A call for better macroeconomic statistics

As the economic crisis continues, one blogger suggests American macroeconomic statistics are “pretty weak” today:

In particular, the data coming out of the Bureau of Economic Analysis at the beginning of 2009 was way off. Here’s Cardiff Garcia, introducing an interview with Fed economist Jeremy Nalewaik:

The initial GDP estimate for the fourth quarter of 2008 showed that the economy contracted by 3.8 per cent. It was released on January 30, 2009 — about three weeks before Obama’s first stimulus bill passed. That number was continually adjust down in later revisions, and in July of this year the BEA revised it all the way down to a contraction of 8.9 per cent.

The BEA is happy to try to explain what happened here — but whatever the explanation, the original 3.8% figure was a massive and extremely expensive fail. It was bad enough to be able to get a $700 billion stimulus plan through Congress, but if Congress and the Obama Administration had known the gruesome truth — that the economy was contracting at a rate of well over $1 trillion per year — then more could and would have been done, both at the time and over subsequent months and years. Larry Summers warned at the time that the risks of doing too little were much greater than the risks of doing too much; only now do we know just how right he was on that front. (And even he didn’t push for a stimulus of more than $700 billion.)…

When I told Cardiff that the status of macroeconomic data-gathering has been declining for decades, I was making two separate statements — first that the quality of statistics has been declining, and secondly that the status of economists collating such statistics has been declining as well. Once upon a time, extremely well-regarded statisticians put lots of effort into building a system which could measure the economy in real time. Today, I can tell you exactly how many hot young economists dream of working for the BEA on tweaks to the GDP-measurement apparatus: zero.

Sounds like there is work to do. This commentator seems to suggest the government needs to offer the kind of money that would attract economists to this task. Are there economists out there right now who could handle this job and all it takes it some more money?

If we were looking at the causes of economic crises or perhaps what sustains them, could statistics really play a large role? Even with the best statistics, policymakers can still make bad decisions. But I suppose if the foundation of policy, the statistics that we trust to tell us what is really going on or what might, is faulty, then perhaps there is really little hope.

At the same time, I would suggest this isn’t only a macroeconomic problem: the world is complex, we want to tackle difficult problems, we are very reliant on statistical models, and there is more and more data to work with and collect. We need a lot of good people to tackle all of this.

Was the popularity of the Kennedy mystique a rejection of 1950s American suburbs?

The Kennedy mystique has been well established in American culture: John F. and Jackie Kennedy swept into the White House, bringing in the television age, the space age, and jumpstarting the 1960s. But I hadn’t connected this mystique to what critics saw as the bland American suburbs of the 1950s:

In the normal course of the apparat’s work, elevating the Kennedys requires the denigration of the Eisenhowers, the 1950s, and the supposed dullness of the country that the Kennedys rescued us from—“our country of suburbs and Ozzie and Harriet, poodle skirts and one kind of cheese,” as Diane Sawyer oddly put it, while the screen showed a golden brick of Velveeta. Jackie by contrast wore clothes by designers who would have gone into a dead faint at the sight of a poodle skirt. When the Kennedys moved in, added the court historian Michael Beschloss, “we had a White House that looked like a bad convention hotel.” The Kennedys brought French cuisine to the White House, Diane Sawyer added. “No more Eisenhower cheese sauce and cole slaw. .??.??. In our middle-class nation, it wasn’t easy for us to fathom this first lady.” Jackie herself is heard complaining about the marks that Ike’s golf shoes left in the flooring. Dwight Eisenhower, lumbering ox.

This view of the suburbs fits well with a set of suburban critiques that began in the 1950s: the suburbs were bland, about conformity, and were populated by people who couldn’t really act like those nice suburban families on TV and who had popular tastes. In comparison to the Eisenhowers and Ozzie and Harriet on TV, the Kennedys were the cultural elite, the fashionable who had refined tastes and opinions. This same argument can be heard today and still pits two sets of people against each other: the urban intellectuals versus the middle class suburbanites, progressives versus conservatives, fashionable and novel versus bland and predictable, novel versus boring, upscale shoppers versus Walmart (or maybe Target on the slightly higher end) patrons. Perhaps it all goes back to those arguments in the early years of America when Thomas Jefferson advocated for a more rural America and Alexander Hamilton pushed for the capital to be in New York City.

