Tag Archives: Economics

The Bookshelf: Bachelor Pad Economics

Aaron Clarey has come out with a new book, Bachelor Pad Economics, in which he explains basic financial planning for young men. He wrote the book as a reference to be used when needed rather than reading it cover, I ignored this advice and read it cover-to-cover. It didn’t really hurt the book.

As usual, Clarey writes in a straightforward, but engaging manner. Despite the subject matter, it never becomes overly dry or dull. With this and Enjoy the Decline, Clarey has begun proof-reading his books, I didn’t notice any of the grammatical errors and sloppy editing that plagued his earlier books.

The book comes in at about 500 pages divided into 15 chapters covering all the aspects of basic financial planning you’d expect and some you wouldn’t. He covers the normal things like budgeting, career planning, and retirement planning, but he also goes beyond this into covering things like girls and family. I didn’t notice any important area of financial planning he missed; it look like he covered all the basics.

On the other hand, I knew most of the basics of financial planning and have read his other books (parts of Enjoy the Decline overlap with this book), so I didn’t get too much new information out of it, but the basics are good and worth repeating.

One thing I like about the book is it goes beyond just financial planning and establishes beforehand the reason you need to financially plan. Clarey makes the point it’s not stuff, but people that make life worth living and financial planning should be geared not towards accumulating more stuff for not reason, but towards creating a better life.

As with Clarey’s other books, there’s a stream of amoral hedonism throughout and he again advocates his Smith & Wesson retirement plan. So, some people might not particularly agree with morality of the book.

Recommendation:

This is a solid, engaging guide to financial planning for young men. If you’re a young man and need to get your financial house in order or don’t have a financial plan, I would heavily recommend getting Bachelor Pad Economics; it’s probably the most boredom-free way to get this kind of advice. It could also be useful to young women, but a lot of the advice might not be as applicable.

If you’re already knowledgeable of financial planning, this book won’t really impart much new. If you’re older, you might get some value out of it, but its market is primarily young men.

Previous Reviews of Clarey:

Enjoy the Decline
Top Shelf
Behind the Housing Crash
Worthless

Repost: Tuition Bubble

Don’t have a new post for you today, so here’s a repost from the early days.

Here’s the New York Times running only a bit behind in reporting on the tuition bubble. I thought this would be a decent time to weigh in on the issue.

the average debt in 2011 was $23,300, with 10 percent owing more than $54,000 and 3 percent more than $100,000

To be honest, this is not that bad. $23k is a lot, but livable, even 54k is not insurmountable, but for the 3%, $100k is a serious commitment. In some areas equivalent to a mortgage on a starter home.

The problem though, is that these are ok only if there is employment for those taking the loans. The NYT doesn’t cover this in this article, but the real problem is half of these people graduating are not going to have jobs or will be underemployed.

$23k in debt is doable if you make $40k a year, even $120k ($900/month according to the article) is doable if you make $60k a year coming out of university and live frugally for a few years.

But, if you are unemployed or working part-time as a barrista, there is no way to keep payments up on much more than a few thousand dollars worth of debt and still be able to advance in life.

****

The NYT misses that the tuition bubble is not a bubble because tuition costs are high; an expensive degree can be an excellent investment for both the lender and borrower if it increases future earnings.

The whole article is off-base as high tuition costs are irrelevant if the economic benefits of the degree match or exceed the cost of the degree.

The tuition bubble is a bubble because a lot of these degrees are worthless.

So why are they worthless? Part of it is simply the transition to post-scarcity, even highly educated and skilled people may simply be replaced by machines. Some of it is because these degrees teach no useful skills, such as Master of Puppetry, an awesome album but a crappy degree. But there is another, even more fundamental, problem that the NYT ignores almost completely.

****

The main problem is touched upon later on in the piece, but only very obliquely:

the main job of the admissions staff, after all, is to admit students

An off-hand reference in the second half of a sentence at the bottom of a paragraph is all the NYT devotes to the  crux of the tuition bubble.

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Huh? Isn’t admissions staff’s job to admit students?

No, the admissions staff’s job is to screen out students for whom university (or college) is not appropriate.

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Doesn’t admissions already do this?

No. It doesn’t. 68% of high school graduates go to college.

Thank about that for a second.

The average graduate is going to college

Remember back to your high school graduation; think about your average classmate.

The guy who wasn’t particularly bright or particularly stupid.

Do you think he would benefit from spending 4 years learning political theory or reading Rousseau?

Do you think it would benefit anyone else that he “learned” this?

****

The evidence says he doesn’t.

One-third of those entering college drop-out.

They pay the expense of a couple years of college and do not even get the dubious benefits of a degree.

The college system is taking advantage of these people who shouldn’t be in college.

****

One-third of college students are dropping out, at the same time, grade inflation is running rampant.

College is becoming increasingly easy, yet still a third of students still can’t hack it.

The admissions people are failing their job. One-third of people entering university are not capable of completing even the dumbed-down modern university curriculum.

Think about how many more would not be capable of completing college if standards were similar to those 50 years ago.

