Thursday, May 30, 2013

The End of Job Applications As We Know Them

First, a word in defense of Thomas Friedman (and his taxi drivers). Although he has the human tendency to seek points of view that reaffirm his own, at least he's sticking his head outside of the bubble and listening to somebody other than like-minded talking heads or agenda-driven "confidential sources". I also agree with Friedman's general conception that the job market is changing, as are the means by which people will find jobs and maintain their positions (or should I say, salaries) over their working lives. That said, in his column about a new website that tests the skills of job applicants... I think he's a bit too credulous toward the creators of the site he touts in his zeal to endorse a new era of employment.
The way HireArt works, explained Sharef (who was my daughter’s college roommate), is that clients — from big companies, like Cisco, Safeway and Airbnb, to small family firms — come with a job description and then HireArt designs online written and video tests relevant for that job. Then HireArt culls through the results and offers up the most promising applicants to the company, which chooses among them.
The problem I see with that is that designing tests isn't a one-off. If you want tests that are measurably effective at assessing worker's skills, you have to do a lot more than create a test for a given job. You need to test the test. Further, let's say you create a test with "the right questions" - how do you grade the answers? If we were talking about tests of math skills, that could be automated. But we're not - at least as highlighted in the column, these are subjective tests:
HireArt asks candidates to do tasks that mimic the work they would do on the job. If it is for a Web analytics job, HireArt might ask: “You are hired as the marketing manager at an e-commerce company and asked to set up a Web site analytics system. What are the key performance indicators you would measure? How would you measure them?”...

Sample question: “Kanye West just released a new fashion collection. You can see it here. Imagine you had to write a tweet promoting this collection. What would your tweet be?” Someone applying for a sales job would have to record a sales pitch over video.
Really, more than a test, that's more like creating a standardized set of interview questions and giving applicants time to think through the answers. In essence, rather than just submitting résumés, the applicants would be interviewing in writing. But who would review the answers, and based upon what criteria? Enter the human element. Or perhaps even the computer element - if you get 500 people applying for each job, odds are that the initial "scoring" is going to be a computerized process, or performed by somebody associated with the website as opposed to a person who would actually be making a hiring decision. If you were hiring a salesperson, how valuable would the pre-recorded pitch be, as opposed to tasking a candidate to make a pitch during the interview and seeing how they respond to you in the role of customer? How much time would you save, reviewing perhaps hundreds of videos from applicants as opposed to interviewing leading prospects?
So what does she advise? Sharef pointed to one applicant, a Detroit woman who had worked as a cashier at Borders. She realized that that had no future, so she taught herself Excel. “We gave her a very rigorous test, and she outscored people who had gone to Stanford and Harvard. She ended up as a top applicant for a job that, on paper, she was completely unqualified for.”
From which I infer, she didn't get the job.

For some of us, the idea of somehow being tested before applying for a job is old hat. I can't recall the last job I applied for that did not want multiple writing samples, a sample document of some sort relating to the work I would be doing, or something else that would suggest qualification (or lack thereof) before I was selected for an interview. And I haven't applied for a job in a very long time. Perhaps outsourcing that sort of pre-screening will work for some employers.

However, I think the future lies in a somewhat different direction. While large employers may well continue to reach out to new college grads through sites like the one Friedman describes, more and more jobs are going to be filled through personal connections and networking. A commonly recited statistic is that 80% of job openings are never advertised. I see a future in which that rises well over 90%, as people rely more and more on sites like LinkedIn to find and check references on people who may not even be aware that they're being considered for a job offer. The test will in no small part be your actual accomplishments, as documented on your profile and as verified by trusted people in your extended network.

Monday, May 27, 2013

The Return on Investment for Law, Business, and Medical School

My last post resulted from a search in which I was looking for general information about the cost of law, business and medical school, in response to what I found to be a dubious assertion from the AEI.
But it may surprise some readers to learn that the sizable rates of return for doctors appear to be less than for other professional degrees such as in business or law. Dentists and physician specialists have comparable rates of return, but primary care doctors have lower—albeit still impressive—rates of return. This is consistent with the general impression that primary care doctors are “underpaid” relative to specialists. Not surprisingly, there is a shortage of primary care doctors.
Frankly, given that the authors wrote a book on this subject, you would think that they would offer a bit more certitude than "appear to be" - the reason that readers would be surprised by the authors' assertion is that the authors "appear to be" wrong.

Upon re-examining the assertion and accompanying graph, and noting the lack of reference to sources or data beyond reference to the authors' recently published book, there didn't seen to be much of a point in tracking down the data. The authors reference "Hours-adjusted annualized internal rate of return on educational investment over a working lifetime", which I infer to mean that they divided cost of training by hours of training... although with medical school that raises the question of whether you should (or whether they did) include residency training along with medical school itself. The authors also speak of the rise in CEO pay, "rising from less than 60 times average U.S. worker compensation in 1940 to more than 100 times that average by 2004", making me wonder if the projections for the return on investment for law school are also predicated upon data that is now, to put it mildly, extremely dated and bearing little relevance to the present legal job market.

Here's the thing: when you break down the cost of getting a MBA (two years) or JD (three years) against a getting a MD (four years of medical school followed by a residency) to an hourly figure, you are intentionally distorting the cost-benefit analysis by pretending that the programs could be the same length. First, medical school is more expensive than business school or law school. Second, it's a longer program. Let's imagine an investment where you can contribute $X per year, with a rate of return that diminishes slightly with each additional year. You pick a fixed number of years, make your investment, and you're done. Your two year (business school) investment will provide a greater 'rate of return' than your four (or more) year (medical school) investment, but with a smaller contribution per year and a lower number of years of contribution, odds are you'll still look back in twenty or thirty years and think, "Wow, think how much better off I would be had I gone for that four+ year investment plan." A comparison of this type really only works if the cost of tuition is comparable and the length of the program is comparable: Once you have an MBA, you're done - you can't re-enroll for another two years in order to increase the size of your investment.