Chicago looks at 63 ways to raise revenue

Following up on a report this week that says American cities are facing falling revenues, a new report for the City of Chicago looks at 63 different ways to raise revenue. According to the powers that be, some of the ideas have merit while other are “non-starters”:

In a statement Tuesday afternoon, Emanuel — who must present his budget plan next month — said several of Ferguson’s ideas are “promising” and will be given serious consideration. But the mayor said “raising property taxes, income taxes or the sales taxes is off the table. And asking drivers on Lake Shore Drive to pay a toll is also a non-starter.”…

Ferguson’s report also suggests imposing a $5 London-style congestion fee on for driving in the downtown area during rush hours. The fee would be collected in an area bounded roughly from North Avenue south to the Stevenson Expressway, and from Halsted Street east to Lake Michigan, although it extends as far west as Ashland Avenue between Lake Street and the Eisenhower Expressway…

In addition, Ferguson also suggests creating a 1 percent Chicago city income tax, much as New York City imposes, for new revenues of $500 million per year. In suggesting the tax, Ferguson’s report points out that the State of Illinois increased its income tax to 5 percent last year, but froze the amount distributed to municipal governments, thus effectively reducing the percentage of the tax that cities receive…

Ferguson also suggests eliminating the city’s more than 160 Tax Increment Financing Districts, where property tax dollars for schools, parks, and other taxing districts are frozen for at least 23 years, so that all property tax increases afterward to go into a fund to improve struggling neighborhoods. Although TIF districts generate about $500 million a year, Ferguson says $100 million in new revenues could actually be generated by eliminating them and returning all property tax revenues to the city and other taxing bodies.

It would be interesting to see look at this document to see how many of the proposed options are already in place in other cities. Additionally, how many current revenue generating schemes in Chicago are used elsewhere? Why not learn from the “best practices” (or “necessary practices”) in place elsewhere?

A number of these ideas would generate significant conversations/controversies. There a number of people who have suggested congestion pricing for big cities but actually putting this into practice and selling it to the car-hungry American public is a difficult task. The smaller options, like changing the garbage system, would probably prove more popular or at least easier to implement but they probably wouldn’t have the kind of financial impact necessary to help the city fight a $635.7 million budget shortfall.

Mayor Rahm Emanuel may have impressed people so far but can he survive this upcoming budget battle?

London School of Economics distances themselves from sociologist who wrote about “erotic capital”

The press has paid a lot of attention to Catherine Hakim’s concept of “erotic capital,” perhaps partly because the stories have claimed that she works at the respected London School of Economics. (See earlier posts here and here.) But the LSE now wants to distance themselves from her work:

Catherine Hakim’s Honey Money: The Power of Erotic Capital garnered some hostile reviews after it was published by Allen Lane last month, with many commentators aghast that an LSE sociologist should advocate that women use their sexual assets to get ahead.

The book’s title is inspired by the catchphrase used by prostitutes in Jakarta who ask for cash upfront for sex – with women advised to exploit their own “erotic capital” to gain professional success.

It has now emerged that Ms Hakim’s links to the LSE are perhaps looser than had been suggested. Although she is described as a “senior research Fellow of sociology” at the LSE on the book’s dust jacket and in subsequent book reviews, Times Higher Education has learned that Ms Hakim has not been employed there since 2003.

She had, with the agreement of the school, continued to work from an LSE office and use email, telephone and other clerical-support facilities – despite not being part of the sociology faculty.

The institution has now written to Allen Lane, an imprint of Penguin, asking it to correct further publications, while Ms Hakim has been asked by the LSE not to refer to herself as an LSE sociologist, THE understands.

One might wonder what would have happened had the book been good or not invoked a scandalous argument.

Additionally, if the reviews of this book have been scathing, why has it gotten so much press? Just because it is a “sexy” topic?

