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I have just published my first piece with The Data Driven Investor on the brave new world of neuro marketing. I had previously syndicated a few articles with them on Medium, but this is the first piece directly published on their website. As I note, The world today is far more technologically and scientifically advanced than at any time in the past. Therefore, it shouldn’t be surprising that marketing techniques are also becoming more and more advanced. And how exactly have they become more "technologically and scientifically advanced?" Well... Researchers can also use electroencephalography (better known as an EEG), which is a much cheaper alternative. The fMRI usually costs $1000 per machine hour. However, the EEG has some drawbacks, most notably, it “does not grant access to deep parts of the brain where the ‘pleasure center’ is located.” Basically, they read your mind to figure out how you react to various products and advertising. Pretty cool (or perhaps terrifying) stuff.
Check it out!
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 Do you remember when the Tea Party was a thing? Yeah, me ummm, kinda... Anyways, here's a piece I thought was a pretty interesting that I wrote for SwiftEconomics.com on the original Tea Party in 1773 as well as the Tea Party protests back when Obama was in office that were sort of a precursor to Trumpism. Anyways, I hope you enjoy: There has been an awful lot of coverage lately regarding tea party protests springing up around the country. Named after the famous Boston Tea Party, hundreds of rallies took place across the country on April 15th, bringing large numbers of people together to protest taxes, reckless spending, bailouts and all the rest of our government’s recent behavior. FOX News is basically in love with these protesters. And for the most part, I sympathize with the protesters. But I’m just not a big fan of Fox’s incredible “fairness” and “balanced-ness,” which makes feeling sympathy a little tough for me. Luckily for me, MSNBC, whom I am not a fan of either, seems to hate the tea parties about as much as FOX loves them. Maybe I should just pick a side and be a mindless cheerleader. So much less thinking involved. Regardless, Keith Olbermann, among others, has been referring to the protesters as “tea baggers.” Which is a bit graphic, especially for the prime time news. (For those of you who don’t know what tea bagging is, the act occurs when a man inserts his scrotum into… you know what, if you’re really that curious, just look up the wikipedia article on it. Wow, I just linked to the definition of tea bagging: a new low for SwiftEconomics.com. My sincerest apologies Ryan.) Anyways, on April 16th, Keith Olbermann continued his uninterrupted streak of guests, who disagree with him on absolutely nothing, by speaking with actor and renowned political philosopher, Janeane Garofalo. She proceeded to describe the tea party protesters as follows: “Let’s be very honest about what this is about. It’s not about bashing Democrats. It’s not about taxes. They have no idea what the Boston Tea Party was about. They don’t know their history at all. This is about hating a black man in the White House. This is racism straight up. That is nothing but a bunch of tea bagging rednecks. There is no way around that.” (1)  Hmmm, stereotyping an entire group of people based on one thing, that reminds me of something. Damn, why can’t I put my finger on it? Regardless, Janeane Garofalo is probably right about one part, the tea party protesters almost certainly don’t know what the Boston Tea Party was actually about. Although, I sincerely doubt she has the slightest idea either. So what was the Boston Tea Party about? Well, of course it was a tax protest that foreshadowed the glorious American Revolution, which pitted the freedom loving (and slave owning) Americans, against the ruthless and tyrannical British Empire (who we’d later become BFF’s with). Now I hate to take your 5th grade history textbook to task, but no, the Boston Tea Party was not an early call to independence. It wasn’t even a tax protest. It was in many ways, of all things, a tax-cut protest. I’ll let historian Niall Ferguson explain: “…most people assume [the Boston Tea Party] was a protest against a hike in the tax on tea. In fact the price of tea in question was exceptionally low, since the British government had just given the East India Company a rebate of the much higher duty the tea had incurred on entering Britain. In effect, the tea left Britain duty free and had to pay only the much lower American duty on arriving in Boston. Tea had never been cheaper in New England. The ‘Party’ was organized not by irate consumers but by Boston’s wealthy smugglers, who stood to lose out.” (2) That isn’t to say it was just a bunch of smugglers throwing a hissy fit; it’s certainly more complicated than that. To get at the full story, let’s start by discussing the motivations behind the American Revolution. The main reason for the Revolution boiled down to two interconnected grievances. The first