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[ 237 ] October 24, 2013 |

Alex Tabarrok’s piece at Marginal Revolution about the bad economics of layaway makes sense on one level. It got all the appropriate and expected twitter hits this morning (Yglesias, Klein, etc). I’m not going to argue against the the post on its merits. Layaway exists as a way to transfer money from people to corporations, it is a bad economic investment for the consumer, etc. Tabarrok can’t figure out why people would agree to do this–stores rarely run out of goods and if they do they are replaced with something else, it’s a big pain to make the payments, etc. And I agree that Consumer Reports probably shouldn’t be calling layaway a good idea.

But like so many ultimately well-meaning articles about the poor I read on the internet, it’s seems to me that Tabarrok doesn’t understand layaway because he’s never been poor (although I don’t actually know). Let’s imagine a situation for layaway. You are 11 years old. It’s July. Your family doesn’t have much money. Getting new school clothes is a big deal because you don’t get very many new clothes in a year and you want to wear them on the first day of school. Your parents are really worried about this. They want to buy you the new clothes. They also know that they will have a really hard time actually saving the money to purchase them all at once. So they put them on layaway at the Target or Walmart and make the payments, hoping to have them all paid off before school starts.

How would I come up with this scenario? Because I was that 10 or 11 year old and my parents used layaway to get me those new clothes I wanted. In fact, in the scenario I am recalling, they actually couldn’t make all the payments and I really wanted those clothes and somehow we talked the store into giving us some of the clothes up front and breaking up the layaway, which probably only worked because I was there and nearly hysterical that I would have to wear old clothes on the first day of school.

In a so-called rational economic world, layaway might not make sense. In the real world that actually people live and operate in it makes a ton of sense, even if it is bad economics. People can’t save money easily. It’s actually a more secure investment to pay some of it up front, which commits the individual to buying the product and makes acquiring it probable, but also gives the buyer some leeway if disaster strikes.

Economists try to understand why people make the decisions they do. The growing field of behavioral economics is mercifully bringing that back into the real world. What has driven the decisions of working-class people in the 20th century more than anything is a desire for security, broadly defined. Whether we are talking about Social Security, Medicare, the union contract that rolled over with few substantial changes except better benefits for 20 years, the ability to own a home after World War II, many of our major policy and labor decisions since the 1930s was driven by the desire for security now mobilized through the American labor movement. The CIO especially centered security as a broad goal and crafted policy to increase working-class security. And it worked, at least for members of the white male working-class, for several decades. Today it has mostly collapsed in an era of contingent labor, union busting, capital mobility, massive debt, and income stagnation.

But I don’t think the desire for security is just a broad policy goal in union offices in Washington, Congress, or the Department of Labor. It also drives people’s daily lives. The struggle to survive and to make ends meet is ultimately a struggle to find some level of security in your life. Sometimes, the desire for security might even drive behavior economists see as irrational. But layaway is a form of security for you to buy your 11 year old his school clothes. So on the fundamental level of seeing your child happy and your home at peace, layaway might be a perfectly rational decision.

What bothers me about articles like this is the lack of understanding of working-class behavior. Tabarrok can’t understand why people would use layaway. But it’s easy to gain that understanding. Ask some poor people why they use it.

Bermudo the Gouty

[ 60 ] October 23, 2013 |

In what is extremely rare medieval history blogging, this list of unfortunately nicknamed medieval kings is pretty great. Below we have Alfonso the Slobberer

And here’s Henry the Impotent

That Sexy Franklin Pierce

[ 63 ] October 23, 2013 |

Another recent old post rediscovered makes me realize why Franklin Pierce went in hard and came out soft. Turns out he ranks pretty high in the presidential sexiness polls.

The Criminal Element, circa 1859

[ 43 ] October 22, 2013 |

This selection from New York Police Chief George Matsell’s Vocabulum, or the Rogue’s Lexicon, a collection of criminal slang, is amazing. It’s available here in its entirety. Here are some words for you. See if you can work them into conversation tomorrow.

Altitudes: A state of drunkenness; being high.

Ambidexter: One who befriends both sides; a lawyer who takes fees from both parties in a suit.

Bag of nails: Everything in confusion.

Balsam: Money.

Barking-irons: Pistols.

