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Posts Tagged ‘Statistics’

Most people recognize that there are disparities of unemployment by region or education.  Florida and the other “sand states” are particularly hard hit. But VDare did an interesting review of unemployment differences between native-born and immigrant workers, and this revealed a serious disparity in unemployment that tilted in favor of the newcomers.

Why might this be?

The folks at the WSJ would suggest this is because immigrants are harder working, more “real” Americans than the lazy welfare cases that are born here.  But is that all of it?  Could it be immigrants don’t want things like insurance or are more willing to walk away from mortgages or have less compunction about paying taxes, nor do they care as much if companies’ adhere to safety protocols?  (By way of illustration, I once observed a Mexican construction worker welding without any eye protection whatsoever.)  And could it be companies like to hire people that are “living in the shadows” because they are more easily exploited?

Here’s Ed Rubenstein’s numbers:

Over the past 12 months:

  • Foreign-born employment rose by 1.7%, or more than eight-times native born job growth (0.2%)
  • The immigrant unemployment rate declined by 4.2%, while the rate for natives declined only 2.1%—half as much.
  • The share of the native-born working age population that is actually workingdeclined for natives; the share of the immigrant working age population that is actually working rose.
  • Perhaps most indicative of future trends: the foreign born population 16 and over (i.e., of working age) rose by 1.6%, nearly double the 0.7% increase for natives.

America’s people, habits, and demographics are all being transformed, and so is our workforce.  These changes benefit a small number of rich business owners and the immigrants themselves, while burdening native-born Americans with lower wages, higher crime, a less solvent state, worse schools, and a weakening of the American character.

America’s Constitution makes no promise to the world or to immigrants or to anyone other than its citizens and their progeny, as it was made to “secure the Blessings of Liberty to ourselves and our Posterity.” But the false consciousness of America as an “immigrant nation” and the willful blindness to the facts by decision-makers and the American people has blinded large swaths of the country too the harm that mass, Third World immigration does to our country’s health and prosperity.  While the more dramatic cases of immigration policy failure are those of terrorist Muslim interlopers, the larger numbers (and problems) come from Latin America. Here the consequence of that is undeniably harmful American worker displacement.

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Five years after Katrina, the event still captures the imagination, particularly its fears.  I was living in Houston at the time Katrina hit.  I was able to talk to many refugees at the time, including young people living on friends’ couches and with relatives, working as waitresses and cab drivers and the like.  I also followed the news very closely.  It was truly an epic disaster.

This Did Not Happen and Your Eyes are Lying to You!

It is perhaps not surprising that on the five year anniversary of Katrina, a major revisionist history effort is underway.  Just as the LA Riots became a story of “12 Years of Neglect” and, last week, a single unrepresentative white crime against a cabdriver makes the national news, there have been hints of this revisionism regarding Katrina before.  The real story, we’re told in the Nation and elsewhere, is of racist whites going on a rampage and not the “conventional wisdom” of mass black local government incompetence, collective poor planning by government and individuals, and an aftermath of largely black criminality.

Isn’t this interesting?  Were the stories, then, of shooters harassing rescuers and aid workers at the time all made up?  Was the looting, arson, and mass chaos of the Superdome just an out of control myth?  Was New Orleans, which had the highest murder rate in the nation, suddenly a peaceful idyll upon the mass desertion of the corrupt, but absolutely necessary, police force?  The revisionists’ claims defy all common sense.

I should note one thing missing from most of these stories are raw numbers. How many people were arrested following the storm?  How many crimes were reported?  How many bodies were found and what was the cause of death? And how reliable are each of these numbers; what interest would any of the authors have in redeeming a certain group of people, restoring New Orleans’ reputation, etc.? How do New Orleans’ numbers compare to Slidell, Lafayette, or neighboring Gulf Coast Mississippi?

These Statistics Do Not Matter and Are Totally Irrelevant to Understanding What Happened Before, During, and After Katrina

It’s rather obvious that the usual liberal efforts at distraction, changing the subject, and Orwellian revisionism are underway.  And the reasons are familiar too:   the goal here is to transform this event, which showcased a serious natural disaster exacerbated by corrupt black-run city and an explosion of black crime, into a tale of federal incompetence and white racism in the form of trigger-happy property owners and cops.  While I have no doubt some stories were exaggerated and there was undoubtedly some overreaction by cops and property owners, I also know that some truths are being looked for very aggressively and others are actively avoided.

