Philip Greenspun’s Weblog

A friend of Facebook cited this New Yorker magazine article: “St. Paul’s School and a New Definition of Rape,” by a professor at Harvard Law School. My friend’s intro: “A thoughtful piece, as always by Jeannie Suk. Taking her last paragraph especially to heart.” And, indeed, the piece is mostly about feelings that one might experience “in the heart.” But criminal justice is one of the largest industries in the United States and therefore people commenting on this issue may be influenced by their wallets. Judges get paychecks, lawyers get paychecks, prison workers get paychecks (larger than Harvard graduates in some states), officials and legislators get paychecks. Different definitions of “rape” may have a significant economic effect on the revenue for this industry because either a larger or smaller percentage of human activities will become potential sources of business. And of course there are oftentimes parallel civil lawsuits when there is an accusation of rape (see Missoula), giving yet more lawyers and judges an economic stake in how many human activities can be classified as “rape.”

Of course, economics may not be the only motivation for people in this debate but why assume that it is entirely irrelevant? Why assume that people in this industry would be just as happy not to be paid as to be paid?

Related: “The Lessons of Stanford’s Sex-Assault-Case Reversal,” a New York Times story on the administrative and legal processes following a year-long relationship between two over-18-year-olds who met (but did not have sex) on the Stanford campus. In a society where we worry about how it will be possible to fund college educations for young people from middle class families, there is no discussion about the resources spent paying university officials and attorneys to argue about sex between these two young people.

Also Related: A TED talk about divorce and its impact on children that was the subject of an email discussion. The speaker is a professor at UC Santa Barbara. Here were some comments:

• “Parents’ conflict is more important than divorce per se” — doesn’t really make sense to consider these things independently. Divorce law often gives people good financial reasons to create conflict (e.g., to cement sole custody and the tax-free river of cash that goes with it). So the two cannot be separated.”
• The whole talk has an enormous blindspot. She is in a state where a woman can go to a bar, have sex with a tipsy patron, and earn more money, after tax, than she gets paid by UCSB. Or where a person can marry three people in succession, stay with each one for 5-10 years, and end up collecting a share of the earnings of three other adults simultaneously. But there is no discussion of financial incentives and their effect on behavior.
• The talk is irrelevant because the present and future of family court action is between biological parents who were never married. The U.S. doesn’t have “children of divorce”; it has “children of people who were never married”.
• To look at an activity that generates $100 billion/year in cashflow and ignore the cashflow makes the analysis incomplete.

 

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Flying the Feathered Edge is an inspiring film about one of the world’s greatest pilots, Bob Hoover. There are a bunch of screenings in various cities on November 11. A group of (mostly) MIT-affiliated pilots watched this at a friend’s house last month on Blu-ray. What amazed us the most is that Hoover would fly high-performance fighter jets wearing a business suit. What’s also impressive, of course, is the amount of risk that a World War II combat pilot or an early Jet Age test pilot had to become comfortable with.

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Typically the boring world of software isn’t a subject for Mother Jones, but electronic medical records somehow made the cut: “Epic Fail” talks about how six years and billions of dollars wasn’t enough to put medical data into a computerized database in a useful form. (Compare to the technological progress in the U.S. during the four years of World War II!)

[If Sheryl Sandberg and/or anyone from the New York Times had contributed, presumably the article would have pointed out that Judith Faulkner, the founder of Epic who has made almost $3 billion personally by selling American taxpayers software based on 50-year-old DBMS technology, could have been way richer if she had been a guy.]

What’s the return on our $35 billion investment as a society? “Doctors are investing the time to input data, but their offices are still having to fax and mail records like they did a decade ago.”

[Personally, I don’t think that it is fair to blame Epic that we chose to implement electronic medical records in the dumbest way possible. Nor is it Epic’s fault that there isn’t as much value in combining multiple individuals’ records in a single DBMS as there would be to combining those individuals’ banking records. I just think it is interesting that software is now important enough to be written about in a magazine that is about the “urgent issues of the day.”]

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A rich friend of mine invited me to an event for rich bastards at a 10,000 square foot house here in the Boston suburbs (complete with bowling alley in the basement). The sponsors were Northern Trust and Netjets. The speaker was David McCullough, author of one of my favorite books, The Path Between the Seas: The Creation of the Panama Canal, 1870-1914, as well as a book about the Wright Brothers (reviewed here).

McCullough put the Wright Brothers book in context. He conceived it as part of a trilogy about the bridge, the canal, and the airplane. These were, in his words, all achievements thought to be impossible and all accomplished by Americans in a uniquely optimistic period between the Civil War and World War I.

