novatownhall blog

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Browsing Posts in Economics

Weasley Panic

Well, the stock market dropped 3% Thursday and Friday, and sure enough, S&P500 futures were trading down over the weekend. The market opened lower this morning, and immediately dropped. All the panic orders placed over the weekend. In short order, the major U.S. stock indices were down more than 5%. The Dow Jones Industrial Average had dropped over 1000 points from Friday’s closing price.

Now, as I write, not so much. The DJIA has regained over 850 points, and is down less than 1% from Friday’s close.

I am now in my 50′s. I hope I can retire early — perhaps at 60. Yet still, I am fully invested in the stock market, and that is where my 401(k) contributions go. I do not buy and sell on hype or panic. I just buy. (I will admit that my portfolio is in desperate need of re-balancing, but that’s another topic.)

The fact is that, long term, stock prices driven by only two forcing functions: inflation and profit. But even ten years from retirement, I’m still investing long-term, because I plan to live long-term! That means stocks.

And market volatility, rather than being a Bad Thing, is actually a Good Thing for those of us in the “accumulation” phase. With a 401(k), one is dollar-cost-averaging into the market, so higher volatility around the long-term forcing functions increases long-term profits.

Just one more example of how those whose actions are driven by facts and logic make money from people whose actions are driven by their emotions.

Once again, I am not saying that Donald Trump will win the nomination, but I am glad that he is bringing this important issue to the forefront. Read Trump’s plan here. We have been incessantly been told that this country will change its character and never once had a debate on whether this is what we want. We are told by our elites that we look more like Brazil and/or that we should continue to bring in millions of Somalis, Afghans and others into our nation. But millions of Americans are opposed to this but have had no voice. Enough is enough. However, I would go even further and declare that the mantra fed to us “diversity is our strength” is the biggest Orwellian lie of our times. (See Robert Putnam’s book “Bowling Alone” for good reading on how increased diversity DECREASES social trust)

Meanwhile, we are to look the other way as our streets are littered with trash, and female genital mutilation and honor killings happen right here in the USA. If we do not arrest this quasi-open borders policy then I predict that within the century, our nation will break up into regional entities, along broad racial and ethnic lines. Just look at the trouble in Baltimore, Detroit, St Louis (Ferguson) and in Minnesota (importing millions of Somalis). Or simply look to the UK or France to see where we are headed if we continue down this road. Every nation can stand a little diversity, but the amount of immigration we have seen in recent years will become toxic.


The UK circa 1960s vs 2015. Before & After Diversity

The UK circa 1960s vs 2015. Before & After Diversity

I know that abolishing birthright citizenship would be a major climb, but at least Trump is bringing these issues to the table and it will force the other candidates to address this issue. (In fairness, Rick Santorum has also been speaking on the need to decrease LEGAL immigration) And at the very least, we NEED a moratorium on immigration as we did between the 1920s – 1960s

Until the 1970′s, more men than women attended college.  Now, not only do more women than men attend college, but more women than men earn Bachelor’s (Bachelorette’s?)  degrees and Master’s (Mistress’s?) degrees.

Back in those halcyon days, educated men worked with less educated women.  Those women might be particularly intelligent, or they might not.  Personality and beauty reigned over intellect.  A young, beautiful, sweet girl could marry an educated man for whom she worked as a secretary, or whom she met in the grocery store or at church.

Now, college-educated men meet their wives either in college or at work.  As such, we are selection sorting by intellect.  Educated men marry educated women, and uneducated men marry uneducated women.  This stratifies society by broadening the IQ curve — more intelligent couples have more intelligent children, and less intelligent people have less intelligent children.

Such selection sorting by intellect necessarily increases the income inequality, as the intellectual inequality increases.

Exacerbating this trend is the fact that less-educated women (who tend, naturally, to be less intelligent) have more children, earlier in life, than do those with more education.  In fact, according to that study, college-educated women average fewer than two children over their lifetimes.  They are not even at replacement rate.  Meanwhile, women with only a high-school education are having an average of 2.7 children over their lifetimes.

Further exaggerating this stratification is that less-educated have those children at younger ages. Let’s figure that women with only a high school education have an average of 2.7 children, at an average age of 25, and that college-educated women have 1.8 children at an average age of 33.  By the age of 100, a less-educated woman will have 53 great-great-grandchildren (from 16 great-great-grand-parents).  The educated woman, however, will have about six great-grandchildren (from eight great-grandparents).

The less-educated (generally less intelligent) people increase, while the more-educated (generally more intelligent) people decrease.

So by more widespread education of women, we have greater stratification because of the selection sorting by education level (a proxy for intellect), and we have a demographic shift toward fewer intelligent offspring.

In Part One, I wrote of how “privilege” is the result of actions.  If a recognizable group tends to make Good Choices (work hard, don’t break the law, etc.), then members of that group achieve some “privilege” accordingly.  When Blacks are committing crimes at ten times the rate Whites are, then Blacks are looked on with greater suspicion.  This is only natural.

(This is why I advocate a truly blind justice system.  The jury should not see the defendant, and he should always be “John Doe” to the jury.  Even if the jurors do not see the defendant, they will be more favorably disposed to Mike Jankowski than to LaShawn White.)

But now, I want to turn to education.  Specifically, the education of women.

