Today, Murray demonstrates, there is an archipelago of affluent enclaves clustered around the coastal cities, Chicago, Dallas and so on. If you’re born into one of them, you will probably go to college with people from one of the enclaves; you’ll marry someone from one of the enclaves; you’ll go off and live in one of the enclaves.

Roughly 7 percent of the white kids in the upper tribe are born out of wedlock, compared with roughly 45 percent of the kids in the lower tribe. In the upper tribe, nearly every man aged 30 to 49 is in the labor force. In the lower tribe, men in their prime working ages have been steadily dropping out of the labor force, in good times and bad.

People in the lower tribe are much less likely to get married, less likely to go to church, less likely to be active in their communities, more likely to watch TV excessively, more likely to be obese.

And then Brooks makes his leap by recommending…

…a program that would force members of the upper tribe and the lower tribe to live together, if only for a few years. We need a program in which people from both tribes work together to spread out the values, practices and institutions that lead to achievement.

Stuart Anderson, writing on Forbes.com, suggests that Brooks and his New York Times elites…

…give up their jobs for two years and invite members of the “lower tribe” to live in their homes “if only for a few years”…

Nice suggestion, Stuart.  I have more.

There are number of problems with Brooks’ suggestion.

For starters, we already tried an experiment of forcing the two “tribes” together so the values of the productive class could rub off on the dependent class.  It’s called public education.  It hasn’t worked out so well.   In fact, the public education experiment has had the opposite effect.  It has reinforced the enclaves that Murray writes about by encouraging folks with similar values to cluster geographically into public school districts.  The school districts serving the productive class seem to be doing fine.  The districts serving the dependent class are miserable.

It doesn’t take much imagination to believe that something similar would happen with Brooks’ National Service program.

Next, a reminder to Brooks: This is a free country.  That’s sort of a basic principle.

By the way, Brooks, have you considered that the previous slapdash social engineering projects have contributed to the formation of the productive and dependent tribes?

If not, I would like to introduce you to a new subject.  It’s called systems thinking, but some also refer to it as economics.  In systems thinking, you consider that many things, such as behavior, are shaped by feedback.

Try this experiment: intentionally fart in a business meeting.  I’m sure you’d expect your co-workers to give you stares of indignity.  Those stares are feedback that shapes your behavior and cause you to try to refrain from rudely farting again.

But, sometimes problems develop in the feedback that may cause you to continue the rude farting.

One problem might be that you’re the boss, and a mean one at that, and your subordinates restrain themselves from giving you honest feedback.

Another problem in the feedback might be that you have social elites who believe you have the right to fart.  They reason, studies show it’s healthy to pass gas rather than restrain it.  After all, it’s a natural body function.

This is the first interference with the feedback.  The social elites convince you that you should be able to fart whenever and you do.  A group forms who buy into the social elites’ B.S. and they fart whenever.  After all, the smart social elite got good grades, didn’t they?

But the polite farters remain unconvinced.  They were raised not to fart in professional settings, they think excusing yourself when you need to fart is easy enough and they really don’t like the noisy and odorous distractions of the newly empowered farters, so what do you think happens?

The polite farters begin to segregate themselves from the rude farters.  The rude farters are first left out of meetings, then passed over for promotions and then not even hired in the first place.  Rude farters obviously give themselves away in interviews, after all.

What are the rude farters to do?  They can’t get jobs or keep spouses.

The social elites, never backing down from engineering a social problem (even ones they helped create) come to the rescue.  Well, if rude farters can’t get jobs, we will just tax the polite farters and give the proceeds to the rude farters, after taking our cut, of course.  That way, rude farters can continue their farting practices indefinitely without having to adhere to the unenlightened values of the polite farters.

This is the second interference with the feedback.  Rude farters were starting to get a valuable signal: to be productive they needed to be able to work with others without intentionally farting, despite what the social elite said.

But, the social elites interrupted that feedback signal and made it possible for the rude farters to continue their socially unacceptable behavior.  They no longer needed to be productive to get by.  They could just be dependent on others and continue farting whenever.

Now, decades later a new crop of social elites come along.  One writes a book about how the rude and polite farters don’t mix much and that the polite farters appear to be productive and proficient, while the rude farters are dependent.

Then another social elite columnist comes along, reads his book and suggests that maybe if we just forced members of the rude and polite farting tribes together for a few years in a National Service, maybe, just maybe, the values (although the social elite has a problem identifying exactly what those values are) of the polite farters will rub off on the rude farters — as long, of course, as the rude farters don’t have to stop farting rudely.

