I don’t care what happened in that video

Jan 27 JDN 2458511

Right now there is an ongoing controversy over a viral video of a confrontation between young protesters wearing MAGA hats and an elderly Native American man. Various sources are purporting to show “a fuller picture” and “casting new light” and showing “a different side”. Others are saying it’s exactly as bad as it looks.

I think it probably is as bad as it looks, but the truth is: I don’t care. This is a distraction.

If you think litigating the precise events of this video is important, you are suffering from a severe case of scope neglect. You are looking at a single event between a handful of people when you should be looking at the overall trends of a country of over 300 million people.

First of all: The government shutdown only just ended. There are still going to be a lot of pieces to pick up. That’s what we should be talking about. That’s what we should be posting about. That’s what we should be calling Senators about. This is a national emergency. The longer this lasts, the worse it is going to get. People will die because of this shutdown—from tainted food and polluted water and denied food stamps. Our national security is being jeopardized—particularly with regard to cybersecurity.

The shutdown was also a completely unforced error. Government shutdowns shouldn’t even exist, and now that this one is over, we need to change the budget process so that this can never happen again.

And if you want to talk about the racist, sexist, and authoritarian leanings of Trump supporters, that’s quite important too. But it doesn’t hinge upon one person or one confrontation. I’m sure there are Trump supporters who aren’t racist; and I’m sure there are Obama supporters who are. But the overall statistical trend there is extremely strong.

I understand that most people suffer from severe scope neglect, and we have to live in a world filled with such people; so maybe there’s some symbolic value in finding one particularly egregious case that you can put a face on and share with the world. But if you’re going to do that, there’s two things I’d ask of you:

1. Make absolutely sure that this case is genuine. Nothing will destroy your persuasiveness faster than holding up an ambiguous case as if it were definitive.
2. After you’ve gotten their attention with the single example, show the statistics. There are truths, whole truths, and statistics. If you really want to know something, you use statistics.

The statistics are what this is really about. One person, even a hundred people—that really doesn’t matter. We need to keep our eyes on the millions of people, the directions of entire nations. For a lot of people, looking at numbers is boring; but there are people behind those numbers, and numbers are what tell us what’s really going on in the world.

For example: Trump really does seem to have brought bigotry out in the open. Hate crimes in the US increased for the third year in a row last year.

Then there are his direct policy actions which are human rights violations: The number of children detained at the border has skyrocketed to almost 13,000.

On the other hand, the economy is doing quite well: Unemployment stands at about 4%, and median income is increasing and poverty is decreasing.
Global extreme poverty continues its preciptious decline, but global climate change is getting worse, and already past the point where some serious consequences are going to be unavoidable.

Some indicators are more ambiguous: Corporate profits are near their all-time high, even in inflation-adjusted terms. That could be a sign of an overall good economy—but it also clearly has something to do with redistribution of income toward the wealthy.

Of course, all of those things were true yesterday, and will be true tomorrow. They were true last week, and will be true next week. They don’t lend themselves to a rapid-fire news cycle.

But maybe that means we don’t need a rapid-fire news cycle? Maybe that’s not the best way to understand what’s going on in the world?

Sexism in the economics profession

Jan 20 JDN 2458504

I mentioned in my previous post that the economics profession is currently coming to a reckoning with its own sexist biases. Today I’d like to get back to that in more detail.

I think I should include some kind of trigger warning here, because some of this sexism is pretty extreme. In particular, there are going to be references to anal sex, which certainly isn’t something I was expecting to find. I won’t quote anything highly explicit—but I assure you, it exists.

There is reason to believe that these biases are not as bad as they once were. If you compare the cohorts of new economics PhDs to those of the past, or to the professors who have been tenured for many years, the pattern is quite clear: The longer back you look, the fewer women (and racial minorities, and LGBT people) you see.

In part because of the #MeToo movement (which, I really would like to say, has done an excellent job of picking legitimate targets and not publicly shaming the wrong people, unlike almost every other attempt at public shaming via social media), the economics profession is also coming to terms with a related matter, which could be both cause and consequence of these gender disparities: Sexual harassment by economists of their students and junior faculty.

It wasn’t until last year that the AEA officially adopted a Code of Professional Conduct mandating equality of opportunity for women (and minorities, and LGBT people). Of course, sexual harassment has been illegal much longer than that—but it’s probably the most under-reported and under-prosecuted crime in existence. Last year’s AEA conference was the first to include panels specifically on gender and discrimination in economics, and this year’s conference had more.