****

Look at this post from Adacious Epigone on IQ by intended major from a few years ago.

Look at education, public admin, business, psychology, legal professions, health professionals, etc.

The average incoming student for all of these is only around average intelligence. About half of them are of below average intelligence.

This is why there is a tuition bubble.

****

It used to be that a college degree meant you were a cut above the rest; that you were a competent, intelligent individual.

Now all a college degree shows is that you are able to stomach a university’s bullshit for a few years and are not a complete dullard.

That’s why your degree is worthless.

It doesn’t signal you’re a superior intellect with a strong knowledge of your specialty.

All it shows is that you’re not completely incompetent and are able to parrot BS back to the BS’ers. How much is not being completely incompetent worth to an employer?

Even a high GPA doesn’t mean much. With grade inflation everybody’s GPA is fairly high, how can an employer trust that you actually earned yours?

****

As an aside, look at public admin and social services: 96.3.

Do you want to know one reason why your government doesn’t work very well? The people in public admin are being educated to run the government. Do not think that these are not going to be the front-line clerks at the DMV, or even their supervisors; these are actually the people who are going to university to learn how to create public policy. They are the ones who will be creating government policy and regulations that will control your life.

Most of them are of  below average intelligence.

Think about that for a minute. Please don’t weep.

Of course, the average business major is not much better, barely scraping by at 101. 2.

And we wonder why the US economy is stagnating?

Teachers are at 99.3. Half of all teachers are of below average intelligence. Here’s where you can start weeping for the future.

Your kid is likely being taught by someone of average or below average intelligence.

If you’re reading a post about the economics of post-secondary education on a blog for leisure (like say, this post you’re reading right now), it’s highly likely the large majority of these teachers, bureaucrats, and businessmen running things and teaching your children are much more stupid than you.

Aren’t you feeling comforted?

****

Thankfully the drop-out rate is so high. I’d hate to think what the school system and government would be like if a third of these sup-par students didn’t fail to finish their degrees.

****

So, after all that, you’re probably understanding why the tuition bubble exists.

It exists because too many people are getting a degree.

Everybody wants to enter the road to the professional, white-collar, middle-class, which is what university is thought of as now.

But not everybody is capable of being a white-collar professional.

Of course, modern liberal dogma can’t admit that some people are just not capable of being white-collar professionals, after all, we are all equal. The Bible (or Stephen Gould, depending on your religious beliefs) and the Constitution (or your sociology professor, depending on your political beliefs)  say so.

So those in charge, those who would read the NYT, can not and will not prevent those who shouldn’t be going to college from going to college.

Instead, they’ll encourage them to go. They’ll give these marginal students huge, government-backed loans they’ll never be able to pay back. They’ll lower academic standards as far as they can go, then lower a them a bit more, destroying any academic, economic, or signalling value of your degree in the process.

Doing otherwise would expose their ideology for the lie it is and their ideology takes precedence over the good of these marginal students, not to mention the other students whose degrees are made worthless.

So, as these marginal students flood colleges, demand for college education increases, so tuition goes up.

The academic value of the degree erodes, as grade inflation and lowered academic standards become necessary to keep these people in college, and maybe (hopefully) let them graduate.

The economic values of these degrees plummets. Your degree no longer signals competence, knowledge, and intelligence to an employer; all it signals is a lack of incompetence. Why should he pay well for that? Why should he hire the marginally competent at all?

Thus a bubble. Paying more and more for less and less.

One thing though, bubbles can’t last forever. Reality always wins in the end.

Eventually, the post-secondary education system will run into reality.

****

Economists do not predict a collapse of the student loan system, which would, in essence, mean wholesale default.

NYT’s economists never fail to be amusing. I wonder if this was Krugman or Friedman, maybe both?

Those who are blinded by ideology will run full tilt into the wall of reality. They will then act surprised.

****

With more than $1 trillion in student loans outstanding in this country

$1 trillion, that’s almost 7% of GDP. If a large percentage of these loans default, this will be a major economic catastrophe. It may be possible for the US government to forgive them, but that will be a significant increase in national debt.

Students are likely stuck with this debt.

****

So what can we do?

Short answer: nothing.

Long answer: That’s a question for another post.

****

One last note:

Leaders of the for-profit industry defended themselves

I’m usually a staunch defender of the free market, but in this case, all I can say is:

Fuck them.

The for-profit college industry is a brood of blood-sucking parasites taking advantage of students who should never set foot near a college for their own benefit, and the student loans programs in a disgusting display of parasitic corporate welfare. May their whole industry rot.

A Living Wage is Impossible

Recently the idea of a “living wage” has come to the for with the “Fight for 15” campaign. The living wage has been a popular idea in the left for a while. I don’t plan on on showing how a “living wage” it will increase unemployment or hurt economic growth, you can find that stuff elsewhere. Rather I am going to show you how a living wage is impossible; it is simply not something that can exist given our present society.