American cities continue to face falling revenues

A new report shows that American cities continue to face falling revenues, leading to changes in city budgets and governments:

Belt-tightening continued in cities across the United States in 2011, as fiscal crunches forced local governments to cut back. City revenue is projected to decline 2.3 percent by the end of 2011, according to a new report from the National League of Cities released Tuesday, marking the fifth straight year of declines.

One of the main factors contributing to the decline in revenue is a drop in property tax collections, which are projected to fall by 3.7 percent in 2011, the second straight year of declines. Last year’s drop of 2.0 percent was the first year-over-year decline in city property tax revenue in 15 years. To make up for the shortfalls, cities cut jobs, canceled infrastructure projects, cuts services such as libraries and parks and recreation programs and modified health care benefits for employees.

Hiring freezes were the most common personnel-related cuts made in 2011. Half of cities reported salary reductions or freezes and nearly one in three reported laying off employees or reducing health care benefits. Other actions included early retirements and furloughs.

Even in good times, cities are often concerned with boosting property and sales tax revenues. Commercial and residential development proposals are often scrutinized to see how much they might bring into local coffers versus how they might require in new services. But in times of economic crisis, municipalities and residents, worried about possible rises in property taxes, look even more closely at this issue. Additionally, it is more difficult to obtain federal or state monies when those governments have their own budget concerns.

The belt-tightening will continue unless the economy posts a remarkable reversal. In the meantime, cities big and small, from the size of Chicago and a looming $600 million budget shortfall to smaller suburbs, will continue to look for ways to maximize revenues. In many places, this will lead to some interesting conversations about whether the local government should dig itself out of the mess or whether the residents should help makeup some of the loss of revenues.

Having to “prove” racism versus assuming that it is a common feature of American life

In defending some comments she made regarding white liberals and their support for President Obama, Melissa Harris-Perry looks at three common objections to conversations about race in the United States: “prove it,” “I have black friends,” and “who made you an expert?” While these are all familiar responses, the first one is a particularly sociological point that raises questions about how we view society and how this plays out in court:

The first is a common strategy of asking any person of color who identifies a racist practice or pattern to “prove” that racism is indeed the causal factor. This is typically demanded by those who are certain of their own purity of racial motivation. The implication is if one cannot produce irrefutable evidence of clear, blatant and intentional bias, then racism must be banned as a possibility. But this is both silly as an intellectual claim and dangerous as a policy standard.

In a nation with the racial history of the United States I am baffled by the idea that non-racism would be the presumption and that it is racial bias which must be proved beyond reasonable doubt. More than 100 years of philosophical, psychological and sociological research that begins, at least, with the work of W.E.B. Du Bois has mapped the deeply entrenched realities of racial bias on the American consciousness. If anything, racial bias, not racial innocence is the better presumption when approaching American political decision-making. Just fifty years ago, nearly all white Democrats in the US South shifted parties rather than continuing to affiliate with the party of civil rights. No one can prove that this decision was made on the basis of racial bias, but the historical trend is so clear as to require mental gymnastics to imagine this was a choice not motivated by race.

Progressives and liberals should be particularly careful when they demand proof of intentionality rather than evidence of disparate impact in conversations about racism. Recall that initially the 1964 Civil Rights Act made “disparate impact” a sufficient evidentiary claim for racial bias. In other words, a plaintiff did not need to prove that anyone was harboring racial animus in their hearts, they just needed to show that the effects of a supposedly race neutral policy actually had a discernible, disparate impact on people of color. The doctrine of disparate impact helped to clear many discriminatory housing and employment policies off the books.

Michelle Alexander brilliantly demonstrates in The New Jim Crow, the pernicious effect of the Supreme Court moving away from disparate impact as a standard to forcing plaintiffs to demonstrate racist intention. This new standard has encouraged the explosive growth of incarceration of African-Americans, turning a blind eye to disparate impact while it demands “proof” of racial bias.

I believe we must be careful and judicious in our conversations about racism. But I also believe that those who demand proof of interpersonal intention to create a racist outcome are missing the point about how racism works. Racism is not exclusively about hooded Klansmen; it is also about the structures of bias and culture of privilege that infect the left as well.