Grad students have been a big part of this push; hundreds of econ grad students signed an open letter demanding that universities implement reporting and disciplinary systems to deal with sexual harassment in economics (one of the signatories is friend of mine from UCI, though strangely I don’t remember hearing about it, or I would have signed it too).

One of the most prominent economists accused of repeated sexual harassment unfortunately happens to be the youngest Black person ever to get tenured at Harvard. This would seem to create some tension between gender equality and racial equality. But of course this tension is illusory: There are plenty of other brilliant Black economists they could have hired who aren’t serial sexual harassers.

It’s still dicey for grad students and junior faculty to talk about these things, because of the very real power that senior faculty have over us as committees for dissertations, hiring, and tenure. Some economists who wrote papers about sexism in the profession have chosen to remain anonymous for fear of retaliation.

Part of how this issue has finally gotten so much attention is by concerned economists actually showing it using the methods of social science. One of the most striking studies was a data analysis of the word usage on econjobrumors.com, a job discussion board for PhD grads and junior faculty in economics. (More detail on that study here and also here.)

I’ve bolded the terms that are sexual or suggest bias. I’ve italicized the terms that suggest something involving romantic or family relationships. I’ve underlined the terms actually relevant for economics.
These were the terms most commonly associated with women:

hotter, lesbian, bb, sexism, tits, anal, marrying, feminazi, slut, hot, vagina, boobs, pregnant, pregnancy, cute, marry, levy, gorgeous, horny, crush, beautiful, secretary, dump, shopping, date, nonprofit, intentions, sexy, dated and prostitute.

These were the terms most commonly associated with men:

juicy, keys, adviser, bully, prepare, fought, wharton, austrian, fieckers, homo, genes, e7ee, mathematician, advisor, burning, pricing, fully, band, kfc, nobel, cat, amusing, greatest, textbook, goals, irritate, roof, pointing, episode, and tries.

I imagine the two lists more or less speak for themselves. I’m particularly shocked by the high prevalence of the word “anal”—the sixth-most common word used in threads involving women.

Who goes to an economics job forum and starts talking about anal sex?

I actually did a search on “anal” to see what sort of things were being discussed: This thread is apparently someone trying to decide where he should work based on “Girls of which country are easiest to get?”, so basically sex tourism as job market planning. Here’s another asking (perhaps legitimately) about the appropriate social norm for splitting vacation costs with a girlfriend, and someone down the thread recommends that in exchange for paying, he should expect her to provide him with anal sex. This one starts with a man lamenting that his girlfriend dumped him on his birthday (that’s a dick move by the way), but somehow veers off into a discussion of whether anal sex is overrated. And this one is just off the bat about frequency of sexual encounters.
So yeah, I’m really not surprised that there aren’t a lot of women on these so-called “job discussion boards”.

The only bias-related word associated with men was “homo”—so it’s actually a homophobic bias, itself indicative of sexism and a profession dominated by cisgender straight White men. I’m not entirely sure that “juicy” was intended to be sexualized (one could also speak of “juicy ideas”), but I’ll assume it was just to conservatively estimate the gender disparity.

Also of special note are “fieckers” and “e7ee”, which refer to specific users, who, despite being presumably economists, caused a great deal of damage to the discussion boards. “fieckers” was an idiosyncratic word that one user used in a variety of sexist and homophobic troll posts, while “e7ee” is the hexadecimal code for one of the former moderators, who apparently uilaterally deleted and moved threads in order to tilt the entire discussion board toward right-wing laissez-faire economics.

Of course, that one discussion board isn’t representative of the entire profession. As anyone who has ever visited 4chan knows, discussion boards can be some of the darkest places on the Internet.

Clearer evidence of discrimination where it counts can be found in citation studies, which have found that papers published by women in top economics journals are more highly cited than papers published by men in the same journals.

What does that mean? Well, it’s the same reason that female stock brokers outperform male brokers and firms with more female executives are more profitable. Women are held to a higher standard than men, so in order to simply get in, women have to be more competent and produce higher-quality output.

Admittedly, citation count is far from a perfect measure of research quality (and for that matter profit is far from a perfect measure of a well-run corporation). But this is very clear evidence of actual discrimination. Not innate differences in preferences, not differences in talent—actual discrimination. It’s less clear where and how the discrimination is happening. Are journals simply not accepting good papers if they see female authors? (This is possible, because most top journals in economics don’t use double-blind peer review anymore—for quite flimsy reasons, in my opinion). Are there not enough mentors for women in academia? Are women moving to more accepting fields before they even enter grad school? Are they being pushed out by harassment as grad students? Likely all of these are part of the story.

