they’re too poor. I believe that everybody in this country who has a mental crisis has got to get mental health counseling immediately. (Sanders, in response to questions about guns)

Is there any evidence that the Americans who have gone on recent rampages were lacking in health insurance or access to psychotherapy? Or evidence that psychotherapy reduces the incidence of mass shootings? The era of mass killings seems to have coincided with a rise in the number of psychotherapists per capita. Webb points this out:

… the shooting in Virginia Tech in ’07, this individual had received medical care for mental illness from three different professionals who were not allowed to share the information. … But we have to respect the tradition in this country of people who want to defend themselves and their family from violence. … There are people at high levels in this government who have bodyguards 24 hours a day, seven days a week. The average American does not have that, and deserves the right to be able to protect their family.

If we are going to argue over this forever, wouldn’t a young skilled American concerned about gun violence be better off simply moving to a country with lower tax rates and lower rates of violent crime? Wikipedia shows that a lot of low-tax nations have a homicide rate less than 1/10th that of the U.S. Click to rank by “rate” and Singapore, Switzerland, South Korea, etc. jump out.

We don’t want American troops on the ground in Syria. I never said that. What I said was we had to put together a coalition — in fact, something that I worked on before I left the State Department — to do, and yes, that it should include Arabs, people in the region. (Clinton)

We should be putting together a coalition of Arab countries who should be leading the effort. (Sanders)

Mercenaries and puppet governments are going to do our military work for us, i.e., the same plan that we had in Vietnam and, more recently, in Afghanistan.

We are live in Nevada, in Las Vegas, at the Wynn Resort (moderator)

We are going to talk about the need to use energy efficiently, conserve water, and make middle class Americans richer in an enormous city built in the middle of a desert, rapidly depleting an underground aquifer, and consuming insane amounts of energy for air conditioning so that middle class Americans can lose whatever money they previously managed to save.

…if you don’t have schools that are able to meet the needs of the people, or good housing, there’s a long list… We need a new New Deal for communities of color… (Clinton)

Aren’t the things on her list already run by the government? People who are poor generally live in a government-provided house and send their children to a government-run school. Clinton herself has been right near the top of that government since 1992. How could a government-run New Deal be different than the government-run Old Deal for these communities?

And 0.6 percent of Americans are at the top echelon, over 464,000, 0.6 Americans. That’s less than 1 percent. But they generate 30 percent of the revenue. And they’re doing fine. So there’s still a lot more money to be had from this top echelon. I’m saying let’s have another tier and put that back into the tax bracket. And that will generate $42 billion. (Chafee)

Budget deficits were over $1 trillion per year from 2009-2012. The last full fiscal year deficit was $500 billion (WSJ). $42 billion sounds like a lot, but where will the rest of the money to plug the deficit come from?

A college degree today, Dana, is the equivalent of what a high school degree was 50 years ago. (Sanders)

Finally a statement that is supported by facts! #investinasia

We’re here in Las Vegas, one of the most sustainable cities in America, doing important things in terms of green building, architecture and design. (O’Malley)

I guess he didn’t visit Lake Mead during his trip (National Geographic on aquifer depletion).

I remember as a young mother, you know, having a baby wake up who was sick and I’m supposed to be in court, because I was practicing law. I know what it’s like. And I think we need to recognize the incredible challenges that so many parents face, particularly working moms. (Clinton)

So an economically rational young woman would seek to have sex with a high-income guy and harvest the child support rather than work? Why would it make sense to take on “incredible challenges” of simultaneously working and parenting when the same spending power can be realized without working?

Every other major country on Earth, every one, including some small countries, say that when a mother has a baby, she should stay home with that baby. We are the only major country. That is an international embarrassment that we do not provide family — paid family and medical leave. (Sanders)

What if we look at child support as an extended maternity leave? Suppose that a woman goes to a bar in Massachusetts and has sex with a dentist earning $250,000/year. She is now entitled to $40,000 per year in tax-free child support, which is roughly equivalent to median household after-tax income in Massachusetts. The cash will flow for 23 years and she can double this income, if desired, by finding a different dentist to have sex with in order to produce a second cash-yielding child. If “family leave” or “maternity leave” is defined as “payments received because of the birth of a child that do not require going to work” then couldn’t we consider the 23 years of child support to be an extended “maternity leave”?