was that the British were centralizing control over the colonies. This was where we get the whole ‘taxation without representation’ bit. The colonists believed it was unfair for the British Parliament to tax them, since they had no say on who was elected to the British Parliament. Instead, they felt colonial officials should make these decisions. This represented what Niall Ferguson calls a “tacit tug of war between centre and periphery – between royal authority in London… and the power of the colonists’ elected assemblies.” (3) The British had previously ruled the colonies in a lackadaisical fashion. After the French and Indian War ended in 1763, the British gained a substantial amount of new territory and began to clamp down. As historian Joseph Ellis put it, ” Now, however, the sheer scale of [the British’s] recently acquired American empire, plus the sudden recognition that governance of its expanded domain required more management than a few secretaries in Whitehall could muster, forced a major overhaul in this accidental empire into something more appropriately imperial.” (4) The British became more controlling, and the method they used to control the colonies brings us to the second grievance; an inequitable economic system known as mercantilism. Mercantilism, when the term is rarely used today, is thought of as just a synonym for protectionism. It is much more than that however; mercantilism could best be defined as a loose connection of economic and political philosophies, which conclude that a country becomes richer by exporting as much as possible and importing as little as possible. The goal is to amass gold and silver bullion, Scrooge style. This is what leads a country to enact trade barriers, grow an empire to control resources and manage its own economy in a myriad of other ways. What this means is that the host country (Britain) will try to profit at the expense of its colonies (America’s) instead of trying to cooperate with them. As my previous article shows, this makes absolutely no sense. However, it was the accepted economic philosophy of the era. Mercantilism came under attack during the enlightenment by classical liberals (basically modern libertarians with an egalitarian streak). Adam Smith’s The Wealth of Nations, was not, as many seem to assume, a defense of the current system, but instead, one of the first and most thorough, assaults on the mercantilist ideology. An ideology that, as Smith wrote: “For the sake of that little enhancement of price, which this monopoly might afford our producers, the home consumers have been burdened with the whole expence of maintaining and defending that empire… It cannot be very difficult to determine who have been the contrivers of this whole mercantilist system; not the consumers, we may believe, whose interest has been entirely neglected; but the producers, whose interest has been so carefully attended to.” (5)  Oh, those Scottish Enlightenment writers, so polite all the time. Let me be a little more blunt. Mercantilism sees all nations in conflict with each other. Thus coercion, not cooperation, is necessary for economic growth. So simply put, mercantilism is an awful system. Well, I guess it’s only awful if you don’t like its main side effects, namely: hyper-protectionism, ultra-nationalism, a merger between corporate interests and the state, cronyism, colonialism, oppression, racism, slavery and near-constant war. All of which characterized that unfortunate period in our history, and are closely related to mercantilism (see here, here and here).
The American Revolution, besides being a war for political control, was also an uprising against British mercantilism, or at least certain aspects of it (Stamp Act, Navigation Acts, etc.). In fact, one indictment against King George, in the Declaration of Independence, was “For cutting off our Trade with all parts of the world.” (6) This referred to the East India Company getting monopoly privileges on trade, a very mercantilist policy if there ever was one, instead of letting the colonists trade of their own accord. So mercantilism is totally weak and the colonists didn’t like it, but how does this play into the Boston Tea Party? Well simple, mercantilism creates ample opportunities for smugglers. High, protective tariffs raise the price of consumer goods and thereby create a market for cheaper, smuggled goods. Think of Al Capone during prohibition. He was the last person to want the 18thamendment repealed; his profits depended on alcohol being illegal. The same thing goes for tea smugglers just prior to the Revolutionary War. In 1773, the British passed the Tea Act, which eliminated many duties on the East India Company, in an attempt to save the company from bankruptcy. The act also gave the company more monopoly privileges over trade with the Americas. The monopoly privileges and what amounted to corporate welfare certainly angered the colonists, and helped lay the groundwork for the revolution. Ironically though, the smugglers benefited from the British’s mercantilistic policies in the same way that Al Capone benefited