Billy Noodle: A soft fellow that believes the girls are all in love with him.

Blue-plum: A bullet; “Surfeit the bloke with blue-plum,” shoot him.

Bread-bag: The stomach. [Also: Middle-piece; Victualling Office.]

Bun: A fellow that can not be shaken off.

Chatty feeder: A spoon. [Also, Feeders: Silver spoons or forks. “Nap the feeders,” steal the spoons. Smash-feeder: A silver spoon.]

Cutty-eyed: To look out of the corner of the eyes; to look suspicious; to leer; to look askance. “The copper cutty-eyed us,” the officer looked suspicious at us.

Daisyville: The country.

Dry up: Be silent; stop that.

And that’s just A through D of the excerpt.

The Poisoned Candy Scare

[ 111 ] October 22, 2013 |

Another Hail Satan Day Halloween is nearly upon us and Dan Lewis reminds us that the famed Halloween poisoned candy scare is a total media mythology.

What about poison, which, being invisible and generally hard to detect, is the more nefarious way to taint candy? You have little reason to be concerned there either. Landers stated, “many reports” of such terrible acts have occurred, however, they are almost entirely the stuff of myth.

Almost entirely.

For nearly 30 years, University of Delaware sociologist Joel Best has been investigating allegations of strangers poisoning kids’ Halloween candy. As of this writing, he hasn’t identified a single confirmed example of a stranger murdering a child in this fashion.

He found other examples of people accidentally passing out tainted candy or, in one case, passing out ant poison as a gag gift to teenagers (no one was hurt), but the bogeyman of terrible people making trick-or-treating unsafe is a canard. One example of a person trying, explicitly, to poison children via Halloween candy was confirmed. However, the child who died wasn’t a stranger—it was the man’s son.

On Halloween, 1974, an 8-year-old boy named Timothy O’Bryan died. His candy had, indeed, been poisoned. A few days prior, his father, Ronald Clark O’Bryan, took out a $40,000 life insurance policy on Timothy and Timothy’s sister, Elizabeth (then age 5), as an unimaginable way to get out of debt. The only way to collect required that at least one of his children die, so the elder O’Bryan laced some Pixy Stix with cyanide and cajoled his son into eating one before bed.

Pretty nice father there. In any case, while the overall point is fair enough, I do have to push back against the framing of Lewis’ article. He blames the scare on “the media.” But I’m not sure that citing Dear Abby and Ann Landers (Hell, that could just be some old family scare there) exactly equates “the media” here. Now I do remember lots of stories growing up about fears of this and local news reports on where to take your candy to get it scanned (my parents never bothered. And really, if I were their son, I probably wouldn’t have either). So the media scare did exist.

But the 1970s and 1980s were full of this kind of paranoia about the cities, bad people, kidnappings, and other horrible things. Don’t talk to strangers. Some of this is still with us, but in fact it is far safer for children today than 30 years ago. From bicycle helmets to Amber Alerts, we took our mostly misplaced paranoia and created a structure of real safety for our children.* But let’s also be clear, this was misplaced paranoia. When I was a kid, there was a famous case of a mother killing her children in my hometown. She blamed it on a shaggy haired stranger flagging her down and massacring her children (and shooting her in the arm). The police were inundated with calls from citizens saying they saw the same person trying to do the same thing to him. Of course he didn’t exist. The woman killed her kids and shot herself in the arm as an excuse.

What was with these fears? I figure it was probably a combination of backlash to civil rights and urban riots, the Manson murders and counterculture more broadly, the economic instability of the time leading to cultural fears, and other broader sociocultural factors that would lead parents to fear irrationally that their neighbors wanted to poison their children through Halloween candy. But while the media certainly fed these fears, it didn’t create them out of whole cloth. People aren’t passive receivers of narratives.

* Not that bicycle helmets aren’t a good thing

Carbon Emissions

[ 16 ] October 22, 2013 |

After a few years of declining carbon emissions in the U.S., emissions are on the rise. The decline led to some headlines about the U.S. actually making real progress despite passing no climate bill. And I don’t want to dismiss the important moves the Obama Administration has made against coal-burning power plants. But the other reasons for the decline were one-time only deals (recession and stagnation, unusual and unsustainable collapse in natural gas prices). If we want to fight climate change in any meaningful way, we are going to need a lot more leadership from the government. Voluntary measures, relying on the market, etc., just flat isn’t going to work.

