Carts and Horses, Causes and Effects

Posted on | January 26, 2014 | 118 Comments

Complex causation in human behavior means that social science often isn’t very scientific. Not every variable can be measured with such accuracy as, for example, annual income and years of education, and things which are not measured tend to be neglected as factors in social science. Researchers don’t usually find correlations by accident, and they never find correlations except in measurable data, so that a certain level of inaccuracy and error is inevitable.

All of this is necessary preamble to an Atlantic Monthly article by Matthew O’Brien with this provocative headline:

Why Is the American Dream Dead in the South?

Uh, it’s not. The research O’Brien cites refers to the chance that someone whose parents are in the bottom 20% of the income distribution can rise to the top 20% of the distribution.

Stipulating that the data in the study is complete and accurate, and that everything in the analysis is legit — well, why is there a bright spot on the resulting map in the vicinity of Tuscaloosa, Alabama, but no corresponding bright spot near Athens, Georgia? Why does rural Arkansas look like a beacon of upward mobility, while the bustling economies of Atlanta and Charlotte produce no such effect?

Most of all, why does the map referenced by O’Brien show that impoverished Appalachia offers more opportunity for advancement than any of the more prosperous surrounding flatlands?

To use a social science term: Your data is obviously fucked up.

Look, O’Brien: I don’t want to start a fight, but if somebody tells you West Virginia is a glory land of economic opportunity, this is obviously somebody who never set foot in West Virginia. I don’t give a damn what they tell you after that, their credibility is shot.

With the strange mixture of credulous certainty and interventionist enthusiasm that behooves a writer for the Atlantic, however, O’Brien proceeds to draw conclusions from this research:

The researchers found that the larger the black population, the lower the upward mobility. But this isn’t actually a black-white issue. It’s a rich-poor one. Low-income whites who live in areas with more black people also have a harder time moving up the income ladder. In other words, it’s something about the places that black people live that hurts mobility.

Ri-iiiight.

Something like the poor being isolated — isolated from good jobs and good schools. See, the more black people a place has, the more divided it tends to be along racial and economic lines. The more divided it is, the more sprawl there is. And the more sprawl there is, the less higher-income people are willing to invest in things like public transit.
That leaves the poor in the ghetto, with no way out for their American Dreams. They’re stuck with bad schools, bad jobs, and bad commutes if they do manage to find better work. So it should be no surprise that the researchers found that racial segregation, income segregation, and sprawl are all strongly negatively correlated with upward mobility

So, if this is about “sprawl” that “leaves the poor in the ghetto,” why a vast expanse of low mobility in the rural South, where there are no ghettos (because there are no major cities) and where there is no suburban “sprawl” (because there are no suburbs)?

Do you see what I mean about “credulous certainty”? If you begin with the assumption that the researchers have accurately measured something meaningful — West Virginia, land of opportunity! — and then start blabbering that “the researchers found” this, that and the other correlation, you’re likely to end up making all kinds of foolish arguments, as Matthew O’Brien eagerly does:

The American Dream is alive in Denmark and Finland and Sweden. And in San Jose and Salt Lake City and Pittsburgh. But it’s dead in Atlanta and Raleigh and Charlotte. And in Indianapolis and Detroit and Jacksonville. Fixing that isn’t just about redistribution. It’s about building denser cities, so the poor aren’t so segregated. About good schools that you don’t have to live in the right (and expensive) neighborhood to attend. And about ending a destructive drug war that imprisons and blights the job prospects of far too many non-violent offenders — further shrinking the pool of “marriageable” men.

WHAT THE FUCK ARE YOU TALKING ABOUT?

You have no clue, O’Brien. “Building denser cities” in rural South Georgia? “Ending a destructive drug war” in Eutaw, Alabama? The American Dream “alive” in Pittsburgh but “dead” in Charlotte? You’re attempting to “solve” a problem you haven’t even begun to understand, and in the process making yourself a public nuisance.

UPDATE: Thanks to Eric Mertz and other commenters who looked over the Harvard study and spotted obvious issues. Here is an excerpt that clearly points toward the basic problem:

We characterize intergenerational mobility using information from de-identi ed federal income tax records, which provide data on the incomes of more than 40 million children and their parents between 1996 and 2012. . . . In our baseline analysis, we focus on current U.S. citizens in the 1980-1982 birth cohorts { the oldest children in our data for whom we can reliably identify parents based on information on dependent claiming. We measure these children’s income as mean total family income in 2011 and 2012, when they are approximately 30 years old. We measure their parents’ income as mean family income between 1996 and 2000, when the children are between the ages of 15 and 20.

Not to put too fine a point on it, this is insane. That is to say, what percentage of people reach the top 20% in income by age 30? Most people’s incomes peak in their 40s and 50s. Many 30-year-olds are just a few years out of college. Mertz promises a more complete analysis Monday at his blog, and we’ll wait to see what he finds. But my basic common-sense hunch — the alleged superior mobility of West Virginians — tells me something is wrong here.