As I have pointed out before, housing is the single largest expense in most households (other than possibly taxes) and is effectively a positional good. (Read the link for the full argument). Americans spend about a third of their income on housing, a number which has been increasing over time. As people become richer, they tend to spend more absolute money to obtain larger houses keeping proportionate housing expenditures at similar or even higher amounts. Housing costs as a proportion of income do not decrease as incomes rise on a societal level.

If you increase the minimum wage, people on minimum wage will spend more on housing as competition for housing increases deu to its status as a largely positional good. This will drive the costs of housing up. After a time of correction, housing costs will have increased in absolute terms but have stayed roughly the same relative to income. There will be no real improvement in the housing situation of most people.

The next big expense for homes with children and working parents is childcare. I’ve already explained why child care will always be unaffordable; essentially, given child care worker to child ratios, a minimum of a quarter of one person’s income is necessary per child for child care. If you raise the minimum wage you simply increase child care costs proportionately.

Finally, the costs of all other goods will increase as well. If you pay minimum wage workers more, the price of all goods will increase across the board, raising the cost of living, particularly for the poor who depend the most on low-cost goods.

Increasing the minimum wage will create minimal improvements for poor families receiving minimum wage (they may create moderate improvement for poor singles who don’t have child care costs and have lower housing needs) because the increased costs of good and services, particularly housing and childcare, will eat away any gains from the higher nominal wages.

A living wage is impossible for this reason; increases in the minimum wage will simply inflate the value of goods proportionately, so there are minimal real agins for the impovershed.

(This of course ignores the impact on the middle class; who will be greatly damaged by a “living wage” as the costs of goods and services increase while wages stagnate).

Guest Post: The Myth of the Wage Gap

Today we have a guest post from Tanner King, a fellow Canadian on the wage gap. Remember, we accept submissions for any blog-related topics. If you have something to say, feel free to send it in.

Once in a while a new statistic regarding the “gender wage gap” will find its way into the mainstream media. Generally we nod along and agree that disparity between earnings for men and women is unfair and should be rectified.

Then we change the channel. Rarely do we consider the implications of these statistics.

Usually they’re just two simple numbers placed side by side. A Toronto Sun article posted in April of 2012 states, in reference to women employees, “Overall they earn 77 cents for each dollar made annually by men…”

This article claims that a female working the same position with the same hours as a male will still make less. You will often notice vague language being used when these statistics are presented. What do they mean by “the same hours”. Is this the same hours per year; is it the same hours p er week? Perhaps for ten years a man and a woman in an executive position work the exact same hours and make the exact same amount of money, but then the woman takes time off for maternity leave, while the man continues to work and make more money, and maybe even achieve a pay raise.

A 2010 study by the Canadian Library of Parliament states “…the gap between women and men underlines the fact that they do not use their time in the same way and that the task of looking after dependent family members is largely borne by women.”

Generally when statistics like this are presented they don’t even go so far as to specify the type of jobs that were looked at or the amount of hours or the education of the people surveyed. It will just be a vague comparison ignoring most contributing factors. This is a tool that can be used to make the gap seem as vast and insurmountable as possible.

Additionally, despite what a lot of these studies would like you to think, this is not some worldwide conspiracy of oppression keeping females down. For example Ireland has the highest gender wage gap in the world…. in favour of women. Irish women without children earn 17 percent more than the typical male worker in the same position according to research by the OECD.

This is not one minor happening wherein the wage gap is reversed in favour of women either. A 2010 USA Today article reports that “Women ages 22 to 30 with no husband and no kids earn a median $27,000 a year, 8% more than comparable men in the top 366 metropolitan areas, according to 2008 U.S. Census Bureau data…” The same article goes on to say “It isn’t true for all women in their 20s working full time — overall, they earn 90% of what all men in their 20s make — just for those who don’t marry or have kids.

Canadian economist Morley Gunderson comments, “Factors emanating from women’s role in the household (e.g., reduced hours in the labour market, reduced mobility because of household ties, education that is less labour–‐market oriented, interruptions in labour market careers, willingness to pay for workplace amenities that are family friendly) are important determinants of the pay gap.”

There is a wealth of information on the web regarding common majors for males and females. I would recommend looking up the statistics specific to your area, or simply talking to people. It’s staggeringly clear that, more often than not, men choose majors more suited to the job market. That means more likely to get a job right out of university, and it means higher wages overall. Women are typically drawn to liberal arts, design, public relations, and things of this nature. It’s no secret that there is not a lot of women in engineering, statistically one of the best choices in major.

Even through a small amount of critical thinking and research we are able to uncover a number of factors contributing to the wage gap in countries all over the world. The important thing is to take statistics for what they’re worth. Check the sources and understand that just because concrete numbers are presented does not mean there is not a bias.

It should also be noted that in Canada, as with the U.S., gender pay equality is a law. If any woman believes that her employer is paying her less because of her gender she has the ability to take legal action.

Feminist research groups will often try to claim any statistics that conflict with the idea that the wage gap is motivated solely by discrimination are lies perpetrated by an overbearing patriarchy. All that can be said to that is to do your own research, talk to people you know, and create some comparisons of your own.