Individually, this is a fabulous thing.  I certainly want my daughters to be educated, and to get professional degrees.  I would love for all of my daughters to get their doctoral degrees before they marry.  I want them to marry other professionals, and to raise their children the same way.

But what does that do in the aggregate?

Back in the days when few women went to college, college-educated men were more likely to marry women who were not college educated.  Now, we have a fairly clear split.  College-educated men marry college-educated women, and non-college-educated men marry non-college-educated women.

Well, it does tend to be the more intelligent people who are college-educated.  So more-intelligent men are marrying more-intelligent women, and less-intelligent men are marrying less-intelligent women.

Furthermore, more-educated women tend to have fewer children, and to have them later in life.

So let’s look at some made-up, but hopefully reasonable numbers.  (“Fake, but accurate”?)  In a century, an educated couple who has two children at an average age of 33, will have three generations of offspring: 2^3=8.  Eight intelligent great-grandchildren.  But of course, those great-grandchildren also have other, presumably similarly-intelligent great-grandparents, and we are just making replacements, not increasing the population of intelligent people.

Meanwhile, the less-intelligent couple will have four children at an average age of 25.  Four generations in a century: 4^4=256 less-intelligent great-great-grandchildren.  They, too, will have other great-great-grandparents, of course, but they have doubled the number of less-intelligent people every generation.  So for every pair of less-intelligent great-great-grandparents, there are thirty-two (32) less intelligent great-great-grandchildren.

With intelligence and education’s being prime indicators of income and wealth, we now see a significant driver of increasing income inequality.

Now, we’ve all heard the latest prog clap-trap: White Privilege clap-trap.

Does being White gives one a leg up on everyone else?  No.  Asians make up less than 20% of the students in Fairfax County Public Schools, but are more than 50% of the students admitted to Thomas Jefferson High School for Science and Technology.  Why is that?  Asian Privilege, perhaps?  Blacks and Hispanics are admitted to TJ at far lower percentages than they occupy in the FCPS student body. Why is that?

Asian have higher graduation rates than Whites, who have higher graduation rates than Hispanics, who have higher graduation rates than Whites.

Asian earn more than Whites, just as Whites earn more than Hispanics, who earn more than Blacks.

Obviously, if Whites had all the power, and exercised that power to discriminate against people of other races, Asians would be down there with Hispanics and Blacks.  But if a cop sees a car full of Asian teenagers driving down the road at 10:05 PM, he probably figures the library just closed.  He does not think that if that car full of Blacks or Hispanics.  Call that “Asian Privilege”.

So the question is, WHY does that cop think as he does?

The fact is, Asians commit fewer crimes than Whites, who commit fewer crimes than Hispanics, who commit fewer crimes than Blacks do. Asian teenagers are more likely to be at the library studying.  So this “Asian Privilege” and “White Privilege” is the result of the actions of generations of Asians and Whites.

Which brings us to the Rat Race.  The progs like to cry that it is not “fair” that Blacks and Hispanics are more likely to start off poor, and so it is not “fair” compete with Whites and Asian.  But how did those Whites and Asians start off in such a better positions?

The children of Whites and Asians are better off because of the actions of their parents and grandparents and great-grandparents reaching back millennia.  The Rat Race is not an individual event, but a relay.  White and Asian parents tend to pass the baton to their children a bit further down the track than do Hispanic and Black parents.  White and Asian parents also teach their children how to run the race faster.

Is is “unfair” for Whites and Asians to teach their children how to read before Kindergarten, when fewer Blacks and Hispanics do?

Is it “unfair” for Whites and Asians to foster a respect for education in their children, when fewer Blacks and Hispanics do?

Is it “unfair” for Whites and Asians to discourage their children from having children out of wedlock?

Of course not.  Blacks and Hispanics could do the same.  If they choose not to do these things, doing them is not “unfair”.

If you don’t have an understanding about what is going on with oil and prices, you need to get in tune. It is important to make a reasonable evaluation on where you stand on this issue and how you will act accordingly. Here is a very good article to cover most bases.

I find this a golden opportunity to start re-organizing some of these “unfriendly” nations. When you look at what compromises OPEC, you will see that they aren’t “friends” of democracy. It also greatly affects Russia, who has been doing some heinous crimes against a sovereign nation. It is a very complex issue when it concerns trades and investments among nations. I look at what outcomes can come to pass for North America. Here is some of what I see:
–becoming energy independent
–ridding ourselves of the ethanol boondoggle
–bringing about cheaper and better goods thru more in-house
–further strengthening of our economy
–nations forced to move to a freer economy
–socialism crumbling under its own, unsustained weight
–reducing the risk for others to make war
This is just quick and brief. I see so many good outcomes from this. Much of this has to come about in conjunction with stopping ALL immigration, which at this time shows no need and necessity, as well as securing the borders (yes, even the one with Canada). Cheaper goods is not the answer when quality is required. Funding war and terrorism is not the answer when we can enhance pay scale and quality of life. Too many win-win scenarios here but I’m sure there will be rain on my parade from not thinking too far out. All that can be resolved without much pain. Energy fuels a society. Energy also prompts and promotes invention and ingenuity. The problem here is getting those in charge to take initiative and make it happen. Some corporations need to be forced in-line rather than being coddled and catered to. One government institution needs to be reigned in to make it work……that would be the EPA. The one organization that hurts our economy.