Wednesday, March 07, 2018



Book Review of "Dream Hoarders: How the American Upper Middle Class is Leaving Everyone Else in the Dust, Why That is a Problem, and What to Do about It" by Richard V. Reeves

What reviewer Robert Whaples reports below is a fairly conventional sociological analysis of social stratification in America.  And there is undoubtedly something in it.  The big problem is said to be that the people who have already got to the top of American society tend to keep it for themselves and their children.  There is little social mobility upwards from lower down in the social hierarchy.  And you will read below about a variety of ways in which that "closed shop" is maintained.

I think that sociological account does however miss a large elephant in the room.  And to see that elephant you need to go to psychology.  A couple of decades ago Charles Murray showed that IQ was a strong predictor of economic success.  So the existing elite will already be high IQ people and it is actually their high IQ that gives them their dominant position, not what schools they went to etc.

Toby Young offers a very extensive exploration of that possibility.  He thinks we already have a ruling INTELLECTUAL elite.  That being so, nothing will help you to get into that elite unless you have the requisite high IQ.  With that everything is possible; without it very little is possible


The American labor market “does a good job of rewarding the kind of ‘merit’ that adds economic value—skills, knowledge, intelligence” (p. 75). “The idea of moving away from a market economy is foolish as well as far-fetched. Markets increase prosperity, reduce poverty, enhance well-being, and bolster individual choice” (p. 77). These aren’t the words of someone from Cato, the AEI or the Heritage Foundation, but from Richard Reeves, a senior fellow in Economic Studies at the Brookings Institution. But, warns Reeves, this “meritocratic market” is embedded in an unfair society. Meritocracy is great for adults, but not for children. The problem is that upper middle class parents have built a system that gives their own children massive advantages—they hoard the prerequisites for the American dream and block the children of others from flourishing.

Market merit is a great thing, but we need to reform our social institutions so that they “aggressively equalize opportunities to develop market merit” (p. 84). “The problem is not that society is too competitive. It is that it is not competitive enough, partly because of ... anticompetitive opportunity hoarding ... but mostly because the chances to prepare for the competition are so unequal” (p. 124). Reeves seems to realize that it would be exceptionally difficult (and probably quite destructive) to eliminate all the advantages that children of successful parents have over other children. These advantages include having caring parents (two of them, not just one), who are good role models and spend time simply talking to their children—one study he cites examines the “conversation gap” and estimates that children in families on welfare hear about six hundred words per hours, working-class children about twelve hundred words per hour, and children of professionals about twenty-one hundred words per hour. Reeves doesn’t aim to undo these immense advantages. Rather, he takes aim at a higher level—at legal rules and institutional arrangements, constructed by the upper middle class to make life better for themselves and their children without considering the potential harm imposed on others—and suggests that we could use “more downward mobility from the top” (p. 58).

So, how do upper middle class professionals—“journalists, scholars, technocrats, managers, bureaucrats, the people with letters after their names” (p. 4) hoard the dream? Reeves focuses on three tactics—exclusionary zoning, college admissions policies, and the allocation of good internships. The most important of these is the first. The upper middle class have segregated themselves into towns and neighborhoods where the cost of living is high, mainly by using zoning rules that make it impossible for poorer people to be their neighbors and enjoy these communities’ amenities—especially good schools. The rich practice an “inverse ghettoization” (p. 102)—building enclaves where they live healthy, safe lives together and don’t have to deal with the annoyances of non-elites and their children, to the detriment of everyone else, argues Reeves. These zoning practices—such as banning multi-family dwellings and setting high minimum lot sizes—mean that those outside the top groups cannot afford to live in the most economically prosperous places. And the dirty secret is that these zoning requirements are stricter in cities with more left-of-center voters. Enrico Moretti and Chang-Tai Hsieh have estimated that if only San Francisco, San Jose and New York adopted zoning regulations of the median American city, the entire U.S. economy would be 10 percent larger because more people would be able to afford to move to opportunity.