from prohibition. The tariffs allowed the smugglers to sneak in Dutch tea and sell it for less than the British. Since the new act would lower the East India Company’s costs, and thereby its prices, the smuggler’s profits would be reduced. So while it’s impossible to know exactly why, on December 16th, 1773, several dozen men (most of them smugglers), stormed aboard the Dartmouth and threw 342 chests of tea in the water; but they were presumably more upset about the British undercutting their profits, than about any sort of perceived oppression. Even more ironically, the Boston Tea Party, while not embodying the spirit of the Revolution, was used as a rallying cry for it. While the smugglers were mostly just interested in protecting their bottom line, Samuel Adams and others defended it passionately, as a principled protest against an unjust system. This was compounded further when the British clamped down even harder on the colonies, going as far as closing Boston Harbor, which lead to more resentment among the colonists, until it boiled over in 1776. Alright, enough with the history lesson. Well I guess all this article really is, is a history lesson. Regardless, to return to the modern protests, it is a bit ironic that they would name their protests after what was mostly just a bunch of smugglers pissed off about what amounted to a tax cut. Well if Obama is actually going to cut taxes on everyone making less than $250,000, which I highly doubt, then maybe it does make sense after all. Or as long as everyone just believes their 5th grade textbook, the protesters should be fine. _____________________________________________________________________________________________ (1) Number 2 Story with guest Jeanne Garofalo, Countdown with Keith Olbermann, MSNBC, April 16, 2009, http://hotair.com/archives/2009/04/16/garofalo-outdoes-herself-tea-parties-all-about-white-power-says-d-lister/ (2) Niall Ferguson, Empire: The Rise and Demise of the British World Order and Lessons For Global Power, Pg. 72, Basic Books, Copyright 2002 (3) Ibid., Pg. 73 (4) Joseph Ellis, American Creation: Triumphs and Tragedies At the Founding of the Republic, Pg. 23, Random House Inc., Copyright 2007 (5) Adam Smith, The Wealth of Nations, Pg. 841, Bantam Books, Copyright 2003, Originally Published 1776 (6) “DECLARATION OF INDEPENDENCE,.” 2009. The History Channel website. 18 Apr 2009, 01:36 http://www.history.com/encyclopedia.do?articleId=207252 My new article for BiggerPockets is up on when it's right to refinance your property. Most of the time, it will boil down to run of three reasons:
As part of a strategy would be like for the BRRRR strategy, when you refinance out the private loan (or cash) you put in to the property. In this environment, you're probably not going to get better rates. But if you have a lot of equity in a property, it might be worth refinancing if you have some better opportunities.
I go into much more detail in the article, so please check it out!  With election season just having passed us by, I thought it would be a good time to repost this article about the 2008 election I wrote for SwiftEconomics. While everyone thought Barack Obama represented a major change to George W. Bush (which in some ways, he certainly did), there was an awful lot about that new boss that was the same as the old boss. Even with Trump, there's a good amount that hasn't changed (*cough* sucking up to Saudi Arabia *cough*). The following is an excerpt from one of Barack Obama’s campaign speeches, paraphrased by yours truly: “Change. Change, change, change. Hope. Change you can believe in. Hope. Hope you can believe in. Yes we can. Dreams. Hope and dreams. Change and hope. Dreams and change. Dreams you can change in. Change, hope and dreams. Hope, dreams and change you can believe in. Yes we can hope to change our dreams. Change.” The theme of which, at least from what I have gathered, is that our current president believes we need to change a few things. Well, I agree with him. I thought President Bush was a disaster. Unfortunately, though, other than the ridiculous hero worship and cult of personality that Obama’s got going (see here, here, here, and of course Obama girl and yeah this one too, sorry, I can’t help myself), it really doesn’t seem like much of anything is changing. Let’s start with economics. This is, after all, an economics website. Barack Obama’s big economic proposal, thus far, was the $787 billion dollar stimulus package. Just about every Republican opposed it. So obviously the previous Republican administration was fundamentally opposed to using tax payers money that was taxed away from tax payers to give back to tax payers to stimulate the economy (yeah it doesn’t make a lot of sense to me either). Oh wait, that’s right, Bush and his administration had their own $150 billion dollar stimulus package in 2007. It was much smaller, but so were our problems back then. If he was still in office during this phase of the crisis, it seems logical to conclude his next stimulus package would have been at least close to the size of Obama’s. Of course, all the Republicans would have supported it then. But at least Obama was opposed to Bush’s massive, wealth redistributing, bailout of failed financial firms. Uhhhhh, no, Obama voted in favor of the TARP. In fact, Democrats supported that bill at almost twice the rate the Republicans did. But hey, that was before Obama got in office; he would never support such a thing now. Except TARP II has been put on the table, by none other than Obama’s Treasury Secretary, Timothy Geithner.  