There’s reason to think that economic ideology has contributed to this problem. If you think of the world in neoclassical laissez-faire terms, where markets are perfect and always lead to the best outcome, then you are likely to be blind to bias and discrimination, because a perfect market would obviously eliminate such things. This is why the recognition of bias has largely come from empirical studies of labor markets, and to a lesser extent from experiments and more left-wing theorists. If you assert that markets are perfectly efficient, labor economists are likely to laugh in your face, while a surprising number of macro theorists will nod and ask you to continue.

Interestingly, recent field experiments on bias in hiring of new faculty did not find any bias against women in economics (and found biases toward women in several other fields). Of course, that doesn’t mean there never was such bias; but perhaps we’ve actually managed to remove it. So that’s one major avenue of discrimination we maybe finally have under control. Only several dozen left to go?

Fighting the zero-sum paradigm

Dec 2 JDN 2458455

It should be obvious at this point that there are deep, perhaps even fundamental, divides between the attitudes and beliefs of different political factions. It can be very difficult to even understand, much less sympathize, with the concerns of people who are racist, misogynistic, homophobic, xenophobic, and authoritarian.
But at the end of the day we still have to live in the same country as these people, so we’d better try to understand how they think. And maybe, just maybe, that understanding will help us to change them.

There is one fundamental belief system that I believe underlies almost all forms of extremism. Right now right-wing extremism is the major threat to global democracy, but left-wing extremism subscribes to the same core paradigm (consistent with Horseshoe Theory).

I think the best term for this is the zero-sum paradigm. The idea is quite simple: There is a certain amount of valuable “stuff” (money, goods, land, status, happiness) in the world, and the only political question is who gets how much.

Thus, any improvement in anyone’s life must, necessarily, come at someone else’s expense. If I become richer, you become poorer. If I become stronger, you become weaker. Any improvement in my standard of living is a threat to your status.

If this belief were true, it would justify, or at least rationalize, all sorts of destructive behavior: Any harm I can inflict upon someone else will yield a benefit for me, by some fundamental conservation law of the universe.

Viewed in this light, beliefs like patriarchy and White supremacy suddenly become much more comprehensible: Why would you want to spend so much effort hurting women and Black people? Because, by the fundamental law of zero-sum, any harm to women is a benefit to men, and any harm to Black people is a benefit to White people. The world is made of “teams”, and you are fighting for your own against all the others.

And I can even see why such an attitude is seductive: It’s simple and easy to understand. And there are many circumstances where it can be approximately true.
When you are bargaining with your boss over a wage, one dollar more for you is one dollar less for your boss.
When your factory outsources production to China, one more job for China is one less job for you.

When we vote for President, one more vote for the Democrats is one less vote for the Republicans.

But of course the world is not actually zero-sum. Both you and your boss would be worse off if your job were to disappear; they need your work and you need their money. For every job that is outsourced to China, another job is created in the United States. And democracy itself is such a profound public good that it basically overwhelms all others.

In fact, it is precisely when a system is running well that the zero-sum paradigm becomes closest to true. In the space of all possible allocations, it is the efficient ones that behave in something like a zero-sum way, because when the system is efficient, we are already producing as much as we can.

This may be part of why populist extremism always seems to assert itself during periods of global prosperity, as in the 1920s and today: It is precisely when the world is running at its full capacity that it feels most like someone else’s gain must come at your loss.

Yet if we live according to the zero-sum paradigm, we will rapidly destroy the prosperity that made that paradigm seem plausible. A trade war between the US and China would put millions out of work in both countries. A real war with conventional weapons would kill millions. A nuclear war would kill billions.

This is what we must convey: We must show people just how good things are right now.

This is not an easy task; when people want to believe the world is falling apart, they can very easily find excuses to do so. You can point to the statistics showing a global decline in homicide, but one dramatic shooting on the TV news will wipe that all away. You can show the worldwide rise in real incomes across the board, but that won’t console someone who just lost their job and blames outsourcing or immigrants.

Indeed, many people will be offended by the attempt—the mere suggestion that the world is actually in very good shape and overall getting better will be perceived as an attempt to deny or dismiss the problems and injustices that still exist.