Sources:

http://iwf.org/news/2790172/
http://www.torontosun.com/2012/04/18/women-still-confront-yawning-gender-wage-gap-study
http://www.parl.gc.ca/content/lop/researchpublications/2010-30-e.htm
http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/close-the-gender-gap-now_9789264179370-en#page1
http://usatoday30.usatoday.com/money/workplace/2010-09-01-single-women_N.htm
http://www.payscale.com/career-news/2009/12/do-men-or-women-choose-majors-to-maximize-income

The BookShelf: Economics in One Lesson

I finished reading Economics in One Lesson weeks ago, but haven’t got around to reviewing it yet. So, here goes.

First, the title is misleading, this book will not teach you basic economics, it is more concerned about correcting basic statist and keynesian errors in economic thinking. Also, it’s 25 small lessons, not one, although, at only about 200 pages you could finish it in an evening if you put your mind to it.

That being said the book is a good one. It is written well and is moderately simple read. It’s a little dry, but not overly so given the subject matter. The arguments are solid and concise and the book is neatly organized.

If you desire to learn about the many economic errors of statism and good, simple counter-arguments to statist arguments, this book will provide. If you have a statist friend, this book would be a good recommendation. On the other hand, you will not learn basic economics, only basic economic errors.

One problem with the book is that it is 50+ years old now, so many of the arguments are now standard within the conservative/libertarian narrative. If you’ve read much about economics or been involved in political debates online, you might find many parts of the book to be somewhat obvious, as you’ve already heard them repeated endlessly. Even so, having the arguments systematized and summarized is useful.

Also, if you’ve read What is Seen and What is Unseen, most of that book’s argument are also addressed here. If you read EON, it would be unnecessary to read WSWU, expect for enjoyment purposes.

Recommendation:

You should read Economics in One Lesson if you’re interested in economics, interested in politics, or want some counters to common statist economic arguments. If you already very knowledgeable about free market economics, this book will likely be unnecessary, although you may still like an organized version of common free market arguments.

What’s next:

A few weeks ago, I started reading John C. Wright’s Universal Apology. It, along with a dissatisfaction with evangelicalism that has been growing within for the last couple of years, has got me to seriously question my protestantism. So, the reading lists are going to go more slowly while I read a bit about the Catholic Church, the Orthodox Church, canon formation, and the like. I will likely post interesting topics I come across here; I may or may not do book reviews. If anyone is interested I’m currently going through The Biblical Canon; I also plan to read the Spirit of Catholicism, the Orthodox Church, and Christianity: the First 3000 Years.

Expect the occasional thread on Catholicism or my readings on here. I may occasionally ask my Catholic/Orthodox readers some questions.

While the reading lists are going to be slow, they are not stopping altogether. I’m still sporadically reading Boston’s Gun Bible and have started sporadically reading Sowell’s Basic Economics. When these are done (whenever that may be) I will review them here. I also am going to start reading the Brothers Karamazov for a book group I’m in, I may or may not review it here and I’ll share any profound thoughts I may have about it.

The Bookshelf: What is Seen and What is Unseen

What is Seen and What is Unseen is a part of both the Free Man’s Reading List and the Dark Enlightenment Reading List. It was written in the early 1800s by a Frenchman, Frederic Bastiat.

The writing is solid and moderately engaging, but nothing spectacular.

It’s a rather short book at less than 50 pages, but it gets its main point, that government spending and government debt have unseen negative consequences and you should be aware of unintended consequences when making policy, quite well. Essentially, it is a debunking on Keynesian BS from over a century before Keynesian BS existed. While reading the book, I couldn’t help like feeling Bastiat was intellectually bitch-slapping Paul Krugman from beyond the grave.

Given the age of the book, most of the arguments are well known on the right or among those with some economic knowledge, so if you’re knoweldgable about economics you might already know most of these arguments, such as the broken window parable, for which the book is known. To simplify the parable, a broken window does not lead to economic gains, as the person spending money to replace the window may be employing the glazier, but the tailor/printer is losing out as her is not buying a new book or new clothes.

But even if you know most of it, the most fascinating thing about this book is how little has changed in two hundred years. How can you not read this and think of the intellectual whores like Krugman:

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it…

Or this, and think of every idiot socialist:

Our adversaries consider, that an activity which is neither aided by supplies, nor regulated by Government, is an activity destroyed. We think just the contrary. Their faith is in the legislator, not in mankind; ours is in mankind, not in the legislator.

Or this and think of the Fed:

Whatever may be the amount of cash and of paper which is in circulation, the whole of the borrowers cannot receive more ploughs, houses, tools, and supplies of raw material, than the lenders altogether can furnish; for we must take care not to forget, that every borrower supposes a lender, and that what is once borrowed implies a loan.

Anyway, the greatest thing about this book is seeing how retarded economic ideas parroted by  the ignorant and blind were intellectually destroyed two centuries ago by an economist most people have enver even heard of. Then you feel somewhat sad that mentally enfeebled will still gain traction with their debunked arguments.

