Economics lesson from McKinsey regarding the homeless in Seattle

From the Seattle Times:

Seattle and King County could make the homelessness services system run like a fined-tuned machine, but without dramatically increasing the region’s supply of affordable housing options, solving the region’s homelessness crisis is all but impossible.

That is the central finding of a new, independent analysis of King County’s homelessness crisis by the consulting firm McKinsey & Company, which produced the report pro bono for the Seattle Metropolitan Chamber of Commerce.

The report estimates King County is short up to 14,000 units affordable for people experiencing homelessness. Because of the gap, and the rising numbers of people who are homeless, annual spending — public, private or both — needs to double to $410 million if the problem is to be solved, according to the report.

And that’s only if the annual rate of people becoming homeless doesn’t increase.

“This is a supply-side issue,” said Dilip Wagle, a McKinsey senior partner based in Seattle. “We are just running out of affordable housing units.”

So the great minds behind Enron have come up with a system in which they will offer free housing in one of the world’s most desirable places to live. World and U.S. population will continue to boom, yet the $410 million per year in free housing isn’t likely to be oversubscribed:

Some corporations keen to alleviate homelessness in their local communities already fund emergency shelters. These are crucial. But they are not a long-term solution. Affordable housing is.

The McKinsey geniuses don’t answer the question that always strikes me when I’m in Seattle and I see homeless folks camping in the cold rain: Since these unfortunate souls don’t have a job or a house, why don’t most of them move to Santa Monica and camp in a warm dry climate?

(I don’t think the answer is “Washington State provides more generous welfare benefits than California”; CATO Institute’s Work v. Welfare analysis in 2013 found that collecting welfare in California was worth 96.5 percent of the state’s median salary while in Washington State it was worth only 72 percent (see Table 4).)

Seattle does have a new “head tax” on companies such as Amazon that use office buildings within the city limits. This is supposed to be what funds the new construction of apartments for the currently “homeless.” Most of heads being taxed, presumably, commute in from the suburbs because they can’t afford prime urban residential real estate in a walkable neighborhood. This commute will have them spending 1-2 hours every day in some of the nation’s worst traffic. By contrast, people who haven’t worked for years or decades will be living in the desirable central city. Once this situation is fully developed, I would love to see the commuting suburban wage slaves call themselves smarter than the newly-housed urban “homeless”!

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Who watched the royal wedding?

Readers whose TV choices are not constrained by the viewing demands of toddlers: Did you watch the wedding of Prince Harry and Meghan Markle? If so, what happened?

The Wikipedia page on Ms. Markle is revealing of American attitudes. Regarding Ms. Markle’s first marriage, it says “[she and Trevor Engelson] divorced in August 2013,” implying that it was a mutual decision and action. Or perhaps it was a natural phenomenon, like a rain shower, that affected them both. Here’s a Reuters/nytimes example: “In 2011, she married film producer Trevor Engelson but they divorced two years later.” Buzzfeed: They filed for divorce citing ‘irreconcilable differences’ in August 2013.”

In fact, it seems that Ms. Markle sued her husband. See, for example, “Is THIS the real reason Meghan Markle divorced her first husband Trevor Engelson?” (Express):

MEGHAN Markle became so addicted to fame that when she finally hit the big time as an actress on Suits, she divorced her first husband and sent him the wedding ring back in the post, according to a bombshell report.

Mr Engelson’s uncle, Mickey Miles Felton, 73, said the family knows the reason behind her decision to divorce Mr Engelson, but they do not want to disclose it.

The bombshell story paints Meghan, 36, as a social climber determined to get to the top no matter what.

When the royal bride-to-be met Mr Engelson, the then 28-year-old was already a film producer and agent while she was a 23-year-old actress fresh out of theatre school. … They quickly moved in together in Los Angeles and she started getting more parts and auditions.

At the time of the lawsuit it seems that Ms. Markle was more successful financially than her husband/defendant. Thus the divorce petition (a “complaint” in more traditional states) does not ask for alimony (see RADAR and also California family law). Had the decision been mutual, presumably the not-so-happy couple would have filed a California form FL-800, Joint Petition for Summary Dissolution.