The authors' conclusions, although not atypical of the quality of AEI scholarship, verge on platitudinous:
It is well-known that much of the difference in healthcare spending between the United States and other nations can be attributed to the higher prices Americans pay for medical care. But the foregoing comparisons suggest that high prices for health labor in the United States might simply reflect higher returns to skilled labor across the board. After all, if we were “overpaying” doctors, we would expect to see a doctor surplus. Yet this is not what we observe. Paying doctors less would not benefit the country as a whole. That is, every dollar saved by consumers also would be one less dollar of income for doctors. Moreover, if doctors were paid much less, more people might get MBAs or law degrees instead. This would surely reduce health spending, but reasonable people might disagree on whether it would improve social welfare.
First the largest contributors to the cost of medical care are, from most costly to least costly, pharmaceutical costs, facilities costs and doctor salaries. If you are going to overlook the first two cost factors and suggest that we're simply looking at an American preference to give higher pay for skilled labor, you're not even trying to build a case. Physician salaries represent roughly 20% of medical costs. If we paid doctors nothing our nation's healthcare system would remain the most costly in the developed world. Medical schools routinely reject qualified applicants. We can easily expand our nation's pool of doctors by expanding medical schools, funding more residencies, and creating an easier path for foreign doctors to qualify to practice in the United States. The constraints we impose do lead to higher salaries for doctors, but through the distortion of the education and labor markets.

In terms of a "doctor surplus", there's in fact an artificial shortage of doctors in the U.S., driven in no small part by the AMA's successful obstruction of the expansion of medical schools, and also from immigration and accreditation policies that make the U.S. market unattractive to doctors in foreign nations who would otherwise be happy to practice in the U.S. Would lower salaries deter people from becoming doctors? Given that among nations in the Organization for Economic Co-operation and Development (OECD), nations other than the U.S. have significantly more doctors per capita, that would not appear to be a valid concern.

The argument that "We don't get any real savings if we pay doctors less, because every dollar saved by a consumer 'would be one less dollar of income for doctors'" - why, then, are AEI's scholars in a constant tizzy about labor unions, taxes on the wealthy, teacher salaries, whether government workers are overpaid, the minimum wage... it all comes out in the wash, right? How about this: We can legislate market distortions and subsidies that increase lawyer salaries to the tune of $1 billion per year and, when people complain, respond, "Paying lawyers less would not benefit the country as a whole, because every dollar saved by consumers also would be one less dollar of income for lawyers." Sound good?

I'll go back to something I said a few weeks ago:
You want the public to subsidize medical schools and residencies, so that you graduate with a lower debt load and, after your initial medical education, have a more comfortable lifestyle? I'm listening - if we give you that, what are you offering in return? How about we reduce compensation for medical care to an amount more in line with the amounts paid by the rest of the world? Do we have a deal?
You know what else that proposal would do? Massively increase the "return on investment" for medical school under the model described above, even though doctor salaries would drop. Go figure.

Law School's a Great Deal If....

It's a couple of years old, but I just came across this one.... After advising law students about how they should get into the best law school they can and, if it's not one "sufficient brand equity to land the 'Big Law' position you want", to transfer after your first year to one that has sufficient brand equity ("work hard in your first year to earn top grades, and then transfer to a better school" - it's that easy, you know, which is why most law students have top grades and most top law schools are overflowing with transfer students after the first year - so you can get that BigLaw job.) The only type of legal job that makes sense to the author. Oh yes, and you should "have a passion for some aspect of law" because "there is never a guarantee of graduating with a high-paying job" and without passion the "tuition will never be worth it".

The author runs a company that coaches students on how to take the LSAT, so I think the biggest takeaway is that his advice "Do not take the LSAT until you are fully prepared.... Find a top class and experienced tutor, and take as many practice tests as you can" and the suggestion that even if you get into a crappy law school it's okay because you can study hard and transfer to a top school after your first year, were about protecting or promoting his business. The rest of the advice... sorry, there's no easy path to go from a school at which BigLaw does not recruit into a top law school, even if you're "committed to excelling during the admissions process". Around the same time the author was writing this piece, I received a letter from the dean of my law school (one where BigLaw recruits) suggesting that alums might might a special effort to hire graduates. You can be a great lawyer from a great law school, but if you start your career off the few tracks that lead to BigLaw jobs, odds are they're not going to let you back on.

But really, only about 13% of new law school graduates end up in permanent, BigLaw jobs upon graduating from law school. A small, additional number might join that track after completing judicial clerkships. If law school only makes economic sense if followed by a career in BigLaw, all that talk about transferring truly is about rearranging the deck chairs on the titanic - the lifeboats don't get any bigger. Worse, your reward is a career in BigLaw. (Oh, sure, some people love it. Others spend a career trying to figure out how to unshackle themselves from the golden handcuffs.)

The author's suggestion that passion can... I guess make up for the poor return on your investment if you don't get a job with a decent salary? For the most part, employers recognize student passion (real or feigned) for what it is - something that's not particularly related to the work they will be doing in their jobs. What if you have a passionate interest in, say, environmental law? Well, the best paying jobs are with the companies that are trying to avoid the application of environmental laws and regulations to their business activities. If you have the passion of a Dick Cheney, I say, "Go for it." If your passion is to "save the planet", you will find that there are lawyer jobs in public interest organizations. But for the most part they don't pay well. Oh yes, and they're full.

Where is passion likely to help? If you can develop true passion for, say, tax law, that can be an advantage if you can convey that passion to employers who are hiring entry level tax lawyers. That passion could matter if it's an area where few of your peers have strong interest and if you're actually capable of convincing an employer that your passion is real (because, as will shock you, a lot of job applicants will lie through their teeth about their passion and commitment to whatever it is the prospective employer wants). Good luck with that.

