Rhymes With Cars & Girls

Steve Sailer’s on a kick lately about rich white parents bending over backwards to keep their kids out of highly-nonwhite schools while telling themselves that’s not what they’re doing at all. Good for a chuckle.

It is very illustrative of the leftist problem in general, which is: how does one support a system characterized largely by credentialed, centralized bureaucratic privilege and unconstrained power, while continuing to always posture as an egalitarian populist on the side of the masses? The answer seems to be to continually harness your brainpower to come up with elaborate theories about this and that (why things are so bad for others, etc.), and in particular to extrapolate whatever conflicted personal hang-ups and obsessions you happen to have into a social theory. Hence, ‘I didn’t keep my kid out of that school cuz it was mostly Hispanic, I kept my kid out of that school because, um, the teachers are so bad. Which raises a troubling social question, why are Our Society’s Teachers so bad? We need to fix that, and you should put me in charge of fixing that!’ Etc. While doing this, of course you get cushy jobs and high salaries and live in nice houses and all the rest.

The essential factor in this approach to social/political issues is the lie. The ‘progressive’, fundamentally, is engaged in lying to others and to himself about his (largely self-centered, egocentric) motivations. In order for the lie to be believable, i.e. guilt averted, the lie has to be carefully constructed, backed by grandiose and intellectual-seeming theories, defended with vigor and viciousness against all challengers, and held to with a deep emotional investment – all characteristics of any current ‘progressive’ stance.

If my theory/slander is correct, then you can expect to find virtually any social institution dominated by the left to behave as something built on a scaffolding of lies. I think Education qualifies as an example. The basic lie of Education is that it is hugely important to always go to the ‘right’ schools, etc., because (supposedly) ‘good’ schools, like, teach a lot lot more than ‘bad’ ones (or something), and that this – learning like a lot more stuff from ‘good teachers’, etc. – is what is important for life and career happiness, at any cost. If your kid is bright but you don’t send him to this sort of ‘good’ school, he’ll get dumb. Etc.

When you see parents agonizing over whether their three-year-old will get into Snotwell Academy For Tots, or whatever, and then on up to spending $30k+ a year on some useless four-year-degree, this is the lie they are telling themselves and others. But because they believe the lie (or act as if they do), it leads to an ‘arms race’ among parents of similar and adjacent social classes, to do the same thing for their children. And because it’s a lie, the phenomena is hugely wasteful for all involved. The irony is that the wastefulness of it all is something that’s easy to spot, by everyone, looking at it from the outside – or even among the people doing it. Yet because the lie is so entrenched in our institutions and social mores, people still just do it (not to do it, if you can, would practically make you a pariah – ‘don’t you care about your children??’), and so no one knows the way out.

But we can start by identifying the truth behind the lie. And in the case of Education, I think the truth is something like this:

Your kid is either smart or he’s not. If he’s smart, the smartness will out, regardless of whether the school is ‘good’, etc. Schools being ‘good’ (above a certain basic level of safety, etc.) is mostly a sideshow. Rather: The main effect of where you send your kid to preschool, or middle school, or college, or whatever, is nothing more or less than what sort of kids will your kid know and hang out with. If you send your kid to a chi-chi preschool, your kid will have play dates with the kid of Michael Douglas and Catherine Zeta-Jones. If you send your kid to a no-name preschool, he’ll have play dates with the kid of a construction worker. If your kid goes to Sidwell Friends or Dalton Middle School, he’ll smoke pot in the park with the kids of Fortune 500 CEOs, politicians, and famous writers. If your kid goes to Suburban Lawns Public School, he’ll smoke pot with the kids of random sysadmins and part-time nurses. If your kid goes to Yale or Princeton or Stanford, he’ll get invited to parties in Kennebunkport or summer houses on Cape Cod to hang out with kids of former Presidents. If your kid goes to State U., he’ll spend spring break in Reno with the kids of no-name semi retired software programmers and middle managers. Etc.

What parents are really choosing when they choosing the ‘best’ schools is: a peer group for their children. Will their precious, special kids be part of and hobnob with an upper-class, privileged peer group? Or will they be part of an undifferentiated, lowbrow peer group of no repute? And the reason parents care about this is largely for their own sake. It’s not like smoking pot in the park or having oral sex at a party is a hugely more beneficial, future-oriented, character-building activity when done with a hedge fund manager’s kid than when done with a gas station manager’s kid. No, parents basically just want to be proud that they got to the point that their kid brushes elbows with so-and-so. They want to feel like their kid is joining the upper crust. They couch all this in terms like ‘opportunities’ and ‘giving them the most options’, and all that, but when you try to boil it down to tangibles it’s pretty clear that this is what they’re really talking about. ‘Opportunities’ means ‘the cool, upper-crust kids’.