What can we make of this choice of bride? The Prince is 33 and presumably will want to have children. The American divorce court veteran is 36, nearing the end of her fertility. Let’s say that the newlyweds enjoy a two-year infant-free honeymoon. Now the Princess is 38. Will my jet-owning fertility doctor friends be practicing the London City Airport steep approach in the sim and then flying over to practice their trade?

Folks expect the marriage to endure under the theory that “She sued the first husband so she would never do that again to a second husband”? Both Prince Harry and Meghan Markle are children of divorced parents and, statistically, such children are at least 1.5X more likely to get divorced than children from intact homes (PyschCentral).

Related:

  • Real World Divorce on UK law, which does not enforce prenuptial agreements and allows a plaintiff to collect a 50 percent share of premarital property after only a year or two of marriage
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Metropolitan Opera is finished financially?

“Met Opera Accuses James Levine of Decades of Sexual Misconduct” (nytimes) is a twist on the usual sex-at-work litigation:

Two months ago, the conductor James Levine, having been fired by the Metropolitan Opera for sexual misconduct, sued the company for breach of contract and defamation. Now the Met is suing him back, arguing in court papers filed on Friday that Mr. Levine harmed the company, and detailing previously unreported accusations of sexual harassment and abuse against him.

The filing paints the clearest picture yet of the investigation that led the Met to dismiss Mr. Levine, its longtime music director and its artistic backbone for more than four decades. The company says it found credible evidence that Mr. Levine had “used his reputation and position of power to prey upon and abuse artists,” citing examples of sexual misconduct that it says occurred from the 1970s through 1999, but does not name the victims.

The Met’s suit says that the company “has and will continue to incur significant reputational and economic harm as a result of the publicity associated with Levine’s misconduct.” The company was already in a difficult financial position before the scandal broke, battling the high costs of putting on grand opera amid a box office slump.

On Friday, Moody’s Investors Service Inc., the credit rating agency, downgraded the Met’s bonds to Baa2 from Baa1, citing its “thin liquidity and the fact that it has not yet been able to reach its endowment fund-raising targets combined with ongoing labor costs pressures and capital needs.” One of the Met’s strengths, it noted, was its strong donor support, which the company relies on.

Why would anyone give the Met money now? If Michigan State had to pay out $500 million recently (see Michigan State settlement means that we will start to see inflation from #MeToo?) and the Met has only $200 million in net assets, isn’t the enterprise already insolvent? A donation today will simply go to a plaintiff who says that he was abused by James Levine and the management knew or should have known about it. (Or maybe the management is being careful not to investigate anything that happened unless the statute of limitations has run?)

Is it possible that this opera company will actually die before its audience does? Or can they go Chapter 11 and ditch their pension obligations (pension for a $310,000/year stagehand cannot be cheap!) as well as the long tail of sex-related liability?

Related:

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Losing the Nobel Prize

This will be the first of a few posts about Losing the Nobel Prize by Brian Keating, a cosmology professor at UCSD.

Let me urge readers to download the Kindle version and read the book so that the discussion will be more lively on future postings!

The book has the following components, mixed together to some extent:

  • a readable tutorial on the history of experimental cosmology (augmented by Shaffer Grubb’s superb illustrations)
  • a detailed history of the BICEP project, envisioned by Brian Keating and supported by Andrew Lange, which looks for inflation-induced gravitational waves
  • a career guide for would-be physicists
  • the personal history of the author
  • statements that physicists who have identified as “female” have not been given sufficient credit for their work
  • an analysis of the effects of the Nobel Prize, as currently structured, on physics

A sample on the genesis of the BICEP project:

Life in Palo Alto in September 1999 was miserable for a postdoc making $35,000 per year with college loans to pay off. My mood moved inversely with the late 1990s’ NASDAQ. The booming stock market severely limited my housing options. The only apartment I could afford was miles off campus, located on the major Caltrain artery connecting the Valley to the City, at the precise location where the train conductors were required to blow a 150-decibel horn to warn would-be rail-jumpers of impending doom. The horns began blaring at 5 a.m.

On a good night, I would accumulate about five hours of sleep. I was exhausted and depressed. My postdoc advisor, Sarah [Church, physicist turned fellow at The Clayman Institute for Gender Research and now a bureaucrat], could sense it. When I’d doze off at work, I’d dream about a new type of telescope, which would later become BICEP. In my mind’s eye, it was a telescope that could see all the way back to the Big Bang.