The group doing the “rewriting” of Katrina–the liberal media–cares not so much about truth in matters of race as it does in events that “fit the script.”  And that script is of evil white racists and innocent (or at worst misunderstood) black victims.  Consider the showcase story in the Nation; a man claims he was shot for no reason by a racist white man with a shotgun.  Is this possible?  It certainly is, especially in the fear-ridden climate after Katrina.  But what if he was a looter?  What if his goal was criminal?  Or what if it appeared to be so?  Would he admit to that?  Certainly not.  Would the Nation reporter ask him? Probably not, or if he did, it would be a pro forma deference to professional standards.

From everything I could see and hear and learn of from survivors while the event was happening, Katrina was terrible and its aftermath was the equivalent of the LA Riots with flooded streets, that crime of all kinds had exploded, that neighborhoods in Houston where Katrina refugees arrived en masse had become more crime ridden, that the 25+ more murders in Houston upon the arrival of the Katrina crowd was not an insignificant uptick in crime, and that any other outcome would truly defy all common sense based on New Orleans’ high crime rate pre-storm. Was there some trigger-happy overreaction by middle class New Orleanians?  Almost certainly.  But what was the cause of this?  Could it be the reasonable fear of massive crime after the storm along with years of negative experience with New Orleans’ underclass?  There’s no reason to think the universe went upside down during Katrina, and that people for many years who were violent criminals suddenly became angels.

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Probably the scariest revelation I’ve had in recent years is coming to undesrtand how little the experts at the top know what they’re doing, even as greater and greater trust is placed in them.  As I’ve gotten older, friends have become CEOs, high level government officials, partners in law firms, and the like.  While most are conscientious and careful, they are also generally, as a group, aware of their limitations.  They are also aware that the public’s expectations and concomitant esteem for their respective roles is grossly out of proportion to their talents.  But the academic economists, some of whom have moved laterally to advising hedge funds and the like, are as cocksure as the most precocious graduate students, replete with “six sigma” predictions and prognostications.  And, as a consequence, a great many pension funds, homeowners, home builders, government authorities, foreign investors, FDIC insured banks, and other major institutions were long on housing well after the conditions for a major bubble had emerged.  And they were cheered on by numerous economists and their explanations of “impounded information” and “efficient markets.”

The cause, in part, has to do with the empirical blindness of many economists, who eschew deep historical, data-driven inquiry for elaborate–indeed “perfect”–models, viz.:

The mainstream of academic research in macroeconomics puts theoretical coherence and elegance first, and investigating the data second,” says Mr. Rogoff. For that reason, he says, much of the profession’s celebrated work “was not terribly useful in either predicting the financial crisis, or in assessing how it would it play out once it happened.”

“People almost pride themselves on not paying attention to current events,” he says.

In the past, other economists often took the same empirical approach as the Reinhart-Rogoff team. But this approach fell into disfavor over the last few decades as economists glorified financial papers that were theory-rich and data-poor.

Much of that theory-driven work, critics say, is built on the same disassembled and reassembled sets of data points — generally from just the last 25 years or so and from the same handful of rich countries — that quants have whisked into ever more dazzling and complicated mathematical formations.

Consider the view of economists on something like free trade, for example.  The free trade theory–a theory of comparative advantage–has been elaborated on by such diverse economists as Adam Smith and Ludwig von Mises.  But respond that a particular country did well and prospered under protectionism–such as the US in the late 19th Century–and they will say that the country would have done even better with looser tariffs.  Perhaps.  But what fact would prove or disprove this theory?  What kind of theory is it that can absorb any data set and not be adjusted thereby?  This is not real scientific inquiry.  It’s ideology . . . or religion.

It’s like Eliot Yeats said:  The best lack all conviction, while the worst are full of passionate intensity.

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A halfway intelligent lance corporal knows that the Afghans are sick of our presence, are united by xenophobic nationalism, and that a great many are skeptical of the kleptocratic Afghan government and military.  So the following exchange with General Petraeus suggests a man whose demand for precision ebbs and flows with his desire for a particualr conclusion:

When asked whether nationalism is putting down roots in Afghanistan‘s tribalized society, Gen. David Petraeus is judicious: “I don’t know that I could say that.” He adds, however, that “we do polling” on that subject. When his questioner expresses skepticism about the feasibility of psephology — measuring opinion — concerning an abstraction such as nationalism in a chaotic, secretive and suspicious semi-nation, Petraeus, his pride aroused, protests: “I took research methodology” at Princeton.

Some things can’t be put into a powerpoint slide.  They just are known intuitively, based on long experience with the people involved.  We lack this experience in Afghanistan.  We lack this experience in Iraq.  We are trying to do some good things, and we are doing them honorably on the whole, but the payoff in terms of national security is hard to see.  The alternative–the occasional punitive raid–seems more easily accomplished and more consistent with the primitive conditions of these nations, as well as the limitations of the American government and American military.