George Bush ran record deficits almost every year of his administration, a fact the Democrats hammered home to prove the Republicans weren’t a party of fiscal discipline. The Democrats are absolutely correct, however, it’s about the same as Moe telling Curly that he’s stupid and relatively mistake prone. Under Obama, the United States is expected to have a $957 billion dollar deficit in just the first half of this year! Needless to say, Obama has not exactly restored fiscal discipline. Luckily, Obama has promised to regulate the financial industry, to make up for Bush’s wild and reckless deregulations. Unfortunately, for change’s sake, as I mentioned in my first ever article, Bush was not a deregulator. The pages in the federal registry increased by an average of 76,526 pages each year under Bush’s watch, and every regulatory agency had its budget significantly increased. So adding more regulations isn’t any different. Furthermore, the main piece of deregulation blamed for our current mess was the Gramm-Leach-Bliley Act. This, however, was passed under Bill Clinton’s administration. If Obama thought we needed to change from both George Bush and Bill Clinton, his Secretary of State nomination seems to be an interesting choice. And speaking of change in the administration, take a look at this list of former Clinton people making up his cabinet. It’s not exactly what I would call change:
Obama even kept Bush’s appointment, Robert Gates, on as Secretary of Defense. I mean, we’re all afraid of change to one degree or another, but give me a break! Moving outside of economics, we find even more similarities. Sure, Obama was against the War in Iraq. He didn’t vote to cut off funding or anything like that, but did give an inspiring one speech opposing the war, which apparently changed the course of history. He gave this speech from the very visible and scrutinized position of state senator. Just try to name your state senator right now. Go ahead, do it! You can’t. Anyway, his reasoning for opposing the war was: “What I sensed, though, was that the threat Saddam posed was not imminent, the Administration’s rationales for war were flimsy and ideologically driven, and the war in Afghanistan was far from complete.” (2) Well that’s at least something. And he should get credit for it. Unfortunately, his withdrawal plan is extremely slow and very similar to what Bush had already negotiated with the Iraqis. Obama is also willing to leave up to 50,000 troops in Iraq after the 2010 withdrawal. Our bases, and Vatican-sized embassy, are probably also there to stay. Well that’s certainly good; I mean we wouldn’t want the Iraqis to actually think we might NOT be occupying their country.
Then there’s Afghanistan, where Obama is planning to substantially increase our military presence in the near future. Apparently, we should throw a big fuss when Bush plans a surge, but when Obama gets his surge on, who cares, right? But at least the Patriot Act is no more. Well, not quite. And by not quite, I mean not at all. Obama did fight against renewing the original version of the Patriot Act, but went ahead and voted in favor to reauthorize it in 2006, as long as it had a few provisions to prevent abuses. OK, that’s like a nickel of change. But when you base your entire campaign around the word “change,” I expect at least a couple of quarters. Furthermore, there are reports that wire-tapping will continue, and in Jewel v. NSA, the Obama administration used the same “State Secrets” excuse the Bush administration had previously used, so to not release any government files on the subject. Obama did at least close Guantanamo Bay, or will in a year. However, he’s leaving the rendition program in place. So I guess torture is illegal in the United States now, but we can still ship suspected terrorists to some third world country and go medieval on them. I guess that’s a little different…I guess that’s technically change. It’s also true that Obama has urged reform on healthcare and climate change policy. However, this is just upping the ante on Bush. Bush, after all, pushed through the ridiculously expensive Medicare Part D. In addition, he funded Hydrogen Energy research and supported John McCain, who like Obama, was trying to push through Cap and Trade. Oh, but Obama is so likeable. He’s smart, charming and articulate (or according to his Vice President; so fresh and so clean clean). On the other hand, Bush was just awful. I mean, come on, he was just a mean, stupid, arrogant, selfish, inarticulate, greedy, racist, sexist, intolerant, conformist, prejudiced, homophobic, ageist, classist, environment