The stories that we are about to report on were inspired by actual events

Thomas Sowell wonders if facts are obsolete.

I agree. We can no longer distinguish journalism from the tabloids. But, I suppose, they are responding to incentives.

Tabloid journalism sells because people consume it.

I think the key question should be why do people consume it and/or prefer it to fact-based journalism?

Do we like drama so much that we don’t care whether it’s real or made up? “Reality” TV may prove that many of us do.

Perhaps newscasts should begin with a disclaimer that the stories they are about to report on were inspired by actual events.

Update: In his piece, Sowell reveals a fact about the Eric Garner case that I did not know (in bold):

…Garner did not die with a policeman choking him.

He died later, in an ambulance where his heart stopped. He had a long medical history of various diseases, as well as a long criminal history. No doubt the stress of his capture did not do him any good…

If this is true, then the media needs to do some soul searching. Sowell continues with:

…and he might well still be alive if he had not resisted arrest. But that was his choice.

In 2012, I wrote about an affliction I dubbed Blame Disorder. This would be a good case of that.


We get what we vote for

This made me laugh. Glenn Reynolds wrote on Instapundit:

LIFE IN THE ERA OF HOPE AND CHANGE: NYC police chief: Tensions like ’70s.

You know what else is like the Seventies? The Democratic solutions to the problems they caused: Dem: Cops should focus on gun control. These guys haven’t had a new idea since 1968.

True. Why would they? It’s sounds good enough to get them elected. If a football team scores touchdowns from passing, they’ll keep passing.

Incentives and knowledge

I recall that when I was in 10th grade I held a political view of the world that is much like the politician’s of today. I wondered, why doesn’t some politician wave their ‘magic wand’ and just fix the problems. Get to it. There is no shortage of politicians promising to do just that.

I was reminded of that this morning as I read the Wall Street Journal’s op-ed on Vermont’s failed single payer medical care system.

Since 10th grade I’ve learned why such things fail. But, it took me too long to do so. The answer is elusive and not discussed as often as I think it should be or too deeply buried in other words and phrases.

I never found it helpful to hear things like “that just doesn’t work” or “socialism/communism/central planning has been tried over and over and has failed over and over.”

Or the discussions get sidetracked in unproductive ways. “You don’t want to help the poor!” “Everyone has a right to [fill in the blank with some benefit that costs somebody something].” Or, on the other side, “Markets are just better.” ”

I’ve never been satisfied with those discussions. I’ve always been interested in why it doesn’t work.

I wish someone would have told me when I was in 10th grade to consider the incentives and the knowledge problem.

It’s, perhaps, not race

The President and First Lady seem to jump to conclusion that being mistaken for a valet or asked to get something off the shelf had to do with race.

I have news for them. Those types of things happen to me, too.

I’ve been asked to get coffee. I’ve been asked by fellow patrons of stores “Do you work here?” I’ve been mistaken for servers at restaurants. I’ve been asked by others for help.

I’ve noticed such things happen when my clothes reasonably matches with what the employees of the establishment are wearing. When I’ve been asked for help, I always assumed it’s because I looked like a nice, approachable guy who would be more than willing to help.

Maybe the First Lady was asked to take something off the shelf because she is taller than the person who was asking and looks like a nice person that would help someone out.

Perhaps the President was mistaken for a valet because what he was wearing more closely resembled what the valets were wearing than what guests were wearing.

It reminds me of a conversation I had with a friend. We were discussing racial profiling, I believe, and I had made a similar comment as above that race was not a key factor in such cases, but the way we frame it makes it seem so.

Him: Oh? So, are you telling me if you were walking down a dark alley and ran into two black dudes in hoodies you wouldn’t be concerned?

Me: Actually, that has happened to me and sometimes I was concerned and sometimes not.

Him: What do you mean?

Me: First, let me ask you something.

Him: Okay.

Me: Why did you ask me about ‘dudes in hoodies’? Why didn’t you just say ‘people’? If it was just about race you would have just said ‘black people.’ So, you already know that there’s more than just race at play.

Him: Huh?

Me: You’re saying that gender and what they are wearing are factors, too. Otherwise, you could have just said ‘people’. And, by ‘dudes’, most people tend to get the impression of young men. So, you are also implying age is a factor, too.

Him: Okay.

Me: So, now back to your question. My answer is, it depends.