At the end, I'm left with the image of a pick-axe salesman in 1856, begging people to come to the California gold rush and assuring them how much better their odds are of finding the mother lode... if they buy enough supplies and the right pickaxe on their way to stake their claim.

Sunday, May 26, 2013

Robert Saumuelson's ObamaCare Journamalism

If you read Samuelson's column, you know that he's not particularly interested in analyzing the issues of the day, so much as he is interested in advancing a specific, right-wing economic agenda. But he could at least make an effort, couldn't he?
To get some answers, I recently talked with the heads of four “professional employer organizations” (PEOs) — these are companies that act as “human resources” departments for small companies. They provide payroll services and advise on fringe benefits and government regulations. Their customers include construction companies, restaurants, small manufacturers and professional firms. Many of these firms are only now coming to grips with the ACA, because they’d assumed that the Supreme Court would invalidate it or that a Republican White House would repeal it.
That's the first place I would look for answers about the PPACA - a bunch of consultants who were apparently happy to reassure their clients, "Don't worry about ObamaCare because it will be repealed or overturned," or who knew better but were not sufficiently competent to convince their clients to prepare for the possibility that they might actually have to follow the law.
To encourage candor, we talked on a not-for-attribution basis.
As if they would own up to that level of incompetence and then speak with Samuelson on anything but a "not-for-attribution basis".
First, some companies now providing insurance are being hit with huge premium increases. Before Obamacare, said one PEO adviser, his clients typically received annual increases of 6 percent to 12 percent. “This year we’re seeing 30 percent rate hikes,” he said. The surge is blamed, rightly or wrongly, on the ACA’s requirement for more comprehensive coverage and on its formula for calculating premiums (aka “community rating”).
Seriously? Is it that the incompetence of the consultants who spoke with Samuelson reached beyond their failure to advise their clients to prepare to comply with the law, and extended into not even knowing the basic economics of health insurance and premium costs? Or is it that Samuelson didn't ask the obvious follow-up question, "Which is it - rightly or wrongly?" To be fair to Samuelson, I think he knows the answer, but if he said it out loud ("wrongly") his three-point list would as a consequence have only two points.
Second, most companies haven’t made final decisions. Those who have go both ways. Another adviser described a 250-worker car dealership with good wages but no health insurance; it will provide coverage and cut wages to help pay costs. Another example involved a 60-worker manufacturing firm with wages of $12 to $15 an hour. It offered bare-bones policies with steep deductibles. Confronting higher premiums for expanded coverage, the owner will drop insurance. He found the ACA “too complex,” said this adviser.
Should we assume at this point that we're talking about a cause of higher premiums other than those that employers rightly or wrongly attribute to ObamaCare? If so, it's pretty much a given that some employers will choose to drop insurance, pay the penalty, and let its workers seek coverage through the exchanges. They're probably better off than with the "bare-bones policies with steep deductibles" (i.e., "crap") policies Samuelson says their employer previously offered - I think it's safe to assume that Samuelson has a gold-plated Medicap plan on top of his own, government-paid, comprehensive Medicare benefits - the workers who need adequate insurance may be better served by their employer's choice. But seriously? The consultant who is paid to make the process as simple as possible for a client employer can't get his client past, "It's too complex"? And that would be the fault of... somebody other than the consultant?
Third, many firms are revising their business models to minimize insurance costs. One favorite idea: Hold workers below the 30-hour weekly threshold requiring insurance. Many part-time employees who work more (say, 35 hours a week) will lose hours.
I've heard about this little scheme, as well. The fixes are so obvious (e.g., setting the penalty based upon total employee hours) that the only reason that it's worth discussing is that people like Samuelson anticipate that Republicans will filibuster any effort to implement a fix. But you know what? It may not amount to much. When an employee is given a choice between working two jobs because his employer won't give him more than thirty hours, and working one job with decent health benefits, guess which job anybody worth hiring is going to choose?

If Samuelson had any experience working in an environment where employees earn at or near minimum wage, he would have some appreciation for how little it takes to convince an employee to change jobs. Samuelson wouldn't notice fifty cents an hour. Were he making $7.25 per hour, it would become a big deal. If you want to run the business with employees who don't mess up orders, don't waste food, are less likely to steal, are easier to train and supervise, etc., as a general rule you have to pay a bit more than the guy down the street. If my competitor in food service were intent on keeping his employees below thirty hours a week, I would be happily skimming the cream off of his workforce.
Another adviser mentioned a client, an engineering firm with 48 workers, that had deliberately restrained expansion.
This is where I make a coughing noise that sounds a lot like I'm actually saying "bull****". If this engineering firm truly is constraining its size to avoid giving its employees decent health insurance, it's not going to have much luck retaining engineers. They have even better options than the movie theater worker and hotel workers whose anticipated plight was, mere moments ago, giving Samuelson such... is the word, delight?

I would suggest that Samuelson stop "concern trolling" ObamaCare and propose some meaningful solutions, but... as I suggested up front, I see no evidence that he's interested in solving the problems ObamaCare is attempting to address.

When it Comes to Tablets, Microsoft is Overplaying its Hand

Perhaps inspired by a burning desire to do a "gotcha" over the historic "Mac vs. PC" ads, where a guy who needed a shave pokes fun at a pudgy guy in a suit, or perhaps inspired by the increasingly tiresome, "You have an iPhone? Let me show you this cool feature in my Samsung" ads, Microsoft is taking a potshot at the iPad:

The ad makes three basic criticisms of the iPad:
  1. 1. It has a relatively bland, traditional desktop whereas Windows 8 uses "smart tiles" that continuously update;

  2. 2. It does not multi-task; and

  3. 3. Microsoft has dropped the ball when it comes to writing software for iOS.