I certainly respect Petraeus’ intelligence and his broader view than many of his peers.  That said, his apparent penchant for statistics in the inchoate realm of counterinsurgency suggests a certain hubris.  He is understandably unlikely to announce when the strategy and overall mission are destined to fail.  He is an impressive “can do” person.  That said, the mediocre results in Iraq have been redefined as a great victory, even though Iraq is securely in Iran’s orbit and is still a violent, unfriendly place.  His remarks on “methodology” in particular reminded me of something John Lukacs wrote critical of certain tendencies in academia in his book Historical Consciousness:

For the image of the people-obscured as it is by rhetoric and obfuscated by statistics–is an elusive phenomenon. We live in an age of democracy, of popular sovereignty, of popular rule: but who are the people? Intelligent opponents as well as some of the proponent of modern democracy recgnized that of Aristotle’s ‘s three principal types of government–monarchy, aristocracy, democracy–the last one, government by the people, by the many, is the most difficult. But there more to this. Rule by “the people” is not only difficult; it is also the most complex; and the most abstract. It is abstract, because while it is possible to find out, and later relatively easy to reconstruct, what a certain ruler wanted, or even what a ruling group wanted, who can say what “the people” wanted–with any reasonable degree of certainty.

General Petraeus needs to consider this.  We don’t know Afghanistan.  Polling of the smallish number of accessible Afghans in the city won’t change that.  We don’t know Afghanistan, in part, because of the failure to train up specialists in the relevant languages that could help us know what the hell these people are saying, thinking, writing to one another, and the like.  We are, in spite of ourselves, the arrogant, ugly American, giving people what they don’t want and surprised when they turn around and want to kill us and our proxies.

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I’ve recently become intrigued by the writings of Nicholas Taleb.  They resonate with me because his criticism of mathematical modeling of markets–i.e., the central activity of “econometrics” and the basis of so much Wall Street activity–has long been a theme of the Austrian School of Economics. The same skepticism of predictability that leads the Austrians to reject socialism also casts a shadow over so much of the noise-making activity of Wall Street. 

Stressing instead, the unpredictability of markets, the role of idiosyncratic (and changing) individual preferences, and the heroic role of the entrepreneur and experience-driven gambles about unmet demand, the Austrians have long condemned the idea that the government, central banks, or even individual investment houses could reliably predict market movements in advance. There is a huge “X Factor,” namely, human action.

Taleb stresses that our social scientific hypotheses and data sets are likely misleading.  We craft comforting narratives from past events, even though these explanations may have little predictive value and can lead to positively dangerous “false positives” going forward.  We are, in essence, stumbling around, looking for answers, with various baffles and blinders. 

Like Taleb’s insights into Black Swans, the nice thing about the Austrian School is that it does not promise utopia.  Instead, it promises the least systemic damage because an authentic free market system–particularly one divorced from central banking and fiat money–is the least systematized.  There may be longer and shorter chains of production, misallocations of capital, and supply shocks, but these problems are dispersed and rooted in the unavoidable uncertainties of market activity.  Unlike the “modern” world of central banking based on fiat currency, temporarily correct but disastrous false signals cannot arise without the harmful pressures of central banking coupled with fiat currency.  Your loss is my gain in a true free market system, and speculators tend to cancel one another out without the false signal of inflationary monetary policy.  Wealth creation might be slower than in the present world of monteary-policy-driven economic bubbles, but so too are the crashes less frequent and less severe. 

Murray Rothbard was fond of pointing to the relatively short-lived 19th Century panics in contrast to the decade-long Great Depression and the repeated multi-year-post-war recessions.

One would have thought the econometricians would have retreated after the failure of Long Term Capital Management in the late 90s, but no such luck.  They returned with the same bravado and cock-sure certainty again, enabled by the same kind of monetary policy that presumes to “create growth.”  Of course, no one can manage the economy, not least the government who, unlike private actors, is concerned equally with social goals and concentrated public choice players as it is with profits and wealth creation.

I was happy to see some criticism of the economists counseling government intervention in today’s Wall Street Journal.  Yet this criticism will likely be drowned out by calls for intervention.  So long as Wall Street’s economists embrace the wrong kind of mathematics in an attempt to predict the unpredictable–with extreme confidence, in fact, backed up by the wrong kinds of statistical reasoning–then the theoretical framework supporting central planning and government intervention will remain.

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