Which makes it easy to understand the phenomenon Sailer is talking about, the disguised ‘white flight’ of the upper class to private schools. The parents Sailer cites are obviously doing this basically because they don’t want their kid to be, like, hanging out with a bunch of Hispanics all the time. They don’t want that largely because they don’t want to think of themselves as the sort of parents who raised a kid who ended up being the kind of kid who hangs out with a bunch of Hispanics. That’s a step (or two) down the social totem pole in these parents’ minds, it would be painful (like parting with a portion of their self-image), and so of course they are willing to pay up to avoid it at all costs.

Obviously, this sort of motivation is painfully unthinkable and impossible to admit, especially to anyone who sees themselves as ‘progressive’, so they have to tell themselves a bunch of other reasons they’re doing what they’re doing. They will even ostentatiously devote huge amounts of time (and talk to others about how much time they’re devoting) to ‘research schools’ and ‘go through the process’, if it can help add to the illusion that what they’re doing is anything other than what I just described.

Fundamentally, it’s painful to think of oneself as this sort of person (even though I suspect a huge fraction, probably a majority, of people are motivated by precisely this sort of thing). And to the progressive, doubly so. This, largely, is why ‘progressive’ theories of social failures, inequality, and so on (theories which blame ‘society’ for this and that, and which cry out for ‘progressive’ ‘solutions’) are so desperately needed. The ‘progressive’ self-image demands such theories, and so such theories are produced. They are theories served up to feed the lies at their root, not to serve truth. But truth is always there, lying in wait to show itself.

See Robin Hanson’s signs that your opinions function more to signal loyalty and ability than to estimate truth. By my count, I suffer from around 4-5 out of 11 of those signs, if not more.

I reckon it’s fair to say I put forth a lot of opinions/arguments in order to demonstrate ‘ability’. Since there’s no one obvious that my opinions could be meant to signal ‘loyalty’ to (if anything, my opinions are about disloyalty), that part doesn’t really apply however.

So let me plead guilty to being, largely, a kind of contrarian showoff.

I think this makes some sense strategically, to be honest. Let’s say you think that all opinions from someone like me should always be meant to ‘estimate truth’, all the time. But why? I’m a lowly blogger. Very few people read me. What if I hit upon some genuine truth, and investigated it honestly, and estimated it fairly, and then wrote it up. What effect would that actually have? Zero-point-none.

But if I entertain, or put forth an opinion in a memorable way, well that won’t change anything either, but at least some people might not be sorry they spent time reading me, and I’ll have had fun writing it.

The alternative of course is just not to write at all due to shame at my self-awareness that my writing is not a 100% genuine truth-estimation endeavor. That may happen too, but it will be out of boredom and lack of interest, not because I don’t live up to Robin Hanson’s opinion standards. No one could.

Are banks just part of the government (HT Foseti)? As someone who’s griped before about financial socialism, I’m certainly receptive to the idea.

The classical defining property of banks is that they borrow money (short-term) from depositors and then try to use it (lend it long-term) to make money for themselves. But they also borrow money from the government, and nowadays those deposits are insured by the government anyway, so one way or another the money banks play with ultimately comes from the government. They spray this money around (making loans, buying bonds, funding deals and issuances, etc.) to various actors in the economy, in the hopes that when the dust settles they’ll end up with more than they started, net of their funding cost, and then pay themselves a sizable chunk as bonus. The fact that this arrangement makes banks the government’s counterparties is what lends credence to the claim that banks are just an unacknowledged part of the government – after all, once a bank has borrowed billions from the government, the government can’t really afford to let them fail, and can’t credibly promise not to bail them out. In other words, the government implicitly holds the tail risk on whatever risky hi-jinx banks get into (and banks are nothing if not good at figuring out ways of squeezing more risk to play with out of the same capital). Privatized gains, socialized losses.

But through their activities, what banks really end up doing is, they figure out Who Should Get To Use Money. If they make a loan or facility to corporation ABC at such and such spread, but XYZ at a higher spread or not at all, this is a judgment that ABC is more business-worthy – i.e., more supported by the market. In other words the bank has decided (rightly or wrongly, but wrong decisions are punished) that people would, at the margin, rather have what ABC is selling than what XYZ is selling, and/or that ABC is better-managed and more viable than XYZ, thus ABC should get more/easier money. Notice that someone has to figure this out. And I’m not sure who it should be, if not banks.

Let’s say you didn’t think it should be banks, because banks are evil and risky. Instead, you tried to set up or change regulations to allow for some other institution(s) to do it (whether part of the government or not), and you didn’t call them “banks” you called them knabs, and you changed the rules around so that it is knabs (and not banks) who end up figuring out where money should go.

Well, they’d end up doing pretty much what banks do. Wouldn’t they? Analysts and spreadsheets, and risk-taking and competition for brainpower, thus corporate structures and obscene payscales.