I like how Harris-Perry flips this objection: looking at the broad sweep of American history, from its days of more overt racism to more covert racism today, why don’t we assume that racism plays a role in everyday life in this society? Can we really assume, as many seem to do, that the issues with race ended at some point, either in the Civil Rights legislation of the 1960s or in the election of minority politicians or the ending of segregationist society in the South? With plenty of indicators of racial disparity today, from online comments from young adults to incarceration rates to homeownership to wealth to residential segregation, perhaps we should we see racism as a default feature of American society until proven otherwise.

Harris-Perry hints at one reason why it is difficult for Americans to see the effects of racism: the court system moving to the burden of proof shifting to “proving” “racist intention.” Without the proverbial smoking gun, it then becomes more difficult to develop arguments just from data and patterns, even if they are overwhelming. While the recent court case involving gender discrimination at Walmart and sociologists siding with the prosecution isn’t about race, it illustrates some of these principles. The data suggests discrimination may have taken place as more women did not receive promotions or pay raises. But without “proof” that this was a deliberate Walmart policy meant to harm women, the numbers may not be enough. The same holds true with race: “statistical discrimination,” stereotypes about large groups of people, may be okay because no individual or corporation can be held directly responsible for the outcome.

Loss of Sunday as a day of rest more about sociology than loss of religious beliefs?

I’ve had several conversations in the last year or so about how Sundays have shifted from being days for church to normal days full of athletic activities, football, and shopping. One commentator suggests this change is due to larger sociological forces:

The revolution in the American Sunday was wrought not so much by paganism as it was by sociology. The workweek shrank from six to five days, and with two days free each week, Sunday lost its specialness. Women went to work, and retailers had to adjust their hours to suit them. The traditional American Sunday, which consisted largely of attending church and abstaining from work, was conditioned by cultural circumstances that no longer existed. Americans could not adapt themselves to 19th-century agrarian life.

So Sundays are the way they are because of an extended weekend, more women in the workforce, and an information-age society? Were all these changes necessary for this to come to pass or would have one, say the extended weekend, been enough to erode the importance of Sundays? What about the rise of the NFL? If these larger social forces are responsible for this change, what could religious congregations or others do to re-promote the Sunday as sabbath idea?

I wonder if someone has some hard data on when and how exactly this shift took place…

Sociologist considers “Humanity 2.0”

A sociologist who is “Auguste Comte chair in social epistemology in Warwick University’s Department of Sociology” discusses his new book titled Humanity 2.0. In my opinion, here is the most interesting part of the interview:

Let’s put it this way: we’ve always been heading towards a pretty strong sense of Humanity 2.0. The history of science and technology, especially in the west, has been about remaking the world in our collective “image and likeness”, to recall the biblical phrase. This means making the world more accessible and usable by us. Consider the history of agriculture, especially animal and plant breeding. Then move to prosthetic devices such as eyeglasses and telescopes.

More recently, and more mundanely, people are voting with their feet to enter Humanity 2.0 with the time they spend in front of computers, as opposed to having direct contact with physical human beings. In all this, it’s not so much that we’ve been losing our humanity but that it’s becoming projected or distributed across things that lack a human body. In any case, Humanity 2.0 is less about the power of new technologies than a state of mind in which we see our lives fulfilled in such things.

Wouldn’t someone like Archimedes describe us as Humanity 3.0 compared to his era?

Yes, Archimedes would probably see us as pretty exotic creatures. He would already be impressed by what we take for granted as Humanity 1.0, since the Greeks generally believed that “humanity” was an elite prospect for ordinary Homo sapiens, requiring the right character and training. Moreover, he would be surprised – if not puzzled – that we appear to think of science and technology as some long-term collective project of self-improvement – “progress” in its strongest sense. While the Greeks gave us many of our fundamental scientific ideas, they did not think of them as a blueprint for upgrading the species. Rather, those ideas were meant either to relieve drudgery or provide high-brow entertainment.