Our Struggling One Percent

[ 44 ] October 22, 2013 |

Won’t somebody think about the plutocrats?

There are millionaires, there are billionaires, and then there are the people who earn over a billion dollars in a single year. For the first time ever, the financial research firm GMI Ratings has found two CEOs making over $1 billion in annual income, according to the firm’s 2013 CEO Pay Survey.

The highest paid CEO in America last year was Facebook’s Mark Zuckerberg, who raked in nearly $2.3 billion over the course of 2012, according to the survey.

The runner up was Richard Kinder of the energy company Kinder Morgan, who earned a mere $1.1 billion, less than half of Zuckerberg’s income. Sirius XM’s Mel Karmazin came in a distant third, collecting only a little over $255 million.

GMI Ratings surveyed over 2,200 top executives across the country in order to establish its rankings, according to a statement from the firm. Overall, the survey found that base salaries rose 2.9%, while total median compensation increased a healthy 8.47% between 2011 and 2012. Other studies have shown that non-CEO Americans have not seen a commensurate increase in their income over the past year. For example, the U.S. Census’ latest report on income and poverty found that overall household income in 2012 was “not statistically different from the levels in 2011.”

The gap between skyrocketing CEO pay and relatively stagnant compensation for everyone else has been widening for decades. While annual CEO compensation increased by 726.7% between 1978 and 2011, average worker compensation only went up 5.7% during the same time, according to a 2012 study by the Economic Policy Institute.

Let’s repeat that last one.

Changes in compensation, 1978-2011

CEO’s: 726.7%
Workers: 5.7%

Hey, the number behind the decimal point is the same. A fair system after all!


[ 94 ] October 22, 2013 |

There’s no reason to think that the United States is more drought-immune than ancient societies that were destroyed by it:

More than 3,200 years ago, life was abuzz in and around what is now this modern-day Israeli metropolis on the shimmering Mediterranean shore.

To the north lay the mighty Hittite empire; to the south, Egypt was thriving under the reign of the great Pharaoh Ramses II. Cyprus was a copper emporium. Greece basked in the opulence of its elite Mycenaean culture, and Ugarit was a bustling port city on the Syrian coast. In the land of Canaan, city states like Hazor and Megiddo flourished under Egyptian hegemony. Vibrant trade along the coast of the eastern Mediterranean connected it all.

Yet within 150 years, according to experts, the old world lay in ruins.

Experts have long pondered the cause of the crisis that led to the Late Bronze Age collapse of civilization, and now believe that by studying grains of fossilized pollen they have uncovered the cause.

In a study published Monday in Tel Aviv: Journal of the Institute of Archaeology of Tel Aviv University, researchers say it was drought that led to the collapse in the ancient southern Levant.

Before we talk about our technology and etc., let’s remember that these societies lasted a whole lot longer than the United States has. There’s no reason to think that we are somehow immune from drought-related collapses just because of more advanced technology that can move water around. Not to mention that the intensive engineering of water comes with a whole set of additional problems.

Beer Sunday

[ 181 ] October 20, 2013 |

I had my first New York-distributed Bell’s last night. Bough a 6-pack of Oarsman, had a Two-Hearted IPA at a restaurant. Forgot how great Bell’s is. And it made me wonder, of the breweries with a reasonably large distribution who specialize in doing a huge variety of beers quite well, what is the top brewer? I figure there are 4 competitors:

A. Bell’s
B. Deschutes
C. Founders
D. Southern Tier

I recognize that these are not necessarily the best brewers in the nation. One could make a case for Stone or Ommegang or Hill Farmstead for instance but they don’t have the breadth of styles of the other 4. Brooklyn does excellent higher end beers but I’m rather indifferent to their base products. Elysian might deserve a mention here but their national distribution is significantly less than the other 4, despite its somewhat unexpected arrival in New York and Pennsylvania, basically jumping over the entire country from the Northwest.