The problem with higher education, as Reeves sees it, is that the game is rigged so that children of the upper middle class have huge advantages in getting into the best colleges and universities—because they live near the best high schools and because, for example, their parents have the wherewithal to spend money on college admissions consultants (who can charge over $10,000 for their top tier of services). “Post-secondary education ... has become an ‘inequality machine” (p. 11), as it “takes the inequality given to it and magnifies it” (p. 55). Elite schools pay lip services to serving all of society, but they are “locked into an equilibrium that militates against serious reform efforts” as it “is simply not in the interests of the most powerful institutions to change things very much” (p. 88-89). Reeves offers a tantalizing sentence or two about supply-side reforms to improve opportunity and access to higher education but doesn’t press the issue. Instead, he focuses on an interesting, but probably not very important, symptom of dream hoarding in higher education—policies that make it easier for “legacy” students, the children of alumni, to be accepted to the top colleges. He makes a strong case that this practice is immoral and downright un-American, citing evidence from a couple cases where abolishing the practice has not reduced alumni giving. He’s a fan of extending affirmative action to encompass social class. He also advocates the abolition of granting special advantages for well-connected students who apply for internships at top firms, non-profits and government positions. The playing field needs to be leveled—so that having parents who know the right people doesn’t give applicants a leg up.

As you can see from my overview of Reeve’s arguments, this is a book that will appeal to people across the political spectrum—in fact, it will probably appeal more to conservatives and libertarians than the “progressives” who run our colleges and have enacted these zoning laws. Reeves’ policy proposals strike me as mostly mild afterthoughts—his primary goal seems to be to open “dream hoarding” up to the disinfectant of sunlight, to encourage us to realize the inconsistencies between our stated creeds and our practices, so that we begin to voluntarily give up our hoarding. In this task he may have failed. I conclude this after having discussed Dream Hoarders with a group of students at an elite college (Wake Forest University). They accepted many of his arguments but ultimately few saw a burning need to give up on legacy admissions (which might benefit their own children) and using special connections to snag good job internships.

I won’t enumerate his proposals, but will object to his take on contraception for teenagers, when he declares that “Causal sex is fine. Casual child bearing is not” (p. 127). One doesn’t have to dig too deep to realize that treating other people so casually, so disposably, as if they are just there for one’s own pleasure, is the root of many of the problems he discusses. Would he advise his own children that “casual sex is fine”? Do parents now say this to their children? The thought of this saddens me deeply.

Finally, Reeves has a fresh take on John Rawls. Rather than considering how we would want things to be arranged if we didn’t know our own original position (shrouded behind the veil of ignorance), Reeves asks us to think about the best arrangement if no one knows his “children’s place in society, their class position or social status; nor does he know their fortune in the distribution of natural assets and abilities, intelligence and strength and the like” (p. 72, emphasis in the original). He senses that if this were the position facing us, we’d be more supportive of redistributive policies and institution, if we were less certain where our own children were going to end up. I’m not so certain.

 SOURCE 

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The World Cries Wolf on U.S. Tariffs

When U.S. president Donald Trump announced sweeping new tariffs of 25 percent on imported steel and 10 percent on aluminum Thursday, the world’s commentariat broke out in a frenzy of condemnation. Trump was accused of playing politics in a way that could “destabilize the global economy.” It was said that Trump’s actions could “bring global trade growth to a halt” (notwithstanding the fact that levels of global trade have already been declining since 2011). His critics screamed “trade war.” Canadian and European leaders immediately threatened retaliation. China didn’t, but American China experts predicted that Beijing soon would.

It is likely that few, if any, of these experts have read the two detailed Commerce Department reports that prompted the tariff decision, or the Defense Department memo endorsing their findings. The goal of the tariffs proposed by Commerce and endorsed by the president isn’t to punish Chinese dumping or put an end to free trade. It’s to ensure that the United States retains any domestic steel and aluminum production at all. Like President Barack Obama’s controversial auto industry bailout in 2009, these tariffs are about keeping an industry for the future, not about making it profitable today.

If China has merely expressed concern over Trump’s plans, it’s because China is not really the target of the planned tariffs. China’s massive state-owned steel and aluminum firms may ultimately lie behind the world’s glutted markets, but Chinese products account for only a fraction of U.S. imports (2.2 percent for steel and 10.6 percent for aluminum). The real problem is that other countries—including allies like Canada and the European Union—have responded to years of Chinese dumping by subsidizing their own industries and imposing broad tariffs on Chinese steel. American antidumping measures have traditionally been more narrowly focused. In a sense, Trump is only catching up with what the rest of the world is doing already.

