Pursuit of Truthiness

my gut tells me I know economics

Archive for January 2009

Happy Links!

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1. Thirsty animal pictures.

2. Folk song about the economic crisis.

3. Unscrew America.  Changing lightbulbs is happy and exciting!

4. Yankee/Rebel Vocab Test.  I was surprised to see how localized some words I used are, and more surpised to see some words are used at all.  The test is pretty good; the one problem I found is that the question “What’s that road along an Interstate highway?” Should have an option like “What road?” or “You mean the trees?” for Mainers and other residents of intfrastructure-deprived areas.  I am apparently 24% Southern by the way.

Written by James Bailey

January 30, 2009 at 2:25 am

Posted in links

Inequality among the Educational Elite

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A new paper from Harvard profs Goldin and Katz examines the data on the earnings and family and education choices of thousands of graduates from Harvard and Radcliffe, with an eye toward gender inequality.

Some highlights:

By the 1970’s, elite women were already going to graduate and professional schools in large numbers.  Since then, the proportion of women in such schools has been steady or in some cases declining.  The exception is the huge increase in the popularity of business school; this change is observed among men as well as women.

Since the 1970’s, the median age of first marriage has risen rapidly, and is now around 30; but the number of children per family has remained fairly steady.

Earnings for both men and women are very high, but median earnings for men are significantly higher.  At the right tail of the distribution, 8% of men make over $1 million annually, but only 2% of women do.

Most of the difference between the men’s and women’s earnings is explained by differences in hours worked, choice of major, choice of professional school, and number of large gaps in employment (ie, to have a baby).  But after controlling for all these things, a gender earnings gap of log 0.3 remains.

In the process of controlling for the impact of college major on earnings, the authors found that economics is the highest earning major, with an earnings gap of log 0.33 =)

Written by James Bailey

January 21, 2009 at 8:57 pm

Posted in Economics, inequality

Tycho Brahe’s beloved pet was a drunken moose

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More excellence in journalism, this time from the Times.  This story is great for several reasons:

1) The title

2) The fact that the title is based off of two sentences in a story primarily about other things.

3) The rest of the story

4) Seriously, a pet moose!  Outside of Alaska!  Awesome.

Written by James Bailey

January 21, 2009 at 1:12 am

Posted in Uncategorized

Tagged with ,

Surviving the Obama Comedy Crisis: A Report From the Front Lines

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This report represents some fine investigative journalism by the NYT.  Most political comedians seem surprisingly unworried.

Written by James Bailey

January 18, 2009 at 11:11 pm

Posted in Uncategorized

Self-Defeating Political Regimes: The Case of Inequality

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We can all think of specific times when a political party has shot themselves and their base in the foot.  In fact, the last eight years may have been one of these times.

If we believe what most say, that power corrupts, then any party long in power will get old and corrupt.  There is no one party, or set of ideas, which can govern well indefinitely; that is not how human nature works.  They must eventually be replaced by new people and new ideas.  In traditional political systems this could be accomplished through royal marriage to outsiders, or weak regimes being conquered, or revolution.  In a liberal democracy, the new regime can be voted in.

There will always be new political challenges that call for new leadership.  But there are also old challenges that emerge anew.  Some problems may move in a cyclical manner.  I posit that inequality is one of these.

For many voters (though not myself), relative equality is an important consideration; even if no one is starving, it is wrong or obscene for a CEO to make 400 times the pay of his company’s janitor.

In a place where inequality is greater, these voters are more likely to support policies which reduce inequality; where inequality is less of a problem, voters will not support redistributionist policies so strongly.  As these policies take effect, they will change the political reality and bring about the end of the economic reality which gave them political life.

Suppose one party, lets call them Republicans, became associated with policies which brought inequality, while another party, call them Democrats, became associated with redistributionalist policies to reduce inequality.  These parties, if strongly associated with these policies, could become tied up in the back-and-forth political cycle of equality.  So if Republican tax policies over the past 8 years increased inequality in America, then Republicans faced a more hostile political environment of their own creation.

David Frum in the New York Times from puts forward a similar thesis from an explicitly conservative perspective and with loads of anecdotal evidence.  This theory deserves further investigation using rigorous statistical analysis, comparing data on inequality at the most local level available with election results at static points in time, and how changes in inequality over an election cycle or over longer periods affects results.

Written by James Bailey

January 10, 2009 at 5:18 am