Recommendations:

I would strongly recommend reading What is Seen and What is Unseen. It’s a short, quick guide to basic economic reasoning that demolishes Keynesian arguments.

The only reason not to read this book, is if you are reading another Austrian economics book that is more in-depth. For example, I have started reading Hazlitt’s Economics in One Lesson, and most of the subject matter of What is Seen and What is Unseen has been covered in the first few chapters of Hazlitt’s book.

But even then, the enjoyment of watching modern idiots being thrashed by some unknown Frenchman 150 years dead may make it worth your while.

Note: I am now moving onto Boston’s Gun Bible and Hazlitt’s Economics in One Lesson, if anyone is trying to read along with me.

Repost: An Economic Analysis of Divorce

I don’t have time this week, so this is a repost of an early post of mine that didn’t get much play. I did a little editing. It’s part of the Sexonomics series and is on divorce, so it fits what has been discussed here recently.

The Cost of the Risk of Material Loss in Divorce

Marriage is often discouraged in the Manopshere, and a single male, choosing whether I want to marry or stay an eternal bachelor is something important. Now, there’re a lot of reasons provided for why to avoid marriage, but the risk and consequences of divorce are easily the most convincing argument. So, I’m going to create a series on the economics of marriage.

This first post will be the economic cost of the risk of divorce for the average bachelor considering marriage.

At another time, I will attempt an economic analysis of the immaterial losses of divorce and the benefits of marriage. Then I will combine it all together in a cost benefit analysis.

What are the odds of divorce?

The “50% of marriages end in divorce” statistic is thrown out a lot, but this number includes those with multiple marriages and divorces, which skews the number higher than for people considering their first marriage, among other problems.

So, according to the US Census Bureau, for men, only about 60% of men reach their 25th anniversary for their first marriage (p. 11), which means about 40% of men did not.

Now, the data is by age cohort, and those married earlier had a greater chance of reaching any particular marriage anniversary milestone. For example, those married in 1975-79 had a 54.4% chance of reaching 25th anniversary, while those in the married in 1960-65 had a 66.9% of reaching this milestone. But, those married in 1975-79 had the worst chances of attaining any particular marriage milestone; they were peak divorce you might say. Since then, younger marriage cohorts have been more likely to reach milestones.

Meanwhile, in Canada, Statistics Canada has it that about 40% of first marriages will end in divorce.

So, we will estimate there is a 40% chance that a male entering their first marriage will divorce.

(Remember, the chances of marriage ending in divorce can vary depending on a wide range of variables, which I am not going to calculate at this time, but I might go into them in-depth in the future.)

How much does the divorce process cost?

The cost of the actual divorce process varies considerably, depending on a wide range of variables. A simple divorce will run about $1000, while a contested divorce can run from about $8,000-$133,000.

According to this, the median cost for mediation is $5,000, while the average contested divorce costs about $20,000.

So, we’ll say your divorce process will be about $20,000.

(Here’s a calculator if you’d like to play around).

What about Spousal/Child Support?

Your chances of paying spousal support depend on the amount of child support already paid and your income. There’s a ton of laws on this, so I’ll just use this calculator to calculate this.

The average Canadian household income is: $74,700
Two-earners without children: $79,700
Two-earners with children: $85,600
One-earner without children: $58,100
One-earner with children: $60,900

The average length of marriage is 14.5 years, with the average age of divorce for men being 44 and for women, 41.

So, putting the average divorce and income in the calculator we can get the average cost of support (both child and spousal) payments come divorce (in Ontario), assuming children live with spouse:

Two-earners without children (Equal): $0
Two-earner without children (Primary – 2/3): $327/month for 7-14 years (10.5)
Two-earners with children (Equal): $0 + $619/month child support
Two-earners with children (2 – Primary – 2/3): No spousal support, $758/month
One-earner without children: $1,186/month for 7-14 years (10.5)
One-earner with children: $838/month for 7-14 years (10.5) + $905/month child support (10.5)

For your own income and planned family situation input the number in the calculator.

So, the average male will have to pay about $149,436 in support if sole provider, $73,458 in support if primary provider, and $0 in support if equal provider. (The cost of child support is there for illustrative purposes, but that would be the cost of having a child, not marriage and divorce and is not calculated here.)

One interesting thing to notice: if you’re the sole breadwinner, your likely monthly payments can actually decrease as mandated child support payments replace spousal support payments. I would not bank too much on this, as it’s likely just a quirk in Canadian law or the calculator and may not apply broadly.

US law does not seem radically different overall from Canadian law.

What about a Settlement?

In Canada, “the spouse with the higher net family property is required by law to pay his” spouse “half of the difference between the two spouses’ net family properties.” Net family properties being current assets minus both liabilities and assets at marriage.

In the US, there are two systems, community property and equitable distribution, depending on the state with variations in how they are distributed. The former divides assets gained during the marriage equally, but leaves property attained before marriage alone. Equitable distribution distributes property equitably (not necessarily equally).

In general, we can say that the property you acquired during the marriage will be split more or less in half. If the wife was the primary housekeeper, while the husband was the primary breadwinner, then the difference will be the wife’s payments for continued support of the house. If they both shared provider status roughly equally, then an equal distribution of marital resources should occur.