McCullough says that he purposely picks topics about which he knows little because learning the history and the technical concepts is an important motivator for him. Reflecting on this trilogy he said that he has become fascinated by the role that adversity plays in developing character and accomplishment: “A lot of history is a lesson in how to cope with failure.” McCullough decried the default emphasis on success stories and pointed out that the Wright Brothers failed countless times before finally succeeding. “You need some adversity to succeed just as birds need a headwind to soar.”

McCullough attributed the success of the Wright Brothers to their home environment, particularly their father encouraging them to read and inquire, effectively giving them an at-home liberal arts education. He also pointed out that Dayton, Ohio at the time had more patents per capita than any other city in the U.S. McCullough said that it was important to study “values learned around the kitchen table” and how that influenced achievement. He said that if could pick just one of the four Wrights to interview (Orville, Wilbur, sister Katharine, or father Milton) it would be the father.

It was an interesting talk, though I wonder how applicable McCullough’s thoughts are to present-day American society. McCullough has been married for 61 years and is touch with all five of his children and 19 grandchildren. “America’s Families and Living Arrangements: 2012” (census.gov) shows an increasing percentage of American children grow up in single-parent households (see Real World Divorce for how, in a typical state, it is twice as lucrative to have three children with three different co-parents than to have three children with one co-parent). A Wright Brothers childhood, growing up in a household with two biological parents in a neighborhood where all of the other households with children also contained two biological parents (excepting in cases where a parent had died (less upsetting to a child than a divorce)), is no longer available at any price anywhere in the U.S.

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Department of What We Say versus What They Hear:

I was chatting with a gender studies teacher. Students were assigned to read various documents regarding the difficulties facing women in the American workforce (certainly in China and Korea women are much more likely to reach the CEO position). One of the assigned works was Lean In by Sheryl Sandberg (Gender, Power, Leadership and the Workplace is an example class that requires students to read Lean In).

The teacher explained that she expected students to question the status quo, become angry about the unfairness of being paid less than men, push for political change, and help their sisters in the office. After digesting these materials, however, one young woman asked “Wouldn’t it make the most sense then for me to get married and let my husband support me?”

[Related: About 15 years ago, at the height of what seemed like the largest possible Wall Street bubble, a female Harvard undergraduate mentioned at a party that “I used to want to be an investment banker. Then I realized that I could simply marry an investment banker.”]

Related:

• “Child Support Litigation without a Marriage” (ways of tapping into a worker’s income without being married or even having children)

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Getting out of the house with two children under age 2 at home is a similar challenge to escaping from another planet. Thus of course the only appropriate movie to see during our afternoon of freedom was The Martian. The filmmakers seemed to have gone to some trouble to achieve technical accuracy, yet the demographics of NASA were very different from the reality disclosed by this Popular Mechanics article:  “less than 20 percent of NASA’s employees are under the age of 40.” Virtually everyone in the movie, including folks with desk jobs in Mission Control, seemed to be young and good-looking.

Readers: Why is it commercially unbearable for an older person doing a tech job to appear on-screen, even in a minor or background/non-speaking role?

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“The Populist Prophet” is a New Yorker puff piece on Bernie Sanders. There are some interesting nuggets, however.

Sanders’s father was a Polish Jew who, at the age of seventeen, came to America shortly after his brother, and struggled through the Depression in Brooklyn. By the time Sanders was born, in 1941, his father was working as a paint salesman. Sanders had an older brother, Larry, and their mother stayed home, like most of the women in their lower-middle-class corner of Flatbush. … “There was tension about money,” Sanders said of his family. They lived in a three-and-a-half-room rent-controlled apartment, and his mother pined for a house. “It wasn’t a question of putting food on the table. It was a question of arguing about whether you buy this or whether you buy that. You know, families do this. I remember a great argument about drapes—whether we could afford them … ”

I spoke with a few of Sanders’s contemporaries who had grown up in the same neighborhood, and their memories were rosier: they recalled kids playing stickball on safe, familiar streets until their parents called them home for dinner.

In other words, there was just one wage earner in the household. This person was an immigrant. The family was receiving one of the few forms of government handout available at the time, an apartment at below-market rent. But at least one member of the family felt that a recent immigrant should be entitled to own a house.

Sanders’s childhood thus involved the same conflict that Americans face today. A large amount of the measured inequality of income in the U.S. stems from the large number of immigrants and children of immigrants among the general population (chart). People who didn’t grow up here, don’t speak English, and weren’t educated in a developed country tend not to be highly valued by employers. If someone freshly arrived cannot get a middle-class American lifestyle from the market, to what extent should taxpayers step in and provide that person with a comfortable house, food, health care in the world’s least efficient system, etc.? Everyone seems to agree that a legal resident of the U.S. gets the basics for free (thus making them pretty rich by global standards), but we argue, as apparently did Sanders’s parents, about whether or not it is fair for some families (typically native-born) to have way more than the basics.