UPDATE II: Welcome, Instapundit readers!

Category: Economics, Science

Comments

118 Responses to “Carts and Horses, Causes and Effects”

ihazconservative
January 27th, 2014 @ 12:46 pm

1) Every Communist country? Like China? Were the Communist countries rich before Communism, or did they have a system where only a few benefited and the rest of the people were poor, making Communism attractive to the masses? Cuba and Russia were hellholes for most of their citizens before Communism.

2) Let’s leave aside the massive amounts of fraud in financial services, from the LIBOR scandal to Credit Default Swaps leading to the collapse of Bear Stearns. If you are going to ignore the repeal of the Glass-Steagall Act as a primary reason and focus on bad housing loans for the financial crisis, then you also have to ignore that parallel bubble-bust cycles occurred outside of the residential housing markets (for example, in commercial real estate and consumer credit); parallel financial crises struck other countries, which did not have analogous affordable housing policies; and the U.S. government’s
market share of home mortgages was actually declining precipitously during the housing bubble of the 2000s.
ihazconservative
January 27th, 2014 @ 12:48 pm

You’re not saying how my point was irrelevant to the original point, which I demonstrated it was by actually quoting from the original post. You are just saying it’s not, so sure, happy to have people read the thread.
LindaF
January 27th, 2014 @ 1:15 pm

Not only that, but the main reason people move to the ‘burbs is because they DON’T want to live in “dense” clusters. They want space, and are willing to pay for it.

Too-close neighbors aren’t necessarily bad, but if the cultures are very different (one, married, the other, not; one working, the other enjoying “funemployment”), closeness becomes torture – for the more stable neighbors. Those who can party loudly until dawn, because they don’t have a job to go to, are resented by the employed. Those whose culture LOVES music that is vile, filled with hate and cursing, will be disliked by those who are Godly people.

I am one that GLADLY left dense housing to have peace and quiet – BTW, in an integrated neighborhood, surrounded by others that value decent living.
aceofwands
January 27th, 2014 @ 1:24 pm

They are repeating history with lending.

The genesis for the collapse started in 1994 and by 1999 the NYT was issuing warnings of an impending collapse. This is when Obama and his law firm decided to sue Citibank in Chicago, forcing loans for people who on any given day would require a cosigner to buy a newspaper.
In 1995 Bill Clinton thought it such a
good idea, he lowered the standards even further.

http://www.obamafordummies.com/sub-prime-mortgages.html

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped
up and bailed out the thrift industry.”

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

http://www.thehispanicconservative.com/General/the-fanny-mae-and-freddie-mac-debacle.html

“(BTW: Bush asked Congress 17 times to stop Fannie & Freddie -starting in 2001 because it was financially risky for the US economy).Barney blocked it and called it a “Chicken Little Philosophy”

(and the sky did fall!)”

http://message.snopes.com/showthread.php?t=77592
dwpittelli
January 27th, 2014 @ 1:30 pm

1) Not that China or Russia were free market countries to begin with, but China and Russia got much, much worse under communism. In contrast, Cuba was the richest country in Latin America, with a strong union movement and middle class; it has none of these advantages now.

2) I have no problem with punishing fraud. I do have a problem with the notion that trading securities is a parasitic or worthless endeavor, or that “financiers that form our upper class” are widely so. Capital will either be moved voluntarily, by investors, financiers and traders, or under threat of force, by a nomenklatura.
Arch
January 27th, 2014 @ 1:39 pm

Data is plural. The Phrase should be, “Your data are fucked up.”
ihazconservative
January 27th, 2014 @ 1:48 pm

It’s difficult to say what Communism has caused to Cuba because so many of their economic problems have to do with our irrational sanctions (supposedly because they are Communist and human rights violations, problems we don’t seem to care about with China to take similar actions). But before Castro they were plagued by high unemployment, poor infrastructure, ties to organized crime and allowing American companies to exploit their resources. As Kennedy said in 1960 in explaining how American foreign policy failure helped usher in Castro, “First, we refused to help Cuba meet its desperate need for economic progress. In 1953 the average Cuban family had an income of $6 a week. Fifteen to twenty percent of the labor force was chronically unemployed. Only a third of the homes in the island even had running water, and in the years which preceded the Castro revolution this abysmal standard of living was driven still lower as population expansion out-distanced economic growth.” Whatever Cuba’s wealth pre-Castro, it wasn’t reaching the people, and such inequality, time and again, leads to revolutions.
dwpittelli
January 27th, 2014 @ 4:56 pm

In 1957, Cuba’s real income per capita (national income divided by population) was $378, or fourth, in Latin America. Only Venezuela, Argentina, and Uruguay ranked above Cuba and evenSpain ($324) and Portugal ($212), failed to reach Cuba’s level. Except for Venezuela, Cuba probably enjoyed the highest per capita income among all countries in the wet tropical zone, extending from the Tropic of Cancer to the Tropic of Capricorn.