I encounter this especially from the left: Simply pointing out the objective fact that the wealth gap between White and Black households is slowly closing is often taken as a claim that racism no longer exists or doesn’t matter. Congratulating the meteoric rise in women’s empowerment around the world is often paradoxically viewed as dismissing feminism instead of lauding it.

I think the best case against progress can be made with regard to global climate change: Carbon emissions are not falling nearly fast enough, and the world is getting closer to the brink of truly catastrophic ecological damage. Yet even here the zero-sum paradigm is clearly holding us back; workers in fossil-fuel industries think that the only way to reduce carbon emissions is to make their families suffer, but that’s simply not true. We can make them better off too.

Talking about injustice feels righteous. Talking about progress doesn’t. Yet I think what the world needs most right now—the one thing that might actually pull us back from the brink of fascism or even war—is people talking about progress.

If people think that the world is full of failure and suffering and injustice, they will want to tear down the whole system and start over with something else. In a world that is largely democratic, that very likely means switching to authoritarianism. If people think that this is as bad as it gets, they will be willing to accept or even instigate violence in order to change to almost anything else.

But if people realize that in fact the world is full of success and prosperity and progress, that things are right now quite literally better in almost every way for almost every person in almost every country than they were a hundred—or even fifty—years ago, they will not be so eager to tear the system down and start anew. Centrism is often mocked (partly because it is confused with false equivalence), but in a world where life is improving this quickly for this many people, “stay the course” sounds awfully attractive to me.
That doesn’t mean we should ignore the real problems and injustices that still exist, of course. There is still a great deal of progress left to be made.  But I believe we are more likely to make progress if we acknowledge and seek to continue the progress we have already made, than if we allow ourselves to fall into despair as if that progress did not exist.

What really works against bigotry

Sep 30 JDN 2458392

With Donald Trump in office, I think we all need to be thinking carefully about what got us to this point, how we have apparently failed in our response to bigotry. It’s good to see that Kavanaugh’s nomination vote has been delayed pending investigations, but we can’t hope to rely on individual criminal accusations to derail every potentially catastrophic candidate. The damage that someone like Kavanaugh would do to the rights of women, racial minorities, and LGBT people is too severe to risk. We need to attack this problem at its roots: Why are there so many bigoted leaders, and so many bigoted voters willing to vote for them?

The problem is hardly limited to the United States; we are witnessing a global crisis of far-right ideology, as even the UN has publicly recognized.

I think the left made a very dangerous wrong turn with the notion of “call-out culture”. There is now empirical data to support me on this. Publicly calling people racist doesn’t make them less racist—in fact, it usually makes them more racist. Angrily denouncing people doesn’t change their minds—it just makes you feel righteous. Our own accusatory, divisive rhetoric is part of the problem: By accusing anyone who even slightly deviates from our party line (say, by opposing abortion in some circumstances, as 75% of Americans do?) of being a fascist, we slowly but surely push more people toward actual fascism.

Call-out culture encourages a black-and-white view of the world, where there are “good guys” (us) and “bad guys” (them), and our only job is to fight as hard as possible against the “bad guys”. It frees us from the pain of nuance, complexity, and self-reflection—at only the cost of giving up any hope of actually understanding the real causes or solving the problem. Bigotry is not something that “other” people have, which you, fine upstanding individual, could never suffer from. We are all Judy Hopps.

This is not to say we should do nothing—indeed, that would be just as bad if not worse. The rise of neofascism has been possible largely because so many people did nothing. Knowing that there is bigotry in all of us shouldn’t stop us from recognizing that some people are far worse than others, or paralyze us against constructively improving ourselves and our society. See the shades of gray without succumbing to the Fallacy of Gray.

The most effective interventions at reducing bigotry are done in early childhood; obviously, it’s far too late for that when it comes to people like Trump and Kavanaugh.

But there are interventions that can work at reducing bigotry among adults. We need to first understand where the bigotry comes from—and it doesn’t always come from the same source. We need to be willing to look carefully—yes, even sympathetically—at people with bigoted views so that we can understand them.

There are deep, innate systems in the human brain that make bigotry come naturally to us. Even people on the left who devote their lives to combating discrimination against women, racial minorities and LGBT people can still harbor bigoted attitudes toward other groups—such as rural people or Republicans. If you think that all Republicans are necessarily racist, that’s not a serious understanding of what motivates Republicans—that’s just bigotry on your part. Trump is racist. Pence is racist. One could argue that voting for them constitutes, in itself, a racist act. But that does not mean that every single Republican voter is fundamentally and irredeemably racist.