A person’s position on this issue would seem to drive a lot of the political debate in the 2016 election. If you want to level the playing field so that a freshly arrived immigrant is at parity with a native-born citizen you would advocate for a 100-percent estate tax rate. You might also advocate for higher tax rates for those with high incomes (since it is rare for an immigrant to achieve a very high income).

[Separately, one of my most liberal friends in Cambridge supports virtually every redistributive idea put forth by Democrats. She has essentially never worked and will soon reach normal retirement age, thus there is no personal cost to her in advocating for higher income tax rates. However, she stands to inherit what a lot of people would consider to be a huge amount of money from her father, a self-made founder and manager of a small engineering and manufacturing business. As it happens, she opposes estate taxes and agrees with George W. Bush that money on which income tax has already been paid should not be taxed a second time when the earner dies (i.e., she wants an estate tax rate of 0 percent).]

 

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A Facebook friend was enthusing about Bernie Sanders and arguing for “direct wealth transfer” to compensate Americans whose wages are stagnant and/or who lose jobs to robots.

I’m wondering if that isn’t already built into the U.S. system. Consider the labor force participation rate (chart), falling steadily since 2009. People who don’t work are eligible for subsidized and/or free housing, food stamps, free health care, a variety of free services for their children, and a free mobile phone (see the Redistribution Recession review). All of these are paid for primarily by high-income Americans because those are the people who pay the most in taxes (if not at as high a rate as Bernie Sanders would like to see collected).

So aren’t we already set up for increasing wealth transfer? The recipients of these transfers receive services, of course, rather than cash, but the function is the same.

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Nearly 20 years ago I argued, in “Tuition-free MIT”, that MIT needed to reduce tuition so that the student body didn’t become “people who were rejected by Harvard”. Economist magazine now looks at colleges ranked by how much they can do for a young person’s earning potential. Harvard is #4 on the list, giving its students a boost from $74.5k to $87.2k. MIT provides a much smaller boost, from $83.4k to $91.6k, ranking in at #26. At least from a purely dollars-and-cents point of view, particularly in light of Harvard’s lower costs for middle class families (MIT tries to play catch-up, however), Harvard is better than MIT.

[Of course, as the Wall Street Journal notes, becoming a California state prison guard may lead to a higher income than attending either school. As noted in Real World Divorce, a one-night sexual encounter with a dentist or physician can yield more in tax-free child support than any of the above pre-tax incomes would be worth. Not working at all combined with a friendship with someone in a taxpayer-funded housing authority, e.g., Cambridge’s, could also result in a superior material lifestyle to working at any of the above-mentioned wages. Young people should keep in mind that there are many paths to the American Dream!]

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A friend has moved from the Midwest to Silicon Valley to work for one of the dinosaurs.

Back in the Midwest he was a passionate liberal, spending a lot of Facebook ink denouncing Scott Walker and his attacks on unionized government workers, etc.

He is making more than double his previous salary, but his standard of living hasn’t improved. He can’t afford an apartment on his tech job salary so he stays in a “hacker hostel in San Jose” for $900/month: ” I understand supply and demand and the invisible hand on some level- but the idea of making 3x the average household income and spending 50 percent on rent for a place I don’t even like irritates me to no end. So many people make these inane salaries and buy a $120k car and pay $2500 for rent. I really would love an Audi R8, but I’ll buy it cash- unlike a lot of other people here.” As with many 19th century immigrant labor camps, the hacker hostel is a cramped all-male environment: “One room has 4 bunk beds; 8 people in it. Usually it is two bunk beds per room if it’s a small room and 3 rooms per house. One room is filled with Nigerian people doing a startup. The whole company lives and work together.” How does one locate such an abode? “You can see the places listed on Airbnb.”

[In other words, techies who earn over $100,000 per year are living in conditions that would be illegal for federal and state governments to supply to citizens who have never worked. (regulations require no more than two people per bedroom)]

A few weeks later we had another exchange: “Have you ever given, or do you know anyone who does give serious thought to leaving the USA for a period of time to save on taxes? So lets, say that at [the big company] I make $140k/year with little hope of raises or promotions in spite of working really hard and living in an overgrown dorm. (They promise I’ll learn to relax and drop that whole ambition disease) I pay about 28% federal taxes, and 10% California taxes. I think if I go to one or more of many islands that are income tax free, my first 100k is income tax free. So if I’m trying to take my net worth from zero to 500k in 5 years, and don’t have the skills to build a wildly succesful startup…this…seems like a good option, but whats the catch? Maybe John Mcafee will shoot me? Maybe they don’t have internet in the islands? Dysentery?”

[I responded that it was easier to move to Texas and simultaneously (a) escape state income tax, and (b) reduce one’s cost of living.]

Related:

• “A 23-year-old Google employee lives in a truck in the company’s parking lot” (related to my 2005 posting “Low-wage workers have to choose between car and rent“)

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