hating, warmongering, Islamophobic, anti-Semitic, xenophobic, flag waving, unpatriotic, misogynistic, misandrinistic, misanthropic, biphobic, transphobic, heterophobic, anti-intellectual, unprincipled, fundamentalist, nationalistic, America-centric America-hater. Alright, I’ll give you that. But just because one is likeable and one is not, doesn’t necessarily mean their policies are fundamentally different from each other. So my question is simple: what exactly has Obama changed? A little bit of change here and there, on the peripheries, doesn’t matter to me and shouldn’t matter much to anyone else. In the end, I think Reason Magazine’s Michael Moynihan put it best, “…it appears that on the economy, the Obama administration will be Bush on steroids, and on the War on Terror, he’ll be Bush-Lite.” Well that’s just dandy. I guess “change you can believe in” was some sort of code for “the same old thing you’re just going to have to learn to accept. Deal with it asshole.” ________________________________________________________________________ (1) List provided by Reason TV, The Winds of Change, January 13, 2009, http://www.youtube.com/watch?v=V2hwfu9KANM and Obama Picks More Clinton Officials for DOJ, Patterico’s Pontifications, January 5, 2009, http://patterico.com/2009/01/05/obama-picks-more-clinton-officials-for-doj/ (2) Barack Obama, The Audacity of Hope, Pg. 347, Vintage Books, Copyright 2006  And all the hubabuloo about a "blue wave" ora "red tsunami" turned into the melodramatic bore of a Democratic House and a Republican Senate.
Or perhaps an upcoming two years of vitriolic gridlock is a better way to describe it... This is definitely one of those "wow, just wow, I literally can't even" moments. This is what The New York Times thinks will convince the average American that Donald Trump's priorities are completely backwards:  What rebuttal is even necessary? Honestly, how can anyone think that the average American still thinks it is a good idea to keep fighting in the Middle East for God knows what reason?
Most Americans don't want to expand the war in Afghanistan and almost all don't want to go to war in Syria. Shockingly, American only believe the Iraq war was a mistake by a margin of two to one, despite the catastrophic consequences of that war. (A war The New York Times helped lie us into I should add.) But even warmongering neocon Max Boot said the Iraq War was a mistake! But the establishment (on both sides) still believes the United States needs to have its military in every part of the world, other than our own border I guess. Our military isn't needed on the border, we have departments for that, of course. But at the very least, it would be coherent for our military to be protecting the border. Not to The New York Times I guess... One of my favorite articles I wrote for Swifteconomics on the nonsense that is gurus (and particularly real estate investment gurus): In the real world I work in real estate investment (yes, it’s been an interesting ride over the past couple years). Like just about every other industry, it’s important to educate yourself about the field. Unfortunately, while there is a lot of good information out there, there’s also a lot of garbage, especially in real estate. I’m quickly reminded of that episode of The Simpson’s where some salesman is offering his book How to Get People to Pay You $50 for a Book for a mere $50. There certainly are an awful lot of get-rich-quick schemes and gurus in the real estate field. I have, unfortunately, attended several of their seminars. Some, such as David Lindahl, I’ve gained significantly from. Others, well, not so much. I won’t name names, but one who was particularly worthless, we’ll call him Wuss Rhitney, may shine some light on how this works: First are the TV commercials saying “Free day long seminar on how to get rich flipping real estate.” Fantastic. Well business was pretty slow at the time, so we decided to go and see if there was a kernel of wisdom in it. Of course there wasn’t, it was a day long sales pitch for a three day event. Still that only cost $100. We figured it would be a great place to network with potential investors so we decided to suck it up and pay the $100. Needless to say, we left after lunch on the first day. Had this seminar gone the way of most—even the good ones—it would have ended with the closing sales pitch. These are always the same. The speaker will announce their product, one piece at a time; first the bootcamp, then CD’s and workbook, then the free mentoring, then the newsletter, etc. Then they will throw out a high and completely arbitrary price, which is obviously “what it usually sells for.” At this point they’ll mention that there are only a limited number of products available. A few uniformed souls (or possibly plants) will jump out of their seat and power walk to the back counter to buy immediately. Then the guru will continue telling you how good the product is, how financially free they are, how much they love spending time with their family, which of course they would be doing if they didn’t have this