Or maybe not, you say. Maybe the knabs would have different, better criteria for allocating money than the evil, selfish banks do. While you can’t (or, at least, shouldn’t) just print the money and send everyone an equal cut, or spray it in bundles from helicopters with those athletic-event T-shirt-launchers, maybe the answer is socialism. In a stereotypical socialist system, I guess Who Should Get Money would be figured out by a highly elite council of commissars – brilliant, selfless, philosopher-kings who sat around in a tastefully-drab room and deduced via their brilliance, insight, education, correct ideologies, and compassion that for the coming year-quintile, X billion goes to the tractor factories, Y billion goes to statues of the Great Leader, Z billion goes to the subway system, (W billion secretly goes to their nomenklatura friends & family), etc.

I admit that’s a possible resolution. But it doesn’t sound preferable to me.

Or, one might consider some of the full-on libertarian (and/or Moldbuggian) alternatives, by contrast. Yes there would be ‘knabs’ but you wouldn’t have to set them up at all, they would all just arise naturally as private funds (no deposit insurance, no government bailouts) bidding on everything privately. Meanwhile the banking sector itself would be characterized by ‘free banking’ and private money. And you ban fractional-reserve banking and maturity mismatches (i.e. the defining quality of depository banks) as instances of fraud. My mind is open to all this, but at present in terms of real-world test cases, proofs of concept, and feasibility, on the scale of the modern financial world, most of these still lie in the realm of science fiction.

So the function of banks, perhaps, is to replace the socialist council of commissars with something feasible that is meaningfully connected to market forces and distributed knowledge. Instead of making up money allocation out of thin air, arrogance, and dogma, banks at least try to make their decisions according to something resembling rational criteria, i.e., what will make them money. Not because they’re saints or geniuses (though possibly some are, at least the latter), but because they participate directly in the rewards. The commissars might decide to fund an overall factory regardless of whether any of the peasants actually wanted overalls, it won’t affect whether they have a fancy dacha and use of the car either way; a corporate bank PM, having at least some incentive, might think twice before (or at least charge more for) making a loan to Overalls, Inc. under the same circumstances. The commissars will make decisions based on preconceived, politicized, top-down and ideological notions of ‘fairness’, ‘egalitarianism’, ‘five-year plans’, ‘what the Great Leader wants’, or whatever other non-economic criteria, whereas banks will at least try to do some half-baked or (more often) misleadingly-precise calculations to convince themselves that the market will reward putting money here or there.

It can’t be denied that the banks have more connection to and dependence on true market forces than do the commissars. So what is the problem, and why is it so hard to convince oneself that banks are free market actors? Perhaps it really does boil down to leverage. Maybe we believe that under a certain leverage, banks would have a harder time getting in trouble, and banks who did get in trouble presumably wouldn’t have gotten that big in the first place, meaning the government would be better able to resist bailing them out. Thus any given instance of ‘socializing the losses’ would be less likely. So yes, banks are ‘part of the government’, but under normal circumstances, only slightly so. It’s just that the more levered and risky banks are, the more ‘part of the government’ they become.

As usual in any conversation about socialism, we only confuse ourselves if we try to think of political economics in a binary way rather than a continuum. There is a continuum between free market and socialism, and (similarly) between ‘private’ and ‘part of the government’, and maybe increasing leverage in this situation may be what helps get you closer to the latter. This both suggests a diagnosis of our recent problems and a possible direction for a solution. Unless you think you can think of a better way to figure out Who Should Get Money. But if so, I’ve probably already read your sci-fi novel.

This isn’t quite how I remember the Beatles sounding, but whatever.

Historians will surely record the summer of 2010 Blogging as the Parking-Space Era. This was the era when the Blogosphere, that great democratizing force, that great flattener that gives everyone a voice in a land of pure dialogue and debate on the Issues of the day, spontaneously diverted the bulk of its energy to discussing the timeless, important question of whether the government should stop requiring businesses/buildings to include a certain minimal number of parking spaces in their plans.

And what a fiery, weighty debate it has been! On the “yes” side we have folks like Yglesias and Cowen. On the “no” side we have folks like Kling and a Cato dude.

I’m here to report that the correct answer is “yes”. But I’m also here to report that WHO GIVES A FLYING F**K. What is wrong with these people?

Here is your classic upper-middle-class concern in a nutshell. Let me just encapsulate what motivates the Matthew Yglesiaseses of the world to care about parking requirements: “When I get Persian in downtown DC with my friends, which I do like every weekend, I want it to be 3% cheaper. If that Persian restaurant didn’t have to provide parking spaces, it could be. Or if we drive to, like, Bethesda for Pad Thai, I want less other cars on the road cuz that makes it take 7 minutes longer for us. If there weren’t free parking, more people in Bethesda would walk downtown, making it easier on people like me.” That is the sole driver of the “too much free parking” side of this debate. They are basically people who have social lives involving going to a lot of chi-chi downtown areas, for culture restaurants, and because of this they’ve devoted their massive intellects to thinking through how to make such a lifestyle more convenient – for them.

They are right, of course. But WHO THE F**K REALLY CARES. This ain’t exactly a civil-rights issue.

Remember when the left cared about Important Things? Like The Iraq War and The Recession? Have Important Things all been solved by President Obama? It would appear so.