It then presents an intentionally misleading price comparison between the iPad and an entry level Windows tablet (with a much lower resolution screen1 and plastic case).

The first two issues are in no small part about power management. I can't tell you the degree to which Apple may incorporate multi-tasking or updating in the next version of iOS, which will include a significant revision of much of the user interface, but history suggests that Apple will continue to favor long battery life over power-draining features that have limited utility. Don't get me wrong - I would like Apple to allow users to have greater choice, even if it means that they will need to recharge their iPads more often. But it's highly misleading to suggest, "Our new mobile OS is really cool" without addressing how that coolness affects battery life and performance.

In terms of iOS not offering Microsoft Excel, well, yeah... Microsoft has delayed producing a version of Office for iOS to the degree that it's difficult to infer any motive but Microsoft's traditional, "Delay upgrading and offer inferior versions of Office for Apple products." Perhaps their next commercial will show some sort of Zune software running on the Windows tablet, with iTunes running on the iPad? My, how turnabout can sting.

Right now I'll admit to having more computers in my house than occupants. One is OS-X, two are Windows 7. And we also have a couple of tablets. The people who claim that tablets are mere toys, or are about to go the way of the Dodo, either haven't used one or aren't paying attention to how they're used. Games aside, a tablet is an incredibly useful tool for consuming online content - checking email, browsing the web, watching streamed or stored video, video conferencing and the like. Responding, "I can do all of that on my desktop or notebook" misses the point - the convenience and portability factor. A few years ago if you went to an airport you would see a lot of people working on notebook computers, trying to scrounge an outlet. These days you see an even larger number of people using tablets to read or otherwise entertain themselves, and notebook users have a lot less competition for those outlets.

But if I'm trying to type or edit a document, work on a spreadsheet, or do any sort of complex or multi-window task, I want to be at my desktop computer with a large monitor and keyboard. It may well be that I would be impressed with the touchscreen UI for Excel. I doubt it, given how unimpressed I am with the touchscreen UI for Windows 8, but Microsoft could surprise me. But what would I do if I actually needed to work on a spreadsheet? I would set down the tablet and use either one of our portable computers or my desktop computer - because they're better designed for that kind of work.

The Samsung ads, in my opinion, have devolved from being cute and funny to, more or less, showing Samsung owners wearing out their own arms by patting themselves on the back.2 Oddly enough, Microsoft seems to understand this, even if they don't actually present a reason to buy a Windows phone other than "It's not an Apple or a Samsung".

The difference is this: If I weigh the pros and cons of the various smartphones available today, I can come up with valid reasons why I might prefer a Samsung over an Apple, or vice versa. If I put the two phones next to each other and run various tasks, I am going to see why I might prefer one over the other.

But if I were to recreate the comparison from Microsoft's commercial at an electronics store, putting the Asus tablet next to an iPad and running various apps, I would not have the experience depicted in the commercial. I would immediately see that the Samsung had an inferior build and display. And from the reviews I've read, I would see the Asus tablet slow down or become momentarily non-responsive when multi-tasking. I might notice that the battery has a significantly lower capacity than that of the iPad, and while crediting advances in CPU technology for its reasonably long battery life nonetheless recognize that the battery life is extended by the use of the much lower-resolution screen. Reviews indicate that I would find the cameras in the ASUS to be of good quality, but that I would likely be displeased by the camera software. And while the tablet might perform better if it weren't running a full version of Windows 8, without that you would have to drop the "And look how well it runs Microsoft software" part of the ad.

I'm reminded of the highly effective commercials Microsoft ran, touting the sub-$1,000 entry price for Windows notebook computers. I'm also reminded of how that series of commercials fizzled out when Apple started offering sub-$1,000 notebooks and Microsoft started touting lower price points - instead of comparing computers of reasonably comparable build and performance, getting into a quality of build and performance that no reasonable consumer would find to be a compelling point of comparison to the Apple product.

If Microsoft's goal is to get buzz, the victory goes to Microsoft - here I am talking about their products. But if its goal is to convince consumers to buy Windows tablets, the commercial seems to oversell the product, creating the potential for customer dissatisfaction at a time when Microsoft needs to build a significant user base for its tablets and risks increasing consumer skepticism of its marketing pitches.
1. The Asus screen offers 1,366 x 768 pixels, for a pixel density of 155 ppi. The iPad offers 2048 x 1536-pixels, for a pixel density of 264 ppi.

2. Commercials I would like to see:
"Why are you and that other guy bumping your phones together?"
"My phone has this awesome feature that allows me to exchange data by bumping it into somebody else's phone, does your phone do that?"
"Um... my phone has email."

"Hey, you're using an iPhone. Wanna see this really cool feature my phone has that yours doesn't have yet? No? You said 'No?' What do you mean, you wouldn't use that feature? What do you mean, 'pro's and con's to every phone'?"

"You waited in line to buy your phone? I got a phone that nobody waits in line for. Wait, that didn't come out the way I wanted."

Tuesday, May 21, 2013

Tax Idiocy on Capitol Hill

Why it only seems like yesterday that a Republican presidential nominee was lecturing us that it would be inappropriate to pay even a penny more in taxes than the government requires him to pay - that doing so would demonstrate that he was unqualified for the job of President. (And a little bit more recently, after he deliberately overpaid his taxes to avoid contradicting a prior claim about the percentage of his income he pays in federal income tax, that the electorate seemingly agreed with him.)

Now, the Senate Permanent Subcommittee on Investigations is concerned that Apple is paying only the taxes it's legally required to pay, and is taking full advantage of the massive loopholes that... yes... Congress wrote into the tax code, or at best has deliberately failed to close, to benefit companies like Apple (and individuals like Mitt Romney).

You know what Congress should do if it's concerned that corporations aren't paying enough tax? I'll give you a hint: It's not "Hold hearings to hear CEOs explain why their companies are not voluntarily paying more tax than the law requires....