The smart social elite never realize:

• that farting politely is THE value that distinguishes the two groups.
• they they interfered with the feedback signals that would have minimized that anti-social behavior.
• that their initial feedback interference caused the formation of the two groups.
• that their second feedback interference insulated the rude farters from having to modify their behavior to get by.
• that all they should do is stop interfering with these feedback signals and tell the rude farters that, perhaps, politely excusing yourself when you need to stink it up is okay after all and that whatever is gained by being rude isn’t worth the social costs you impose on yourself.

And, unfortunately, the smart social elite write about the poor rude farters as if they are incapable sad sacks that have no bearing on their position in life, even though generations of immigrants have demonstrated that you can come to this country, start on the lower rungs and work yourself up the ladder rather quickly by adopting productive behaviors and social norms, like not farting in meetings.

(Thanks to Don Boudreaux of Cafe Hayek for the link to Stuart Anderson’s article.)

I wonder if Mankiw has given any thought to following in the footsteps of Sebastian Thrun and Peter Norvig, who taught their Stanford intro to computer science course online to 165,000 worldwide students.  Given the demand, Thrun gave up his tenure to start his own online university, Udacity, with novel goal of teaching people who want to learn how to program.

There are a few people who could stand to learn basic economics.  Perhaps Thrun has a spot for Mankiw on his faculty.

Related articles

• Stanford AI Professor Thrun Leaves University to Start Udacity, an Online Learning Startup (downes.ca)
• Udacity’s model (blogs.reuters.com)

The emergency care act is well-intended.  Few people want to see people in dire medical need be denied care.

But, unfortunately, the discussion and thinking usually stops there — are you compassionate or not?

We never seem to proceed to the next step of exploring the real world consequences of this compassionate mandate.  One real world consequence is moral hazard, which leads to an externality.

The moral hazard is that I face less incentive to arrange for cost-effective medical care by doing things like buying insurance and building a relationship with a primary doctor, because if I need medical attention I can get it at an emergency room.

The externality is that my poor planning causes others to have to pick up the cost of my emergency room visit through higher emergency room fees.  According to the emergency care act Wikipedia article, 55% of emergency care goes uncompensated.  No wonder emergency room bills are so high.  Those who do pay have to cover for those who don’t.

Free emergency care is a good deal.  Sometimes businesses run good deals too and they put a limit on them, like “Limit 1 Per Customer.”

Maybe with emergency care we should set a limit on the number of freebies that you get.  Maybe at some point we should expect those who are using the system to pay for it or to find a more cost-effective solution.

I know folks would likely still have a trouble denying care to someone who has run out of freebies, but maybe at that point we start taking a closer look at their lifestyle and see why they can’t afford to buy insurance or pay a $50 doctor’s office visit.

Even the insurance that I pay for has a maximum lifetime benefit.  Why shouldn’t the free stuff have a limit too?

I attempted to explain the same topic that Jordan writes about last September in my post, Government is an expense.

My key point then was that GDP is often misused as a measure of health for the economy, but that is like measuring the health of a business by adding its revenues and expenses together.

Jordan explains it better than I did with a lemonade stand example.  In his example, kids invest $10 in a lemonade stand, make $7 back by selling cups of lemonade and folks think that is good because there was $17 worth of economic activity, instead realizing there was a $3 loss.

GDP is not a good measure of the health of the economy because it’s like considering the $17 of lemonade stand spending and saying that was good, rather than realizing that $3 of value was lost in the process.  None of us would last long if we kept turning $10 into $7.  But, that’s essentially what we do when we increase government spending to keep GDP up.

The lemonade stand kids should learn from the signal they received from the market.  The signal is that selling lemonade in the neighborhood is not worth their while because customers do not value a glass of lemonade in that time and place to pay enough for it.

So, the kids should try other things.  Maybe they should try a different drink or different corner.  Or maybe they should offer to do yard work for their neighbors.

They should keep experimenting to discover things that their neighbors do find worthwhile enough to pay enough to make it worth the kids’ while too.  Full disclosure, I tried the lemonade stand experiment a few times too.  I tried it in the street and at family garage sales.  It never produced profits for me.  I did much better doing things like mowing lawns, raking leaves, shoveling snow and assembling bicycles.

We do no good encouraging the kids to keep at turning $10 into $7 to maintain that $17 of economic activity.

If you [colleges] can’t stop tuition going up, your funding from taxpayers will go down.

I wonder if he has considered that the funding from taxpayers is the very cause of rising tuition?