For the first few months of my time at Stanford, I was completely absorbed by a new paper called “Polarization Pursuers’ Guide,” written by cosmologists Andrew Jaffe, Marc Kamionkowski, and Limin Wang. … It was the first time I heard anyone say it was possible to experimentally probe the first instants of cosmic history, that mysterious epoch called inflation,

Not only was it possible to see whether inflation had really happened, but, according to these cosmologists, it would require only a modest-sized telescope. I had worked on just such a small telescope for my PhD project.4 I knew that tiny telescopes come with big bonuses: they are simpler, more efficient, and less expensive than their bigger brothers. A small telescope that could capture microwaves, rather than optical light like Galileo’s, could probe the inflationary epoch just as well as a telescope many times its size and cost.

After his talk, Lange agreed to chat with me for a few minutes. I had heard so much about him I felt like I knew him. He was forty-two years old and had been at Caltech since 1993, after a meteoric rise from freshly minted PhD in 1987 to professor, both at UC Berkeley. Caltech had been courting him for a while, betting that his stock would continue to rise. BOOMERanG proved they were right. By the time I met him, he was rumored to be the most popular professor at Caltech; the lecture I’d just heard confirmed those rumors.

Lange hosted social events at his house and clearly enjoyed his role as both a mentor and a friend. Soon, he and I developed a close bond. Often, he’d give me nuggets of what he called “fatherly advice”: words of wisdom about science, academia, and occasionally even about actual, biological fatherhood. The latter information, while not immediately relevant, made a deep impression on me nonetheless. He worshipped his three young sons. His office was a museum of their artwork. On the shelves he’d placed their science projects right next to his own award plaques and pieces of the actual rockets he’d launched into space. Most Mondays, he’d regale me with tales of his weekend exploits with his sons, camping out or launching model rockets in the Mojave Desert. It was clear that they were his world, a refreshing revelation to me: you could be one of the world’s most brilliant scientists and still make fatherhood your top priority.

BICEP took five years and two million dollars to build. You can, however, build a polarimeter simply by donning polarized sunglasses, looking at the zenith at sunset, and spinning around in place. Because light is polarized when it scatters off air molecules, you’ll notice the brightness of the sky varies twice, from bright to dark to bright to dark, every time you spin a full circle. This twofold brightness variation is the signature of polarization.

Like your sunglasses polarimeter, all polarimeters have four features in common: optics (for you, the lenses of your eyes), a polarizing filter (the sunglasses) to separate vertically polarized light from horizontally polarized light, detectors (your retinas), and a polarization modulator (your legs keeping you spinning) that causes the intensity of the light through each of the polarizing filters to vary predictably. So too did BICEP feature these same four essential polarimeter elements. BICEP’s optics were 30 cm (1-foot) diameter lenses made of high-density polyethylene, the same material used in milk jugs. Though these containers appear opaque to the eye, they transmit microwaves almost perfectly. The two lenses produced clear vision over a huge field of view nearly twenty degrees wide—equivalent to two fists held at arm’s length.

Compared to the retina or even a smartphone camera, BICEP’s detector count—98—seems pitiful. But if we were lucky, our pixels would capture waves of gravity coursing through the oldest light there is. No phone, no matter how smart, could even come close to taking that picture.

To detect the faint CMB heat at all, the detectors needed to be cooled to just a quarter of a degree Celsius above absolute zero. Here, once again, BICEP’s Lilliputian size was its biggest asset. Since it was small, barely 1.5 m (5 feet) long, the entire BICEP telescope—optics, polarizing filters/detectors—could be put inside what was essentially a giant thermos. BICEP’s thermos was a cylindrical vessel just large enough to contain all the optical elements and hold them at a pressure less than a millionth of what you feel at sea level. Keeping the pressure inside low was crucial; if there were too many air molecules inside the cryostat they’d quickly rob heat from the walls of the thermos, bringing unwanted heat into the detectors and rendering them useless. The thermos had two chambers within it filled with liquid helium. A dedicated refrigerator held a liquid form of an isotope of helium, called liquid helium-3. Ordinary liquid helium got BICEP to about 3 kelvin, and helium-3 helped it reach 0.25 kelvin. For the first time in human history, we had cooled an entire telescope to the temperature of interstellar space.