Him: On what?

Me: What are they wearing? How are they behaving? How old are they?

Him: What do you mean?

Me: I have walked down lonely streets and encountered ‘black’ people on many occasions and only on a few of those I have had concerns.

If they were women, or men dressed professionally or casually and behaving politely, I didn’t have any concerns. When they were dressed like bums and behaving politely, no concerns, either. Would you in those cases? So, as you already admitted, gender, age and dress are important cues, even more important than race by itself.

If they are younger than 12 or older than 30 or so, I’m not concerned. So, age is also big factor.

Him: Oh. I guess I can see that.

Me: I have walked down lonely streets before and have encountered people of all races who were dressed like thugs and behaving like they were looking for trouble and that’s when I had concerns.

Come to think of I’ve encountered male, teenagers who were dressed like thugs, but didn’t appear to be looking for trouble and I was much concerned. So, maybe it wasn’t even the clothes, but the behavior that is the most important factor.

So, while ‘what would you do on a lonely street’ is a popular example people like to use because they think it gets at one’s true racial biases, that example fails in the asking, but few people notice.

Him: I was following. Now you lost me.

Me: Again, you asked me about ‘dudes in hoodies.’ Not just ‘people.’ Not women. Not young kids or older men. Not young men in professional or casual clothes. So, in the asking, you admitted that gender, age and clothes are important factors, so that’s why it fails in the asking. Yet, since this question is primed with ‘race,’ people tend to ignore all the other factors included as part of the trick and focus solely on one factor, race. What if you asked me, “Would you be concerned about running into two white dudes in hoodies on a lonely street?” My guess is you would be just as concerned. So, it’s really not about the race. It’s about ‘dudes in hoodies.’

I honestly can’t remember if I made any headway. But, he seemed to consider the train of thought.

Don’t encourage the un-encouragable

Alex Tabarrok of Marginal Revolution shares his favorite of Morgan Housel’s Motley Fool article, 122 Things Everyone Should Know About Investing And The Economy.

I especially agree with this one:

For many, a house is a large liability masquerading as a safe asset.

This is important to understand and relates to my previous post.

In the U.S. we (especially politicians) have rose-colored glasses when it comes to home ownership. We think it’s good, always. We think, the more the better, always. We have this same affliction with education.

So, you start to see politicians do things to make it easier to become a home owner, like lowering down payment standards.

Home ownership can be good, but as with all good things, it isn’t good for every situation. And, there is a law of diminishing returns that limits the more is better, always.

Back in 2010, the Wall Street Journal interviewed Canada’s Finance Minister, Jim Flaherty. I wrote about that here. Canada did not have a banking crisis in 2008. Part of the reason why is that they do not see home ownership with rose-colored glasses like we do. This prevents them from doing unwise things like getting people into home ownership when renting is likely the best option for them.

He said:

“They [Canada’s version of Fannie and Freddie] are supposed to have a certain part of the market but they are not supposed to be a dominant player in the market. They do make sure that lower income earners have access to a roof over their heads, but that can mean rental housing.

There’s no stigma to renting there. That kept Canada’s government, mortgage lenders and borrowers from doing things that encouraged risky home ownership.

In the interview, Flaherty points out some of these things

  • Canada’s lenders didn’t securitize (sell off) mortgages, or off load risks of bad mortgages, to others. They lent and held the mortgage, so it was in their best interest to make good loans.
  • Borrowers couldn’t just walk away from a home with a mortgage. “They remained personally liable.” That encourages borrowers to be more prudent about becoming a home owner. If you can’t rid yourself of the debt by simply stopping paying your mortgage and walking way from the house if things go south, then maybe you don’t buy a home or you buy one that better fits your budget.
  • Canada’s tax code also doesn’t treat mortgage interest as a deduction. This policy also tips the scales toward home ownership in the U.S.

Time machine? Sadly, no.

The news reported recently that Fannie Mae and Freddie Mac plan to offer programs to allow young home buyers to buy a home with as little as 3% down to make it easier to buy a home.

Hmm…I thought for sure this was a headline from 1995, but no. It’s from December 2014.

Do they not remember how this ended last time?

Why not start a program that teaches financially responsible behavior young home buyers can use to save up a sizable down payment so they can truly be homeowners and not just renters with a deed.

I know why. That doesn’t sound as good.