Have you noticed that the areas of the economy where costs tend to rise faster than inflation — education (K-12 & college) and health care for example — receive the most taxpayer dollars?

The areas of the economy that have little or no taxpayer funding tend to produce exponentially better and cheaper products.

It’s not just coincidence.  It’s basic economics.  Supply and demand.  We all know what happens to the price of that hot Christmas toy every parent wants to buy their kids — it goes up from the strong demand.

Now, imagine that government comes along and says that no child should be without that hot Christmas toy.   In fact, government is going to give a $50 voucher –provided by taxpayers, of course — to ensure that every family gets one.

What do you think would happen to the price of that hot Christmas toy?  Yes.  It will go up further because of even higher demand.  So, that $50 voucher just gets built into the price.

In the same way, the taxpayer dollars that flow into education and health care just gets built into the price.  Education and health care are our hot Christmas toys.

By saying that he wants to cut taxes in certain sectors to encourage or help them, doesn’t Obama admit that higher taxes hurt business?

“What happened before in state government was that they would just spend, and then in April they would come to the governor’s office and say, ‘Oh, oops. Sorry, we need another 30 million. We need another 50 million.’ And there would be a huge number of supplemental spending bills that would get passed on June 30th along with the budget for the next fiscal year,” often with tax hikes to pay for them, says Mr. Christie. “And I said to my folks, ‘If you don’t manage to budget, you’re going to get fired.’”

Here’s the metaphor:  It’s suicide when a parasite begins think of itself as the host, as it will proceed to consume the host and then wonder what happened as it dies.

Here government is the parasite and the private market is the host.

I do not intend to use the word parasite in its pejorative.  I intend to use its biological meaning.  There are many cases of parasite organisms that provide benefits to the host and I do believe that government can provide benefits to its host.

Government is a parasite that feeds from the private market.   While it does provide benefits, like defense and a backing to the rule of law, it would not exist if it were not for a valuable resource from which it could draw its life force.

In some cases, that resource may be natural.  Middle Eastern governments are sustained by the proceeds of oil.  Warlord governments in Africa form around resources such as diamonds.  The crony kleptocracy of Russia persists on the bounty of Russia’s natural resources.

And our representative democratic government persists on the wealth generated in the private market.

But, few people see that.  They reflexively see each new perceived problem as a job for government to solve, without considering private alternatives, and then when the government runs out of money, they simply say, raise taxes.

Governor Christie describes this mindset in New Jersey.  ”Ooops.  Sorry, we need another 30 million.”

This mindset leads the parasite to incrementally consume the host and then wonder why it’s dying.  Where did the jobs go?  Where are the new jobs!? Why are tax revenues declining?  Raise taxes on the rich!

In this one, I quoted from a Sowell book and wrote about how we are taught what to think not how to think through something.

In this column from Thomas Sowell, he calls what has resulted presumptuous ignorance and agrees with on a potential source of it:

One of the reasons for so much presumptuous ignorance flourishing in our time may be the emphasis on “self-esteem” in our schools and colleges. Children not yet a decade old have been encouraged, or even required, to write letters to public figures, sounding off on issues ranging from taxes to nuclear missiles.

Agreed.

Related articles

• A Brass Age? – Thomas Sowell – Townhall Conservative (gds44.wordpress.com)

I’ve picked winners.  I’ve picked losers.  

I want to continue to exceed the authority granted to me in the Constitution to pick more winners and losers.

I want to work with everybody in Congress to do things that I want done.  If you are against what I want, well, then, you’re bad.

Here’s my dream SOTU address:

As your President, I commanded the military to protect you so that you could continue to enjoy a level of freedom and standard of living unsurpassed ever on this planet and continue to pursue your happiness — even in these hard times.

I’ve preserved, protected and defended the Constitution, just as I solemnly swore to do when I took the oath when you elected me President.

I ask Congress to continue to pursue a rollback of government interference in your lives.

We’ve had some hard times.  Mistakes have been made.  I hope we all have learned from them.  One of the key lessons I hoped we all learned, is that when we manifest our generosity by demanding that others do something, rather than doing something ourselves, things end badly.

I’d like to encourage you, if you see a problem, work with your family…your friends…your neighbors and do something about it.

Good night.

Key highlights:

• Stanford computer science Prof offers online course on Artificial Intelligence.
• 160,000 people take it.
• On campus class size dwindles from 200 to 30, as more folks say they learn better from the online lecture.
• Professor decides to change the goal of his course from weeding out students to teaching them.

Now for the awesome part:

• That computer science professor quits Stanford and starts his own, online university, Udacity.