It gets exciting when the new refractor is parked down at the South Pole. Unfortunately, one of the parents does not survive to see the scientific child grow to adulthood:

[Andrew Lange] called me to say he was separated from his wife … He sounded so sad, so uncharacteristically down. I was crushed that my fatherly mentor wouldn’t be there for me, but even more than that, I felt awful for his three sons.

Four weeks after BICEP2 began observing, on January 22, 2010, I was in the middle of a POLARBEAR collaboration meeting at UC Berkeley when Paul Richards, Andrew Lange’s thesis advisor, burst into the conference room. Two decades earlier, he had supervised Andrew in that very room. “Andrew is dead,” Paul cried out. “He committed suicide.”

A few years later, I went back to where Andrew’s remarkable life came to an end: a seedy motel, so utterly unworthy of containing the greatness of this sweet man. When I interviewed at Caltech a decade earlier, I had stayed in this very motel. The beginning of my life inextricably entwined with the end of his, at a crappy motel near the campus where he had once had it all: National Academy member, California Scientist of the Year, seemingly certain Nobel laureate.

[See “Children, Mothers, and Fathers” for statistics on the tendency of American men to commit suicide after an encounter with the local family court.]

Professor Keating chronicles how the Nobel Prize was set up to reward lone geniuses and then expanded to permit recognizing up to three scientists per year/discovery. If you’re a listed author on a Nobel-winning physics paper, what are your statistical chances of being a personal Nobel-winner? Perhaps 1 in 1000:

FIGURE 55. Number of credited collaborators on Nobel Prize–winning experiments in physics, plotted on a logarithmic scale. Four particularly large values stand out: 385 authors on the discovery of the W and Z bosons in 1984, 6,225 authors on the two Higgs boson discovery papers in 2013, 342 authors on the neutrino oscillation discovery paper in 2015, and 1,004 authors on the LIGO gravitational-wave detection paper in 2016. Gaps represent years with no prize or prizes given for theoretical discoveries.

Some have complained that giving a share in the physics prize to every scientist involved would devalue the award, decreasing the well-earned attention that the originators of the project deserve. Yet awarding the Nobel Peace Prize to groups has in no way decreased its prominence. The peace price can be awarded to groups, individuals, or groups and individuals (as was the case, for example, with the 2007 prize, half of which was awarded to the Intergovernmental Panel on Climate Change and the other half to former U.S. vice president Al Gore. Especially in experimental science, where collaboration is essential, expanding recognition would help convince young people to take more risks in the ideas and projects they pursue. For me personally, the most rewarding aspect of my job is working with scientists from all over the world, from Uganda to the Ukraine, from Thailand to Texas, on every continent including Antarctica. It’s high time the Nobel Prize reflects the true reality of modern physics: the best science of all is the most collaborative.

What if you are lucky enough to win this lottery?

After winning the ultimate accolade, laureates benefit from the “rich get richer” phenomenon that historian and sociologist Robert Merton called the Matthew effect, in which a greater proportion of scientific resources becomes concentrated in the hands of a smaller group of (mostly male) scientists. Laureates receive resources unavailable to their colleagues, and these come not only in the form of research funding and lab space. Papers by Nobel Prize winners garner more citations. Laureates attract the best graduate students and postdocs. It’s not that other great scientists can’t attract funding, lab space, and graduate students—it’s just that our society gives laureates a gilded stamp of approval that makes them even more desirable to funding agencies, universities, and prospective students. And, since past Nobel Prize winners are automatically invited to nominate future winners, their protégés receive the ultimate job perk: they are far more likely to become laureates than those who were not mentored by laureates.10 There’s one last, if little-known perk: according to a recent study, Nobel laureates enjoy an extra year of longevity compared to nominated scientists who didn’t win.

How does it compare to Olympic gold?

Olympic competition stresses athletes with pressures similar to those that dog scientists aspiring to win Nobel gold: grueling work done in isolation, over many years, for low wages. The costs required to train, travel, and compete to win an Olympic medal are astronomical: as high as seven million dollars per gold medal, according to a recent study.16 Is there sufficient return on investment for national Olympic committees? The same could be asked of universities, where the financial packages used to lure Nobel laureates sometimes exceed Olympic medal amounts. Institutions, and the donors they must make proud, clearly feel the answer is

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Atlantic: You need not be in the 1 percent to be part of the problem anymore

“The 9.9 Percent Is the New American Aristocracy: The class divide is already toxic, and is fast becoming unbridgeable. You’re probably part of the problem.” (Atlantic) is making the rounds of my Facebook friends. The author says that he lives among the mansions of Brookline, Massachusetts where his pro-immigration neighbors seek low-cost nannies to come to their $3 million houses and take care of children. (See “Elizabeth Warren helps another politician raise money on a ‘get money out of politics’ platform” for my last post about a trip to this neighborhood.)