Monday, May 20, 2013

Mickey Mouse, He Isn't....

I think it's reasonable to infer that the baby isn't actually crying because of the Tusken Raider, but....

Sunday, May 19, 2013

Trends in Mass Shootings

Right-wing ideologue S.E. Cupp recently challenged left-wing ideologue Michael Moore,
Mass shootings are also down... yes they are! It is true! Mass shootings are... It is fact! They are down, as is gun crime. That's a fact.... Look it up, I'm not the first person who said it.
Well, facts are important, but they're not something I find to strongly correlate with Cupp's arguments. So let's take a look. If you apply a narrow definition that excludes "things like armed robbery or gang violence", as did Mother Jones, you find an increase in casualties and that "24 of the last 62 worst mass shootings have taken place in the past seven years alone". If you apply a broad definition, Fox News found that mass shootings are holding steady.
Why the difference? Fox is looking at all mass shootings involving four or more victims — that’s the standard FBI definition. Mother Jones, by contrast, had a much more restrictive definition, excluding things like armed robbery or gang violence. They were trying to focus on spree killings that were similar in style to Virginia Tech or Aurora or Newtown. The definitions make a big difference: On Fox’s criteria, there’s no uptick. On Mother Jones’, there’s a clear increase.

Meanwhile, by either criteria, there does seem to be a surge in mass shootings in 2012. But it’s unclear whether that’s a one-year blip or not.
I would wonder what Cupp was looking at, but she seems like the type who believes that anything she says magically becomes true if she argues forcefully or claims "It's a fact!"

When Moore challenged her, specifically in relation to school shootings, Cupp added to (or is it amended) her claim,
There have been fewer mass shootings over the past thirty years. That's just a fact.
It's certainly not a fact in relation to school shootings. I have not yet found data predating 1976, but it's also not true in relation to homicides with multiple victims going back to 1976. Perhaps she's alluding to lynchings and prohibition-era violence associated with organized crime? One can only guess - but when you're addressing a relatively rare type of crime (homicide with multiple victims) such factors can easily skew the trend.

At this point, I'm comfortable concluding that Cupp was either making stuff up or was cherry-picking a source in order to present what she knows to be a distorted, fundamentally untrue statement of "fact". I'm prepared to be proved wrong. Anybody?

Fools, Frauds and the Budget Deficit

It's probably not worth paying attention to Robert Samuelson on the budget deficit as he has little to no regard for consistency between his columns, and either has little to no interest in how government spending works or has little to know interest in presenting an honest argument. Nonetheless....

Samuelson is in a tizzy because the 2013 budget deficit is projected to be $642 billion, down from an earlier projection of $845 billion and well below "2012’s deficit of $1.1 trillion". Samuelson imagines that the government has now been overtaken by Dick "deficits don't matter" Cheney-types, and that the government is going to now stop focusing on deficit reduction and budgeting. Samuelson, it would seem, isn't spending much time following events in Washington. He's also continuing his mantra of, "We need to cut 'entitlement spending' so we can afford unlimited war spending", but has little to no regard for whether today's budget policies depress the economy and thus slow economic growth for years and decades to come.

You would think that Samuelson would look at the numbers and think, "We didn't anticipate a 24% drop in the deficit until almost half-way through the year, we're really bad at these projections." Even if you assume he hasn't looked at how projections of healthcare inflation have been incorrect. Or has forgotten his history, such as Alan "the genius" Greenspan fretting that if we didn't cut taxes for the rich, we would pay down the national debt too quickly. Funny, I don't recall the Robert Samuelson of that era criticizing Greenspan, "We can't pay down the nation's debt quickly enough." Did I miss something?) Samuelson then carries on for a while about stimulus spending, conflating any deficit spending with stimulus spending. Seriously?

The funny thing is, I'm prepared to agree with Samuelson. Our nation should have a responsible discussion of deficits and debt, albeit preferably with a significantly stronger factual context than one finds in a typical Samuelson column. We should be discussing priorities and, rather than engaging in demagoguery or attempting to gut Medicare without telling the public what we're doing, attempt to set actual priorities.

It seems to me that people like Samuelson don't like that idea, though, because the nation's priorities may turn out to be different from their own. Let's recall Samuelson's own words when his own priorities for government spending might end up on the chopping block:
But I am certain -- now as then -- that budget consequences should occupy a minor spot in our debates. It's not that the costs are unimportant; it's simply that they're overshadowed by other considerations that are so much more important. We can pay for whatever's necessary.
If a $2 trillion war of choice isn't even worthy of discussion, then the size of any particular budget deficit is even less worthy of discussion. What should matter are future costs and revenues, and the accuracy of our projections. By the same token that Samuelson can shrug,
Nothing of consequence has changed. A few numbers have shifted slightly. That’s all. They moved in a favorable direction. Next time, they might go the other way.
he should be prepared to concede that his emphasis of "We need to cut Social Security and Medicare this second or we'll face catastrophe in a quarter century" is misguided. After all, if being off by roughly 25% within a single year represents an inconsequential shift in the numbers that should be shrugged off, how can you justify setting policy based upon one or two percentage points of projected over twenty-five, fifty, or one hundred years?

Given the reality that our projections tend to be flawed - the future is full of surprises - and the present Congress cannot dictate spending priorities for future sessions of Congress, the proper focus for any given session of Congress is their actual, current, spending. By that measure, the present projections are good news, and the focus needs to be less on "what might happen twenty years from now" and more, "That's a good start, now let's talk about next year". In terms of long-term spending and spending priorities, we should be having the discussion that Samuelson seems intent on avoiding - if we can't afford everything, what do we cut first?