It’s also important to have conversations face-to-face. I must admit that I am personally terrible at this; despite training myself extensively in etiquette and public speaking to the point where most people perceive me as charismatic, even charming, deep down I am still a strong introvert. I dislike talking in person, and dread talking over the phone. I would much prefer to communicate entirely in written electronic communication—but the data is quite clear on this: Face-to-face conversations work better at changing people’s minds. It may be awkward and uncomfortable, but by being there in person, you limit their ability to ignore you or dismiss you; you aren’t a tweet from the void, but an actual person, sitting there in front of them.

Speak with friends and family members. This, I know, can be especially awkward and painful. In the last few years I have lost connections with friends who were once quite close to me as a result of difficult political conversations. But we must speak up, for silence becomes complicity. And speaking up really can work.

Don’t expect people to change their entire worldview overnight. Focus on small, concrete policy ideas. Don’t ask them to change who they are; ask them to change what they believe. Ask them to justify and explain their beliefs—and really listen to them when they do. Be open to the possibility that you, too might be wrong about something.

If they say “We should deport all illegal immigrants!”, point out that whenever we try this, a lot of fields go unharvested for lack of workers, and ask them why they are so concerned about illegal immigrants. If they say “Illegal immigrants come here and commit crimes!” point them to the statistical data showing that illegal immigrants actually commit fewer crimes on average than native-born citizens (probably because they are more afraid of what happens if they get caught).

If they are concerned about Muslim immigrants influencing our culture in harmful ways, first, acknowledge that there are legitimate concerns about Islamic cultural values (particularly toward women and LGBT people)but then point out that over 90% of Muslim-Americans are proud to be American, and that welcoming people is much more effective at getting them to assimilate into our culture than keeping them out and treating them as outsiders.

If they are concerned about “White people getting outnumbered”, first point out that White people are still over 70% of the US population, and in most rural areas there are only a tiny fraction of non-White people. Point out that Census projections showing the US will be majority non-White by 2045 are based on naively extrapolating current trends, and we really have no idea what the world will look like almost 30 years from now. Next, ask them why they worry about being “outnumbered”; get them to consider that perhaps racial demographics don’t have to be a matter of zero-sum conflict.

After you’ve done this, you will feel frustrated and exhausted, and the relationship between you and the person you’re trying to convince will be strained. You will probably feel like you have accomplished absolutely nothing to change their mind—but you are wrong. Even if they don’t acknowledge any change in their beliefs, the mere fact that you sat down and asked them to justify what they believe, and presented calm, reasonable, cogent arguments against those beliefs will have an effect. It will be a small effect, difficult for you to observe in that moment. But it will still be an effect.

Think about the last time you changed your mind about something important. (I hope you can remember such a time; none of us were born being right about everything!) Did it happen all at once? Was there just one, single knock-down argument that convinced you? Probably not. (On some mathematical and scientific questions I’ve had that experience: Oh, wow, yeah, that proof totally demolishes what I believed. Well, I guess I was wrong. But most beliefs aren’t susceptible to such direct proof.) More likely, you were presented with arguments from a variety of sources over a long span of time, gradually chipping away at what you thought you knew. In the moment, you might not even have admitted that you thought any differently—even to yourself. But as the months or years went by, you believed something quite different at the end than you had at the beginning.

Your goal should be to catalyze that process in other people. Don’t take someone who is currently a frothing neo-Nazi and expect them to start marching with Black Lives Matter. Take someone who is currently a little bit uncomfortable about immigration, and calm their fears. Don’t take someone who thinks all poor people are subhuman filth and try to get them to support a basic income. Take someone who is worried about food stamps adding to our national debt, and show them how it is a small portion of our budget. Don’t take someone who thinks global warming was made up by the Chinese and try to get them to support a ban on fossil fuels. Take someone who is worried about gas prices going up as a result of carbon taxes and show them that carbon offsets would add only about $100 per person per year while saving millions of lives.

And if you’re ever on the other side, and someone has just changed your mind, even a little bit—say so. Thank them for opening your eyes. I think a big part of why we don’t spend more time trying to honestly persuade people is that so few people acknowledge us when we do.

What exactly is “gentrification”? How should we deal with it?

Nov 26, JDN 2458083

“Gentrification” is a word that is used in a variety of mutually-inconsistent ways. If you compare the way social scientists use it to the way journalists use it, for example, they are almost completely orthogonal.

The word “gentrification” is meant to invoke the concept of a feudal gentry—a hereditary landed class that extracts rents from the rest of the population while contributing little or nothing themselves.