Figure 1 is kind of interesting. If you slice and dice American wealth enough times you can find some interesting patterns. The figure shows that the great rise in “wealth” for the top 0.1 percent has come mostly from the bottom 90 percent and not from the top 10 percent. This would be kind of upsetting in a constant-wealth and constant-population society. But in an economy that has been getting wealthier overall, does this mean that a substantial cohort of American families are actually getting poorer? That information cannot be determined from this upsetting-on-its-face figure. The figure also ignores immigration. We have been admitting tens of millions of low-skill immigrants. Most of them are in the “bottom 90 percent”. But they didn’t have wealth taken from them by the Top 0.1 percent. Most of them weren’t even here in the U.S. when the purported “taking” was occuring.

[Separately, in a non-market economy such as the U.S. I question statistics on “wealth.” The person who has the right to live in public housing in Cambridge, for example, has an official wealth of $0. Yet the person has the lifetime right to occupy, and often pass down to descendants, an apartment that could sell for $1 million. Also an entitlement to food stamps (SNAP), health insurance, a free smartphone, etc. Oxfam, when they’re not partying with paid women in Chad and Haiti, marks these apparent assets to $0 and concludes that low-income Americans are worse off than the poorest people in China and India. But if these folks living in Cambridge Public Housing or in taxpayer-funded housing in San Francisco or Manhattan would not trade places with the pooreset families in India, $0 seems like the wrong number.]

The author is a implicit but huge denier of the research presented in “The Son Also Rises: economics history with everyday applications”. Children who grow in a town with a highly ranked public school are likely to be successful because of the superior education that they receive. Certainly it could not be the case that towns in which successful parents live tend to contain children who will put up strong test scores and thus make it look like the local public schools are awesome. Example:

Nowhere are the mechanics of the growing geographic divide more evident than in the system of primary and secondary education. Public schools were born amid hopes of opportunity for all; the best of them have now been effectively reprivatized to better serve the upper classes. According to a widely used school-ranking service, out of more than 5,000 public elementary schools in California, the top 11 are located in Palo Alto. They’re free and open to the public. All you have to do is move into a town where the median home value is $3,211,100. Scarsdale, New York, looks like a steal in comparison: The public high schools in that area funnel dozens of graduates to Ivy League colleges every year, and yet the median home value is a mere $1,403,600.

(Note that this is pretty much the opposite of the advice that college admissions counselors give. If you have a smart kid and want him or her to get into college (and don’t want to check an official victim group status box that will guarantee admission), you’ll be told to move AWAY from towns such as Scarsdale.)

In an article on economics, the author treats marriage and divorce as being immune from economic incentives (the same magazine in 2017 published “America, Home of the Transactional Marriage,” taking the opposite perspective):

Since the 1970s, the divorce rate has declined significantly among college-educated couples, while it has risen dramatically among couples with only a high-school education—even as marriage itself has become less common. The rate of single parenting is in turn the single most significant predictor of social immobility across counties, according to a study led by the Stanford economist Raj Chetty. … The fact of the matter is that we have silently and collectively opted for inequality, and this is what inequality does. It turns marriage into a luxury good, and a stable family life into a privilege that the moneyed elite can pass along to their children.

Nowhere does the author mention that economic incentives have changed dramatically since the 1970s. Today, unless a high-income partner can be persuaded to marry, it is not economically rational to marry. Child support guidelines that were mandated at the end of the 1980s made it just as profitable to collect on an out-of-wedlock child as it had been to collect on the child of a marriage (see “History of Divorce”). Having sex for one evening with a medium-income partner is more lucrative than marrying a low-income partner (see “Child Support Litigation without a Marriage”). Having three children with three different sex partners is more lucrative than having children with one long-term co-parent. Having the government as a financial partner is better than being married to a low-income, or even a median-income partner. See, for example, Table 4 of the 2013 Work v. Welfare tradeoff study (the latest available), in which in the author’s home state of Massachusetts a single mom collecting welfare can get 118 percent of the state’s median salary. If she were to marry she would likely have a lower spending power (and, according to a TODAY Show poll, have a lot more stress because husbands are annoying and don’t help them enough with child- and household-related tasks). The genius who writes for the Atlantic does not consider the possibility that low-income Americans are just as smart and rational as he is, but face different choices and incentives.