If You Want to Reduce Suicide, Focus on the Economy

Ross Douthat is concerned that "loneliness" may be behind an increase in the suicide rate among middle aged men... a classic case of missing the forest for the trees. You would think this part would clue Douthat in:
This trend is striking without necessarily being surprising. As the University of Virginia sociologist Brad Wilcox pointed out recently, there’s a strong link between suicide and weakened social ties: people — and especially men — become more likely to kill themselves “when they get disconnected from society’s core institutions (e.g., marriage, religion) or when their economic prospects take a dive (e.g., unemployment).” That’s exactly what we’ve seen happen lately among the middle-aged male population, whose suicide rates have climbed the fastest: a retreat from family obligations, from civic and religious participation, and from full-time paying work.
But you can see he's already on the wrong track by the end of the paragraph. That is, the problem is not about a retreat from family, community and work. It's about the carpet being pulled out from under you.

You would think it was a state secret that the group at highest risk of suicide was middle class men (particularly white men), and that risk of suicide is strongly associated with three stressors: job loss, loss of family and poor health. Contrary to Douthat's assumption, there's not a higher suicide risk if you're single versus married - but divorce is a risk factor.

In our culture, our identity is wrapped up in the work we do. One of the first questions you're likely to be asked when you meet somebody is "Where do you work" or "What kind of work do you do". The factors also tend to go hand-in-hand. Poor health can lead to the loss of employment, financial stress resulting from loss of employment (or from poor health) can lead to divorce. When somebody's self image is built around job and family and he feels that he's irretrievably lost his economic future and his family, that's a huge psychological blow.

Douthat builds his argument in part on a fiction, that we're dealing with "structural unemployment". I've taken some issue with those who argue that there's nothing structural about our unemployment situation, but the type of thing they're talking about (the ability to return to full employment) and the type of thing I'm talking about (the ability of somebody who has lost employment to get back onto a similar income and career path) are two different things. If Douthat believes that there's something new about the problems men have if they're displaced from the workplace during or after their late forties, he hasn't been paying attention. Not even to the content of the newspaper for which he writes:
Unemployment is almost always a traumatic event, especially for older workers. A paper by the economists Daniel Sullivan and Till von Wachter estimates a 50 to 100 percent increase in death rates for older male workers in the years immediately following a job loss, if they previously had been consistently employed. This higher mortality rate implies that a male worker displaced in midcareer can expect to live about one and a half years less than a worker who keeps his job.

There are various reasons for this rise in mortality. One is suicide. A recent study found that a 10 percent increase in the unemployment rate (say from 8 to 8.8 percent) would increase the suicide rate for males by 1.47 percent. This is not a small effect. Assuming a link of that scale, the increase in unemployment would lead to an additional 128 suicides per month in the United States. The picture for the long-term unemployed is especially disturbing. The duration of unemployment is the dominant force in the relationship between joblessness and the risk of suicide.

Joblessness is also associated with some serious illnesses, although the causal links are poorly understood.
More academically,
Suicide rates among both men and women aged 35–64 years increased substantially from 1999 and 2010. This finding is consistent with a previous study that showed a notable increase in the overall suicide rate among middle-aged adults relative to a small increase in suicide rates among younger persons and a small decline in older persons during a similar period. The increases were geographically widespread and occurred in states with high, as well as average and low suicide rates. By race/ethnicity, the increases were highest and statistically significant only among whites and American Indian/Alaska Natives, widening the racial/ethnic gap in suicide rates....

Possible contributing factors for the rise in suicide rates among middle-aged adults include the recent economic downturn (historically, suicide rates tend to correlate with business cycles, with higher rates observed during times of economic hardship); a cohort effect, based on evidence that the "baby boomer" generation had unusually high suicide rates during their adolescent years; and a rise in intentional overdoses associated with the increase in availability of prescription opioids.
In a loosey-goosey sort of sense, one court argue that Douthat has a point. That if people who were suicidal could break out of their mindset, reconnect with their communities, and find peace and joy in their lives, they would no longer be suicidal. But that would be to assume that depression and suicide are the results of a rational thought process rather than cognitive distortion, and that somebody who is suicidally depressed is well-positioned to make significant life changes. Sometimes in response to a suicide you hear, "I don't understand, he seemed so happy that day" - the result of a confusion of the immense relief that can come from the decision to commit suicide with an emergence from depression. When severely depressed individuals receive treatment, you have to be very careful during their early recovery because in some cases the only thing holding them back from suicide is lacking the cognitive energy to carry out their plan. This cartoon series, I think, does a pretty good job of illustrating depression - but that freedom depicted at the end can be (and in the author's case, was) dangerous.

Douthat shares a non-suicidal author's account of how he reconnected with his small hometown due to his sister's terminal illness, and extrapolates,
Too often, and probably increasingly, not enough Americans will have what the Lemings had — a place that knew them intimately, a community to lean on, a strong network in a time of trial.

And absent such blessings, it’s all too understandable that some people enduring suffering and loneliness would end up looking not for help or support, but for a way to end it all.
It seems that Douthat is looking for a simple solution to the issue of suicide that ties into his conceit that a simple, small town lifestyle is somehow superior to... the way he lives his own life. As if anybody can find peace, contentment and community simply by moving to small town, rural America. As if small town, rural America would be unchanged if we all moved there. As if that's even possible. As if you can't find community in a city. As if suicide rates weren't higher in the less urbanized parts of the nation.

If you care about reducing suicide, you should be calling for government policies to help restore full employment. You should be advocating programs to help people deal with job loss and regain decent employment. You should be concerned about the quality and availability of mental health care. Pretending that all will be well if people return to the type of community seen in states with above-average suicide rates? Probably not helpful.