When asked about legalizing recreational marijuana, you told her let’s wait and see how it plays out in Colorado and Washington. It’s been more than a year since you’ve said that. Are you ready to take a position tonight? (reporter to Clinton)

No. I think that we have the opportunity through the states that are pursuing recreational marijuana to find out a lot more than we know today. I

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“It’s Financial Suicide To Own A House” has some great explanations for why you don’t want to buy a house:

The other day my sink broke. …

My house is 150 years old. It used to be a hotel. Things break. Pipes crumble in the hands of the plumber.

I email the landlord, who calls a plumber, who gets new pipes that are paid for by the landlord. The landlord wasn’t expecting it but that’s what they signed up for.

Meanwhile, I read a book on the couch in the other room.

The same thing when Hurricane Sandy came over the river. People were canoeing in the street outside my house. The water filled two feet in my house.

“This is the first time in 100 years the water got this high,” the landlord told me. So he ripped up floors, cleaned out mold, fixed furniture, and took care of it.

This time I was upstairs reading a book.

…

It’s a lot of work to own a house also. Have you ever spent time in the Death Star? I mean Home Depot. That place is huge. And I only need that one special color of paint.

But where is it? The stormtroopers at Home Depot are never around when you need them.

And what about that “snake” that can clean my toilet. Where is it? And how do I use it? And is it gross? Why do they call it a snake?

It’s no wonder that plumbing is one of the highest paid professions in America.

And how long does it take to paint a house. Or who do I go to? And will they overcharge me if they pave the driveway?

Did I calculate that into my total cost of owning a house?

Related:

• Rick Santorum’s “flat tax” proposal in the Wall Street Journal, whose central feature for personal income tax turns out to be … encouraging Americans to keep buying houses by preserving the mortgage interest deduction (up to $25,000 per year)
• Economists: Homeownership leads to unemployment
• Economist magazine argues against tax-deductible debt

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My basic investing article cheerleads for index funds, largely based on Burton Malkiel’s 1973 research (subsequently updated and currently available as A Random Walk Down Wall Street (11th Edition)). “How Some Investors Get Special Access to Companies” is a September 27, 2015 Wall Street Journal article that should encourage a little doubt among the indexing believers.

Public companies are allowed to meet with favored investors privately:

The result is a booming back channel through which facts and body language flow from public companies to handpicked recipients. Participants say they’ve detected hints about sales results and takeover leanings. More common are subtle shifts in emphasis or tone by a company.

Access usually is controlled by brokers and analysts at Wall Street securities firms, who lean on their relationships with companies to secure meetings with top executives. Invitations are doled out to money managers, hedge funds and other investors who steer trading business to the securities firms, which in turn provide the investors with a service called “corporate access.”

Investors pay $1.4 billion a year for face time with executives, consulting firm Greenwich Associates estimates based on its surveys of money managers. The figure represents commissions allocated by investors for corporate access when they steer trades to securities firms.

A recently published paper in the Journal of Law and Economics analyzed the trading behavior of dozens of investors who met during a 5½-year period with senior management of a company listed on the New York Stock Exchange.

While the paper doesn’t identify the company or investors, researchers concluded that the investors who got face time with management made better trading decisions. Several large hedge funds met the company as frequently as once a quarter.

Brian Bushee of the University of Pennsylvania’s Wharton School and two other academic researchers concluded that trading volume picked up around the time of the private meetings. Trades made then were more likely to be profitable than trades made at other times.

Along the same lines, but not obviously actionable for the typical investor… “Insiders Beat Market Before Event Disclosure: Study” (WSJ, September 14, 2015):

Corporate executives and board members regularly make market-beating returns from buying and selling their companies’ stock in the days before disclosing a significant event, according to a study that says it has found a link between insider knowledge and investment profits.

On average, the officials netted about 0.4 percentage point over a broad market index between the time of their trades and the market close after the disclosure. These gains, realized over the span of a few days, would be much larger on an annualized basis.

When officials bought shares outright—rather than by exercising options received as compensation—the gains were even better, at about 1.6 percentage points over the index.

The longer companies waited to make disclosures, the better the returns, according to the study. When companies used the full four-business-day window, the average excess profit rose to 1.95 percentage points.