[This is a common blind spot for high-income Americans. See “Paying the price for breakdown of the country’s bourgeois culture” (Philadelphia Inquirer) by Amy Wax, later a disgraced law professor (she said that students admitted under race-based affirmative action programs didn’t do well), and Larry Alexander, a non-disgraced (as far as I know) law professor:

Almost half of all children are born out of wedlock, and even more are raised by single mothers.

This cultural script began to break down in the late 1960s. A combination of factors — prosperity, the Pill, the expansion of higher education, and the doubts surrounding the Vietnam War — encouraged an antiauthoritarian, adolescent, wish-fulfillment ideal — sex, drugs, and rock-and-roll — that was unworthy of, and unworkable for, a mature, prosperous adult society.

But restoring the hegemony of the bourgeois culture will require the arbiters of culture — the academics, media, and Hollywood — to relinquish multicultural grievance polemics and the preening pretense of defending the downtrodden. Instead of bashing the bourgeois culture, they should return to the 1950s posture of celebrating it.

Professor Wax assumes that low-income Americans have a different (and inferior) “culture” to hers. It never occurs to her that the government set things up so that they could maximize their spending power by being “single mothers.” (Obviously they could have a higher spending power by becoming a dermatologist or marrying and staying married to a dermatologist, but those berths are limited whereas Welfare entitlements are, by definition, unlimited.) She watches people come to her school every day, pay tuition, and work to become lawyers. She presumably thinks that this is not because they came from a “culture” in which people wanted to become lawyers, but rather becuase of the salaries paid by law firms. Yet when she sees poor Americans behaving in a certain way, this is definitely attributable to “culture” rather than rational economic choices.]

On the third hand, maybe there is something to what this guy has to say. Here’s a recent Facebook posting from a friend. He is an engineer and his wife is a physician. They live in a suburb with highly ranked public schools, but pay for private school. Here is the school-related issue that concerns him currently…

So our son [Donatello]’s ocean school trip is on a 137 foot sailboat. They have the kids work on deck, and make us sign a waiver, but they don’t have any kids wear life jackets. I think that is nuts. But boat person culture is to not wear one. Few people do.

They explained that “They have all mandated safety equipment on board” and “Life jackets are bulky and hard to work in.” We have a Mustang Survival auto-inflating jacket! They are not hard to work in. This school bans peanuts but doesn’t use life jackets when working on deck?

(Not sure that his use of the term “boat person” is appropriate in the context of private school brats on a yacht… Perhaps this isn’t the best argument for an MIT education.)

The author concludes with a call for a planned economy, basically:

History shows us a number of aristocracies that have made good choices. The 9.9 percenters of ancient Athens held off the dead tide of the Gatsby Curve for a time, even if democracy wasn’t quite the right word for their system of government. America’s first generation of revolutionaries was mostly 9.9 percenters, and yet they turned their backs on the man at the very top in order to create a government of, by, and for the people. The best revolutions do not start at the bottom; they are the work of the upper-middle class.

Yes, the kind of change that really matters is going to require action from the federal government. That which creates monopoly power can also destroy it; that which allows money into politics can also take it out; that which has transferred power from labor to capital can transfer it back. Change also needs to happen at the state and local levels. How else are we going to open up our neighborhoods and restore the public character of education? … We should be fighting for opportunities for other people’s children as if the future of our own children depended on it. It probably does.

Why isn’t the immediate solution to stop low-skill immigration, including of “refugees”? If we are at imminent risk of a violent revolution and urgently need government action to raise the spending power and life quality of the lowest income Americans, why would we want to increase the size of this angry mob by 1-2 million people per year (low-skill immigrants plus children of low-skill immigrants). The author doesn’t consider the scale of immigration as something that the central planners should set.

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Stonernomics Update

Back in 2015 I asked “Legal marijuana questions: (1) why does it cost more than spinach?

