“The Triumphant Decline of the WASP”

A NY Times opinion piece from Harvard law professor Noah Feldman makes this argument: “The decline of the Protestant elite is actually its greatest triumph.” Feldman explores the changes in the Supreme Court (the appointment of Kagan would make it 6 Catholics, 3 Jews) and Princeton (“As late as 1958, the year of the “dirty bicker” in which Jews were conspicuously excluded from its eating clubs, Princeton could fairly have been seen as a redoubt of all-male Protestant privilege).

So what changed? Feldman provides some reasons: “the anti-aristocratic ideals of the Constitution,” education was an important defining trait for WASPs so opening up universities was a big step, and the American value of fair play. The result:

Together, these social beliefs in equality undercut the impulse toward exclusive privilege that every successful group indulges on occasion. A handful of exceptions for admission to societies, clubs and colleges — trivial in and of themselves — helped break down barriers more broadly. This was not just a case of an elite looking outside itself for rejuvenation: the inclusiveness of the last 50 years has been the product of sincerely held ideals put into action.

These may be accurate reasons. But they seem to ignore the historical context: something happened in the 1960s that changed institutions like Ivy League schools and led to a very different looking Supreme Court. In that decade, the Civil Rights Movement plus an explosion in higher education for the burgeoning US population plus higher rates of immigration from non-European locales plus cultural change (rock ‘n’ roll, television, more open questioning of authority, etc.), changed, or at least began to change, the socioeconomic status of WASPs.

Measuring celebrity

Forbes has released its annual list of the 100 most powerful celebrities. See Forbes’ website for a full portal that includes profiles of some of the celebrities and the full rankings (including rankings on subcategories). Topping the list is Oprah followed by Beyonce and James Cameron.

Buried at the bottom of the story is the methodology by which Forbes developed its list (the methodology is mentioned in this reposted story at Yahoo):

The Celebrity 100 is a measure of power based on money and fame. Earnings estimates, which include income from films, television shows, endorsements, books, and other entertainment ventures, are calculated between June 2009 and June 2010. Figures were rounded off where appropriate. Additional sources include Billboard, Pollstar, Adams Media Research, The Nielsen Company, and SNL Kagan. Fame is calculated using web hits on Google, Blog Search, TV/radio mentions on LexisNexis, overall press mentions on Factiva, and the number of times a celebrity’s image appeared on the cover of 25 consumer magazines. Social rank is calculated using metrics like Facebook friends and fans as well as Twitter followers.

I would be very interested in knowing the weights applied to each of these measures and broader categories (such as social rank). Take Lady Gaga for example: she is new to the list this year, does not have the media empires like some of the others on the list (Oprah’s big money advantage comes from an involvement in a multitude of media outlets), and yet benefits from a #1 ranking in the social rankings.

After a quick glance, money appears most important here. Perhaps having money prompts more media (of all kinds) mentions. Or perhaps the media mentions help build the money which then leads to a reinforcing cycle. Regardless, just having money may be a sign that you are a true celebrity. We as Americans may like our celebrities because they host a TV show or can do amazing things with a golf ball or can direct exciting movies, but just having money seems pretty interesting in itself.

Tax credit over, new home sales drop 33%

The sales of certain large-ticket items, such as new homes or new cars, are often reported on in the media as indicators of the strength of a consumer-based economy. So this probably is not a good sign:

New-home sales in May fell from April to a seasonally adjusted annual sales pace of 300,000, the government said Wednesday. That was the slowest sales pace on records dating back to 1963. And it’s the largest monthly drop on record. Sales have now sunk 78 percent from their peak in July 2005.

The tax credits, $8,000 for a first-time homeowner or $6,500 for a current homeowner, expired April 30.

On the whole, we have come a long way from the housing-sale crazed days of the first half of the 2000s.

Affordable housing in suburbia

This recent article from the Chicago Tribune discusses Naperville’s efforts to provide affordable housing. The opening paragraph sets up the issue:

“Naperville officials are grappling with how best to achieve two goals that sometimes are in direct conflict: adding more affordable housing for low- and moderate-income senior citizens and residents with disabilities while not costing the cash-strapped city budget anything extra.”