The simple fact is that the world produces much more steel and aluminum than it needs. A global shakeout is inevitable, and every country wants to make sure that its own industries are the ones that survive. The only question is: who will blink first? If one country has done a lot of blinking over the last twenty years, it’s the United States, as the Commerce Department report amply documents. Embracing a free-market approach, being reluctant to provide subsidies, applying very selective tariffs and never even thinking about nationalizing its strategic industries, the United States has consistently ceded market share to its statist rivals overseas. The Trump tariffs bluntly but effectively draw a line under twenty years of creeping retreat.

In its evaluation of the Commerce Department reports, the Defense Department flatly concluded that “the systematic use of unfair trade practices to intentionally erode our innovation and manufacturing industrial base poses a risk to our national security” and agreed with the Commerce Department’s conclusion “that imports of foreign steel and aluminum based on unfair trading practices impair the national security.” Of the three national-security responses offered by Commerce, DoD preferred the second option, targeted tariffs, over the first (global tariffs) and third (global quotas). But that’s a question of strategy, not principle.

The DoD is, obviously, a military organization, not an economic one. It is “concerned about the negative impact on our key allies” of a broad, uniform tariff. So the DoD prefers targeted tariffs on countries that, except for South Korea, are not U.S. allies. But as the DoD memo admits, targeted tariffs raise complicated enforcement challenges due to the international transshipment of steel and other jurisdiction-shifting exercises. The Commerce report estimated that targeted tariffs would have to be at least 53 percent on steel and 23.6 percent on aluminum to be effective. Trump’s flat tariffs of 25 percent and 10 percent would be easier to implement and harder to avoid.

A single, global tariff also sends a simple, universally understood message that this time, the United States is not going to blink first. This dispute is not about the World Trade Organization, playing by the rules, commitment to globalization or the much-hyped international liberal order. It’s about the fact that some countries are going to have to give up their steel and aluminum industries. The United States should not be one of them. Countries that have historically made high steel and aluminum output a matter of national policy should act responsibly to dismantle their bloated industrial bases. Until they do (and there are no signs that they will), the U.S. government should act to ensure a fair price for those few American producers that remain.

SOURCE

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Trump's jokes "outrageous"

The six most outrageous things Trump said at the annual Gridiron Dinner.

North Korea
On North Korea, Trump said he "won't rule out direct talks with Kim Jong Un," noting that the reclusive regime "called up a couple of days ago" and expressed a desire to talk. "As far as the risk of dealing with a madman is concerned, that's his problem, not mine," Trump added in reference to Kim.

It wasn't clear if the president was being serious. In a tweet last year , the Republican called Kim "a madman who doesn't mind starving or killing his people."

Jared Kushner
"Before I get started, I wanted to apologize for arriving a little bit late. You know, we're late tonight because Jared could not get through the security."

Trump's son-in-law had his top-level government security clearance downgraded last week, with various reports attributing the move to concern over Kushner's international business dealings.

Vice President Mike Pence
"I really am very proud to call him the apprentice. But lately, he's showing a particularly keen interest in the news these days. He starts out each morning asking everyone, 'Has he been impeached yet?' Mike, you can't be impeached when there's no crime, please remember that."

Special counsel Robert Mueller's Russia inquiry has fueled calls for the president's impeachment but Trump has refuted claims of collusion with the Kremlin.

Jeff Sessions
"I offered him a ride over, and he recused himself. What are you gonna do? But that's OK."

The attorney general famously excused himself from the Russia investigation last year, citing potential conflicts of interests, in a move that sparked Trump's ire.

White House resignations
"So many people have been leaving the White House. It's invigorating since you want turnover. I like chaos. It really is good. Who's going to be the next to leave? [Adviser] Steve Miller or [First Lady] Melania?"

Many senior aides have departed since Trump took office last January, including national security adviser Michael Flynn, chief of staff Reince Priebus, and most recently, communications director Hope Hicks.

On chief strategist Steve Bannon, whose explosive comments were featured in the tell-all "Fire and Fury" book, Trump said the former Breitbart News executive "leaked more than the Titanic."

Media
On the New York Times, which Trump has repeatedly criticized as fake news, the president said "I'm a New York icon. You're a New York icon. And the only difference is I still own my buildings."

He also called Fox News the "fourth branch of government."

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCHPOLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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