When all you have is faux-pop sociology, everything starts to looks like a cheap cultural archetype

If you’ve discussed politics with me more than 10 times in person, you probably know how much I hate David Brooks. He’s an intellectual lightweight who has appropriated the trappings of intelligence just enough to fool the casual upper-middle-class liberal into pitying those poor misguided salt-of-the-earth white conservatives. His columns generally tolerate only one reading; after this, their threadbare contours reveal themselves.

Unfortunately, he got a job as a token conservative at the New York Times, where he has used every opportunity to promote himself as a rich guy who just loves poor guys (the white ones). He paints in broad, lazy strokes to paint liberals as out of touch, but more often reveals himself as having no clue what life is like outside New York (“Obama’s problem is he doesn’t seem like the kind of guy who could go into an Applebee’s salad bar, and people think he fits in naturally there.” No Applebee’s has ever had a salad bar.)

His latest column is no different. Brooks considers a new book called Coming Apart: The State of White America, 1960-2010 (which title Brooks abbreviates simply Coming Apart). The book’s thesis seems to be that America (‘s white population) is dividing itself into two classes: one successful and one poor. The upper class lives in urban/suburban pockets around the country, and the social circles of its members don’t intersect the lower class. Upper class people tend not to have children out of wedlock, have jobs, and are generally successful due to their virtuous behavior. Therefore, the solution to the country’s (white people’s) problems is for the upper class to mingle with the lower and teach them the good habits of successful people.

(The books’ author, Charles Murray, also co-wrote a book called The Bell Curve, which examined data from IQ tests, noticed that (self-reported) racial categories corresponded to differences in test results and concluded that black people are dumber than white people, and furthermore this information has important implications for public policy. There are way too many problems with this to get into here, but here are a few of the questionable assumptions behind this line of argument: intelligence exists, it is reducible to a single number, this number can be found by a written test, intelligence is highly determinative of financial success, intelligence is highly heritable, there is a way to encourage high-intelligence women to have more babies and discourage low-intelligence women from having as many babies without infringing on a woman’s rights, &c. It probably goes without saying that the book has been heavily criticized as being both poorly reasoned and racist as hell. Keep this in mind as you think about his new book.)

Brooks begins by painting a picture of increasing inequality. Over the last 50 years, home and car prices have spread out greatly, and this is just one small facet of stratification.

The upper tribe is now segregated from the lower tribe. In 1963, rich people who lived on the Upper East Side of Manhattan lived close to members of the middle class. Most adult Manhattanites who lived south of 96th Street back then hadn’t even completed high school. Today, almost all of Manhattan south of 96th Street is an upper-tribe enclave.

He goes on to detail the disparity in employment, church-going, divorce rates and other supposed cultural signifiers the (white) upper class has used to make itself productive. Brooks recommends a “program that would force members of the upper tribe and the lower tribe to live together” so that rich and poor alike “work together to spread out the values, practices and institutions that lead to achievement.”

Murray decries the left’s and right’s model of societal division (the left sees an economic divide between the top 1% and the bottom 99%, in today’s parlance, and the right sees the cultural/Hollywood elite versus the regular masses) and instead focuses on the top 20% who excel due to their traditional values and the bottom 80% who struggle due to their bad habits. The first thing to point out is that Murray focuses only on white people, supposedly to remove the effect of race. This is problematic, to say the least. A one-semester course in econometric analysis emphasizes the necessity of not discarding a huge chunk of your data (!), because the variation among groups is at least as important as the variation within those groups. An uncharitable reader might guess at the reason Murray restricts his concern to white people, but I’ll let you fill in that particular blank.

The first problem with this brand of analysis is that there’s no plausible mechanism by which marriage, for example, contributes to economic success. Fighting over money is a major source of stress to a relationship, and I’d think the relationship would be ambiguous, and just as likely to run the other way. His examination of the difference of employment rates between rich and poor people is an interesting shade of tautological.

I think, however, Brooks gives away the game here:

It’s wrong to describe an America in which the salt of the earth common people are preyed upon by this or that nefarious elite. It’s wrong to tell the familiar underdog morality tale in which the problems of the masses are caused by the elites.

This is the story successful people tend to tell themselves: the results prove the virtue of the person experiencing them. Poor people aren’t poor because of the recession of unions, or the growing control money exerts over our political system, or the internationalization of trade, or anything outside their control. Poor people are poor because of their own bad habits.

Of course, the converse is even more egregious: rich people are rich because they made themselves rich. Nobody is lucky, nobody came upon the right job at the right time, nobody got into a profession just before its industry blew up. They did the right things and got rich. (Never mind all the people who did the same things and languish in the bottom half of the income distribution.)

The big story (or the most plausible version of it, from my perspective) is that, especially in our political system, money leads to control. Successful industries have the ability to change the law in order to entrench their economic might, protect themselves from competition and stymie the emergence of alternatives. At the same time, they use their power to decrease labor’s leverage in the collective bargaining process. This has led to wage stagnation for the bottom 60% or so.

Meanwhile, wealthy people have used their ability to influence the political process to make the places where they live better by excluding poor people. Brooks points to Manhattan as an example of an elite playground, and he’s right, but it’s basically illegal to make Manhattan any more dense, thanks to land use restrictions created by residents. The benefit of living there (increased real estate values and higher levels of cultural amenities) accrues to current residents, but the cost of those restrictions is borne by everyone who would like to live there, but couldn’t afford it. Since the benefits are concentrated and the costs diffuse, there’s no will to make Manhattan more affordable.