There does not seem to be much economic cost to the average husband at the point of settlement in Canada, unless he sunk significant sums into the marital home prior to marriage and the wife did not match these sums after entering the marriage.

In the US, one could economically lose if the equitable distribution was not necessarily equal, or by quirks of local law, but for the average divorce, these would not present much of a cost. There might be extreme cases in both systems where quirks or abuses of the law could lead to unequal distribution either way, but

Other Cost Considerations

This is not to say that this will not increase economic hardship. Having to pay the expenses for two dwellings will, by itself, greatly increase economic hardship on both ex-spouses. For the ex-husband specifically though, the extra cost of two dwellings would be accounted for in the spousal/child support payments taken from his income.

It is possible a divorce could affect a male’s job performance, and thus his earnings, creating additional economic cost, but this would be outside my ability to remotely calculate.

The Total Material Cost of Divorce Risk for the Man Considering Marriage

Our formula:
Costs of Divorce Risk = Risk of Divorce * (Cost of divorce process + cost of support)

Average Male Single Earner
40%*(20,000 + 149,436 ) = $67774.40

Average Male Primary Provider
40%*(20,000 + 73,458) = $37383.2

Equal Male and Female Provision
40%*(20,000 ) = $8,000

For the average male who’s considering marriage and planning to be the sole breadwinner of the family, the material cost of the risk of divorce would be just over a full year’s worth of pay. For the average male who plans to be the primary but not sole breadwinner, it would be somewhat less than a full year’s pay. For the average male who plans a marriage where both partners earn equally, it would be a few months’ worth of pay.

So, if you plan on marrying and being the sole or primary breadwinner, you would have to ask yourself if you would pay roughly a year’s salary to be married.

* This analysis will be done for Canada. Canada’s divorce laws are generally nationally coherent, with federal laws and. The US’ divorce laws differ widely between states, so I can’t really calculate for the US. On the other hand, for the majority of men, the analysis shouldn’t vary too significantly; this should be roughly applicable to most and sufficient for analytical purposes. Check your own jurisdiction’s laws for personal information.

Government Transfers and GDP

I have started reading through the Captain’s Enjoy the Decline and in the 2nd chapter he talks about proving the US is in a permanent decline. He brings up his old point here about how GDP is growing at 2.2% rather than the 4% of yesteryear, and how we could have an average income of $100,000 if the government didn’t interfere. He was also talking about how government is now almost 40% of GDP. That got me thinking about the government and the GDP.

The most common method of calculating GDP is is through the use of this formula:

GDP = C + I + G + (X – M)

Or, in English:

GDP = private consumption + gross investment + government spending + (exports – imports)

What I’m going to focus on here is G. As per wikipedia:

G (government spending) is the sum of government expenditures on final goods and services. It includes salaries of public servants, purchase of weapons for the military, and any investment expenditure by a government. It does not include any transfer payments, such as social security or unemployment benefits.

When calculating GDP, the measure of government contribution to the economy is NOT the value of goods and services the government produces; it is the measure of the value of the resources the government consumes. G in the GDP measures what the government takes out of the economy, not what the government puts into the economy.

For example, if the the government spent $200-million building a road it would count the same as if the government spent $200-million moving rocks from point A to point B and back to Point A. As long as the government wasn’t using the resources for transfer payments, they could bury the money and GDP would increase. (See the Broken Window Fallacy).

For the rest of this post, we will refer to C, I, & (X-M) as “actual GDP” and G as government spending.*

Here are the annual real GDP growth rates for the US since 2008:

2008: -0.3
2009: -3.1
2010:  2.4
2011:  1.8
2012:  2.2

Here’s G:

2008: 2,497.4
2009: 2,589.4
2010: 2,605.8
2011: 2,523.9
2012: 2,481.3

and growth in G:

2008:  2.6%
2009:  3.7%
2010:  0.6%
2011: -3.1%
2012: -0.6%

Over the last 5 years, since the housing crash, the portion of GDP that is made up of G has declined by 0.6%. US GDP on the other hand, has increased by 6% over the same time period.

Originally, when starting this post, I was wondering if increased government consumption was resulting in a higher G, inflating GDP numbers. In other words, I was suspicious the government was simply consuming more resources (whether for productive or unproductive tasks) from the private sector to mask a decline in actual GDP.

The data says it has not; in fact, the opposite is true, G has somewhat declined as a percentage of GDP. I was tempted to just junk this post as my suspicion and the point I was thinking I might make proved to be incorrect, but I decided I’d post this information here anyway for anyone who’s curious.

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This however, brings up another point for my post.

According to Table 1.1 here, federal government spending has increased by 27.1% between 2008 and 2012. This new spending represents 6.0% of 2012 GDP. Total government spending has increased by 10% in the same time period, representing 3.6% of 2012 GDP. Interestingly (and completely surprising to me), non-federal government spending (total minus federal) has actually decreased by $323.8 billion, or 6.6% over the same five years, representing 2.4% of 2012 GDP.