What does it look like in practice? “Towers Watson CEO Sold Stock Before Big Deal:
John Haley netted nearly $10 million on preannouncement sales” (WSJ, September 23, 2015):

In early March, when merger talks were under way between Towers Watson and insurance broker Willis Group Holdings PLC, Mr. Haley exercised 106,933 stock options and sold the underlying shares for a $9.7 million profit, according to regulatory filings. The sale was Mr. Haley’s first in more than a year and shed 55% of his stake in Towers Watson…

When the roughly $9 billion deal was announced on June 30, Towers Watson shareholders criticized it, sending the Arlington, Va., company’s stock down nearly 9% that day. Their beef: the deal’s price tag, which valued Towers Watson at $125.13 a share, or about 9% less than the prior day’s close.

Maybe the future of efficient investing has to include some managed funds that are big enough to pay for and acquire access to inside information?

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The one thing that Lisp programmers can agree on is how much better Lisp is than C and similar languages. I was talking last week to some programmers who use the Clojure version of Lisp and it made me wonder “If Lisp is so great, why did this guy have to build a slightly different version instead of building a popular application program in an existing version of Lisp, such as Common Lisp?”

What do readers think? We accept the proposition that C is feeble and yet there are only three major variants of C: C, C++, and Objective-C. Over the same period of time there have been at least the following: MacLisp, Interlisp, Lisp Machine Lisp, Common Lisp, Scheme, Emacs Lisp, AutoLisp, Clojure (perhaps readers can think of others). Yet Lisp has fewer programmers and completed programs. Thus the ratio of popular installed computer programs to versions of the language is vastly higher in C than in Lisp.

Who loves Clojure and why? And why hasn’t the C world turned into a similar Tower of Babel?

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People with moderate incomes often express an idea of the form “nobody can spend more than $X per year.” So they’re surprised by the public company CEO who seeks to have her golfing buddies on the Board ladle out $20 million per year in shareholder cash. How can she actually spend the after-tax$10 million per year? Or consider Katie Holmes, whose net worth from acting is about $25 million and whose profit from her short-term marriage to Tom Cruise was supposedly about $15 million after taxes (this article provides some background on Holmes’s divorce litigation strategy). She is supposedly returning to the courthouse in an effort to increase the profitability of her child beyond the current $400,000-per-year (tax-free). A reader comment on the Redbook article on the subject is “She needs more than $400 THOUSAND PER YEAR to raise one child? Seriously?” And what about rich retired people? Some of them give half of their money to charity but how can they spend the remaining few $billion?

New Yorker magazine has the answer: “The Couture Club,” complete with photos:

The client on the neighboring yacht, a Russian woman who was relaxing with her family in the fading light, had sailed into Portofino to see the results of Alta Moda’s work.

The [$1700] sundress was a bargain compared to Alta Moda creations, which start at about forty thousand dollars and can cost much, much more.

Suites cost upward of three thousand dollars a night. Portofino, which covers less than a square mile, did not have enough hotel rooms to accommodate all four hundred of the Dolce & Gabbana guests, and some had booked hotels in the neighboring town of Santa Margherita Ligure, or in Rapallo*—a ten-minute boat ride away. A fleet of Mercedes minivans had been amassed from Milan and Genoa, and two dozen boats had been rented for the weekend.

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My Facebook friends have been posting Columbus Day items that reference our theft of this great continent from the Native Americans, e.g., “A store had a sign outside that said ‘Columbus Day Sale.’ Does that mean that I can walk in there and take anything that I want without paying?”

Do we have the mental energy and space to reflect on what we might owe the 5 million current descendants of the American Indians? The favored/featured victims in the media lately seem to be (a) transgendered individuals, and (b) women. Those two categories together account for at least 160 million people. If we are going to fret about these 160 million disadvantaged souls can we truly reflect on the fact that the 5 million Native Americans would be crazy rich today if we gave them back their land and paid rent for it?

[Separately, “What Really Keeps Women Out of Tech” is the New York Times’s latest entry in the war-on-women theme. The author says that she “earned a bachelor of science degree in physics in the 1970s but left the field” (a curious statement by itself since, ordinarily, one would need a PhD in physics simply in order to enter the field of physics) and is now a teacher of creative writing. She describes research in which women were frightened off from computer nerdism by Star Wars posters, which could well be a reasonable reaction to the extent that the posters included any depiction of Jar Jar Binks. Neither the author nor any of those reader comments approved by the NYT asks the question “Why would a young American woman want to spend years training to be a computer programmer when she could have the same spending power (median pre-tax pay $74,280) simply by having sex with three computer programmers and collecting the resulting child support? (or by having sex with one dermatologist)” Nor does anyone ask “If, as the author suggests, women don’t major in CS because, though they yearn to sit at a desk for 50 years and code, they feel that they don’t belong with all of the guys already in the department, wouldn’t we expect to find a large enrollment in CS departments at colleges that are 100% female?” Nor, finally, does anyone ask why the author, who chose a career in creative writing/hanging out with humanities majors, and the quoted psychology professor, who chose a career in psychology, are so passionate about women other than themselves becoming programmers.]