Here’s an update from The Guardian, “How do you move mountains of unwanted weed?”:

He invested $250,000 in the structural build-outs, lighting, environmental controls and other initial costs to achieve a 5,000 sq ft, Tier I, OLCC-approved indoor canopy.

Ongoing labor and operational costs added another $20,000 a month.

Weed prices were high: Duyck forecast a $1,500 return per pound. If Duyck could produce 20lb of flower a week, he’d make back his money and start banking profits in just three months.

Duyck sent 60lb of pot to the auction block in December. He had adjusted his expectations downward: he hoped to see something in the ballpark of $400 a pound.

It sold for $100 a pound.

It still seems to cost more than what we pay for spinach:

a gram of weed was selling for less than the price of a glass of wine.

The $4 and $5 grams enticed Scotty Saunders, a 24-year-old sporting a gray hoodie, to spend $88 picking out new products to try with a friend. “We’ve definitely seen a huge drop in prices,” he says.

Across the wood and glass counter, Bridge City owner David Alport was less delighted. He says he’s never sold marijuana this cheap before.

“We have standard grams on the shelf at $4,” Alport says. “Before, we didn’t see a gram below $8.”

How much of that is taxes? At what point can I declare victory for predicting that growing marijuana wouldn’t yield more profit, or have a higher pre-tax wholesale cost, than growing other plants? Not quite yet, presumably. From what I can tell from a quick search, whoelsale spinach is about $2 per lb. Thus, wholesale marijuana even in these depressed times is 50X the price of spinach. But I can’t figure out why!

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Michigan State settlement means that we will start to see inflation from #MeToo?

“Michigan State settles Larry Nassar lawsuits for $500 million” (Lansing State Journal):

Michigan State University has agreed to a $500 million settlement with the hundreds of women and girls who say Larry Nassar sexually assaulted them, bringing to a close another aspect of the scandal now in its 20th month.

The settlement and the details were announced in a statement from attorneys representing victims and the university. A portion of the settlement — $75 million — will be held back in the event of future lawsuits filed against MSU over Nassar.

MSU has paid nine law firms more than $11.3 million to represent it and its current and former employees in the civil litigation and state and federal investigations related to Nassar’s crimes.

MSU spokeswoman Emily Guerrant said the university has not determined how it will pay for the settlement or how much will be covered by its insurance providers.

To date, MSU has paid law firms at least $2.5 million to handle insurance aspects related to Nassar’s crimes and the lawsuits.

It’s likely MSU has multiple liability insurance policies and it’s possible for an organization its size to have $500 million in coverage ,although the university’s out-of-pocket costs could still be in the tens of millions, Lars Powell, an insurance expert at the University of Alabama who is not involved with MSU, said Wednesday. It’s likely the insurers were part of the settlement discussions, he said.

“I would guess that whatever settlement they reached would be the amount of insurance they carry,” said Powell, who is director of the Alabama Center for Insurance Information & Research. “They wouldn’t just agree to the settlement, nor would the plaintiffs agree to that settlement, if the insurers weren’t on board.”

The reader comments on the corresponding New York Times article are mostly along the lines of “It should be way more”:

This settlement is about a billion dollars short if they really wanted to send message.

This is a travesty of justice. $1.5mm per gymnast for years of abuse?

So, let me get this straight: $1.5+ million each to 332 victims is supposed to wash away the foul memories of a monster who manhandled and abused them?

There are a few folks who respond to this emotional situation with logical arguments (the sure sign of being a total asshole?):

Lifelong Democrat: Let the funds for this settlement be paid by the athletic department, which has proximate responsibility, rather than from academics. So MSU has to drop some sports, or cut back on athletic “scholarships,” that’s a price they ought to have to pay. (Response from Kara Nemsi: There is no way to separate academic and athletic departments. It will be the students who will pay for this through their tuition and debt.)

(from a man, obviously): I certainly sympathize with the women who were abused, but $500 million could fund a lot of scholarships, new classrooms and laboratories. [He hasn’t visited our Boston suburb. He would learn that building a new K-8 school for 440 town children plus 84 Metco-program children (sorted by race identity) and 20 teachers’ kids will cost roughly $100 million in a best-case scenario.]