dying desire to spread the incredible knowledge they have among the masses and so forth. During this time members of the audience are trying to justify the purchase. But oh wait, they have one final price drop for you now bringing the price to only 20% of the real market value (read: arbitrarily selected opening price). Now those who were trying to justify buying at the higher price have their minds made up for them. The tactic certainly works. It works for the good ones and the bad ones. And the bad ones, are typically a bit sue-happy. This was the case with Wuss Rhitney, who went after the “anti-guru” John T. Reed for posting a negative review of his work. John T. Reed responded by launching an all out investigation against him and found, among other things: – Wuss Rhitney claimed to own millions of dollars of real estate by 25, when in fact he owned only $98,000 worth of heavily leveraged property at that time (maybe he meant millions of yen) Wuss Rhitney is an extreme case though. Many are just shysters. On Reed’s website he has “guru rankings” and a “Real Estate B.S. Detection Checklist.” Some of the items, which I think can be easily adjusted for gurus in just about every field, include – Emphasis on luxurious lifestyle As John T. Reed notes, “In general the gurus I do not recommend are salesmen, not real estate guys. Both carnival barkers and the majority of real-estate gurus are salesmen.” Many, not surprisingly, have sales backgrounds as well.  Sadly not atypical It’s not just real estate. I got suckered into an Amway Global seminar once. The first 50 minutes of the seminar, which I’m embarrassed I stayed for, was basically a rehash of Robert Kiyosaki’s The Cashflow Quadrant (which can be boiled down to this; owning company = good, working for company = bad). During this time they surprisingly didn’t mention the company’s name nor what you’d actually be doing if you signed up with them. When he finally did drop the Amway bomb, you could hear a collective sigh. I discreetly made my way out of the room.
And then add informercials, which are little more than televised guru seminars. Or how about the Internet, which has created a haven for gurus that don’t even need to have seminars or long, late night TV spots. One website promises to show you “how to create a lifestyle most people only dream about living” through some online business venture. You have to give them you’re email address to find out the price though. Another site offers to teach you how to lose 10 pounds in two weeks. Cost: $14.99 (half of the regular, arbitrary price that is never charged). Another offers to teach you how to “make girls wet with your eyes.” Cost: $57 (again half the “real” price). And all those seem cheap. I remember some guy trying to get me into a business selling other people’s stuff on eBay. All I had to put down was $3,000. That sounds pretty reasonable I think. Now, some of this stuff is obviously complete garbage, but some of these things do work… at least for a few people (see Timothy Ferrisfor one). The problem is you don’t make a lot of money by targeting the select few who actually can benefit from it. The shotgun approach is what makes money. Thus these strategies have to be “easy.” On the other side of things, I don’t need a bunch of reviews to tell me P90X works. It’s a brutal 90 day workout, of course it works. The question is, can you stay with it. But P90X makes it clear its routine is going to be vicious and actually makes that part of the sales pitch (which I commend them on). Unfortunately, with get-rich-quick, become-a-beauty-model-overnight and create-a-harem-for-yourself pitches, it makes sense financially for the guru to market them to a wide group of people as if doing it was easy. Thereby, even at good seminars there are usually a lot more people there then should be. Most won’t start or will quickly get discouraged. Some will become disillusioned and angry at the guru, others will blame themselves, but probably most will move on to the next shiny object that gets their attention. And that’s the game. So be careful you know what you’re getting into before you sign up. Don’t go to a seminar unless you are somewhat acquainted with the topic at hand. For example, if you’ve never invested in real estate, pick up a book or two before going to a seminar. Read online reviews about the seminar, guru, program or whatever it is. Be very weary of any up-selling at the events or guest speakers with something to sell (you can always wait a day and buy it after you’ve had time to think about it, no matter what they say…always). And know that virtually all good things require effort and are by no means a sure bet. As good as a guru can make a deal sound, it always has some sort of downside. Photo Credit: Business Networking U and Vacant Desk _____________________________________________________________ *Mortgage holders pay mostly interest at first then as the loan nears maturity, their payments become more and more principle. This is why a 30 year loan that is 20 years old will only be about half way paid off instead of two thirds.