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Over the summer the Boston Museum of Fine Arts segregated pictures by the skin color of the subjects (previous posting). This fall they present an exhibit segregated by the inferred income class. “In Boston, a Class-Driven View of Dutch Art” (WSJ):

The exhibition, which opens [today] and closes Jan. 18, splits the classes into upper, middle and lower, with each occupying its own gallery space. They are broken down into further subdivisions in each room, with a fourth space devoted to “Where the Classes Meet,” which includes depictions of the dark interior of a blacksmith’s shop and a bustling town square in Amsterdam.

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Do No Harm: Stories of Life, Death, and Brain Surgery (Marsh) is a great book in the English tradition of experts writing for laypeople (contrast to the standard American presumption that laypeople are too stupid to understand any technical subject). I’ll write more about this book later but one of the things that struck me was that England seems to have retained its system of private litigation for malpractice despite the fact that medicine is now socialized/government-run:

‘Mrs Seagrave’s daughter was threatening to sue us last night,’ he said. ‘She said we were all hopelessly disorganized.’ ‘I’m afraid she’s right but suing us isn’t going to help, is it?’ ‘No,’ he replied. ‘It just puts one’s back up. And it’s quite upsetting.’

The case was over an operation I had carried out three years earlier. The patient had developed a catastrophic streptococcal infection afterwards, called a subdural empyema, which I had initially missed. I had never encountered a post-operative infection like this before and did not know any other neurosurgeons who had either. The operation had gone so well that I had found it impossible to believe it might all go wrong and I dismissed the early signs of the infection, signs which in retrospect were so painfully obvious. The patient had survived but because of my delay in diagnosing the infection she had been left almost completely paralysed and will remain so for the rest of her life. The thought of the conference had been preying on my mind for many weeks.

I had not dared to ask for how many millions of pounds the case would probably be settled. The final bill, I learned two years later, was for six million [about $9 million].

I wonder if UK-based readers of this blog can shed some light on this arrangement. If the government runs most of the hospitals and also the court system, why would it send medical malpractice cases through the court system to be decided by lay judges and juries? Why not legislate an administrative process for compensating victims of medical mistakes? Why have a system where Person X gets paralyzed from a neurosurgeon’s mistake and gets $X million in compensation while Person Y, starting from roughly the same circumstances and suffering the same paralysis, gets $Y million, purely due to variations from jury to jury?

(And speaking of mistakes, you definitely don’t want to read this book before heading anywhere near a hospital:

I hope I am a good surgeon but I am certainly not a great surgeon. It’s not the successes I remember, or so I like to think, but the failures. But here in the nursing home were several patients I had already forgotten. Some of them were people I had simply been unable to help, but there was at least one man who, as my juniors put it in their naive and tactless way, I had wrecked. I had ill-advisedly operated on him many years earlier for a large tumour in a spirit of youthful enthusiasm. The operation had gone on for eighteen hours and I had inadvertently torn the basilar artery at two in the morning – this is the artery that supplies the brainstem, and he never woke up again. I saw his grey curled-up body in its bed. I would never have recognized him were it not for the enamelled plaque with his name by the door.

)

 

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For years I have been wanting the bottom half of a drone. Why? We already have the top half at East Coast Aero Club, i.e., a standard helicopter or airplane. For capturing images out the side of a helicopter, why not use the bottom half of a drone (the gimbal and the camera) to take stabilized video and stills? It seems as though the clever engineers at DJI (now a $1 billion drone company!) had more or less the same idea: the DJI Osmo. I have ordered one to try out. I am a little concerned that a gimbal designed to cancel out the vibration of a smooth electric-powered quad-copter will not be up to the challenge presented by a piston-powered two-bladed 2400 lb.-gross-weight helicopter. As soon as the Osmo shows up I will provide a full report.

Meanwhile… what do readers have to say about DJI and its products? The Osmo can supposedly support their high-quality Zenmuse X5 camera/gimbal with a four-thirds system sensor. Has anyone tried out the high-end imaging devices from DJI?

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