Other measures provide a better approximation of the degree to which real income was shared among the population. Cuba ranked third in Latin America on a per capita basis in daily calorie consumption, steel consumption, paper consumption and radios per 1,000 persons. In 1959, Cuba had one million radios and the highest ratio of television sets per 1,000 inhabitants. (…)

The level of wages in Cuban manufacturing contributed significantly to the nation’s relatively high living standards. In 1957, wages averaged $6 for an eight-hour day in manufacturing as a whole and ranged from over $4 for unskilled workers to $11 for skilled employees in Cuba’s sugar mills. Real wages in Cuba were higher than any country in the Western Hemisphere, excepting the United States and Canada.

Between 1949-58, the average annual share of national income paid in workers’ remuneration (wages, fringe benefits, pensions) was 65 percent, and it showed a noticeable tendency to rise. Surprisingly by 1958, Cuba’s percentage was surpassed by only three developed Western countries: Great Britain, the United States, and Canada. https://www.latinbusinesschronicle.com/app/article.aspx?id=2108
K-Bob
January 27th, 2014 @ 7:09 pm

No, I’m not “saying” anything. I wrote what I wrote. Not what you wrote.

Are you incapable of telling the difference? Maybe you should look up the term “quotation” as a starting point.
m00tpoint
January 27th, 2014 @ 9:03 pm

I just have to know. Imagine you can double the income of the bottom 20%, but only if you also triple the income of the top 20%. Is this a good deal for the people on the bottom?
Julie Pascal
January 28th, 2014 @ 12:51 am

I think that’s the point of the fuss, isn’t it? Mobility may well be the defining difference in upward movement, but the map and presentation somehow present that these differences in outcome are regional.

In truth, the guy from Kansas who moves to Atlanta is probably doing fab.
Eric D. Mertz
January 28th, 2014 @ 9:07 am

Precisely. And they can’t take that into account. With – according to the paper the guys at the Atlantic were discussing – 38% of adults living in a different place than where they grew up, permanently assigning them to the zipcode they were first recorded as dependents on tax forms is bad methodology. Its why this paper is useless for anything other than figuring out what questions to ask so we can get a REAL picture of income mobility in this country.
La Pucelle
January 28th, 2014 @ 10:29 am

You’ve noticed that as well? It’s a damn plague in Virginia, where our leftist “betters” are trying to move all the dirty poor worker bees into the cesspool that is D.C.. With the out-of-control deforestation and development of what was once rural land, I’ve started to suspect the “elites” are in truth trying to gentrify the country because they’ve decided they don’t really like city life after all.

Of course, once they get out into the country, they begin lamenting how there’s no Trader Joes, (I mean, those farmers’ markets are so quaint, but I can’t get my fair trade arugula!) no Starbucks, no overpriced trendy gyms…and then once they’ve turned the countryside into yet another overpopulated urban area, they wonder what went wrong and the plague of locusts begins again.
The Sanity Inspector
January 28th, 2014 @ 11:13 am

What especially riles me is when they compare a wealth gap chart from twenty or thirty years ago with a current one. Someone should tell them that the low income people from 1985 and the middle income people of 2010 are the same people. Of course I made less bagging groceries during summer break than I do in the prime of my career! Who doesn’t?
K-Bob
January 28th, 2014 @ 12:03 pm

That’s a better point than mine. I’ll have to remember that.
Zombie John Gotti
January 28th, 2014 @ 11:19 pm

I have to wonder what’s up with the subdivisions he uses on his map. They don’t correspond to counties or Congressional districts. They could easily be manipulated to paint a specific picture.
Maniccheapskate
January 29th, 2014 @ 11:51 am

Uh, the people I know in the Southwest, dream of monster trucks, bacon everything and beer hats, their feet are on the ground about the other stuff, you know, like saving money, paying cash, shopping at the goodwill or salvation army for the good stuff not really used by those Jones chasers; NO, none, zip, nada: in debt, growing a garden, killing, gutting, skinning, and cooking supper or breakfast, paying off 30 year mortgages in 10 yrs or less, eating at home; after cleaning up after the animal processing,of course, etc.etc.etc….
If one writes, about a culture, after being raised in different cultural norms and predisposed to point out negatives due to a bias predicated on not living in that different culture, I suppose anybody can be an expert, at anything, without being, a expert. So what the $%ck does living in Las Vegas since 1997, where the to the bone progressive Harry Reid receives a vote majority for decades, give one the insight to know what nirvana; anybody not from Vegas, is seeking.
Monday Linkfest with Vanessa Hudgens | Blackmailers Don't Shoot
February 3rd, 2014 @ 10:02 pm

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