Here's an article I wrote forSwiftEconomics.com where I respond to a rather pathetic critique of me from Media Matters, or more accurately, a criticism of Alex Castellanos, who cited me among others in an article he wrote for The Daily Caller. (I should also note I have written a few articles for The Daily Caller as well).
So Media Matters, a truly unbiased organization if there ever was one, ran an article criticizing conservatives for denying the alleged wage gap between men and women. The article particularly criticized Alex Castellanos, who got into a bit of tiff with Rachel Maddow about said wage gap. Well it just so happens that Alex Castellanos used my article on the wage gap as a major source for his conclusions. (Yep, I got cited by name in The Daily Caller, what what). I’ll get to the article by Media Matters in a second, but first I need to respond to the commenter, one MidnightWriter, who noticed where Castellanos got much of his information. It wasn’t all that difficult to eviscerate.
Oh boy, I’m about to be eviscerated! It is true, however, that my entry was mostly a summation of research by James Bennett, Thomas Sowell, Warren Farrell and Denise Venable.
This was the strongest source ol’ Alex could find to back his arguments? We’re asked to accept some rather broad ground rules centered on what can be called same pay for the same work (such as the idea that history professors are not paid as well as business professors — something offered with no numbers to support that thought, nor are we given any numbers that tell us the averages of what male and female professors in those fields are paid). We’re offered two rather misleading charts; one that shows that more men receive college degrees incomputer science (which has nothing to do with equal pay for equal work), and a chart that offers weekly median earnings (the issue is averages).
Average full time business professor: $111,621, average full time history professor: $82,202. The average associate and assistant business professor make $93,767 and $87,248 respectively. The average associate and assistant history professor make $63,228 and $52,626 respectively. (Source: here). Of full time, associate and assistant professors in business, women make up 17.9%, 29.1% and 37.3% respectively. In history, women comprise about 18%, 36% and 44% respectively. Google searches no están difícil. Furthermore, this was one small point that was supposed to be so obvious it didn’t require a citation (the sky is blue by the way) to illustrate why inequality doesn’t necessarily equal discrimination.
Both graphs were supplemental and not even referenced in the text. A degree in computer science is well known to come with a higher wage than say, sociology. (Are you really going to ask for another citation here?) And medians are actually better than averages typically because they eliminate outliers that would otherwise skew the data. I explained this in a later entry of the Lies, Damned Liesseries and you can enjoy this guy’s take on it. And, of course, there was that classic bit of cherry picking, college educated, never married women between the ages of 40 – 64 actually earn more than college educated, never married men between the ages of 40 – 64. Seriously? That ever so slender slice of the pie is supposed to prove just what now? Here we have one select demographic group where the women earn, roughly 20% more than the men — well, geez Louise, how much worse does that make it in all the other categories for women to end up earning 23% less overall?
The argument is so exceptionally and epicly bad it will require a list of bullet points:
> MidNightWriter forgets to mention that I listed four statistics, not just that one, illustrating the wage gap was fallacious
And finally:
I’ve got to say, though, I did love the title — “Lies, Damned Lies, and Statistics.” The author knows his Mark Twain, but apparently has no concept of irony.
Maybe MidnightWriter was discussing the fact that Mark Twain popularized the term, but I doubt it. Sorry MidnightWriter, Twain didn’t come up with it, he attributed the saying to Benjamin Disraeli(although there is some controversy as to whether Disraeli came up with it either).