If indeed that is what we are talking about, then obviously this is bad. Moreover, it’s not an entirely unfounded fear; there are some remarkably strong vestiges of feudalism in the developed world, even in the United States where we never formally had a tradition of feudal titles. There really is a significant portion of the world’s wealth held by a handful of billionaire landowner families.

But usually when people say “gentrification” they mean something much broader. Almost any kind of increase in urban real estate prices gets characterized as “gentrification” by at least somebody, and herein lies the problem.

In fact, the kind of change that is most likely to get characterized as “gentrification” isn’t even the rising real estate prices we should be most worried about. People aren’t concerned when the prices of suburban homes double in 20 years. You might think that things that are already too expensive getting more expensive would be the main concern, but on the contrary, people are most likely to cry “gentrification” when housing prices rise in poor areas where housing is cheap.

One of the most common fears about gentrification is that it will displace local residents. In fact, the best quasi-experimental studies show little or no displacement effect. It’s actually mainly middle-class urbanites who get displaced by rising rents. Poor people typically own their homes, and actually benefit from rising housing prices. Young upwardly-mobile middle-class people move to cities to rent apartments near where they work, and tend to assume that’s how everyone lives, but it’s not. Rising rents in a city are far more likely to push out its grad students than they are poor families that have lived there for generations. Part of why displacement does not occur may be because of policies specifically implemented to fight it, such as subsidized housing and rent control. If that’s so, let’s keep on subsidizing housing (though rent control will always be a bad idea).

Nor is gentrification actually a very widespread phenomenon. The majority of poor neighborhoods remain poor indefinitely. In most studies, only about 30% of neighborhoods classified as “gentrifiable” actually end up “gentrifying”. Less than 10% of the neighborhoods that had high poverty rates in 1970 had low poverty rates in 2010.

Most people think gentrification reduces crime, but in the short run the opposite is the case. Robbery and larceny are higher in gentrifying neighborhoods. Criminals are already there, and suddenly they get much more valuable targets to steal from, so they do.

There is also a general perception that gentrification involves White people pushing Black people out, but this is also an overly simplistic view. First of all, a lot of gentrification is led by upwardly-mobile Black and Latino people. Black people who live in gentrified neighborhoods seem to be better off than Black people who live in non-gentrified neighborhoods; though selection bias may contribute to this effect, it can’t be all that strong, or we’d observe a much stronger displacement effect. Moreover, some studies have found that gentrification actually tends to increase the racial diversity of neighborhoods, and may actually help fight urban self-segregation, though it does also tend to increase racial polarization by forcing racial mixing.

What should we conclude from all this? I think the right conclusion is we are asking the wrong question.

Rising housing prices in poor areas aren’t inherently good or inherently bad, and policies designed specifically to increase or decrease housing prices are likely to have harmful side effects. What we need to be focusing on is not houses or neighborhoods but people. Poverty is definitely a problem, for sure. Therefore we should be fighting poverty, not “gentrification”. Directly transfer wealth from the rich to the poor, and then let the housing market fall where it may.

There is still some role for government in urban planning more generally, regarding things like disaster preparedness, infrastructure development, and transit systems. It may even be worthwhile to design regulations or incentives that directly combat racial segregation at the neighborhood level, for, as the Schelling Segregation Model shows, it doesn’t take a large amount of discriminatory preference to have a large impact on socioeconomic outcomes. But don’t waste effort fighting “gentrification”; directly design policies that will incentivize desegregation.

Rising rent as a proportion of housing prices is still bad, and the fundamental distortions in our mortgage system that prevent people from buying houses are a huge problem. But rising housing prices are most likely to be harmful in rich neighborhoods, where housing is already overpriced; in poor neighborhoods where housing is cheap, rising prices might well be a good thing.
In fact, I have a proposal to rapidly raise homeownership across the United States, which is almost guaranteed to work, directly corrects an enormous distortion in financial markets, and would cost about as much as the mortgage interest deduction (which should probably be eliminated, as most economists agree). Give each US adult a one-time grant voucher which gives them $40,000 that can only be spent as a down payment on purchasing a home. Each time someone turns 18, they get a voucher. You only get one over your lifetime, so use it wisely (otherwise the policy could become extremely expensive); but this is an immediate direct transfer of wealth that also reduces your credit constraint. I know I for one would be house-hunting right now if I were offered such a voucher. The mortgage interest deduction means nothing to me, because I can’t afford a down payment. Where the mortgage interest deduction is regressive, benefiting the rich more than the poor, this policy gives everyone the same amount, like a basic income.