Monday, May 13, 2013

Lawyers, Don't Hire Spammers to Promote Your Law Firms

I understand that some lawyers, probably many or most, simply don't know any better - somebody calls them up promising to generate more traffic to their website. The well-practiced sales pitch makes it sound like a good deal, and then... stuff like this starts getting posted around the Internet under the name of the lawyer or the law firm:

It sounds as if you could possibly have a case but it may be a close one. I think it would be worth your time to go and talk to a professional lawyer in Washington State. Be sure to bring all important documents including your medical papers and perhaps an over view from your current doctor that did find the tumor explaining the situation. Hope this helped and good luck.
Do you think you have a case? The Law Offices of John P****s may be able to help you!
That wasn't the worst example I've seen - just the latest to hit one of my forums. The trick that particular spammer used was to try to paraphrase prior comments (which may be from non-lawyers) in order to try to create something that sounds reasonable.

Usually, the company you hired is either based in or subcontracts with another company in the Philippines, India, Bangladesh, or elsewhere in the developing world and pays somebody in that nation with middling English skills to push your link out to forums and blogs. (That particular spammer was working out of the United States, so the lawyer probably paid a premium for the website promotion services.) I'm sure they will subsequently hand you a nice list, perhaps with pretty charts, showing how many links they generated for your site. What they won't tell you is that most of those links will have little to no value for your website and, in some cases, the rapid volume of new, similar links on sites that allow user-generated conduct will trigger a penalty for your site.

But it's worse than that. You're a lawyer. You have ethical duties that govern your advertising - and make no mistake about it, this is advertising. No, you weren't told that a worker in an overseas phone bank would be posting messages that appear to be from you or from your law firm, but that doesn't mean you're not responsible for their actions. You didn't exercise due diligence when hiring your website promotion firm, you didn't adequately supervise their work, and they could be out there posting wildly incorrect information or giving wildly incorrect advice under your name.

Recall also, you probably have a duty to maintain a copy of all of those posts in your records for a specific period of time in order to comply with the advertising rules for your state.

Friday, May 03, 2013

Wealth is Not Proof of Better Genes and Values

In response to an essay about rich kids doing well in school, McArdle questions whether the answer truly lies in enriched environments,
But is that really the right explanation? The rich pulling away from the middle class is also exactly what we would see if test-taking ability has a substantial inherited component, and the American economy is increasingly selecting for people who are very, very good at taking tests. The latter is undoubtedly true, and there's some fairly strong evidence for the former, in the form of studies of adopted kids. Such studies tend to show that adopted kids bear a much stronger resemblance to their biological parents in terms of lots of things, from weight to income to test scores, than they do to their adoptive parents. Once you've hit a fairly basic parenting threshhold--food, health care, touching and talking to your kid, and not physically or sexually abusing them--the incremental benefits of more intensive parenting seem at best small, at worst unclear.
McArdle appears to be confused on a number of fronts. First, the manner in which people in our society meet, form family units and reproduce is not scientific. If this were scientific, not only would we be looking at and testing for specific criteria before approving reproduction, we would see weaker stock that we would need to exclude from contributing its genes to the next generation. We would see a marked difference between the children of the power couple, where both parents had high education and high income, versus couples where only one partner had the "power job", versus couples where one partner stayed at home, versus couples who were wealthy simply by virtue of inheritance.

McArdle presents the example of the marriage of Laura Ingalls Wilder (Little House on the Prairie), who she sees as intelligent and bookish, and Almanzo Wilder, who sees as being significantly less intelligent - intelligence apparently defined by academic interest and achievement. McArdle suggests that in the modern era, the couple would have had nothing in common and thus would likely not have met and married.
Laura Ingalls would quite likely have gone to an elite school, and probably graduate school, then moved to a coastal city, and eventually married another bookworm. Almanzo Wilder would be married to someone like him, a hard worker who nonetheless found school tedious and left as quickly as possible. And when their two sets of children showed up at school, their test scores would be very different.

Instead they had one child, Rose Wilder Lane, who became a very talented short-story writer (her collection, Old Home Town, is a very fine and somewhat brutal study of the Missouri town where she grew up.) They could just as easily have had a child like Almanzo, whose talents lay in other directions.
It apparently did not occur to McArdle that the outcome is not binary - that genetics are far more complex than the "Brown Eyes vs. Blue Eyes" diagrams she made in fifth grade. She could as easily argue that her example proves that bookishness is a dominant trait, and that if we pair off intelligent, bookish people with those who are not "nearly as smart as" as them, we'll have a nation full of smart people within a generation.

Second, you cannot effect significant genetic change across a culture over the course of two or three generations. If the argument is that tests became important in the mid-20th century, and that good test-takers have subsequently congregated, married, and as a result have produced a population of exceptionally good test-takers, it's fair to ask, what are the genetic components behind test-taking, and how do we measure them? When an individual takes a test prep course and sees a 10% increase in his score, is that because his genes have changed? Also, if test-taking prowess is hereditable and leads to wealth, why does the U.S. have a long history of economically outperforming nations that consistently outperform the U.S. on tests such as PISA?

Third, the fact that some aspects of personality are hereditable does not render environment irrelevant. As a group, children raised in an unsafe, tumultuous home predictably suffer long-term effects from their childhood experiences that are less prevalent in children raised in safe, stable households. When you see significant changes in a population across a generation (e.g., the rise in IQ in Irish children since 1970, or disparity in IQ between children of East and West Germany with the differences dissipating after reunification, it's not only inadequate to say, "What can we do - it's genes" - its obviously wrong and it's a cop-out. People tend to marry within their social class, and they tend to follow a career path modeled for them within their social class and family, with a potentially profound impact on their future earnings.

Fourth, the wealthy remain at an advantage even when you control for personality and intellect. When the economic outcomes for the lowest-performing children of the wealthy meet or exceed the economic outcomes for the highest-performing children of the poor, you can't deny the role of wealth. Winning the lottery doesn't change your genome, but it sure can open up opportunities that were not previously available.