Anyways, enough with MidNightWriter, what about the Media Matters article. Well the article lists out a bunch of conservatives, including Castellanos, who have criticized the wage gap. Then it blows them out of the water with an AAUW report: Overall, the regression analysis of earnings one year after graduation suggests that a 5 percent pay gap between women and men remains after accounting for all variables known to affect earnings. Women who choose male-dominated occupations appear to earn more than do other women. Undergraduate majors in business and management, engineering, health professions, or public affairs and social services enhance both women’s and men’s earnings. [AAUW, April, 2007]
Wait, what? … 5%?* That’s it? What happened to 77 cents on the dollar? Hold on, they’ve got more:
Bush Labor Department: The “Adjusted Gender Wage Gap … Is Between 4.8 And 7.1 Percent.” In January 2009, the Bush administration’s Department of Labor published a report written for the department by CONSAD Research Corporation. While downplaying the existence of wage inequality, Deputy Assistant Secretary of Labor Charles E. James stated in a foreword to the CONSAD report that after controlling for several variables, there was “an adjusted gender wage gap that is between 4.8 and 7.1 percent.” [CONSAD Research Corp, 1/12/09]
Fascinating. This is the same report I mention in the expanded version of this article I put into my new book. I’ve never said that some sort of wage gap is impossible, just that it’s very much exaggerated if it does exist at all. Indeed, I think the CONSAD report misses some things, which I will get to shortly. But either way, I haven’t seen any “92.9 – 95.2 cent” pens in protest of the patriarchy. Nor have I heard Media Matters or any other liberal apologize for distorting the wage gap by some 300%!
And OK, I’m a man so I guess I’m not supposed to have an opinion on these things, but ladies, at what point does the wage gap become trivial? 1%? 3%? 5%? If guys still pay for dates most the time and the wedding rings we buy are a wee bit more expensive, maybe we have a date/wedding ring premium. Or maybe it’s this (warning, much profanity ensues):
Regardless, even saying it’s 5% or thereabout is questionable. The idea that you can control for every variable is a fallacy. Russ Roberts has a great discussion with Jim Manzi on this very subject I highly recommend. As Jim Manzi explains:
I’ve built thousands of regression models in my life, and they are not useless; they are useful for certain purposes. What I argue is that they are not capable of determining reliable, useful, and nonobvious effects of interventions…
Yes, we can get close, but be very careful with phrases like “studies prove” or “a regression analysis showed.” There’s always some uncontrolled variable. Indeed, the CONSAD report doesn’t appear to take years at the same job into account (men 5 years, women 4.4 years) or total time spent out of the labor force. What about people paid on comissions? The CONSAD report, for its part, does mention:
If the salesperson’s wages includes commission on sales, discrimination by customers could result in a substantial gap in wages between male and female salespersons and service workers. (Pg. 55)
The word “commission” or “commissions” doesn’t appear in the AAUW report. Also, it’s not necessarily customer discrimination, for example, the CONSAD report also mentioned men paid with tips, i.e. waiters and waitresses, earned 11% less (Pg. 93). That could be an aberration, or discrimination on the customers part or something else entirely. Customers could discriminate slightly against male waiters and female cars salespeople or something along those lines that’s much more nuanced than Media Matters would have you believe.
With regards to the overall wage gap, it could just be that men dedicate themselves slightly more to their careers and women seek a better work/life balance. In other words, motivation is very important and not easily quantified and basically impossible to control for. For example, a poll by MBACareers.comrevealed that men and women who obtain MBA’s have very different career aspirations: Additionally, the survey revealed the long-term career goals for male and female MBAs differ as well. Men acquiring an MBA aspire to become president or CEO of both public and private companies or to start their own businesses. Women MBAs, however, ranked management consulting, executive level vice-president positions and non-profit executive management high among their career goals.
Indeed, I would go so far as to say women are wiser in this respect. But it’s a wise trade off that hurts the bottom line. And while young women have become a lot more career oriented, much of the data on the wage gap is from older men and women who, for better or worse, have and have had a more traditional mindset.
Finally, what about negotiating for raises? The evidence is a bit anecdotal but women appear less likely to do so. There are certainly things we could do to rectify this, but they have to do more with education and societal norms. Having the government negotiate or help negotiate on women’s behalf seems like the most patronizing thing imaginable. Discrimination exists, without question, but it is not nearly as prevalent as Media Matters, Rachel Maddow or MidNightWriter would have you believe. And if the wage gap even does exist, it’s not anywhere near as big as they would have you believe either. Photo Credit: PatDollard.com |
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