This weblog is a safe space for thoughts that would get us all defriended on Facebook. Let’s think about all of the above from the perspective of a Bermuda-based insurer…

If we take the NYT commenters as representative of a likely jury pool, and also look at the total amount (more than $100 for every Michigan resident who has a job), shouldn’t liability insurance rates for employers, universities, etc. rise? Without higher rates, who will rush to line up to pay out the next $500 million? If rates do rise, that has to be passed on to consumers as higher prices, right? Since money invested in the U.S. has to earn a comparable return to what it would yield in a less exposed-to-litigation society, prices must go up to maintain the same profit percentage given a rise in the cost of liability insurance.

Will economic historians look back at the 2010s as the beginning of the Era of #MeToo Inflation?

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The sexless marriage as viewed from the other woman’s point of view

“What Sleeping With Married Men Taught Me About Infidelity” (nytimes) gives some color to the statistic “Only 48% of married women want regular sex after four years.” (Good Housekeeping).

A few years ago, while living in London, I dated married men for companionship … After being married for 23 years, I wanted sex but not a relationship. …

What surprised me was that these husbands weren’t looking to have more sex. They were looking to have any sex.

Maybe the reason some wives aren’t having sex with their husbands is because, as women age, we long for a different kind of sex. I know I did, which is what led me down this path of illicit encounters. After all, nearly as many women are initiating affairs as men.

One thing that is interesting is the author’s (and editors’?) faith in the power of words and conversation:

I am not saying the answer is non-monogamy, which can be rife with risks and unintended entanglements. I believe the answer is honesty and dialogue, no matter how frightening. Lack of sex in marriage is common, and it shouldn’t lead to shame and silence.

In the end, I had to wonder if what these men couldn’t face was something else altogether: hearing why their wives no longer wanted to have sex with them. It’s much easier, after all, to set up an account on Tinder.

One of our neighbors divorced her 50-year-old husband in order to spend more time having sex with her 30-year-old boyfriend (she kept most of the cashflow off the husband’s paycheck, fortunately, as she did not work at all and her new lover was only minimally employed). Would this fit woman in her late 40s have regained her interest in the 50-year-old given some “dialogue”?

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Using Ladies Lingerie to make room in Academia for the next generation

“Is ‘Ladies Lingerie’ a Harmless Joke or Harassment?” (Atlantic):

Simona Sharoni, a professor of women’s and gender studies at Merrimack College, asked a crowded hotel elevator what floor everyone needed. Richard Ned Lebow, a professor of political theory at King’s College London, replied, “Ladies’ lingerie” (or, as Sharoni remembers it, “Women’s lingerie.”) Several people laughed. Was that sexual harassment?

Academics have been debating the question among themselves since last month, when Sharoni filed a formal complaint about the incident, triggering an investigation by the International Studies Association. The ISA would later conclude that Lebow must apologize in writing by May 15.

Professor/Victim Sharoni is a 57-year-old at an obscure college here in suburban Massachusetts (the Wikipedia page is almost empty). Her abuser is a 76-year-old professor at King’s College London, ranked among the world’s top 25 universities. Thanks to the miracle of tenure, ordinarily a younger scholar who wanted this guy’s job would have to wait for him to die. But perhaps she can get rid of him and free up his position for herself via this dispute? (or maybe she will take over a position at a 2nd-tier school when that person moves to the 1st-tier King’s College?)

Separately, this is a good illustration of how much free time tenured faculty have on their hands! (Consistent with the book Higher Education?, which calculates that a typical Yale professor earns $820 per hour of work that is actually required.)

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Gift idea: The Girl Aviators and the Phantom Airship

Here’s a fun gift for an elementary or middle schooler: The Girl Aviators and the Phantom Airship, a beautifully produced hardcover of a 1911 book.

The book has some nice illustrations and the re-publisher has added some interesting photos of early aviation.

This is a good reminder that at one time nearly ever American was excited about aviation and not because they wanted to go to LAX for $199.

Report from an 8-year-old reader:

There is a competition to build an airplane, except for the engine. Roy and his sister Peggy build an airplane and name it “The Golden Butterfly.” The plane is built to hold 3, but flies fine with 4 kids. They participate in a race and end up winning [surprise!].

Favorite parts: A kidnapping that includes falling into a well. The race victory.

My suggestion: Send the book to your favorite young person who is about to escape for the summer!

Readers: What are some other good books for, say, 10-year-olds, on aviation?

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