In the short run, this policy would probably be expensive, as we’d have to pay out a large number of vouchers at once; but with our current long-run demographic trends, the amortized cost is basically the same as the mortgage interest deduction. And the US government especially should care about the long-run amortized cost, as it is an institution that has lasted over 200 years without ever missing a payment and can currently borrow at negative real interest rates.

This is one of the worst wildfire seasons in American history. But it won’t be for long.

Oct 22, JDN 2458049

At least 38 people have now been killed by the wildfires that are still ongoing in California; in addition, 5700 buildings have been destroyed and 190,000 acres of land burned. The State of California keeps an updated map of all the fires that are ongoing and how well-controlled they are; it’s not a pretty sight.

While the particular details are extreme, this is not an isolated incident. This year alone, wildfires have destroyed over 8 million acres of land in the US. In 2015, that figure was 10 million acres.

Property damage for this year’s wildfires in California is estimated at over $65 billion. That’s more than what Trump recently added to the military budget, and getting close to our total spending on food stamps.

There is a very clear upward trend in the scale and intensity of wildfires just over the last 50 years, and the obvious explanation is climate change. As climate change gets worse, these numbers are projected to increase between 30% and 50% by the 2040s. We still haven’t broken the record of fire damage in 1910, but as the upward trend continues we might soon enough.

It’s important to keep the death tolls in perspective; much as with hurricanes, our evacuation protocols and first-response agencies do their jobs very well, and as a result we’ve been averaging only about 10 wildfire deaths per year over the whole United States for the last century. In a country of over 300 million people, that’s really an impressively small number. That number has also been trending upward, however, so we shouldn’t get complacent.

Climate change isn’t the only reason these fires are especially damaging. It also matters where you build houses. We have been expanding our urban sprawl into fire-prone zones, and that is putting a lot of people in danger. Since 1990, over 60% of new homes were built in “wildland-urban interface areas” that are at higher risk.

Why are we doing this? Because housing prices in urban centers are too expensive for people to live there, but that is where most of the jobs are. So people have little choice but to live in exurbs and suburbs closer to the areas where fires are worst. That’s right: The fires are destroying homes and killing people because the rent is too damn high.

We need to find a solution to this problem of soaring housing prices. And since housing is such a huge proportion of our total expenditure—we spend more on housing than we do on all government spending combined—this would have an enormous impact on our entire economy. If you compare the income of a typical American today to most of the world’s population, or even to a typical American a century ago, we should feel extremely rich, but we don’t—largely because we spend so much of it just on keeping a roof over our heads.

Real estate is also a major driver of economic inequality. Wealth inequality is highest in urban centers where homeownership is rare. The large wealth gaps between White and non-White Americans can be in large part attributed to policies that made homeownership much more difficult for non-White people. Housing value inequality and overall wealth inequality are very strongly correlated. The high inequality in housing prices is making it far more difficult for people to move from poor regions to rich regions, holding back one of the best means we had for achieving more equal incomes.

Moreover, the rise in capital income share since the 1970s is driven almost entirely by real estate, rather than actual physical capital. The top 10% richest housing communities constitute over 52% of the total housing wealth in the US.

There is a lot of debate about what exactly causes these rising housing prices. No doubt, there are many factors contributing, from migration patterns to zoning regulations to income inequality in general. In a later post, I’ll get into why I think many of the people who think they are fighting the problem are actually making it worse, and suggest some ideas for what they should be doing instead.

When are we going to get serious about climate change?

Oct 8, JDN 24578035

Those two storms weren’t simply natural phenomena. We had a hand in creating them.

The EPA doesn’t want to talk about the connection, and we don’t have enough statistical power to really be certain, but there is by now an overwhelming scientific consensus that global climate change will increase hurricane intensity. The only real question left is whether it is already doing so.

The good news is that global carbon emissions are no longer rising. They have been essentially static for the last few years. The bad news is that this is almost certainly too little, too late.

The US is not on track to hit our 2025 emission target; we will probably exceed it by at least 20%.

But the real problem is that the targets themselves are much too high. Most countries have pledged to drop emissions only about 8-10% below their 1990s levels.

Even with the progress we have made, we are on track to exceed the global carbon budget needed to keep warming below 2 C by the year 2040. We have been reducing emission intensity by about 0.8% per year—we need to be reducing it by at least 3% per year and preferably faster. Highly-developed nations should be switching to nuclear energy as quickly as possible; an equitable global emission target requires us to reduce our emissions by 80% by 2050.