Now my west coast bias tells me, correctly, that the region has better beer than everywhere else. So I want to go for Deschutes here. But whatever is in the water in Michigan works pretty bloody well because Bell’s and Founders are both beyond outstanding beers. Even when I don’t care for the genre, like that raspberry thing Founders is pushing right now, I’ll try it because I respect the brewers enough (in this case, it is basically like drinking raspberry jam, which is not my thing) and I know it will be well-crafted.

So to waste some time on Sunday, what is your vote for best all-encompassing brewery with a reasonable distribution area?

…(djw) in comments, “Terry Teagle the Touchdown Beagle” links to this map, which is pretty neat. I found a couple of things out of date–Full Pint is in Ohio now, and Ballast Point is in Washington. But those are both quite recent developments. It’s interesting how many small northwest breweries are available in Vermont, but nowhere else East of the Mississippi. Was also surprised to see that Old Schoolhouse, which may be my favorite Washington brewery, is available in New Jersey and Maryland. They stick to more or less standard styles, but they do them all quite well.

Tom Foley and Western Political Transformations

[ 88 ] October 19, 2013 |

Tom Foley’s death is a worthy time to think about the late 20th century transition in western politics. Foley was really the last of a generation of western politicians who could come from rural areas but support a progressive agenda, including on environmental issues. He was mentored by Scoop Jackson, who for all the rightful disdain he gets from progressives on foreign policy and military spending was actually a very important environmentalist who did more than any other politician to push the National Environmental Policy Act through Congress in the wake of the Santa Barbara oil spill of 1969 and other environmental disasters. He was hardly the only example of this. Mike Mansfield, Frank Church, Wayne Morse, Mo and Stewart Udall–there was a lot these types in the West.

It’s also worth noting how much foreign policy dominates progressive political judgment in the post-Vietnam era. Whereas Jackson is remembered as the Senator from Boeing, Mark Hatfield is remembered as the Good Republican who opposed Vietnam. But on environmental issues, where Jackson was doing really good work, Hatfield was a total and unrepentant timber industry hack. If Jackson was the Senator from Boeing, Hatfield was the Senator from Weyerhaeuser. I’m not particularly comfortable with one being lauded and the other denigrated and I think that this has happened says an awful lot about progressives and not all for the better.

Foley was a part of this world. When he was defeated by George Nethercutt in the 1994 Republican landslide, he bemoaned the inability of Democrats to appeal to rural people anymore. But this was really part of the natural realignment of American politics in the wake of the civil rights movement. This was not only palpable in the South, but also in the West, where it was paired with environmental politics. In the wake of three decades of wilderness expansion, the Endangered Species Act, and the ancient forest campaigns, rural westerners believed the government was attacking their way of life. In fact, corporations were far more at fault, particularly in logging. But since Americans love their corporate overlords, the government and the hippies in Eugene and San Francisco and even Moscow, Idaho were a lot easier to blame.*

So Foley was caught in a larger political shift that he couldn’t have done much to forestall. Eastern Washington has remained Republican dominated for 20 years now and it’s hard to imagine it any differently.

* I have documents of loggers in Idaho complaining about Frank Church serving the interests of Moscow hippies instead of Read Idahoans.

Illegal Logging

[ 26 ] October 19, 2013 |

Illegal logging is not something the progressive community takes particularly seriously, but it’s actually a very big deal, not only in Brazil (where it does get attention) but in Mexico (where the cartels have expanded their operations) as well as in Peru, as discussed here. This is an area where state attention to an issue can make a big difference, but there isn’t a strong ideological foundation in Latin America for environmental protection. Left-wing and right-wing are pretty addicted to classic developmentalist strategies, as we saw when Lula took power in Brazil. Mostly, it’s just a real depressing problem for me. The U.S. is a huge market for this illegal wood. Like most products, when we buy wood to build we don’t think about where the wood comes from, whether it is harvested sustainably (or even legally).

Ketchup and Culture Wars

[ 209 ] October 19, 2013 |

It’s pretty typical that Drudge would invoke the fear of salsa overtaking ketchup as America’s favorite condiment in his culture wars. Personally, I say Viva Reconquista. If ketchup is the condiment of the Tea Party, it just confirms everything I already think about it. So all you haters out there can go back to dumping Drudge Sauce on your eggs and fries, comfortable in the fact that you are supporting Real America through your condiment choices.

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