This is not a unique issue to many suburbs, particularly those with little or no remaining land for greenfield development. However, the position of Naperville is instructive of the issue in suburbia: Naperville leaders are most interested in providing affordable housing for a different group than many may think when they hear the term “affordable housing.” Rather than looking to build housing for low to middle income workers who can’t buy into Naperville’s relatively expensive market, the city wants housing for the elderly and the disabled.

In both cases, these two groups primarily already live in Naperville – and affordable housing would help them stay there. This is an issue particularly for the elderly: once retired, high property taxes often make it difficult to remain in a suburban home. Downsizing within one’s long-time community would often be desirable rather than having to move away after retirement. A suburban community that consistently loses its older residents may lose touch with its past and become known as a more transient place.

The rest of the article also describes critiques of Naperville’s planning from a local housing group, DuPage United.

#1 manufacturing nation: soon to be China

Maybe this is a foregone conclusion to many, but this Financial Times article suggests 2011 is the year when China will exceed the manufacturing of the United States.

This would end a 110 year period when the US led world manufacturing. This “American Century” (plus 10 years) contained an impressive display of produced items: steel, early cars, to household appliances, to military weapons, airplanes, personal computers, and more.

Even with a global shift to an “information economy,” many countries would give a lot to have more manufacturing jobs. Manufacturing is not just about raw goods: it involves local communities who then contain factories and working classes. Places like Detroit are infamous for going from economic powerhouses to empty cities within four decades. Other cities, like New York and Chicago, have made the shift from manufacturing to other sectors, primarily finance, insurance, and real estate (FIRE), within the same four decades.

From the article:

“Last year, the US created 19.9 per cent of world manufacturing output, compared with 18.6 per cent for China, with the US staying ahead despite a steep fall in factory production due to the global recession.

That the US is still top comes as a surprise, since in 2008 – before the slump of the past two years took hold – IHS predicted it would lose pole position in 2009.”

Interestingly, the return for China to the top adds to China’s long manufacturing edge before the modern era. Perhaps the “American Century” was just a blip on the screen of history:

“If China does become the world’s biggest manufacturer, it will be a return to the top slot for a nation which – according to economic historians – was the world’s leading country for goods production for more than 1,500 years up until the 1850s, when Britain took over for a brief spell, mainly due to the impetus of the industrial revolution.”

Financial prospects dim, lottery sales up

While the financial markets may be tense, lottery sales in Illinois are expected to go up for the seventh consecutive year. Besides consistent marketing campaigns, another dynamic may be at play:

“Lottery’s a dollar — it’s like buying a lipstick during a recession versus a whole new outfit,” said Jodie Winnett, acting superintendent.”

So it seems like a small outlay – just a dollar or two – but the odds of winning a major prize are astronomically low. Keep adding up those dollars or two, multiple across thousands of people, and the lottery has rising sales.

Best home improvement payoff: a little less junk

A look at the returns sellers can expect from certain home improvements. The best: decluttering. The worst: a family room addition. And deeper in the article: “All this is anathema to retailers like Home Depot, Lowe’s, Bed, Bath & Beyond, Williams-Sonoma and Lumber Liquidators. They all benefit from the myth that pumping money into your house pays off later on the auction block.”

Odds not good for IL and CA finances

From CNNMoney.com:

“How ugly are the state budget problems?

Nasty enough that traders are betting that two big U.S. states, California and Illinois, are just as apt to default on their bonds as Portugal — and almost as likely as Iraq…

The going rates in the CDS market say traders believe there is an equal chance — about 1-in-4 — that California, Illinois, Portgual or Iraq will default on their obligations within five years.”

David Brooks defending the liberal arts

David Brooks takes a run at defending the liberal arts. Perhaps not an easy task in this financial milieu. According to Brooks, the benefits: improved reading and writing, increased knowledge of the language of emotion, providing a wealth of analogies, and a better understanding of “The Big Shaggy.” Seems like a typical defense…though I question the use of the term “The Big Shaggy.”

From birth to age 17: $222,360

This is the estimated cost for raising a child from birth to age 17 from a U.S. Department of Agriculture report. The figure is calculated for a middle-income family. Bet this study has some interesting methodology and calculations…