I don't disagree so much with McArdle's conclusion as I do with how she reaches it,
Maybe the answer is not a quixotic attempt to somehow replicate the experience of being raised by two professionals with advanced degrees. Maybe it's to question the great educational sorting, and the barriers it has erected. Of course, I am not suggesting that we should give up on educating our kids, or that education is irrelevant to preparing people for the workforce. But we should ask whether incremental requirements are actually adding value. Because every additional year of schooling we require makes it harder and harder for those who don't enjoy school to compete in the wider world.
McArdle's argument does not support either the notion that the wealthy perform better academically because the typical wealthy child enjoys "the experience of being raised by two professionals with advanced degrees", as there are plenty of wealthy people where one or both partners lack advanced degrees, and plenty of middle class families where both parents have advanced degrees. Few impoverished families with two advanced-degree holding parents, and fewer still when you recognize that their transitory period in student family housing or at the very start of their careers isn't representative? Certainly. But none of that directly supports the genetic argument.

It would be helpful, I think, if McArdle explained what she means by "incremental articles". If I interpret that as, "Adding another round of standardized testing," or "Trying to concoct some sort of formula for rating teachers and trying to purge the lowest-performing teachers", then she's right. That sort of reform can make it "look like we're doing something", and may also be very expensive, but is not likely to materially affect outcomes - and we should examine the data, costs and benefits before expending hundreds of millions or billions on experimentation. Similarly she's correct that insisting that people get additional years of education, without any associated effort to ensure that they're getting something of value in exchange for their additional investment of time and money, is not likely to produce meaningful results. But if you look at the German or Irish experiences (or Polish, or certain American immigrant communities, etc.), you can see why its inappropriate to point to an impoverished community and say, "It's their genes" - and can find many examples of that argument being used to deny equal treatment to a population on grounds that, in retrospect, seem absurd.

Rich Kids are Doing Fine... And its News?

A few days ago, Sean Reardon shared an observation which he suggested may not surprise you, "the children of the rich perform better in school, on average, than children from middle-class or poor families."

So let me see... kids who on the whole have the most educated parents, the most affluent homes and best home environments, safe neighborhoods, good schools, and ready access to additional resources if they start to flounder, do better on the whole than the kids who do not have those advantages? Let me guess - the next thing that may not surprise me is that kids who have the least educated parents, the poorest homes and home environments, unsafe neighborhoods, schools that struggle to maintain order and perhaps even to maintain their basic facilities, and who have trouble accessing additional resources even if their parents attempt to find and utilize those resources, bring up the bottom?

The author notes that this is a phenomenon associated with wealth, not gaps in racial achievement or a decline in school performance. He argues that school quality is a small part of the difference.
The most potent development over the past three decades is that the test scores of children from high-income families have increased very rapidly. Before 1980, affluent students had little advantage over middle-class students in academic performance; most of the socioeconomic disparity in academics was between the middle class and the poor. But the rich now outperform the middle class by as much as the middle class outperform the poor. Just as the incomes of the affluent have grown much more rapidly than those of the middle class over the last few decades, so, too, have most of the gains in educational success accrued to the children of the rich....

The academic gap is widening because rich students are increasingly entering kindergarten much better prepared to succeed in school than middle-class students. This difference in preparation persists through elementary and high school.
The author paints an idyllic picture of a typical wealthy family,
Money helps families provide cognitively stimulating experiences for their young children because it provides more stable home environments, more time for parents to read to their children, access to higher-quality child care and preschool and — in places like New York City, where 4-year-old children take tests to determine entry into gifted and talented programs — access to preschool test preparation tutors or the time to serve as tutors themselves.
I doubt, however, that the phenomenon is explained by the small percentage of wealthy families who employ tutors to prepare their children for kindergarten admission tests. Also, let's note, being tutored for a test can make you perform better on that test, and that can be particularly true of aptitude tests, but what you end up with is not evidence that one group is outperforming another by any measure other than the test. Instead, you end up with an invalid measure. We can talk of, "support[ing] working families so that they can read to their children more often", but in some of those wealthy families the reading is done by the nanny, and I suspect that modeling remains a significant factor - if the only books (real or virtual) you have in your home are the ones you read to your kids, that may indicate both motivation and the possibility that your kids will engage with books in a way you do not; if you have a home full of books and spend a lot of time reading, the odds go way up that your kids will follow your lead.

That said, we already know that giving children an enriched preschool environment can significantly improve a child's performance as they enter school. Despite the anti-Head Start demagoguery (that after the child starts school and you end the enrichment, you see a reversion to the mean over the next few years), we know how to boost a child's academic performance. As various experiments have shown, both in public school and charter school settings, kids from impoverished community perform better in school when they spend more hours in the classroom and receive tutoring. Shocking, isn't it?

Rich people care about education, they can vote with their feet if they don't like the performance of their child's preschool or public school, and they can and largely will avail themselves of resources when their kids struggle. They are also positioned to help their kids pursue their interests, whether academic, artistic or athletic. Basically, if you're wealthy you're much more likely to care about education. "But middle class families value education," you protest? Sure, but our society largely cares about education in the abstract. Education matters, but teachers get paid too much, kids don't really need art or music, and a B is good enough - particularly if you're good at sports.

Although anybody's best laid plans can gang aft agley, there's a difference between hoping your child goes to college and gets a degree, and expecting that your child to attend a top university and proceed to graduate school. It's easy to find public schools that bring kids in several weeks in advance of the start of school for sports, and put significant resources into sports equipment, facilities and coaching. It's easy to find schools where past sports victories are trumpeted, and sports trophies and banners prominently displayed. You rarely find the same sort of priority being placed on academics. Its not an either or - you can push both sports and academics - but our society's choices reflect its actual values.

Let's remember also, the lowest performing children of the wealthy tend to earn more money than the highest performing children from poor families. Wealth has advantages, and those advantages affect motivation and outcome.