As mentioned above, G only measures what the government consumes or invests in, it does not include government transfers.

G has more or less stayed the same (and has actually declined as a portion of GDP), while government spending has increased by over a quarter.

What this means is that the none of the new government spending is from the government actually consuming or investing in anything. None of the new government spending is new roads, new hospitals, new schools, or new jet fighters; none of it has even gone to increased bureaucrat’s salaries, buying heroin for the homeless, or burying resources in the desert. None of the new spending was used on anything remotely productive or even on a program pretending to be productive.

All 27.1% of the new federal spending has gone to increased transfers.

In other words, since 2008, the federal government has forcibly taken an extra 6% of the entire economy from some people and transferred it to other people with not the slightest pretense of it being for the public benefit or as an investment in the future.

This is naked robbery.

In addition, part of this extra federal spending has come at same time that state spending has been reduced, further centralizing government spending.

Just federal transfers, not including state transfers or federal consumption of investment as found in G, now make up about 20%** of the economy. Six percentage points of that came from the last five years.

The federal government has taken an extra 6% of the entire US economy from the producer class and given to the parasite last five years and currently spends an one-fifth of the economy simply in transferring money from producers to parasites.

If this pattern continues, the US will become a centralized socialist state.

****

* All dollar amounts are 2005 US$ and in billions.
** May be slightly off, but not by more than, maybe, a percentage point. 2012 #’s were used for GDP and federal outlays, but I could not find a 2012 number for federal G, so I used the 2011 number.

Matthew Yglesias is an Idiot

Today, I’ve decided to highlight more economic stupidity.

Here is something from one Matthew Yglesias (whose name I always want to spell Yggdrasil). He is the economic “expert” for Slate magazine. In other words, he is paid solely to “think”* and write about economics. Some of you may also know that Matt is a vulgar Keynesian of the Krugmanite variety. You could almost call him a lesser Krugman.** Because of his vulgar Keynesian, Yglesias has never met a government program and government spending he does not support (except when it inconveniences him personally).***

With that small introduction to this professional master of economics, we can turn to what he wrote recently on Amtrak:

In the main part of the country where people actually ride intercity trains and where intercity trains form an important part of the transportation infrastructure, we have operating profits. In a decent national rail policy, those operating profits could finance infrastructure improvements in the northeast corridor where rail is important and useful. Everyone knows that the Acela is a joke version of high-speed rail by European or Asian standards, and there’s a lot that could be done incrementally to improve that with upgraded rolling stock and targeted improvements to straighten tracks or improve tunnels and grade crossings. Instead we’re stuck in a dynamic where all these trains are running in places where nobody rides them and the local voters and elected officials aren’t supportive and Amtrak ends up sigmatized for its dependence on federal subsidies. But operating passenger rail where people want to ride intercity trains turns out to be perfectly viable without huge subsidies. And it could do a much better job of serving the needs of the communities where rail is useful and valued if those operating surpluses were used to cover infrastructure costs rather than soaked away covering operating losses elsewhere.

It’s almost like the train system could benefit from being put in places where people value it and not put in places where people do not want to use it.

This train system would make excess operating surpluses from extracting fares from people who value it. These fares could then go to whomever decided to provide the trains as an incentive to provide trains where needed. The provider of trains could use these surpluses to profit himself and to reinvest in more and better trains for greater surpluses in the future.

If only we could think of a system where people with resources, incentivized by the possibility of profiting off of providing trains, would invest those resources in providing trains in places people valued them in exchange for being able to take an operating surplus from collected fares. It would solve all our train system problems and the government wouldn’t even need to subsidize the train system, saving those tax dollars for something more important, like buying homeless people heroin.

Where, oh where, could the government possibly find a system like this?

What kind of system could possibly cause people to invest resources in providing valued services to others in an efficient manner solely so they can profit from operating surpluses?

A system that utopian must be impossible to create. I guess we must all suffer by paying taxes for trains no one uses.

****

In case you’re oblivious, that was sarcasm.

There wasn’t much of a point to this post, but this: Matthew Yglesias is an idiot.

I would generally use some superlatives here, but I don’t think my limited writing talents could possibly do justice to his ignorance, as his stupidity is positively Krugmanite.

If his head wasn’t rammed so far up his vulgar Keynesian ass, the supremely obvious solution to this supposed quandary might be able to penetrate his inordinately thick skull and he might actually be of some use other than as a paid stooge of the internet wing of the Cathedral press corps.

On the other hand, if his head wasn’t buried so deep in his rectum that methane and anaerobic bacteria were his primary means of subsistence, Slate wouldn’t hire him for the cushy job of confirming idiot liberals’ a priori emotional beliefs with a few hundred daily words of scientific-sounding economic nonsense.

So, maybe he’s smarter than I thought.

I wish I got paid for the nonsense I write and the Cathedral probably pays better than anonymous blogging.

Maybe I should start writing academic-sounding blather that validates the unthinking prejudices of the economically illiterate and makes them feel smart.