The emergence of finance as an industry has distorted the economy to an extent that is difficult to get a handle on, and it’s the same story here. The benefits go to financial professionals, and the costs are borne by everybody else. Banks exist to store people’s money and loan it out to other people. By shifting capital from savers to those who can use it to grow a business, they enhance the efficiency of the economy as a whole. Markets for stocks and bonds do the same. Somewhere along the line, however, financial products got more complex. The only people who understand them either have enough free time to do deep research into those products, or get paid to create them.

At some point, the benefits of the financial system stopped going to those who borrow to build capital in a business and started being siphoned off by the financial system itself. This caused the explosion of income for the top 1% (or 0.1% or 0.01%). Because these are the people in positions of influence, and they have a lot of money, they get to make the rules.

This is a lot longer than I intended, so I’ll stop here. I’m sure I’ll come back to these topics in the future. I’ll leave you with Murray’s quiz, which tells you to what extent you are culturally elite. (Post it to your Facebook profile and compare to your friends!) This working-class hero scored a 48, despite going to private high school and college and growing up the son of a doctor in an upper-middle-class suburb. It’s full of questions about fishing, shitty TV shows and David Brooks’ favorite restaurants.

Clearly the financial crisis was caused by poor people taking out loans they couldn’t afford

…rather than unbelievably horrendous business practices. This family refinanced their home to take advantage of lower interest rates. The mortgage servicer, however, never closed the old loan, and filed an “Erroneous Release of Mortgage” (signed by a $10-an-hour fake notary). The interest rate went back up, and they were hit with late fees for not making their payments during the several months they thought they were paying their new mortgage. (No one knows what happened to they money they paid during that time.) The FHA showed the original loan, which they insured, had been paid off.

What do you think would happen to you if your tax records were kept this shittily? This was standard practice during the boom times. Everybody was obsessed with originating new loans as quickly as possible; they would collect the fees, then sell the loan to anyone who would buy it.

(And it turned out anyone would buy the loan. Someone figured out along the way that if you can figure out how to bundle loans together in the right way, a security backed by mortgages would qualify for the highest rating. Institutional investors, like pension funds and local governments, are legally obligated to invest their money in high-grade investments in order to minimize the risk to anyone relying on them. It turned out, however, that the models used to calculate the risk didn’t admit the possibility that house prices could decline nationally, which is exactly what happened, leaving these institutional investors holding the bag while banks, desperate to get some of their money back, started foreclosing on mortgages.)

So on one side, you have a prudent homeowner who sees falling interest rates and wants to lower her monthly payment. On the other hand, you have a company that specializes in originating, buying and selling home loans. Who would you expect to be more on top of their shit? Or, I suppose, who should be? If a legal dispute arises, the burden shouldn’t be on the homeowner, who in this case is now in foreclosure due to the bank’s negligence.

There absolutely must be consequences for businesses that engage in negligence and fraud. The public has a right to know which companies were running legitimate mortgage businesses, and which were hiring anybody off the street to shuffle papers in order to make a quick buck. The role for the government in a situation like this is to ensure everyone is on the level, and punish anyone who isn’t; people who should know better should face criminal liability. This isn’t going away. I hope the Department of Justice’s new task force (announced in the President’s State of the Union address) can get something done, as this is one area where the Republicans in Congress won’t be able to block action.

(And if anybody tells you the financial crisis was caused by the Community Reinvestment Act, which prevented banks from denying loans to black people just because, you’ll know what to tell them.)

Compensation, and Ron Paul’s Ahistorical History

Ta-Nehisi Coates is one of the few authors remaining at the Atlantic who lives up to its reputation. In response to Ron Paul’s repeated insistence that the Civil War “didn’t need to be fought,” and as an implied rejoinder to libertarian insistence that the unConstitutional Civil Rights Act was an unnecessary intrusion into private affairs, he is writing a series of posts about compensated emancipation, by which the federal government would have bought all the slaves from all the slaveholders.

As he explains in the introduction, a series is needed to disprove a soundbite because

[…] Comfortable History is asymmetrical warfare it needs only a smattering of facts, and need not guard against a lack of context, presentism, or other facts that might undermine its arguments. Instead it breezily proceeds through hypotheticals and abstract thought experiments  which somehow satisfy our desire to be in possession of a dissident intellect. Comfortable History is like the computer virus that poses as the shield — it positions the espouser as a brave truth-teller, even as it infects us with lies.

The first post is about Lincoln’s views of slavery and the southern response to his election: they seceded, raised an army, and fired on federal property, something commonly referred to as an act of war (which I like to call Treason In Defense Of Slavery). The South was not a democratic society where some people happened to own slaves, it was a slave society. Its leaders argued slavery was a moral good, as opposed to the necessary evil the framers considered it to be. Any threat to the institution of slavery was a threat to the South itself, so deeply ingrained was the practice.

The second is about the economic impossibility of the purchase (or alternately, how it would have led to the same expansion of federal power as a war, a common libertarian complaint). Furthermore, the government would either force slave owners to accept an unfair price (which is different from forcible emancipation only by degree, not type) or allow them to set an inflated price:

A government which buys slaves, with the explicit intent to buy all slaves, is in a poor bargaining position versus slaveowners.. Signalling your intention to buy up all the supply of a commodity on the market increases the price you’ll pay, whether that be bonds or human beings.

The latest installment provides several examples of other violent slave rebellions, putting the lie to Paul’s statement that “every other major country in the world got rid of slavery without a civil war.” Slave rebellions in Haiti, Brazil and Venezuela make the falsity of this assertion apparent, but the real point (which is made in passing regularity by Coates) is that Paul is implicitly talking only about violence that affects white people.

Read the whole thing.