At the current rate of improvement, we will overshoot the 2 C warming target and very likely the 3C target as well.

Why aren’t we doing better? There is of course the Tragedy of the Commons to consider: Each individual country acting in its own self-interest will continue to pollute more, as this is the cheapest and easiest way to maintain industrial development. But then if all countries do so, the result is a disaster for us all.
But this explanation is too simple. We have managed to achieve some international cooperation on this issue. The Kyoto protocol has worked; emissions among Kyoto member nations have been reduced by more than 20% below 1990 levels, far more than originally promised. The EU in particular has taken a leadership role in reducing emissions, and has a serious shot at hitting their target of 40% reduction by 2030.

That is a truly astonishing scale of cooperation; the EU has a population of over 500 million people and spans 28 nations. It would seem like doing that should get us halfway to cooperating across all nations and all the world’s people.

But there is a vital difference between the EU and the world as a whole: The tribal paradigm. Europeans certainly have their differences: The UK and France still don’t really get along, everyone’s bitter with Germany about that whole Hitler business, and as the acronym PIIGS emphasizes, the peripheral countries have never quite felt as European as the core Schengen members. But despite all this, there has been a basic sense of trans-national (meta-national?) unity among Europeans for a long time.
For one thing, today Europeans see each other as the same race. That wasn’t always the case. In Medieval times, ethnic categories were as fine as “Cornish” and “Liverpudlian”. (To be fair, there do still exist a handful of Cornish nationalists.) Starting around the 18th cenutry, Europeans began to unite under the heading of “White people”, a classification that took on particular significance during the trans-Atlantic slave trade. But even in the 19th century, “Irish” and “Sicilian” were seen as racial categories. It wasn’t until the 20th century that Europeans really began to think of themselves as one “kind of people”, and not coincidentally it was at the end of the 20th century that the European Union finally took hold.

There is another region that has had a similar sense of unification: Latin America. Again, there are conflicts: There are a lot of nasty stereotypes about Puerto Ricans among Cubans and vice-versa. But Latinos, by and large, think of each other as the same “kind of people”, distinct from both Europeans and the indigenous population of the Americas.

I don’t think it is coincidental that the lowest carbon emission intensity (carbon emissions / GDP PPP) in the world is in Latin America, followed closely by Europe.
And if you had to name right now the most ethnically divided region in the world, what would you say? The Middle East, of course. And sure enough, they have the worst carbon emission intensity. (Of course, oil is an obvious confounding variable here, likely contributing to both.)

Indeed, the countries with the lowest ethnic fractionalization ratings tend to be in Europe and Latin America, and the highest tend to be in the Middle East and Africa.

Even within the United States, political polarization seems to come with higher carbon emissions. When we think of Democrats and Republicans as different “kinds of people”, we become less willing to cooperate on finding climate policy solutions.

This is not a complete explanation, of course. China has a low fractionalization rating but a high carbon intensity, and extremely high overall carbon emissions due to their enormous population. Africa’s carbon intensity isn’t as high as you’d think just from their terrible fractionalization, especially if you exclude Nigeria which is a major oil producer.

But I think there is nonetheless a vital truth here: One of the central barriers to serious long-term solutions to climate change is the entrenchment of racial and national identity. Solving the Tragedy of the Commons requires cooperation, we will only cooperate with those we trust, and we will only trust those we consider to be the same “kind of people”.

You can even hear it in the rhetoric: If “we” (Americans) give up our carbon emissions, then “they” (China) will take advantage of us. No one seems to worry about Alabama exploiting California—certainly no Republican would—despite the fact that in real economic terms they basically do. But people in Alabama are Americans; in other words, they count as actual people. People in China don’t count. If anything, people in California are supposed to be considered less American than people in Alabama, despite the fact that vastly more Americans live in California than Alabama. This mirrors the same pattern where we urban residents are somehow “less authentic” even though we outnumber the rural by four to one.
I don’t know how to mend this tribal division; I very much wish I did. But I do know that simply ignoring it isn’t going to work. We can talk all we want about carbon taxes and cap-and-trade, but as long as most of the world’s people are divided into racial, ethnic, and national identities that they consider to be in zero-sum conflict with one another, we are never going to achieve the level of cooperation necessary for a real permanent solution to climate change.

The temperatures and the oceans rise. United we must stand, or divided we shall fall.