****

* In this case, the word ‘think’ is used in the loosest definition of the term possible.

** Yes, I know you’re wondering if it is actually possible for there to be a something intellectually lesser than Paul Krugman since he became a paid shill for the Cathedral in the NYT. In this case lesser refers to popularity with fools and usefulness to the Cathedral rather than to any intellectual or analytical (in)abilities.

*** Hint: The definition of a bad government program in the Coocooland of vulgar Keynesianism is any that is personally inconvenient to a liberal shill. The definition of a good government program is any that increases the power of government but does not inconvenience a vulgar Keynesian or a friend of the same.

Hypocritical Entitlement

Ian wrote about Hugo Schwyzer’s latest word vomit, so I checked it out (the link is to Google Cache: no cookie for you Gawker).

We’ll ignore the fact that he and his feminist allies have absolutely no empathy for the millions of young men hurting (yes, hurting) from involuntary celibacy. Fuck ’em, they’re just men.

We’ll ignore the fact that assholes like Schwyzer and his feminist allies have been lying to men for decades about what attracts women and then when these men follow through on the lies they’ve been told, the assholes gather around and bully them for it.

We’ll ignore how Schwyzer completely ignores the privilege women have when it comes to the availability of sex, despite him and the rest of the Uncle Tim’s being all about the exposure of privilege.

Ian does an excellent job of analyzing Hugo’s spiteful piece, so I’m not going to. Read Ian’s article.

Instead, I’m going focus on the self-righteous hypocrisy of this little bit:

Sex with other people may be a basic human need, but unlike other needs, it can’t be a basic human right. It’s one thing to believe that the state ought to provide food, shelter, and health care to those who can’t afford these necessities of survival. It’s another thing to say that the state should ensure that even the hideous and the clueless have occasional orgasms provided for them others. While in Britain, a few local governments have sent disabled men on trips to Amsterdam to see sex workers, citing psychological need, not even the most progressive Europeans have suggested that anyone is entitled to have their romantic longings reciprocated. NGOKC reminds us just how many young men are outraged at this reality that attractiveness, charm, and fuckability are not and never can be equally distributed.

Remember, sex is not a basic human right.

Men are not entitled to sex.

But, women are entitled to your labour (in the form of welfare, food, shelter, and health care).

Nothing seems abnormal about this, this is what you were raised on.

This is what you were raised on; words that should provoke skepticism.

One random commenter explains the general just of the mood at Jezebel:

Because they aren’t entitled to women’s bodies regardless of how much you personally feel women are “privileged” when it comes to sex on demand.

You aren’t entitled to a women’s body.

But they are entitled to yours.

You work, you sweat, you break your back, you endure inanity, boredom, idiocy, and bureuacracy for 40+ hours a week. Women are entitled to about 40% of that.

Women are entitled to about 2 days of your labour, 16 hours, every week. They are entitled to take this through the threat of force, violently supported by the guns of the police.

But a half-hour a week of mutually pleasurable activity. Nope, men aren’t entitled to it.

If you attempt to deprive them of your hard work, of your labour, of your body, you go to jail. The IRS (or the CRA for Canucks) will see to it. But if you are deprived of sex, of their body, meh, fuck you (you wish).

Women are entitled to your body, but you aren’t entitled to theirs.

It’s simple: either people are entitled to the bodies of others for attaining their basic needs (of which sex would be one) or they are not.

To say otherwise is hypocrisy.

Turn it around:

Because they aren’t entitled to men’s bodies regardless of how much you personally feel men are “privileged” when it comes to economic outcomes.

Wonder what the Jezebellers would think of this? (Hint: Read 1 Kings 18:1-18)

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The next time someone demands the state pay welfare for the societal parasites, ask when the state will ensure you have your *ahem* basic needs met.

When the person reacts in a horrified manner (as they invariably will) ask why the parasites basic biological needs are more important than yours.

When they bring up consent, choice, “my body, my choice”, entitlement, or whatever other slogans they substitute for thought, ask why you don’t have a choice and why the parasites are entitled to your body.

Continue to rhetorically poke around a bit and listen to the verbal diarrhea they issue forth pretending it’s a logical argument. You won’t accomplish anything, but you might get some lulz.

****

So, am I saying women should be forced to give sex to those men who need it?

Hells no.

I’m saying no one is entitled to the body of another. Men are not entitled to women’s bodies, women are not entitled to men’s bodies.

I just want the hypocritical wankery to stop.

But I know it won’t.

Women’s entitlement to the labour of men is so thoroughly entrenched that most reading this will either miss the point or be horrified.

So it goes, back to your drudgery. Those single mothers aren’t going to feed themselves.

****

Side-note:

I wonder what Schwyzer and his ilk would think of a Tumblr called Nice Girls of OKCupid where users made disparaging comments about the profiles of fat/ugly women, sluts, ignorant women, and single mothers outlining their “great personalities”?

Oh, and to head off the initial objections to the comparison: women, the feeling you get about “creeps” is exactly the feeling men get about “fatties” and “sluts”. Not that it matters, you’ll discount men’s feelings anyway.