What is considered “normal” for human beings has changed quite a bit over the centuries. This reminds me of something I read months ago about the concept of “normal” in medicine: we tend to focus on more unusual circumstances so don’t know as much what the possible ranges of “normal.” When first introduced, many technological changes were not “normal” but humans adapted. As Fuller suggests, perhaps we need to have a conversation about what is “normal” and how much change we are willing to accept and how quickly it might be implemented.

Were Archimedes and the Greeks correct in focusing more on “character and training” rather than scientific progress?

When people talk about these sorts of topics, readers start thinking about things like robots, prosthetics, and computer chip implants and don’t think so much about eyeglasses or common crops. Indeed, the book cover plays off these common stereotypes with its “futuristic” look at a human head. Does this jump to future technology and the potential problems immediately turn some possible readers off while a cover that played around more with “safer” ideas like eyeglasses would be attractive to more people?

American language about government policy and economic life shifts from community to individualism

Here is an interesting argument about how common American discourse about public policy and economic life has shifted since the 1930s:

In 1934, the focus was on people, family security and the risks to family economic well-being that we all share. Today, the people have disappeared. The conversation is now about the federal budget, not about the real economy in which real people live. If a moral concept plays a role in today’s debates, it is only the stern proselytizing of forcing the government to live within its means. If the effect of government policy on average people is discussed, it is only as providing incentives for the sick to economize on medical costs and for the already strapped worker to save for retirement.

From the 1930s to the 1960s, as the Princeton historian Daniel T. Rodgers demonstrates in his recent book, “The Age of Fracture,” American public discourse was filled with references to the social circumstances of average citizens, our common institutions and our common history. Over the last five decades, that discourse has changed in ways that emphasize individual choice, agency and preferences. The language of sociology and common culture has been replaced by the language of economics and individualism.

In 1934, the government was us. We had shared circumstances, shared risks and shared obligations. Today the government is the other — not an institution for the achievement of our common goals, but an alien presence that stands between us and the realization of individual ambitions. Programs of social insurance have become “entitlements,” a word apparently meant to signify not a collectively provided and cherished basis for family-income security, but a sinister threat to our national well-being.

Over the last 50 years we seem to have lost the words — and with them the ideas — to frame our situation appropriately.

This is a fascinating line: “The language of sociology and common culture has been replaced by the language of economics and individualism.” This reminds me of the findings about how public opinion changes when asked about “welfare” versus “assistance for the poor.” The concepts are similar but the connotations of the specific terms matter.

Is the end argument here that changing the language will lead to more communal understandings or does reversing the “Bowling Alone” phenomenon have to come first? It would be helpful to know what exactly these commentators think happened in this period beyond simply the change in language. Could we argue that the success of the community-oriented policies of the mid 1900s that led to a booming economy, rising incomes, suburbanization, and homeownership was “too successful” in that it led to these shifts in language and focus?

Sociology class at Brown has teams of students give away $15,000 dollars

I’m guessing that it is a pretty unique sociology course at Brown that has students work in teams to give away $15,000:

Receiving $15,000 for a college class might sound like a laughable dream, but in SOC 1870A: “Investing in Social Change,” a course offered by the Department of Sociology in conjunction with the Swearer Center for Public Service, that is exactly what happens. There is, of course, a catch — students do not keep the $15,000, but instead work in teams of five to award the money in grants to one or more community organizations.

After reading about a philanthropy-based class at another school, Martin Granoff P’93 approached the Office of the Dean of the College about funding a similar class at the University. They brought the idea to Roger Nozaki MAT’89, director of the Swearer Center for Public Service and associate dean of the College for community and global engagement, who then approached Associate Professor of Sociology Ann Dill about co-teaching the class…

This past year there were 34 applicants for the 18 spots.

In addition to assigned readings, the class also features a number of speakers, a majority of whom are Brown alums who work for Rhode Island or Providence nonprofits.

Obviously, it takes a good amount of money to make a course like this happen but it sounds like an exciting opportunity.

I wonder if a class like this is best-suited for a wealthy school like Brown where students could easily end up in positions to give away corporate, government, or private money or for less-advantaged schools where being able to give away this amount would put students in a more unusual position.